Housebuilding in Scotland - the social and economic benefits

Homes for Scotland has this month published its report on "The Social & Economic Benefits of Homebuilding in Scotland".

The report highlights Scotland's chronic shortage of housing; with the number of newbuild completions in 2019 (the report is based on figures from pre-pandemic 2019 – chosen as being the most up to date year of a more "normal" operating context) down 12% from pre-crash 2007 and the cumulative under-supply of new homes since the crash now approaching 100,000. It calls for an all-tenure target of at least 25,000 new homes to be built every year and highlights the myriad social and economic benefits which could be realised if that figure were to be met.

Assessment of Social and Economic Benefits:

The report is organised around the four following key drivers of the prevailing policy framework:

1. Inclusivity: it focuses on the employment opportunities which the sector creates across Scotland, not only in terms of direct employees of housebuilders and their contractors, but also those in the development supply chain and in 'induced' jobs created in the wider economy through the spending power of these employees. It estimates that up to 79,200 people in Scotland are in employment supported by the housebuilding sector. The sector's impact on education – directly via training and developer contributions and indirectly via the proven relationship between housing standards and educational outcomes – is also stressed;
2. Quality of Life: the report highlights the link between poor housing and poor health and that issues such as damp, poor insulation, overcrowding, fuel poverty and lack of open spaces can all have a serious detrimental impact on mental and physical wellbeing. The provision of warm, safe and adaptable new homes in diverse communities with access to open space and leisure facilities is cited as an important factor in improving health outcomes and providing for the needs of an increasingly ageing population;
3. Environmental Sustainability: the sector's key role in tackling the climate crisis and in achieving the ambitious targets set by the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 is noted. Through improved energy efficiency, recycling of construction waste and creation of green space – together with a reduction in car dependency via green transport links and creation of '20 minute neighbourhoods', the housebuilding sector is rightly credited with making a considerable and increasing contribution to Scotland's battle against climate change; and
4. Economic Growth: in addition to developer contributions and community investment, the report cites the house building sector's direct contribution to the Scottish economy: £1.8 billion direct GVA and £3.4 billion in direct, indirect and induced GVA. Its substantial contributions to national and local tax revenues are also highlighted.
   

The Benefits Deficit

Having analysed the economic and social benefits provided by the sector, the report notes the constraints being placed on these benefits by under-supply of housing. And it sets out calculations of the potential gain that could be made if completions reached their target of 25,000 per annum on matters including employment figures, affordable housing delivery, public and local authority revenues and infrastructure investment – see Table 4.1 of the report. In addition to the economic benefits that increased delivery would provide, the report concludes that "the delivery of a higher number of new homes would provide increased social benefits. Increasing the scale of well designed energy efficient homes plays a key role in delivering improvements to health, education, regeneration and carbon reduction outcomes as well as housing access for all. Modern building standards and the delivery of high quality neighbourhoods also support this ambition." Homes for Scotland stress the importance of delivery of both market homes and affordable housing of all tenures in promoting the four key values set out above.

Meeting Demand – Planning is Key

Homebuilders will welcome this affirmation of the undeniable benefits which the housebuilding sector delivers to Scotland. The Scottish Government and local authorities must take note of what the sector can contribute nationally and locally when setting the Minimum All Tenure Housing Land Requirements in NPF4. The planning process has a fundamental role to play in providing enough land for housing development across the country and thus realising the social and economic benefits identified in the report.

Public consultation on the draft NPF4 expires at the end of this month and it is important that all stakeholders put forward their views on the draft before this date.