proposed student and young professionals … student and young professionals accommodation,...

Proposed Student and Young

Professionals Accommodation,

Bonner’s Field, Sunderland

Capacity Assessment Butlers Walsall Ltd December 2016

23160/HE/AFa

Nathaniel Lichfield & Partners nlpplanning.com

This document is formatted for double sided printing. © Nathaniel Lichfield & Partners Ltd 2016. Trading as Nathaniel Lichfield & Partners. All Rights Reserved. Registered Office: 14 Regent's Wharf All Saints Street London N1 9RL All plans within this document produced by NLP are based upon Ordnance Survey mapping with the permission of Her Majesty’s Stationery Office. © Crown Copyright reserved. Licence number AL50684A

Proposed Student and Young Professionals Accommodation: Capacity Assessment

12635697v2

Contents

1.0 Introduction 1

Proposed Development .................................................................................... 1

Area of Impact.................................................................................................. 1

Study Framework ............................................................................................. 2

Structure of the Report ..................................................................................... 3

2.0 Policy Context 4

National Policy Context .................................................................................... 4

Sub-Regional Policy Context ............................................................................ 5

Local Policy Context ........................................................................................ 6

Summary ......................................................................................................... 8

3.0 Baseline Context 9

Student Population ........................................................................................... 9

Housing requirements ...................................................................................... 9

Current supply................................................................................................ 10

Potential supply .............................................................................................. 11

Summary ....................................................................................................... 13

4.0 Capacity Assessment 14

Establishing Capacity ..................................................................................... 14

Demonstrating need ....................................................................................... 14

Summary ....................................................................................................... 19

5.0 Economic Impact 21

Construction Impacts ..................................................................................... 21

Operational Impacts ....................................................................................... 22

Expenditure Impacts ...................................................................................... 24

LPA Fiscal Impacts ........................................................................................ 25

Summary ....................................................................................................... 26

6.0 Conclusions 27


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1.0 Introduction

1.1 This report has been prepared by Nathaniel Lichfield & Partners (NLP) on

behalf of Butlers Walsall Limited. It sets out the capacity for, and impact of, the

proposed development of new, high quality mixed-use student accommodation

on previously developed land at 1-5 Bonner’s Field, Sunderland, as requested

by Sunderland City Council (‘the Council’) as part of the pre-application

meeting.

Proposed Development

1.2 The quantum of development being examined via this assessment comprises

of 403 purpose-designed bedspaces1 for both undergraduates and young

professionals, together with a 156m2 (GEA) A1/A3 retail unit.

1.3 The description of development proposal is as follows:

“Demolition of existing workshops and erection of 363 unit mixed use

residential block for students and young professionals (Use Class C3) with

integral car parking, ancillary amenities and commercial unit (Use Class

A1/A3), along with external landscaping and access works.”

1.4 The site is located immediately west of Sunderland College and Sunderland

University’s Riverside Campus sites. It is included within the Middle Super

Output Area (MSOA) ‘Sunderland 006’ within the St. Peter’s Ward in

Sunderland and is currently vacant.

Area of Impact

1.5 As the proposed development is predominantly targeted at Higher Education

students, the most appropriate area to be considered as part of the capacity

and needs assessment is the Sunderland local authority area.

1.6 However, it is also recognised that the economic impacts generated during

construction and operational phases of the development are likely to be

observed across a wider labour catchment area – i.e. the area from which the

proposed construction/operational development would draw the majority of its

workforce.

1.7 For the purposes of this assessment, the wider labour catchment area has

been defined as the two local authority areas of Sunderland and South Shields.

This has been defined having regard to 2011 Census data relating to

commuting patterns. This shows that the majority (81%) of workers in the

Middle Super Output Area (MSOA) within which the application site is located

live within these local authority areas and the majority of residents (79%) of this

MSOA also work within the same two local authority areas.

1 Including 314 no. studios, 40 no. 2 bed flats and 9 no. 1 bed flats.


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Study Framework

1.8 This report draws upon the BeDSPACE methodology developed by NLP,

which provides an analytical framework for assessing the capacity for and

economic benefits of, new student accommodation developments. This

framework, as it relates to the analysis for the proposed developments at 1-5

Bonner’s Field, is set out in Figure 1.1 below.

Figure 1.1 NLP BeDSPACE Analytical Framework

Source: NLP

1.9 The analysis focuses first on the capacity and need for additional student

accommodation, before considering the wider role that student accommodation

can play in supporting economic growth.


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1.10 Our approach is consistent with the requirements set out in Para 16.5 of the

Council’s Draft Core Strategy, which states that proposals should clearly

demonstrate the likely demand for additional accommodation with regard being

given to:

“Existing and projected numbers for students in further/higher education in

the city, taking into account any expansion plans of the University of

Sunderland;

The proportion of these students that is likely to require accommodation in

the city;

The existing number and location of student housing units;

The number and location of additional student housing units that have

extant planning permission;

Any potential impact on the local housing market if the number of students

living in accommodation not specifically designed for students decreases;

and

The adaptability of the proposed development for uses other than student

housing if the anticipated demand does not manifest.”

Structure of the Report

1.11 The report is structured as follows:

Section 2 provides an overview of the baseline policy context concerning

student accommodation at the national, sub-regional and local level;

Section 3 considers recent trends in relation to the local student

population trends and outlines the student accommodation profile of the

main impact area (Sunderland local authority area). The wider economic

context for the labour catchment area (Sunderland and South Tyneside) in

which the application site is located is also considered;

Section 4 examines the current capacity and need for additional student

accommodation within Sunderland;

Section 5 sets out the potential economic impacts that could be generated

during the construction of the development and after its completion; and

Section 6 presents the overall conclusions.


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2.0 Policy Context

2.1 The following paragraphs provide a summary of key planning and economic

strategy documents of relevance to the development proposals. This includes

a review of the national, sub-regional and local policy context relating to higher

education, housing and student accommodation.

National Policy Context

National Planning Policy Framework (2012)

2.2 In March 2012, the Government published the National Planning Policy

Framework (NPPF). This document replaced all previous Planning Policy

Statements and Guidance notes. At the core of the NPPF is the principle of

sustainable development which is defined as having three roles; economic,

environmental and social. New development proposals should actively comply

with each of these priorities.

2.3 The document establishes a presumption in favour of sustainable

development. For decision-taking, the NPPF states that this means:

Approving development proposals that accord with the development plan

without delay; and

Where the development plan is absent, silent or relevant policies are out-

of-date, granting permission unless … any adverse impacts of doing so

would significantly and demonstrably outweigh the benefits.

2.4 The NPPF is resolutely pro-growth, recommending that the planning system

should seek to support economic growth rather than constrain it:

“The Government is committed to ensuring that the planning system does

everything it can to support sustainable economic growth. Planning should

operate to encourage and not act as an impediment to sustainable

growth. Therefore, significant weight should be placed on the need to

support economic growth through the planning system.” (NLP emphasis)

[Planning should] “proactively drive and support sustainable economic

development to deliver the homes, business and industrial units,

infrastructure and thriving local places that the country needs. Every effort

should be made objectively to identify and then meet the housing,

business and other development needs of an area, and respond positively

to wider opportunities for growth.” (NLP emphasis)

2.5 With specific regard to residential development, the NPPF comments that local

planning authorities should:

“Plan for a mix of housing based on current and future demographic

trends, market trends and the needs of different groups in the

community.” (NLP emphasis)


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“Recognise that residential development can play an important role

in ensuring the vitality of centres and set out policies to encourage

residential development on appropriate sites.” (NLP emphasis)

Planning Practice Guidance (2014)

2.6 CLG (Communities and Local Government) has produced on-line Planning

Practice Guidance which includes guidance on the assessment of housing and

economic development.

2.7 The Practice Guidance provides a methodology for assessing housing and

economic development needs. It highlights that all needs across all types of

housing should be considered as part of the plan making process, including the

private rental sector and student housing.2

2.8 For student housing specifically, the Guidance states that:

“Local planning authorities should plan for sufficient student

accommodation whether it consists of communal halls of residence or self-

contained dwellings, and whether or not it is on campus. Student housing

provided by private landlords is often a lower-cost form of housing.

Encouraging more dedicated student accommodation may provide low

cost housing that takes pressure off the private rented sector and

increases the overall housing stock.” (NLP emphasis)

“Plan makers are encouraged to consider options which would support

both the needs of the student population as well as local residents before

imposing caps or restrictions on students living outside of university-

provided accommodation.” (NLP emphasis)

2.9 The Guidance also states that all student accommodation can contribute

towards the local housing requirement, based on the amount of

accommodation it releases in the housing market.3

Sub-Regional Policy Context

North East Local Enterprise Partnership, North East Strategic Economic Plan (2014)

2.10 The NELEP’s Strategic Economic Plan (SEP) entitled: More and Better Jobs

sets out a clear vision that by 2024, the North East LEP economy will provide

over one million jobs; representing an increase of 100,000 new jobs.

2.11 By driving jobs growth, the plan aims to fully close the gap on employment

rates between the North East and the national average (excluding London),

and to halve the gap on three quantifiable measures, including:

“Gross value added (GVA), with wages and profits rewarding workers

and investors and sustaining high levels of employment;

2 Paragraph Reference ID: 2a-021-20160401

3 Paragraph Reference ID: 3-038-20140306


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Private sector employment density, with more companies and jobs

driving a high growth economy; and

Activity rate, with no one left behind, and those distant from or

disadvantaged in the labour market helped to take advantage of the

opportunities created by a successful growing economy.”

2.12 In order to achieve this scale of change and to maximise the North East LEP

economy’s opportunities effectively, the plan seeks to capitalise on the region’s

strengths, including:

“The cities, NewcastleGateshead, Sunderland and Durham, are powerful

locations, combining higher education, cultural and tourism assets, retail

and evening economy, with financial, professional and business services

employment. The large and international graduate and post graduate

populations in the main cities add to the evening and weekend

economies, and more leisure visitors are taking city breaks in the North East.”

(NLP emphasis)

2.13 Building upon these strengths, the SEP identifies opportunities to capitalise

upon the contribution which Universities make to the economy of the North

East and the importance of continuing to promote the area as a destination for

international students.

Local Policy Context

Sunderland Economic Masterplan (2012)

2.14 The Sunderland Economic Masterplan seeks to set the direction for the city’s

economy over the next 15 years to ensure Sunderland has a prosperous and

sustainable future.

2.15 A central element of this Masterplan is to support the development of

Sunderland’s city centre to attract investment and young people. This includes

the need to develop a university city to generate increased spending and

activity within the city centre.

2.16 The Masterplan states that: “the notion of a university city includes a physical

sense of attractiveness, vibrancy and cultural appeal - not only to students, but

also visitors and investors.” As a result, the plan seeks to encourage the

retention of students within the city centre to bring about these characteristics

and qualities and to generate more activity, both day and night.

Sunderland Core Strategy and Development Management Policies Draft Revised Preferred Options (2013)

2.17 In order to support the ambitions of the Economic Masterplan and in alignment

with the NPPF, the Draft Core Strategy seeks to ensure that new housing

development meets the future needs for all residents, including students. To

achieve this, the Strategy states that the City Council will: “support the


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development of student accommodation in appropriate and accessible

locations where there is an identified need.”

2.18 The strategy recognises that the University is of key strategic importance for

the Sunderland and highlights the need for student accommodation in

appropriate locations. The Strategy seeks to direct student accommodation to

the campuses and the Central Area (in which the application site is located) to

minimise car use and provide good access to the educational establishments

and local facilities.

2.19 This is also considered important in supporting the regeneration of the city

centre which is identified as a key priority to attract new businesses and

investment. As part of the overall vision, by 2032, the Strategy seeks to create

a revitalised city centre, forming the destination of choice for the whole city to

live, work and play in. The Strategy also seeks to regenerate key sites along

the river corridor, removing former dereliction and vastly improving the city’s

environment. The application site, which includes a wide range of resident

leisure facilities, potentially including (for example) a gym/games room/study

rooms/dance studio, as well as a new A1/A3 unit for residents and visitors

along the riverside can assist in this regard, providing a high quality new

development on a vacant riverside site.

Sunderland City Council, Interim Student Accommodation Policy (2015)

2.20 Sunderland City Council’s Interim Student Accommodation Policy aims to link

the City Council and Sunderland University’s aspirations for developing a city

centre which has the characteristics and qualities of a university city. The main

objective of the Interim Policy is to:

“Maximise the benefit of student accommodation to regenerate the city centre

and assist in creating a university city that offers an excellent student

experience.”

2.21 The Policy recognises that student experience is a key driver for where a

student chooses to study and this experience includes housing and leisure. It

also acknowledges that Sunderland does not yet possess all of the

characteristics and qualities of a university city which is bustling with students

visiting shops, cafés, bars, restaurants and leisure activities that meet their

needs. As a result, the Policy comments:

“The city centre needs to be exploited more by student life to bring about these

characteristics and qualities and to generate more activity, both day and night.

The close proximity of the two university campuses to the city centre should

also assist in driving this forward and the potential for the city centre to be a

prime location for student accommodation and for Sunderland to be recognised

as a great experience for students.”

2.22 The Policy highlights that the majority of students currently reside in private

rented accommodation, which is predominantly comprised of Houses in

Multiple Occupation (HMOs). Wards such as Barnes, Hendon, Millfield, St.


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Michael's and St. Peter's are known to accommodate high levels of HMO’s,

resulting in the decline of traditional dwelling houses and problems for

permanent residents due to a lack of property management. This has led to

the introduction of Article 4 Directions to manage the number of HMOs within

certain wards.

2.23 The Policy goes on to state that whilst students traditionally looked for halls of

residence in their first year then moved to shared housing, recent demand

suggests that more students are seeking to reside in halls/purpose designed

student accommodation (PDSA) for all of their university life. The availability of

high quality PDSA in the right locations is therefore considered increasingly

important to prospective students.

Summary

Local authorities are required to plan for a mix of housing to meet the

needs of different groups in the community, including sufficient student

accommodation whether or not it is on campus;

More dedicated student accommodation should be encouraged which

may take pressure off the private rented sector and increase the overall

housing stock and improve the vibrancy of the area through the inclusion

of a mix of uses;

Residential development can play an important role in ensuring the

vitality of centres;

The North East’s large and international graduate and post graduate

populations play an important role in supporting the evening and

weekend economies of the region’s main cities;

Developing and regenerating Sunderland city centre will play a key role

in attracting investment;

Retaining students within the city centre will support this ambition and

help to create a university city, generating increased spending and

activity, both day and night;

The delivery of high quality student accommodation within the campuses

and the Central Area (in which the application site is located) will

minimise car travel, provide good access to local facilities and create an

excellent student experience;

The current high proportion of HMOs within the student rental market in

Sunderland has resulted in the decline of traditional dwelling houses and

problems for permanent residents in certain wards; and

The delivery of additional PDSA will help to address these challenges

and to meet increasing demand for high quality accommodation.


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3.0 Baseline Context

3.1 This section of the report provides a summary of the key economic indicators

of relevance to the proposals, in order to provide an understanding of current

conditions and recent performance. The data outlines trends regarding the

local student population and local market for student housing. It also considers

the student accommodation profile within Sunderland, as well as the wider

economic context, against which local capacity and the anticipated impacts of

the proposed development can be assessed.

Student Population

3.2 Sunderland is home to the University of Sunderland, as well as a range of

Higher Education providers and colleges. As highlighted within the Council’s

Draft Core Strategy, the University of Sunderland alone attracts some 15,000

full time and part time students to its prestigious modern campus at St. Peter’s

Riverside, together with a £75million city centre campus.

3.3 Along with other cities across the UK, Sunderland has seen a rapid growth in

the number of students over the past 15 years. In the 2014/2015 academic

year, the number of full-time students attending the University of Sunderland

totalled 11,220, compared to 8,775 in 2000/01.4 This represents a growth rate

of 28%.

3.4 This rate of growth has been largely driven by an increase in international

students. In 2000/01, international students accounted for 11% of the total

student body, in comparison to 31% in 2014/15. In absolute terms, this

represents a growth of 2,855 full time and part time students from outside of

the UK.

3.5 Whilst the Interim Student Accommodation Policy suggests that the University

does not envisage any significant increases in student numbers over the next

2-3 years, an analysis of enrolment figures over the past 5 years indicates that

the University experienced a growth of 4.6% between 2009/10 and 2014/15.5

If this trend were to continue, the city could attract an estimated 520 additional

full-time students within the next 5 years.

Housing requirements

3.6 Analysis of accommodation data from the Higher Education Statistics Authority

indicates that during the 2014/15 academic year, a total of:

1,490 full-time UK students attending the University of Sunderland

originated from outside of the North East region;

4 HESA (2016), Student data 2014/15

5 NLP analysis of HESA, Students in Higher Education 2010/11 – 2014/15


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1,030 North East based students opted to live in provider maintained

accommodation (i.e. University Halls of Residence) or private rented

accommodation; and

4,200 students were international students.

3.7 Taken together, this suggests that approximately 6,720 students (or 60% of

the full time student body) required some form of accommodation outside of

their home address in the 2014/15 academic year.

3.8 The potential increase of up to 520 full time students over the next 5 years

would result in a total of 11,740 students by 2019/20. Assuming that current

trends continue and 60% of these students require accommodation, this could

result in an increased requirement for c.7,045 bedspaces.

Current supply

3.9 As outlined within the Council’s Interim Planning Guidance, there are currently

a total of 5,472 student bedspaces within Sunderland, including:

1,547 University bedspaces;

548 bedspaces within the Forge (operated on behalf of the University);

and

3,377 private rental bespaces, including HMOs.

3.10 An analysis of the private rental stock suggests that of the 3,377 private rental

bedspaces outlined above, approximately 788, or 23% are operating as PDSA

halls of residence, as outlined in Table 3.1 below (assuming 100% of the

available bedspaces have remained in the student housing market).

Table 3.1 PDSA housing stock, Sunderland

PDSA Halls of Residence Number of beds

Park Lane House Stockton Road 114

Dunn House,North Bridge Street 110

Cassaton House, Fawcett Street 105

All Saints House, Portobello Lane 90

City View @ Phoenix House, Union Street 88

Swan Street Centre, Swan Street 68

Ella Lea Court, Lower Dundas Street 55

Sun Central, Norfolk Street 44

City View @ Thornhill, Thornhill Crescent 40

Rectory Lodge, Tunstall Road 26

Harrison House, Fawcett Street 25

West Lodge, Tunstall Road 23

Total 788

Source: NLP analysis of student housing planning permissions

3.11 This would suggest that there is a current supply of 2,883 purpose designed

bedspaces, including University accommodation and the Forge, with the

remainder of the private rental stock comprising of private rental

houses/flats/HMOs.


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Potential supply

3.12 In terms of future supply, the Interim Student Accommodation Policy indicates

that there were a further 3286 student bedspaces with extant planning

permission in 2015.

3.13 Since this date, a review of the Council’s Planning Portal indicates that a

further:

72 beds have been approved; and

151 beds are under consideration.

3.14 Taken together – and assuming all bedspaces with extant/current planning

permission and those under consideration come forward – this would generate

a potential supply of c.3,435 PDSA bedspaces. However, it is recognised

within the Interim Student Accommodation Policy that a number of the 328

extant planning permissions are longstanding and may not come forward and

the 151 beds under consideration are not guaranteed. Therefore, if none of

the 328 extant and 151 proposed bedspaces are developed this could

potentially reduce the supply to c.2,955 bedspaces.

3.15 This would suggest an overall maximum undersupply based on current

demand of between 3,285-3,765 student bedspaces. Based on the

estimated student increase, this could potentially rise to c.3,610-4,090

bedspaces – although it is recognised that a proportion of this will continue to

be provided by the private rental sector.

3.16 The full extent of this undersupply is currently accommodated within

HMOs/other private rental provision within Sunderland. However, as outlined

in Section 2.0, this has led to a reduction in traditional dwelling houses.

Indeed, an analysis of Council Taxbase data for 2016 indicates there are 1,350

dwellings exempt from Council Tax predominantly for the accommodation of

students within the Sunderland local authority area.

Wider Economic Context

3.17 The principal economic conditions and trends in the main area of impact

(Sunderland) and the labour catchment area (Sunderland and South Tyneside)

in comparison to the regional and national average are summarised in Table

3.2.

6 Excluding Phoenix House has now come forward comprising of 88 beds.


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Table 3.2 Headline Economic Trends

Factor

Main impact area:

Sunderland

Labour catchment

area (combined)

Region: North East GB average

Total population (2015) 277,200 425,900 2,624,600 63,258,400

Total population growth (2005-2015)

-0.7% -0.7% 3.0% 7.8%

Working age population growth (2005-2015)

-2.4% -1.8% 1.0% 5.4%

Proportion of residents aged 16-64 (2015)

64.0% 63.7% 63.3% 63.3%

Economic activity rate (Jul 2015-Jun 2016)

72.5% 73.7% 75.3% 77.9%

Proportion of working age residents claiming JSA (Oct 2016)

2.1% 2.5% 2.1% 1.2%

Working age residents claiming JSA for 12 months + (Oct 2016)

0.8% 0.9% 0.7% 0.4%

Jobs density (no. of jobs per working age resident) (2014)

0.71 0.65 0.70 0.82

Employment growth (2010-2015) 7.1% 6.4% 6.8% 5.2%

Working age residents with NVQ level 4+ (2015)

25.3% 16.8% 30.7% 37.1%

Working age residents with no qualifications (2015)

10.2% 6.2% 10.4% 8.6%

Key: Better performance than the main impact area

Worse performance than the main impact area

Source: ONS / NLP analysis

3.18 As demonstrated above, in comparison to the labour catchment area, regional

and national average, the main impact area has:

Experienced lower total and working age population growth over the

period 2005-2015;

A higher proportion of residents aged 16-64 and higher levels of

employment growth over the period 2010-2015; and

Lower economic activity rates, suggesting that there is capacity within the

labour market to increase employment levels.

3.19 In comparison to the regional and national average, both the main impact area

and the labour catchment area also have:

A lower proportion of residents with NVQ level 4+ qualifications; and

A higher proportion of working age residents claiming JSA for 12 months

or more.

3.20 This suggests that there is a need to support additional employment

opportunities within the local area and to retain skilled residents within the local

authority.


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Summary

Sunderland University has a total full-time HE student population of

11,220. Over the past 15 years, this has grown by 28%;

This rate of growth has been largely driven by an increase in international

students, accounting for 31% of the total student body in 2014/15;

If the growth of full-time HE students over the past 5 years were to

continue, the city could attract an additional 520 students within the next 5

years;

Based on the proportion of North East students living in student/private

rented accommodation and the number of students from outside of the

region, approximately 6,720 students would require housing in the

2014/15 year;

If these trends were to continue, the potential increase of 520 full time

students over the next 5 years, could result in an increased requirement

for c.7,045 bedspaces;

The current supply of University/PDSA bedspaces totals c.2,883, with a

maximum potential supply of up to 550 more, assuming all of those with

extant/recent/pending planning permission are completed;

This would suggest a current undersupply of between 3,285-3,765

bedspaces assuming all students requiring accommodation would seek

PDSA provision. Over the next 5 years, this could rise to c. 3,610-4,090

bedspaces;

Currently, a high proportion of this demand is accommodated within

HMOs/other private rental provision, with 1,350 dwellings exempt from

Council Tax predominantly for the accommodation of students; and

The main impact area has experienced lower population growth,

economic activity rates and a higher proportion of working age residents

claiming JSA for 12 months+, suggesting that there is capacity within the

labour market to increase employment levels.

3.21 Taking into account the above, the proposals therefore present a key

opportunity to accommodate the potential increase in student numbers, reduce

the numbers of students residing in the private rental market and support

additional employment opportunities in the local area through the construction

and operational phases of development.


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4.0 Capacity Assessment

4.1 This section provides a summary of the capacity for further student

accommodation within the local authority area of Sunderland, drawing upon the

findings of Sections 2.0 and 3.0, as well as an analysis of local and comparator

area accommodation trends.

Establishing Capacity

4.2 As demonstrated below, the local authority area of Sunderland has potential

capacity to accommodate a maximum of 3,610-4,090 additional bedspaces

within the next 5 years, assuming all students who require accommodation

wish to reside in PDSA. However, it is recognised that, in practice, a

proportion of this demand will continue to be supplied by the private rental

sector.

Figure 4.1 Capacity for additional PDSA in Sunderland Local Authority Area

Source: NLP analysis

4.3 In determining the full extent to which this maximum level of PDSA capacity is

required, it is also important to understand the local context in which the

development is proposed, including current accommodation trends,

comparator area trends, housing delivery and policy drivers. These factors are

considered in the following paragraphs.

Demonstrating need

Current accommodation trends

4.4 Current accommodation patterns demonstrate that clusters of students residing

in PDSA/private rented accommodation are focussed around the city centre,

highlighting the preference for student accommodation sites to be within close

proximity to the University campus and local services. In particular, the wards


12635697v2 P15

of Barnes, Hendon, Millfield, St. Michael's and St. Peter's contain a high

proportion of students in University/PDSA halls/private rental housing.

Figure 4.2 Location of students in University/PDSA halls/private rented accommodation 2014/15

Source: HESA (2016) / NLP analysis

4.5 At the city centre level, there is a clear focus of provision around the city centre

and University’s main campus areas, as defined within the Council’s Interim

Student Accommodation Policy. However, as demonstrated within Figure 4.4,

there are also a number of extant and pending permissions as well as 2

University Halls of Residence located outside of this central area.

4.6 The Interim Student Accommodation Policy states that:

“To assist in the regeneration of the city centre and in creating a ‘University

City’, the City Council will consider favourably proposals for purpose-built

student accommodation or the conversion of existing buildings for student

accommodation within the city centre and on existing university campuses.”

4.7 The application site itself is located within the St Peter’s campus area,

reflecting its strong links to the University campus, located just 350m east of

the site. The site is also highly accessible to public transport links, with St.

Peter’s Metro Station located just 150m west of the site.


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Figure 4.3 Location of existing/proposed student housing

Source: NLP analysis of Sunderland City Council Planning Portal Applications for Student Housing

Comparator areas

4.8 As outlined within Section 3.0, Sunderland has a current supply of 2,883

University/PDSA bedspaces, providing accommodation for 26% of the full time

student population (totalling 11,220). However, if student numbers continue to

rise at current rates, the full-time student body could total 11,740 within the

next 5 years, reducing this figure to 25%.

4.9 The potential maximum future supply of up to 550 additional bedspaces would

increase this figure to 29% based on future student growth, however it is

recognised that this includes 328 bedspaces with extant permission and 151

bedspaces pending consideration. Assuming none of these bedspaces come

forward, the supply would reduce to 2,955 bedspaces, providing

accommodation for just 25% of students.

4.10 In comparison to other university cities across the UK, this represents a

significant shortfall in the provision of PDSA relative to student numbers. As

demonstrated in Figure 4.1, university cities across the UK, on average, offer


12635697v2 P17

PDSA bedspaces for 38% of the total full-time student body. Regional

competitors such as Newcastle and Durham have a level of provision which

aligns with, or exceeds this average figure, generating a strong

accommodation offer for current and potential students.

Table 4.1 Percentage of full-time students able to access PDSA (September 2016)

City

Percentage of full-time students able to access PDSA (Sept 2016)

Coventry 53%

Liverpool 51%

Leicester 47%

Durham 42%

Nottingham 41%

Edinburgh 41%

Sheffield 40%

Leeds 40%

Exeter 40%

Newcastle 38%

Aberdeen 38%

Cardiff 37%

Southampton 36%

Manchester 36%

Birmingham 35%

Bristol 34%

London 30%

Sunderland 26%

Glasgow 22%

Source: Source: Knight Frank, (2016), Student Market Review

4.11 For Sunderland to offer a comparable level of provision (i.e. 38%), a total of

4,265 bedspaces would be required based on current student numbers, or

4,460 based on potential future student numbers.

4.12 In order to bridge this gap, the potential minimum requirement for new PDSA

could be in the region of 1,380 bedspaces based on current student numbers

and PDSA supply recognising that a proportion of the students requiring

accommodation would wish to remain within the private rental sector.

However, if student numbers continue to rise, this could increase to between

1,025-2,2407 bedspaces based on the potential future supply. This assumes

all existing accommodation remains operational and fit-for-purpose.

4.13 The proposed development of an additional 403 bedspaces for students and

young professionals therefore offers an opportunity to help address this short-

term need, providing high quality accommodation in close proximity to the Sir

Tom Cowie campus.

7 Assuming that either all 550 bedspaces are developed, or just the 72 with recent planning

permission.


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Housing delivery

4.14 As highlighted in the Council’s Interim Student Accommodation Policy,

accommodation is a key driver in influencing where a student chooses to

study. The supply of modern, fit-for-purpose and high quality accommodation

choices will therefore be central in supporting Sunderland’s aspiration of

becoming a university city with a vibrant city centre.

4.15 However, as outlined below, Sunderland has delivered a significantly lower

number of new PDSA beds in 2016 than the majority of the UK’s university

cities, with the exception of Bristol and Manchester. This suggests that the

quality of student accommodation offer of other cities across the UK will be

improving at a significantly faster rate than in Sunderland.

Table 4.2 Delivery of new PDSA beds (September 2016)

City Delivery of new PDSA beds (Sept 2016)

London 5,082

Edinburgh 1,888

Newcastle 1,453

Southampton 1,382

Leeds 1,332

Cardiff 1,311

Liverpool 1241

Sheffield 1,178

Birmingham 1,128

Leicester 939

Glasgow 858

Aberdeen 718

Coventry 376

Exeter 362

Nottingham 311

Durham 307

Sunderland 211*

Bristol 71

Manchester 0

Source: Knight Frank, (2016), Student Market Review

*Based on the number of bedspaces under construction in the Interim Student Accommodation Policy and the completion of Phoenix House.

4.16 As demonstrated above, only Bristol and Manchester have delivered a lower

number of bedspaces in the past year, however, these cities already include a

higher proportion of bedspaces (34% and 36% respectively). Only Glasgow

currently has a lower proportion of PDSA, however, development rates were

three times higher over the past year.

4.17 The development of new, high quality and modern bedspaces will be central in

enabling Sunderland to compete with other university cities. However, the

majority of Sunderland’s current stock of PDSA was developed within the


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1980’s and 1990’s, including the University’s accommodation and the Forge,

which account for over 70% of the current PDSA stock.

4.18 The overall requirement for between 1,025-2,240 bedspaces is therefore likely

to be significantly higher in Sunderland in order to support the continued

development of modern, high quality accommodation.

Policy drivers

4.19 Analysis of local policy (as outlined in Section 2.0), highlights that:

Student experience is a key driver for where a student chooses to study

and this experience includes housing and leisure;

More students are seeking to reside in halls/purpose designed student

accommodation (PDSA) for all of their university life;

Wards such as Barnes, Hendon, Millfield, St. Michael's and St. Peter's

are known to accommodate high levels of HMO’s, resulting in the

decline of traditional dwelling houses and problems for permanent

residents due to a lack of property management;

Student accommodation will play a key role in regenerating the city

centre and assist in creating a university city that offers an excellent

student experience; and

Focussing development within the city centre and campus areas (in

which the application site is located) will minimise car travel, provide

good access to local facilities and the University.

4.20 This indicates that there is a clear policy focus on supporting student housing

within the city centre and campus areas, in order to support the development of

a university city, protect family housing and prevent an over-concentration of

students within the private rented sector.

Summary

If all students requiring accommodation wished to reside in PDSA, the

potential maximum capacity for new student accommodation over the

next 5 years would total 3,610-4,090 bedspaces;

Current accommodation patterns demonstrate that clusters of students

residing in PDSA/private rented accommodation are focussed around

the city centre, highlighting the preference to be within close proximity to

the University campus and local services;

There are currently a number of extant and pending permissions as well

as 2 University Halls of Residence located outside of the city

centre/campus areas;

The application site itself is located within the St Peter’s campus area,

reflecting its strong links to the University campus, located just 350m

east of the site;


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Based on an analysis of comparator university cities across the UK,

Sunderland would require a minimum of between and 1,025-2,240

bedspaces over the next 5 years to provide a comparable level of PDSA

provision relative to the total full-time student population;

However, it is also recognised that over 70% of Sunderland’s current

PDSA accommodation stock was developed in the 1980’s/1990’s,

increasing the requirement for modern bedspaces;

Low levels of recent development in comparison to other university cities

also suggest that the quality of student accommodation offer of other

cities across the UK will be improving at a significantly faster rate than in

Sunderland, widening the gap in accommodation offer; and

There is a clear policy focus on supporting the future growth of student

housing within the city centre and campus areas, in order to support the

development of a university city, protect family housing and prevent an

over-concentration of students within the private rented sector.

4.21 The proposed development therefore presents a key opportunity to contribute

towards these objectives and to accommodate the growing numbers of

students requiring accommodation in Sunderland.


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5.0 Economic Impact

5.1 In respect of the need to build a strong, competitive economy, the NPPF states

that:

“The Government is committed to ensuring that the planning system does

everything it can to support sustainable economic growth. Planning should

operate to encourage and not act as an impediment to sustainable

growth. Therefore, significant weight should be placed on the need to

support economic growth through the planning system.” (NLP emphasis)

5.2 The Localism Act also confirms that local finance considerations are now a

material consideration.

5.3 This Section therefore identifies the economic benefits which will arise from the

proposed development under the following headings:

Construction Impacts: quantifies the economic benefits to be delivered

during the construction of the proposed development – including an

analysis of construction jobs and investment;

Operational Impacts: considers the employment impacts to be generated

once the development is completed and operational;

Expenditure Impacts: considers the uplift in local expenditure to be

generated by new student residents at the completed development; and

LPA Fiscal Impacts: assesses the increased revenue streams for

Sunderland City Council that could be generated by the proposals

through New Homes Bonus payments.

Construction Impacts

5.4 The key economic benefits to be delivered during the construction phase

comprise of: an injection of significant private sector capital into the local

economy; employment opportunities supported in the construction industry and

related sectors; and the uplift in economic output generated by the investment.

Each of these benefits is considered in the paragraphs below.

Investment

5.5 The proposed development of approximately 403 student and young

professional bedspaces is anticipated to result in a total capital investment of

c.£15 million, representing a large injection of private sector funding into the

local economy.8

Employment

5.6 Based upon an estimated total construction cost of £15 million, it is anticipated

that the proposals could be expected to generate almost 150 person years of

8 Based upon estimated build costs provided by the client


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construction employment, equivalent to supporting just under 75 temporary

construction jobs per year of construction throughout the 2 year build period.

5.7 In addition, a number of indirect jobs would be supported in suppliers of

construction materials and equipment, as well as associated professional

services. Businesses would also be expected to benefit to some extent from

temporary increases in expenditure linked to the direct and indirect

employment effects of the construction phase. This is likely to be driven by

workers spending their wages in local shops, bars, restaurants and other

facilities, which in turn, helps to support the creation of induced jobs.

5.8 Applying an appropriate national multiplier9 to the 75 direct construction jobs

per annum derived above, indicates that 112 indirect and induced jobs could

be supported per year of construction (in addition to the 75 direct jobs above).

5.9 In assessing the economic impact of the development proposals, it has been

assumed by NLP that no displacement of employment would occur during

construction. This assumption has been made having regard to the 285 JSA

claimants in Sunderland and South Tyneside seeking work in the construction

industry in October 2016.10 As such, the total number of gross direct, indirect

and induced jobs (derived above) would be equal to the net additional jobs.

Economic Output

5.10 It is anticipated that the construction phase will support a temporary uplift in

Gross Value Added (GVA) – a common measure of economic output and

productivity. Indeed, the capital investment associated with the development

proposals could be expected to deliver a temporary uplift in GVA in the order of

£10.0m per annum throughout the anticipated 2 year build period. This has

been estimated having regard to the average GVA per construction worker for

the North East and taking account of the level of employment to be supported

by the scheme and appropriate GVA multiplier for the construction industry.

Operational Impacts

5.11 The proposed development of managed student accommodation and 156m2

(GEA) of A1/A3 floor space presents the opportunity to support on-site direct

and indirect/induced employment in the local area, as well as increased

economic output. These benefits are considered in the following paragraphs.

Direct employment

5.12 Based on discussions with the developer it is understood that the development

of 403 bed spaces will support the creation of 22 new FTE jobs in the ongoing

maintenance and management of the site. This is expected to include:

6 administrative staff;

9 A multiplier of 2.51 has been applied, drawing upon research undertaken by CEBR on behalf of the

National Housing Federation (2013). 10

ONS, Claimant Count, 2016


12635697v2 P23

10 cleaning staff;

4 security staff; and

2 maintenance staff.

5.13 In addition, the development of 156m2 (GEA) of A1/A3 floor space is expected

to generate between 8-13 FTE jobs, depending upon the final use of the unit,

as outlined in Table 5.1 below.

Table 5.1 Direct Employment Impacts

Proposed Use Size Employment Density FTE Jobs

Retail (A1)

156m2

(GEA)

1 FTE job per 17.5 sqm (GEA)

8-13 Foodstore (A1) 1 FTE job per 22 sqm (GEA)

Restaurant/Café (A3) 1 FTE job per 22 sqm11

(GEA)

Coffee Shop (A3) 1 FTE job per 13 sqm (GEA)

Source: HCA Employment Densities (2015) / Operator Estimates / NLP Analysis

5.14 The application site is currently vacant and, as such, no existing business

premises will be lost as a consequence of the development proposals. On this

basis, the net on-site employment change is estimated to total between 30-35

FTE jobs.

5.15 In calculating the net additional impact of this development, however, it is

important to acknowledge that some employment generated may result in

displacement from elsewhere within the AOI. Such effects can arise due to

existing businesses losing trade as a result of new development at the

application site (i.e. ‘product market displacement’), or via the relocation of

existing jobs to the site (i.e. ‘labour/factor market displacement’).

5.16 New student accommodation and ancillary A1/A3 space is expected to

generate a low level of both product and labour/factor market displacement,

taking into account:

The type and scale of development – designed to meet the needs of new

residents and to retain a higher number of students in the city centre;

The high level of existing A1/A3 provision within the local area, creating a

wide catchment area over which any product market effects would be

dispersed; and

The 4,555 JSA claimants in the AOI seeking work in sales and customer

service, administrative, security, catering and cleaning occupations,

reducing any labour/factor market effects.12

5.17 Having regard to the above, and in the absence of any site-specific impact

analysis, a 25% allowance for displacement has therefore been applied. This

11

Based upon job: floorspace ratios for restaurants provided by operators, drawing upon NLP research 12

ONS, (2016), JSA by occupation September 2016 including occupation codes: 41, 71, 72, 9223, 9224, 9233 and 9241.


P24 12635697v2

corresponds to a ‘low’ level of displacement, as defined by the English

Partnership Additionality Guide, although it is recognised that any

displacement effects observed in practice may be lower. Of the 30-35 new

FTE jobs to be created, it is therefore estimated that approximately 8-9 jobs

could be displaced, reducing the net additional on-site jobs to 23-26 FTEs.

Indirect and Induced Employment

5.18 For commercial developments, it is also necessary to consider the multiplier

effect created by businesses and organisations located at the application site

purchasing goods, supplies and services from other firms in the area of impact

and beyond. This - coupled with wage spending by employees and local firms

in the supply chain - will support the creation of indirect and induced jobs in

other local shops and services.

5.19 Based on the creation of 23-26 net additional direct jobs, it is estimated that the

proposals will result in 7-8 ‘spin-off’ FTE job in local services and other firms

across the area of impact.13 At the regional (North East) level, a total of 11-13

‘spin-off’ FTE jobs are expected to be supported (including the 7-8 to be

captured locally).

Economic Output

5.20 Additional employment created by the scheme is also likely to result in an

increase in economic output. Gross Value Added (GVA) represents the

additional value that is added through economic activity.

5.21 It is estimated that the creation of 23-26 net additional direct jobs could be

expected to generate between £535,000 - £645,000 of net additional direct

GVA per annum. This estimate has been derived having regard to:

The level and nature of direct employment to be supported by the

development; and

Average GVA per worker for those sectors that best align with the type of

jobs to be accommodated on site (e.g. retail/accommodation & food) in

the North East.14

Expenditure Impacts

5.22 The 2011/12 (latest available) Student Income and Expenditure Survey15

estimates that full-time students spend an average of £6,705 per annum on

food, entertainment, household good and personal items. Taking into account

the average annual rise in inflation (based upon data published by the Bank of

England) this equates to a 2015 spend (latest date available) of £7,142 per

annum.

13

The latest English Partnerships guidance on calculating the additionality of development has been used to select a combined multiplier of 1.3 to reflect direct, indirect and induced employment effects at the local level. A multiplier of 1.5 has been assumed to reflect regional job effects. 14

Source: Experian (2016). 15

Department for Business Innovation and Skills, (2013)


12635697v2 P25

5.23 The total gross expenditure generated by the development of 403 new

bedspaces could therefore be in the region of £2.88 million. However, it is also

accepted that some of the residents within the development at 1-5 Bonner’s

Field will currently reside in accommodation in the local area and thus

contribute already to the local economy. For the purposes of this assessment,

it has been assumed that a minimum of 57% of residents will be new (based

upon the proportion of students requiring accommodation – although it is

recognised that in practice, this figure may be higher) and that 75% of the

spending will retained locally; considering the relatively low mobility of students

to travel to a wider area for shops and services.

5.24 Taking into account the above, the net additional expenditure generated by the

proposals is likely to be in the region of £1.2 million per annum; the majority of

which could reasonably be expected to be spent in Sunderland City Centre. It

is estimated that this additional resident expenditure could directly support the

creation of 18 new FTE jobs within the local area, including opportunities in

retail, leisure and other sectors. Given the planned development of a A1/A3

unit, it is possible that some of the c.18 FTE jobs may overlap with the

operational on-site jobs, although it is not possible at this stage to separate

these effects.

LPA Fiscal Impacts

5.25 The development proposals at the application site could result in increased

revenue streams to Sunderland City Council as a result of:

New Homes Bonus payments;

Release of housing back into the general market, resulting in increased

Council Tax receipts; and

Increased Business Rate receipts resulting from the A1/A3 unit.

New Homes Bonus

5.26 The New Homes Bonus matches for a six year period, the increase in Council

Tax income from new homes or homes brought back into use. Payments are

not ring-fenced and therefore local authorities are able to use Bonus payments

in the most beneficial way to support their needs.

5.27 Having regard to the above, the provision of 363 self-contained student

dwellings16 and using the CLG New Homes Bonus calculator, it is estimated

that once complete, the scheme would generate a total of over £2.1 million

New Homes Bonus payments (albeit profiled to reflect the build period for the

development).

16

Including 314 no. studios, 40 no. 2 bed flats and 9 no. 1 bed flats.


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Release of Housing

5.28 The development of 403 student bedspaces offers the potential to release

private rental housing back into the general market/prevent additional private

rental housing being taken up by students.

5.29 Based upon the definition of House in Multiple Occupation (HMO) including 3

or more people17, the proposed development could potentially release up to

134 homes back into the general market. This could also potentially increase

Council Tax revenues by almost £170,000 per annum.18

Business Rates

5.30 The provision of 156m2 of A1/A3 space at the application site could also be

expected to generate additional business rate revenue, a proportion of which

would be retained locally by Sunderland City Council. An estimate of rateable

value per m2 for the retail uses proposed at the application site was generated

from VOA data, looking at the rateable value of similar developments in the

local area. This suggests that the proposals would result in an uplift in

business rate revenue of approximately £4,900 per annum, £2,450 of which

would be retained by Sunderland City Council under the Business rates

retention scheme.

Summary

5.31 The above has demonstrated that the proposed development will deliver a

range of economic benefits, as outlined below:

17

https://www.gov.uk/private-renting/houses-in-multiple-occupation 18

Based upon average house price values for Sunderland equivalent to Council Tax Band C (ONS, 2016, House Price Statistics for Small Areas).

https://www.gov.uk/private-renting/houses-in-multiple-occupation


12635697v2 P27

6.0 Conclusions

6.1 As demonstrated within this report, the proposed development of 403 student

and young professionals bedspaces at 1-5 Bonner’s Field presents a key

opportunity to support Sunderland’s development to a university city, providing

a vibrant, high quality mixed-use residential site within the central campus

area.

6.2 The development of additional PDSA bedspaces also offers the opportunity to

regenerate a vacant riverside site and reduce the number of students residing

in the private rental sector, releasing traditional family housing back into the

general market.

6.3 The capacity assessment demonstrates that Sunderland has the capacity to

accommodate a maximum of 3,610-4,090 new student bedspaces, assuming

all students requiring accommodation wish to reside in PDSA. Recognising

that a proportion of students may wish to remain in the private rental market,

an analysis of other university cities across the UK indicates that Sunderland

would require a minimum of 1,025-2,240 bedspaces over the next 5 years to

provide a comparable proportion of PDSA.

6.4 However, taking into account the lower development rates in Sunderland and

the fact that over 70% of Sunderland’s current PDSA stock was developed

within the 1980’s and early 1990’s, the requirement for modern bedspaces is

likely to be significantly higher.

6.5 In the absence of further accommodation development, the number of students

residing within the private rental market could increase by c.310 students (60%

of the expected 520 student growth) within the next 5 years, assuming past

accommodation and growth trends continue. This would place additional

pressures on the private rental market in and around the city centre. The

development of an additional 403 bedspaces will therefore assist in meeting

this increased demand for high quality student accommodation and help to

move Sunderland closer to the average provision of PDSA relative to the

student population.

6.6 The development at 1-5 Bonner’s Field will also deliver a range of economic

benefits, including:

Providing an injection of £15m of private sector capital, which will deliver

just under £10.0m in local GVA per annum over the 2 year build period;

Supporting 75 temporary direct construction jobs per year of

construction and 112 indirect and induced ‘spin off’ jobs in the supply

chain, local shops and services;

Creating 23-26 net additional permanent FTE jobs on site, generating

between £535,000 - £645,000 additional GVA per annum;

Supporting 11-13 additional ‘spin off’ jobs in the site’s supply chain and

wider regional economy;


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Attracting and retaining new students within the city centre, delivering

just over £1.2 million additional expenditure per annum in the local

economy that could help to support in the order of 18 FTE jobs in new

and existing local businesses;

Generating just under £2.1 million in New Homes Bonus Payments and

£4,900 Business Rates payments for Sunderland City Council; and

Potentially releasing/protecting over 130 private rented homes in the

general housing market, generating up to £170,000 in additional Council

Tax revenues per annum.

6.7 These benefits should be regarded as material in determining the planning

application for development at 1-5 Bonner’s Field.


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proposed student and young professionals … student and young professionals accommodation,...

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