Fact No 1 – The UK remains in the grip of a housing crisis.  Demand remains high (we’re dying older, kids want to move away from Mum and Dad earlier, we’re divorcing more often and immigration has grown considerably).  But supply has dwindled down to its lowest ebb since 1946 or 1923, depending on which version of history you prefer.

(Interesting note – According to a recent UK Government commissioned study, for at least the last 20 years, we have built proportionally considerably less housing than many of our nearest European neighbours, one of the results of which is that our house prices have soared.  Duh!  Go figure)

Fact No 2 – The continuing impact of the recession means that mortgage affordability remains stubbornly low.  Unless you have a lottery win this Friday or the bank of Mum and Dad coughs up your deposit, the 20-25% downpayment most banks now demand as a minimum remains out of reach for the masses.

Fact No 3 – We need millions of new homes.  The last Tory Government wanted 4.4 million by 2016.  The recently departed Labour Government’s stated target was 3 million by 2020, although its last policy utterances added up to just shy of 6 million by 2025.

So what is our shiny new Government doing about this crisis?  Here’s a list of its pronouncements to date:

Positive measures

• Local Housing Trusts – a relatively modest scheme helping local communities to build their own homes which forms an element of the Decentralisation and Localism Bill currently before Parliament — small beer

• Yet another Government initiative to bring empty homes back into use — not holding any breath on this one

• A ‘Home on the Farm’ scheme that encourages famers to convert disused farm buildings into affordable housing — not really expecting a major impact from this one either

(Its much vaunted ‘incentivisation’ scheme for local authorities, which apparently will transform all councils into aggressive supporters of residential development for some not inconsiderable shekels dangled at them by the Coalition Government, has yet to be announced but is programmed for later this month).

Negative measures

• Complete chaos in the planning system by abolishing the regional strategies (from which all housing numbers have hitherto been derived)
• Abolition of the National Housing and Planning Advisory Unit which was responsible for estimating the housing numbers needed across the UK

• Two measures in the Decentralisation and Localism Bill which will further restrict housing delivery – local referenda (whereby local residents will be able to frustrate unpopular large scale planning applications) and SSSI style protection for green space (inevitably further restricting land available for development)

• Two changes to PPS3 – the abolition of minimum residential density targets and the removal of back gardens from the definition of brownfield land (bearing in mind that 25% of housing development last year was back garden development and in the South East that often was up at the 40-50% mark)

• A reduction of £450 million to the HCA’s budget as part of the wider Government cost cutting exercise
• Funding for eco-towns has been halved

So the question is this: (a) does our new shiny Government just not understand how to tackle the housing crisis or (b) is it in political denial about it in order to appease its shire county NIMBY voters?

Prediction – Should the Coalition Government last, the housing numbers will continue to bump along the floor, as banks begin lending again over the next few years a 1980s house price inflation boom will develop and the Government will be forced to pull its head out of the policy sand after taking much criticism.

You heard it here first.

Nick Keable is vice president, UK Operations, for The Saint Consulting Group, email keable@tscg.co.uk, phone +44 207 592 7050

So when New Labour came to power, we had a ‘big bang’ planning reform moment: a green paper, much debate, a Bill and finally the Planning and Compulsory Purchase Act 2004.

In outline, this legislation tried to do two things at once: it dramatically changed planning policy and at the same time fundamentally reorganised the development control process.  As with all big bangs, there was much heat, not a lot of light, and ‘certainty’ which is the holy grail for all in the development sector, went up in smoke.

The Coalition Government has a new way.  No big bang.  Not even a little bang.  More planning reform by a thousand cuts.  So far we have had:

• 20 May – The full Coalition Agreement, which laid out exactly what planning reform and associated initiatives the Coalition Government would undertake
• 27 May – The new Secretary of State, Eric Pickles, announced in an eight line letter that Regional Strategies should be ignored as he was about to kill them off
• 9 June – Planning Minister Greg Clark announced changes to PPS 3, namely abolishing housing density targets and ‘garden grabbing’ (by which incidentally 25% of all residential development had been delivered in the previous 12 months)
• 6 July – Eric Pickles killed the Regional Strategies.  They are now revoked, dead, devoid of life, are no more than a footnote in New Labour history
• 8 July – Publication of the Department for Communities and Local Government ‘Structural Reform Plan’, essentially a timeline of when they are going to do what

And what does all this mean?  In short:

Already enacted – Government Office for London being wound up (other Government offices to follow for sure), Regional Strategies abolished, PPS 3 changed dramatically

Summer 2010 – Local government incentivisation scheme to be announced – we wait with baited breath…

Summer 2011 – The Decentralisation and Localism Act will receive Royal Assent, which will include abolition of the IPC and HIPs, creation of LHTs, a new SSSI style designation for community green space as well as referenda for directly elected mayors in the 12 largest cities and local referenda on any local issue in any local authority area

Nov 2011 – The Queen’s Speech will announce a new Bill to include the remaining elements left over from the Tories’ Open Source Planning green paper

Scary stuff.  And all rather disjointed and protracted.  Certainty there is not.

Nick Keable is vice president, UK operations, for The Saint Consulting Group, email: keable@tscg.co.uk or phone +44 207 592 7050

By Nick Keable, Vice President, UK Operations, The Saint Consulting Group

The event is over.  The victors are enjoying their glory.  The losers are squabbling amongst themselves.  The punters are looking to their next fix.  No, not the World Cup, I’m talking about the UK General Election.  The caravan has moved on, but what really happened?

Like most analysts in the political world, Saint Consulting had been pointing out for more than a year that it was most unlikely that the Tories would ever win the General Election outright.  Why?

First, some basic maths.

a) The steadily increasing number of third party votes since the 1950s has made it progressively harder for the two main parties to win outright at each election.  Just in raw votes, think about the growing number of votes that have been cast in recent elections for the Lib Dems, SNP, Plaid Cymru, DUP, UUP, Sinn Fein, SDLP, UKIP, Respect, BNP, Greens, English Democrats, Monster Raving Loony Party, various Independents – you get my drift.  In terms of seats, in 1951 there were only 9 non Labour or Tory MPs; by 1970, there were 12, by 1979 this had risen to 27 and now in 2010 we have 85.

b) The significant size of the swing needed by the Tories in many of their key 116 target seats because of their low starting point after a poor performance in the 2005 election. The Tories required the second largest swing to them in UK electoral history (after Labour’s landslide in 1997).

c) The inbuilt mathematical bias right now of the number of safe seats in favour of the Labour Party (historically this used to be the other way, and the ‘Boundary Commission’ has been playing with this for decades but population movement has always been ahead of them).

d) The differential between the disproportionally large number of inner city Labour held seats (in London, Birmingham, Merseyside, the North East and Glasgow) versus disproportionally smaller number of rural Tory seats.  This is in part due to the population shift from rural areas to cities in recent decades.

Secondly, maths aside, there are some election tactics reasons for this result as well.

e) The Labour campaign was always going to be a negative campaign in the ‘better the devil you know’ vein.  It was good politics to do that as sadly history has shown repeatedly that negative campaigning is more effective than positive campaigning.

f) The Tories’ strategy had been to keep their cards close to their chest to stop Labour stealing and/or savaging their policy ideas (remember the months and months of the political commentariat saying ‘the Tories are all spin, they haven’t told us one policy yet’).  This meant that they could unleash their policy agenda as the election was called.  This gamble relied on having a compelling agenda to wow the electorate.  Which, as it turned out, they didn’t.

Lastly, there are some election campaign realities that hurt the Tories.

g) The Labour vote held up surprisingly well.  Most surprised were Labour themselves!  Some quick analysis would indicate that the vote held up particularly well where there is a significant ethnic minority population and a large number of public sector employees.  I guess ‘Tory hatred’ is a factor we should use in election analysis from now on as this election showed that this is a real driver for some Labour voters.

h) The agreement by David Cameron to join the Prime Ministerial debates was in some ways a massive error.  It allowed Nick Clegg into the game.  No party leader ahead in the polls – including Tony Blair – had ever said yes before for exactly this reason, which had always stopped the debates due to the proportionality guidelines all broadcasters must follow during election campaigns under electoral law.  The so called ‘Clegg bounce’ meant that the Lib Dems were able to stop the Tories from winning any of their Lib Dem target seats, needed by Cameron to get over the 326 seat line.  (Many media pundits have said that the Lib Dems did badly because they had such good polling for a time and then actually lost 8 seats.  Not so.  This was a good result for them.  A year ago, they thought they might lose 20 seats).

i) If UKIP had not been standing, the Tories would have won a majority.  In round numbers, the 16,000 UKIP votes in the 20 most marginal constituency battles, robbed the Tories of an outright win.

j) Frankly, the Tories ran a poor campaign.  It was not very coherent, had no driving central narrative and lacked enough eye-catching policies.  Its central theme of the ‘Big Society’ was launched on an unprepared electorate, the lesson being that if you want a policy or position to be understood, then you have to lay the ground early.

Nick Keable is vice president, UK operations, for The Saint Consulting Group, email: keable@tscg.co.uk or phone +44 207 592 7050

So, how do companies use the planning process to raise barriers to entry into a geographic market?

Some participate in the local planning process in ways that seek to limit the areas where new competitors are allowed to locate. Some seek to ban new commercial zones, for example, or convince governments to limit the size, density or design of new buildings to keep out the latest formats of competitors. Some seek big box limitations that ban stores that exceed a certain square footage, while others limit lot coverage, enlarge open space requirements, set minimum buffer zones.

Or they may sign leases that block the landlord from leasing space to a competitor. Or they may buy land to prevent their competitor from locating a building on it.

Or they may help neighbors urge the local city council to refuse to permit the new entity or they may file or support lawsuits that seek to do the same thing.

All of these tactics have been used by hospitals, quarries, retailers, shopping malls and other firms to protect their assets from unwanted competition.

Not only are these tactics not illegal or unethical, they are a crucial part of the competitive strategy for companies that must protect and grow market share in today’s highly competitive markets. They have become smart business for those who think outside the box.

Mike Saint is chairman and CEO of The Saint Consulting Group, email msaint@tscg.biz

The competitive landscape is changing. Increasing government laws and regulations make it possible for some firms to win while their competitors lose, by expanding the competition beyond the traditional boxes. See Wharton Business School Professor Richard Shell’s outstanding book, Make the Rules or Your Rivals Will.

These days competition is not limited to price, product, service and marketing. The playing field has expanded. In many industries, the field now includes using governmental zoning, planning and environmental rules and regulations (not to mention intellectual property laws and other regulations) to give one firm an advantage over  competitors.

In the old days, people welcomed all new development. New stores meant new jobs, new taxes and new progress for a community. City Hall’s response to a proposed real estate development was often, “when do you want the mayor at your ground breaking ceremony?”

But over the years, anti-growth, anti-sprawl, and pro-smart growth movements have spread across the country. Citizens have become advocates for protecting the environment and historic sites and stopping new construction that will add to increasing traffic jams.

These trends have opened the door to incumbent firms to influence local zoning and planning decisions in a way that protects their multi-million-dollar investments from competing entrants.

By helping neighbors and environmentalists encourage local officials to keep out new development (and Saint Index® polls show 74% of Americans want nothing new to be built in their communities), they protect their own capital investments and protect their own gross margins.

Mike Saint is chairman and CEO of The Saint Consulting Group, email msaint@tscg.biz

Business strategists constantly urge executives to “think outside the box.” And these days many retailers, hospitals, mall owners, and other business owners are doing just that.

In the past, competitive strategy was limited to what was inside the box. You competed on price, merchandising, customer service, product selection and ambiance of what was inside your box (store) versus what was inside your competitor’s box (store.)

Each company placed stores just about wherever they wanted. And then each would try to outdo the other on price, service and selection.

The trouble with this strategy was that it drove down market share and with it, profit margins.  If there were three stores in a geographic area, each serving the same target market with the same total spending available, each location had, on average, a 33% market share.
But when a fourth competitor enters, puts up a location in the same area, each competitor now has on average, a 25% share. Each of the incumbents has lost 25% of its gross revenue and, usually, 5 to 15% of its gross margin. In a store or mall doing millions of dollars a week in sales, this is a huge loss.
And for the smaller, less dynamic incumbent, the reduction in sales and margin may be greater than average and they may find themselves out of business entirely.

Should they accept the terms of the competition, or attempt to move the battle to a place where they are not overmatched?

Mike Saint is chairman and CEO of The Saint Consulting Group, email msaint@tscg.biz

By P. Michael Saint, Chairman and CEO, The Saint Consulting Group

Let’s look at Henry V and the Battle of Agincourt on St. Crispin’s Day. The year was 1415. October 24 — St. Crispin’s Day. Henry V had led an English Army to France. 5000 of his 6000 troops were carrying longbows, a weapon capable of firing arrows up to 330 yards.

The French had at least 30,000 troops, with cavalry and heavily armored foot solders leading the way into the cramped, muddy battlefield. But the longbows made victory possible even against such overwhelming odds. Henry’s troops could safely launch their missiles from 600 to 900 feet away and not be struck down by the French cavalry or foot soldiers.

In the end, as one account states: “At Agincourt they (the English) were cornered by a French army of 20,000-30,000 men, including many mounted knights in heavy armor. On a cramped battlefield where the superiod French numbers offered little advantage, Henry made skillful use of his lightly equipped, mobile arches. The French were disastrously defeated, losing over 6,000 men, while the English lost fewer than 450.”

Henry could not have won on an open field in hand-to-hand combat. He would have been overwhelmed by the superior French forces. But he used his weapons and the tight, muddy battlefield to play to his strengths. He made the French fight where he, Henry, had a chance.

Was it unfair for Henry to use longbows?

Mike Saint is chairman and CEO of The Saint Consulting Group, email msaint@tscg.biz

By P. Michael Saint,

Let’s talk about David and Goliath. Not the metaphor. The Bible story.

For those of you who have not had a chance to read 1 Samuel 17:1-58 lately, here is a summary:
Goliath is a 9-foot-plus-tall Philistine warrior, dressed in heavy armor, who challenges the Israelites to fight him “mano a mano,” winner take all.
The Israelites are all scared of the giant, who has an obvious weight, height and strength advantage over any normal size man in hand to hand combat. And Goliath has killed all those who have fought him man to man in the past.

Enter David, a slight of build, teenage shepherd.
Pulling up well short of Goliath (and beyond the reach of the mighty warrior or his weapons), David pulls out his trusty sling shot, loads a stone, and launches it right into the forehead of the giant, knocking him unconscious so that he, David, can take Goliath’s own sword and cut off his head.

In my opinion, applying this lesson to land use fights, the key to this story is that David, outgunned in traditional close quarters conflict, changes the rules of the game. The fight will not be fought up close and personal, where David is guaranteed to lose but will be fought from afar.
At sling shot distance, David not only has a chance to prevail, he has an advantage. Goliath is not dressed nor equipped to fight at a distance. He has no weapons to respond to David’s propelled rocks. David wins.

Should we feel sorry for Goliath because David chose to fight on a field where he, David, and not Goliath had the advantage? Or should we applaud David for thinking outside the box and expanding the field of competition to a broader area, where he had a chance to survive?

Mike Saint is chairman and CEO of The Saint Consulting Group, email msaint@tscg.biz

Over the past 26 years, The Saint Consulting Group has developed a strong and focused culture.

Despite being geographically dispersed working in three countries and 45 states, our Saint University programs, mentoring and training ensures that our values and philosophy are shared by everyone working on Saint Consulting projects.

Click here for our Value Statement

Patrick Fox is president of The Saint Consulting Group, email fox@tscg.biz

No matter how good you are or how many times you have gone above and beyond to ensure your projects are designed and built to the highest standards, you come to town with a target on your back.  No matter how many times you have made commitments to neighbors and local officials and followed through on them, many will never trust you.  You are a developer.  They know why you are here and what you want.  Their defenses are up and they are ready to fight.

In this age of social networking and internet access to all the information all the time, bad developers are in big trouble.  Shortcuts made on projects here are heard about everywhere.  Commitments made and not lived up to on your east coast project are going to be used to defeat you on your west coast project.  There is no place to hide.

Even the best developers with solid reputations have to deal with the fact that the public is increasingly cynical and ready to fight.  74% of all Americans are saying no to any new development in their communities- That’s no to everything!  This is the handicap that every developer starts with.  Nearly 70% believe that the relationship between developers and elected officials makes the entire process unfair.  A staggering one in five Americans have actively opposed a project in their community meaning they have gathered petition signatures, called officials or demonstrated their opposition by attending hearings.

After 20 years of media showing residents fighting big box development and winning, everyone believes they can fight and win.  The old saying “You can’t fight progress or city hall” is out the window.  Yes you can and everyone knows it.

Local officials are feeling the heat.  No longer do they push for economic development to bring in jobs and taxes.  Now they stand with the opponents and fight development.  87% of Americans believe that a candidates position on growth is important when they decide for whom they will vote.  The people supporting development don’t tend to show up at hearings.  Anger and fear are much stronger motivations.

The system is completely out of balance and it leans heavily in favor of the opposition.  Convincing local politicians to support your project in the face of angry constituents is a real challenge.  You still need to do all the right things in terms of building responsibly, conducting due diligence and outreach to neighbors but that’s not enough.  You also need to be able to demonstrate support- local constituent support.  You need to show that supporting your project is not political suicide.

A developer cannot get by on reputation any more.  The angry constituents have a great deal more influence over the actions of these local officials than any reasoned argument from a developer.  The best defense is to have local residents stand up and make your case for you.  They have the credibility you need and the power to really influence the approvals process.

Patrick Fox is president of The Saint Consulting Group, email fox@tscg.biz, phone 781 749 7290