Re-contextualising purpose-built student accommodation in secondary cities: The role of planning policy,consultation and economic need during austerity

Abstract

The rise of purpose-built student accommodation (PBSA) has become a dominant feature of many secondary cities over the last decade. These cities often have weaker property markets than ‘primary’ or capital cities and often rely on the ‘knowledge economy’ to drive economic and urban development. A growing body of work has explored the effects of ‘new-build studentification’ and its relationship to economic crisis and the financialisation of housing. Less attention has been paid to how the localised political and economic impacts of austerity led to the creation of particular planning policies and actions to facilitate PBSA. Through a case study of a housing estate in Newcastle upon Tyne, UK, whose ward has seen a 467% increase in student housing numbers, this article highlights that student housing is shaped not merely by issues of supply and demand but also often by planning practice and local economic demands. Whilst we recognise that PBSA development is also reliant on particular global economic conditions and investment strategies, this article calls for a more relational, contextual approach to examining PBSA. We pay specific attention to local political and institutional actors and their policies, working practices and social constructs amidst austerity.

Introduction

Purpose-built student accommodation (PBSA) has come to dominate the skylines of many secondary cities globally, presenting new opportunities for spatial commodification. This market is now valued at £50 billion worldwide, with the UK market accounting for around 30% of total global PBSA (Knight Frank, 2019). In the UK, student housing options have shifted from houses of multiple occupation (HMOs) in established communities of terraced housing (Hubbard, 2009) to centrally located, privately managed, sometimes gated PBSA, often akin to luxury city centre developments (Chatterton, 2010; Holton and Mouat, 2021; Revington and August, 2020; Smith and Hubbard, 2014). Consequently, PBSA has physically altered neighbourhoods in ways more prominent than suggested by early scholarship on ‘studentification’, identified primarily as a cultural process whereby neighbourhoods become dominated by students (Smith, 2004). In this article, we examine the political economy of PBSA in the aftermath of the 2008 global financial crisis. We posit that there are two connections between the rise of PBSA and the crisis. The first is at the global financial level whereby PBSA was positioned as a new niche, low-risk sector when other forms of development were not so lucrative (Newell and Marzuki, 2018; Revington and August, 2020). This stems from some distinct attributes, including long-term leases, low vacancy rates, nomination agreements with universities and the forecasting of student numbers. The second is at the local institutional level, which has had less scholarly attention, yet which is the focus of this article. In a most rudimentary manner, councils have used planning policy to engineer students out of HMOs and into PBSA to rebalance neighbourhoods, relieve pressure on local housing markets and return HMOs to family homes (Hubbard, 2009). However, the motivations for supporting PBSA go beyond merely shifting students into particular locales. Instead, we examine how councils, under financial pressure following the economic crisis, have used PBSA to stimulate stalled housing markets, bring forward development on central brownfield sites and capture economic value. Cash-strapped councils saw significant financial benefits stemming from PBSA, including tax and developer contributions and central government incentives, which have been used to fund hard-pressed statutory services during austerity. We use the term ‘austerity’ to refer to the economic measures imposed on councils by governments in the aftermath of the global financial crisis. These measures intended to reduce government deficits through spending cuts and economic restructuring. Peck (2012) describes this as the ‘extreme economy’ in which state downsizing and rolling privatisation are seen as ‘fiscal necessities’, often devolved to councils and those most economically vulnerable (see also Blyth, 2013; Featherstone et al., 2012; Gray and Barford, 2018). In planning, austerity has accelerated the neoliberalisation of planning, instilling further economic growth ideologies and inter-urban competitiveness into planning at the expense of planning for the public good (Davoudi et al., 2020; Inch, 2018; Miessner, 2020; Olesen, 2014; Shepherd, 2021).

Further to this focus on austerity, our interest is with secondary cities – regional capitals that play a nationally important economic or jurisdictional role (Chen and Kanna, 2012). These cities often have weaker real estate markets than ‘primary’ or capital cities, but large student populations, so rely on the ‘knowledge economy’ to drive economic and urban development (Goddard and Vallance, 2013; Ruiu, 2017). In these (often post-industrial) cities, PBSA has played a central physical role, being a means to stimulate urban densification on brownfield sites at a time of falling public budgets for regeneration. PBSA is a useful lens to observe the impacts of austerity on planning in secondary cities because secondary cities often have less development capacity then oft-cited ‘primary’ or capital cities, and have used PBSA to prop up stalled housing markets and bring forth supply to meet housing targets. They also warrant further academic attention with regards to the neoliberalisation of planning and land/housing financialisaton, which is often focused on capital or primary cities (Beswick et al., 2016; Romainville, 2017; Teresa, 2019). We focus on the estate of Shieldfield in Newcastle upon Tyne, UK, where 20 PBSA blocks have been constructed around the periphery of the neighbourhood. The ward saw a 467% increase in student housing from 2011 to 2015, with students now comprising 25% of the local population (Newcastle City Council (NCC), 2017). This has had a significant impact on the social mix and character of the area. Our research examines the planning policies and practices which helped facilitate PBSA, finding that PBSA has been used as a mechanism to capture ‘trickle-down’ public and economic benefits in an austerity context. A decoupling of planning processes and socio-political contexts at the local scale and investor logics at the global scale has also created uneven development out of step with local conditions and needs.

In examining the connection between PBSA, planning and austerity, we take a political-economy, actor-focused stance, looking closely at the role of the planner and their experience of working in an increasingly under-funded planning system. As Inch (2018: 1080) highlights:

It is … important to pay attention to specific local practices, the sites where those politics are enacted; not assuming the presence of a stable pattern of domination but instead a series of locations where global strategies are being actively forged and potentially re-worked.

Thus, rather than conceptualising PBSA as solely the result of capital flooding into niche property sectors, causing new bubbles, booms and busts by itself, we highlight the actors, policies and strategies that have enabled it. Critical political economy often pays too little attention to the actors and empirics of development processes (Nethercote, 2019). For example, there is surprisingly little evidence of the tactics used by English planning departments to cope with austerity, and even less in-depth qualitative work involving enhanced engagement with one council. Our analysis offers a close reading of Newcastle’s planning policies, coupled with interviews with council officers, councillors and residents.

The first section of the article offers an overview of the literature, highlighting the role of councils in facilitating the growth agenda and ‘trickle-down’ public benefits through development, particularly during austerity, and how consultation and the idea of ‘planning for the public good’ have suffered. The second section outlines the rise of PBSA in Shieldfield and emphasises the power of planning policy and economic incentives for Newcastle City Council (NCC). We then explore how austerity has affected community consultation, with residents unable to feed into key policies which led to PBSA overbuilding. The final section discusses the potentials for better planned student housing which retains social and economic value locally, as well as the production and implementation of policy which is more in step with local visions and needs.

Before the central discussion, it is important to discuss the methodology. This research was conducted by final-year Master of Planning students at Newcastle University on a module where students work on a live research project, undertaking data capture and analysis. Students worked within the ongoing participatory action research and social arts project – Dwellbeing Shieldfield which Heslop initiated with two arts producers/researchers. Dwellbeing Shieldfield was founded in 2017 to examine the impacts of PBSA in Shieldfield and to action community-led responses, and has since become a resident-led charitable community benefit society and cooperative. Throughout the seven-month module, students worked with residents, presenting findings at community meetings. The research involved the analysis of land ownership, investment patterns, local and national planning documents and 24 interviews with stakeholders (developers, architects, planning consultants, council officers, residents and local businesses).

PBSA and planning for economic gain

Whilst much foundational scholarship on studentification has focused on social and cultural impacts, including the connection between studentification and gentrification (Chatterton, 2010; Hubbard, 2009; Prada, 2019; Sage et al., 2013; Smith, 2008; Smith and Holt, 2007), student identities (Holton, 2016; Holton and Riley, 2016) and social segregation (Fincher and Shaw, 2009; Smith, 2009; Smith and Hubbard, 2014), recent transformations in the student housing market have seen new conceptualisations emerge with a political economy focus. These highlight new building typologies (Holton and Mouat, 2021), financialised processes of development (Revington and August, 2020), stakeholder partnerships and institutional arrangements (Ruiu, 2017). However, there is little research on the role of local planning within this (but see He’s (2015) work on the role of top-down regulations in China, Ruiu’s (2017) overview of planning policies related to PBSA in Newcastle, UK and Revington et al.’s (2020) longitudinal analysis of student housing in planning policy in Canada). There is even less attention on how localised political and economic impacts of the financial crisis, and austerity in particular, led to the creation of particular planning policies and actions aimed at facilitating PBSA development. As Savini and Aalbers (2016: 881) state, austerity policies may ‘induce more profit-oriented planning with the aim to trickle down public benefits from property investment strategies’. However, councils may lack the capacity, skills and know-how of the international economic marketplace to effectively steer global capital, especially in times of financial hardship (Savini and Aalbers, 2016). Cuts to UK planning departments have caused Slade et al. (2019) to describe planning as an under-valued ‘Cinderella service’, with training shortfalls, short-term staffing contracts and a reliance on agency workers who often lack the ability or willingness to exercise situated judgement. Habermehl and Perry’s (2021) research on the Greater Manchester Spatial Framework highlights a lack of time and resources for consultation, excluding residents without the agency and prior knowledge of planning. They state that regulations with ‘a focus on targets encouraged officers to make assessments based on numerical viability, rather than long-term visionary local planning’ (Habermehl and Perry, 2021: 566). As we reveal, these tactics are spatially, socially and institutionally fragile for councils, calling into question the social function of planning and the role of councils as servers of local citizens. Evidently, these changes have a longer history. Planning is increasingly guided by narrow neoliberal political agendas, seeking inter-urban competitiveness, whilst being heavily reliant on a ‘growth-first’ principle which maintains that any sort of growth is in the public interest despite evidence that the public payoffs often appear minimal or even harmful (Allmendinger and Haughton, 2012; Beswick et al., 2016; Olesen, 2014; Raco, 2005). Scholars have noted that austerity has been geographically uneven, with northern English secondary cities being most heavily impacted (Gray and Barford, 2018). Furthermore, these cities inevitably have different development trajectories to primary cities, engaging in inter-urban competition to retain and attract tax-paying individuals and inward investment. Additionally, they often rely on the knowledge economy to stimulate economic and urban development. The geography of our own case study of Newcastle should also be considered. This is a secondary city which is physically isolated, being closer to Scotland’s capital than other major English cities. This relative isolation means that the city struggles for inward investment (Tomaney and Ward, 2017). McGuinness et al. (2018: 330) note the ‘lack of place-based (spatial) sensitivity in the English planning system’ and a selective spatial imaginary that desires ‘to accelerate land supply in dynamic housing markets in southern England, where pressure on land, problems of housing affordability and opposition to development are intense’. They state that the implications for places with weaker property and land markets are not considered in the formulation of national policy. This inevitably has implications for how northern secondary cities attract and retain development investment. Yet Revington and August (2020) find that PBSA provides particular opportunities for real estate investment in secondary cities where there has often been a strategic growth of globalised and commodified forms of higher education, and its connected ‘services’ (such as housing). Holton and Mouat (2021) also note the connection between post-industrial cities and PBSA, whereby ex-industrial space is ‘verticalised’, helping to meet new consumer demand for city centre living. This is true in the case of Newcastle, which still retains centrally located ex-industrial brownfield land awaiting redevelopment.

There is a need to ‘stay with’ the local state to understand the drivers and impacts of PBSA in an austerity context beyond the role of finance-driven demand. Whilst market forces can limit the impacts of planning (Revington et al., 2020), planning is not only constrained. Planning, its policies and practices on a local level, shape and stimulate the property market, playing a key role in the production and durability of markets in specific places. To understand how PBSA is produced locally, we need to understand what Jones (2012: 807) calls ‘the mundane and decentred practices of state officials and ordinary citizens’ – an affective attentiveness to how planning policy is operationalised against officers’ working practices and values (Clifford, 2022). Nethercote’s (2019) work on high-rise construction in Melbourne presents an image of the state struggling to exert influence alongside the power of vested interest groups, the hegemony of neoliberalism and ‘small state’ ideologies. Yet she also highlights that it also has considerable stakes in new development, playing a central political-economic and affective role in smoothing the way for urban expansion. Gotham (2006) further notes that councils play an important role in promoting investment in real estate through marketing sites, place branding, attracting developers, creating policy, organising infrastructure works and negotiating planning obligations. ¹ Yet the exact role of the state in development is geographically differential. Consequently, there is a need to offer situated understandings of these practices and tactics through actor-focused studies. Through empirical attentiveness to the micro-politics of the state and the enactment of its policies, we can reveal how local conditions, ideologies, practices and actors have shaped PBSA in secondary cities during austerity.

Re-contextualising PBSA within the local state

Shieldfield and the rise of PBSA

We feel as if we’ve been left behind. I’m passionate about Shieldfield … I’ve always lived here and I’ve seen all the changes. But it’s so sad, the decline in the community, and the spirit’s gone. We’ve been promised different things so many times and we’ve been let down. (Interview with Shieldfield resident)

Shieldfield lies just east of Newcastle city centre and was redeveloped through the slum clearance programme of the 1950s–1970s, with private accommodation replaced by a council estate of terraces, low-rise flats and four high rises, bordered by industrial units. Many terraced houses have since been sold off under the 1980 Right to Buy legislation which gave secure council tenants and some housing associations the legal right to buy their homes at a large discount. Much housing is now rented as student housing, but a substantial amount of housing is still owned by NCC, with 63.3% of households renting from social landlords (OCSI and HACT, 2018: 26). Shieldfield is home to around 5000 people (OCSI and HACT, 2018: 2), with the 2011 Census reporting that students make up 12.2% of households (OCSI and HACT, 2018: 9), although this figure is likely to be much higher today as most PBSA was built post 2011. It is an economically deprived area, with 48% of children living in poverty (OCSI and HACT, 2018: 2). During the last 10 years, Shieldfield has seen rapid development in the form of 20 PSBA blocks on the periphery of the estate, comprising 1873 bedspaces (NCC, 2017). Shieldfield’s location on the periphery of Newcastle city centre and close to the universities made it an accessible and attractive location for PBSA. It also had a lot of brownfield, ex-industrial land of low value, where, in the words of one planning officer, ‘nothing was happening. It was also contaminated land so now it’s a better use’. One developer went so far as to state that ‘It’s been the best thing that ever happened to Shieldfield because it was a shithole’. Shieldfield was thus stigmatised and seen as ripe for development by both public and private actors. PBSA has affected the character and social mix of Shieldfield and has impacted social facilities, with two pubs and Shieldfield’s social club closing, either through demolition or renovation for student housing. One community officer stated: ‘people are quite isolated, so they’re living in their own blocks and where do they actually come together? … They feel like the “community of then” isn’t there anymore’. Many residents feel that the ‘student problem’ has been engineered out of affluent areas and into a council estate, which arguably has less social resilience to fight proposals and cope with changes. Residents are also exhausted from fighting planning applications (and losing), eroding trust in NCC, with concerns largely ignored in consultations.

As highlighted above, the broader context of austerity has impacted policy- and decision-making in relation to PBSA. In Newcastle, since 2010, NCC has made over £300 million of reductions due to government cuts (NCC, 2020). This equates to £268 per person in Newcastle, compared to an average of £131 per person in England (Veldpaus and Pendlebury, 2019: 5), showing that austerity is uneven. This has implications for how NCC, and other secondary cities, have used development to raise capital to ‘prop up’ other statutory services such as social care in a period of austerity. Within planning, between 2010 and 2014, councils in North East England made average cuts of 26% to departments (Association of North East Councils, 2014). Unlike other council functions, there is no minimum legal service provision for planning. A policy officer stated that a shift had occurred towards doing ‘the bare minimum’, by meeting statutory requirements and reducing non-statutory activity, such as community engagement. Having fewer staff, and many who are junior with less expertise, has led to increased officer workload. In interviews, officers said they lack time to properly consider the impacts of developments, with one policy officer stating there is, ‘less time to develop a broad understanding of the topic area you are looking at’. This has inevitable implications for how development is undertaken and for whose voices are heard in the process.

Planning as economic function: The policy context

The development and implementation of planning policy within an austerity era have helped facilitate the PBSA building boom. Councils are not only enticed by developers and investor groups, but themselves forge plans, evidencing these through housing needs and economic assessments, suggesting a political–economic decision-making process. NCC’s (2007) Interim Planning Guidance (IPG) on Purpose Built Student Housing and 2011 Maintaining Sustainable Communities Supplementary Planning Document (MSCSPD), were, according to one planning officer, ‘a deliberate policy to try and de-concentrate Jesmond and Heaton [areas with significant amounts of HMOs] … which was pushing out families’. Policies akin to this have been utilised in other cities (Hubbard, 2008; Revington et al., 2020; Sage et al., 2013; Smith, 2008, 2009). From 2001 to 2011, the number of HMOs in Newcastle rose by 129% to over 6000 houses (NCC, 2011: 8), which, as the MSCSPD states, has had ‘a harmful impact on local communities’ (NCC, 2011: 3). As stated in the updated 2017 MSCSPD, PBSA would offer a myriad of benefits, including helping to reduce HMOs, and returning these to family homes, making local universities more attractive to prospective students through ‘high quality, affordable accommodation’, increasing the vitality of the city centre and footfall of local businesses and securing development on vacant sites (NCC, 2017: 12–13). Consequently, PBSA was to play a key role in the economic and urban development aspirations of the Council at a time of austerity through mechanisms such as the New Homes Bonus (NHB) ² and planning obligations. NCC’s IPG concluded a need for up to 5000 additional bedspaces (NCC, 2011: 22) and identified 47 potential PBSA sites. Then, in 2015, NCC’s (2015) Core Strategy and Urban Core Plan (CSUCP) (part of Newcastle’s local plan) identified a need for a further 2000 bedspaces. Yet by 2017, over 12,000 bedspaces had been completed, with a further 3760 under construction and 2832 with planning permission (NCC, 2017: 38), as well as live planning applications for further bedspaces (NCC, 2017: 11). NCC thus continued to grant permission, in line with the sites identified. Whilst the number of new units is difficult to predict when accounting for increased student numbers and the movement of students from HMOs to PBSA, what is evident here is the discounting of local planning policy in favour of the National Planning Policy Framework (NPPF) (which sets out government planning policy in England), which has permitted saturation of the market. As a pro-growth, deregulationist framework (Shepherd, 2021), the NPPF has made it increasingly difficult for councils to refuse applications. This is because it includes a ‘presumption in favour of sustainable development’ to encourage councils to approve schemes ‘that accord with an up-to-date development plan’; or where the ‘plan is absent, silent, indeterminate or where relevant policies are out of date’, then permission should be granted ‘without delay’ (MHCLG, 2019: 6). Shepherd (2021: 2) states that this was ‘a means by which central government could indirectly compel local authorities and communities to consent to more housing to support economic growth in the aftermath of the global financial crisis’. Council planning was seen as an obstacle to growth, so the government attempted to stymy councils’ decision-making powers to contest applications. As Shepherd (2021: 10) reveals, this has resulted in permission for new housing, including PBSA, being granted in contravention of local plans and the desires of communities. This highlights the difficult local implications stemming from the centralised nature of the English planning system which does not allow for nuances stemming from differential regional markets or demand levels, where different political cultures, development histories and capacities of action may exist (McGuinness et al., 2018). This inevitably leads to uneven development. One planner highlighted this, stating that:

the idea of the NPPF was to give councils more freedom, but the reality is saying yes to everything. It is dependent upon how strong the local planning policies and the management are – a short-term fix is not necessarily to the benefit of the area. It’s harder for councils to be strong willed, sometimes it’s about having the strength of character to say no.

Another officer said frankly: ‘The easier decision is to approve but this isn’t always the right decision’. The ambivalence within these statements highlights the inability of officers to resist the pressures of developers due to national policy, as well as them being under pressure locally to stimulate development on stalled, ex-industrial parcels of land.

Planning as economic function

A further economic, political and affective role for PBSA occurs through direct cash for councils thorough various mechanisms, as we describe below, but also through promoting an impression of urban growth by facilitating high-density development on ex-industrial land. As highlighted earlier, visually transformative developments have economic and geopolitical symbolic functions, particularly in secondary cities which are often in competition with nearby localities for inward investment (Nethercote, 2019).

One economic development officer stated that NCC had ‘become much more commercial in outlook’, with officers now ‘required to present a business case to do anything’. The officer highlighted an emphasis on taking fewer risks and aiming for a quick investment return. One planner stated that ‘there have been occasions where the corporate view has been in conflict with the planning view … Some things are just taken out of your hands’. Yet the officer recognised that ‘the “economic view” is not always the “planning view”’. This highlights the political pressures faced by planning departments – at best, planners must find a middle ground that works for planning, housing and economic development departments, politicians and the council executive, and at worst they must concede influence.

One economic argument for PBSA is its potential to trigger urban regeneration, as a panacea for stalled development sites and ex-industrial parcels of land seen as a blight on future urban potential (and investment hopes). ‘Regeneration’ has long been the failsafe of secondary, ex-industrial cities, attempting to shake off industry-blackened images and notions of urban failure. From the 1980s to the 2000s, Newcastle, as with other ex-industrial cities globally, attempted to transform the image of the city through ‘iconic’ regeneration efforts, such as waterfront renewal (Smith and Ferrari, 2012). This was facilitated and financed through central government initiatives. Post-economic crisis councils have found alternative routes to facilitate ‘regeneration’ and urban intensification on brownfield sites, with one planning officer stating that ‘funding for regeneration has almost entirely disappeared’. Developers use this as a tool of persuasion when proposing schemes. Developer Metnor, in a description of their ‘student village’ in Shieldfield, said, ‘we are proud to have helped to regenerate this area … by transforming a once derelict brownfield site into a vibrant student hub’ (Ford, 2015). In an article in the Evening Chronicle (2009), one planner stated that ‘the provision of PBSA in the area will contribute to the diversity of residential accommodation and long-term regeneration of the area’. Furthermore, the economic benefit of the ‘student pound’ (Chatterton and Hollands, 2002) is also important, with one economic development officer saying, ‘It’s almost impossible to overstate the importance of students within the economy’. In effect, without central government funding initiatives, councils now rely on developers to help stimulate regeneration efforts in often ad hoc, piecemeal ways. This is, in effect, the privatisation of regeneration.

PBSA also makes a financial contribution through a variety of mechanisms, including the NHB, council tax gains and planning obligations. Boosting housing numbers is a key political arena and a central driver of successive governments’ policies (Heslop and Ormerod, 2020), and PBSA counts towards NCC’s five-year housing target set out in the Housing and Economic Land Availability Assessment (HELAA). As one planner stated: ‘there is definitely pressure for councils to say yes to housing; house builders know this and has led to less good schemes because they’ve got a strong bargaining position’. The government has sought to incentivise new housebuilding through the NHB. Yet the NHB has been criticised for monetising planning and putting housing numbers ahead of social and environmental factors (Pugalis and Townsend, 2013). Even though students are exempt from paying council tax, the NHB is still paid on PBSA, and with PBSA a lot of units can be built on relatively small sites, meaning higher financial returns. Furthermore, the NHB is now a material planning consideration, so it must be taken into account when assessing applications (Pugalis and Townsend, 2013). The money NCC has received via the NHB (which includes council tax paid on previous delivery of new homes) has gradually increased from £2,102,146 in 2013/2014 to £6,088,521 in 2019/2020 (DCLG, 2013; MHCLG, 2019), showing that it offers a decent financial incentive for NCC to support housebuilding and PBSA.

With falling Government funding, NCC has been under pressure to increase returns from council tax and business rates – key, steady incomes that support statutory services. Through new PBSA, council tax revenue may increase by returning HMOs to family homes, as one planner stated: ‘the Council is desperate for money and is competing with other places across the North East [of England], so the corporate view is on … the promotion of housing to increase council tax revenue’. The aforementioned inter-urban competition is evident here, whereby housing becomes a central arena to bring forth growth and urban renewal opportunities and to attract tax-paying citizens. Many of the affluent family areas have effectively been studentified, and NCC has seen families and people of working age move to neighbouring council areas to find homes in desirable locations (NCC, 2015: 29). As students move out of HMOs, NCC hopes that working families will replace them. A report by Savills (2013) states that PBSA in Newcastle could ‘unlock’ 3300 family homes and related council tax gains of £3.2 million per annum. NCC’s HELAA (2018) highlights that for every three PBSA beds created, one HMO is released. Our analysis found that 624 HMOs have been released back into the market, equating to council tax gains of £1.1 million, highlighting that there can be financial benefit for the public purse.

Ferm and Raco (2020) highlight that English councils depend on development tax revenues more than other European systems where there is greater central redistribution of funds. This is most often in the form of planning obligations which capture some of the land value uplift which occurs through development (Crook and Monk, 2011). From 2005 to 2017, £2.8 million was contributed from PBSA whilst NCC predicted that they would receive a further £2.5 million if all planned PBSA went ahead (NCC, 2017: 12). We found that nearly £2.4 million has been contributed for open space and transport in Shieldfield since 2015. Despite the economic advantages of planning obligations (albeit short term), some would argue that they have caused reliance on developers to fund infrastructure works in an austerity context. Crook (1998) argues that it may be used to effectively ‘sell’ planning permission, and Wainwright (2014) states: ‘In practice, since council budgets have been so viciously slashed, [Section 106] has become a primary means of funding essential public services’. We found planning obligations to be an insufficient mechanism for capturing value uplift over time, as properties are resold often multiple times by different investors and more value is accrued. Furthermore, in secondary cities with weaker property markets, councils must negotiate harder to gain economic value through planning obligations (Ferm and Raco, 2020). Consequently, developer contributions have limited regenerative potential; rather, they offer a piecemeal approach to delivering small-scale improvements instead of a long-term vision for places. Thus, instead of the state being the ‘active executor’ in the financialisation of land and real estate (Beswick and Penny, 2018), NCC presents as a more desperate body, with less control over development and without the financial ‘pull’ of a primary city. As a result, rather than serving a simple supply–demand issue, or being a low-risk property sector for global investors, PBSA has a wider local economic purpose.

Consultation and broken promises

The economic reality of council cuts helps to explain why planning’s social function has been undermined in favour of its potential as a facilitator of growth. NCC’s ability to undertake in-depth community engagement processes without statutory requirements has been significantly impacted by austerity. One planning officer stated:

what we fall back on is the things we legally have to do … everything else has fallen a bit … without an infinite amount of resources and staff and time it’s just tricky to get out and speak to people … we have to be mindful of resources.

Furthermore, the Communities team, which plays a vital role in communicating to residents, ‘has been decimated’ according to one officer. Prior to austerity, there was at least one community coordinator per ward; now there are only four to cover the entire city. There has also been a 40% reduction in ward budgets, and only one ward meeting per year when there used to be 10. Consequently, mechanisms for local democracy are suffering, with communities often bypassed in decision-making. One councillor stated that, ‘now, the vast majority of local business happens in closed meeting rooms’ – development is thus happening outside of the public sphere. There was a general feeling that financial incentives influence decision-making, with one councillor stating that ‘everything is tilted towards the developer’, whilst one resident said: ‘I think money talks, I think once big business and big money offers are there … they’re not going to take any notice, the plans are there and they’re going ahead anyway’. Regardless of objections repeatedly raised to planning applications, every PBSA proposal was approved. As one local business owner stated, there has been a ‘cycle of being let down and ignored’, of ‘broken promises’. Furthermore, the aforementioned weight of policy in decision-making meant that when objections were raised, officers referred to policy to make a final judgement. Whilst in committee reports concerns were noted about the level and impact of PBSA in the area, officers referred to the NPPF which states support for ‘residential development on previously developed sites in sustainable locations’ (NCC, 2014: 8). The report for one application stated: ‘it is considered that the proposed use at this location accords with … policies and therefore the principle of student accommodation in this location is supported’ (NCC, 2014). As these statements highlight, whilst committees are supposed to be the representative democratic oversight of planning, policy often makes the final decision. As one councillor stated, ‘The perception is that the council always have the power to stop it but we don’t always … there is absolutely no democratic process at all – it’s purely based on legislation and legal frameworks in policies’. Consequently, there is a sense of frustration from officers who recognise that the centralised nature of the planning system, the reliance on developer contributions to stimulate wider neighbourhood change and the impacts of austerity have created a need for ‘short-term fixes’, instead of planning for long-term, sustainable communities.

It was not only the quality and intention of consultation that hindered residents from effectively objecting; we also found a lack of planning literacy amongst residents. Most comments on applications were non-material ³ and would not generally have been considered by the planning committee. Whilst residents could frame the impacts of PBSA, they struggled to interpret these within policies. In interviews, councillors and planners recognised this but did not have the time or resources to enable better understanding. Additionally, the influence of policy on decision-making highlights the importance of thorough consultation at the scoping phase of policy-making. When developing the influential MSCSPDs and the CSUCP, officers consulted ‘people who have got involved in interest in groups’ – such as residents’ groups, businesses and universities. Shieldfield did not have an effective community organisation to filter consultation activities to residents, so local people were bypassed on policy consultations which had major impacts upon their neighbourhood. Consequently, consultation was pushed to the end of the development process – the stage at which it has least impact. Without robust systems of consultation and communication between councils and residents, debate is foreclosed, and those places with less resource and capacity are often omitted from decision-making (Ormerod and MacLeod, 2019).

One planning officer stated that residents have been ‘battered … by the powers that be’ – yet these ‘powers’ stem not only from investors and developers but also from local and national pro-growth policies. Yet this is NCC’s double bind – the need to facilitate development and maintain the necessary conditions for property interests, whilst also retaining its legitimacy within communities (Nethercote, 2019). Whilst councils must uphold policy, individual officers often have a (sometimes personal) dissatisfaction with processes of decision-making, which they do not always deem to be in the interest of communities. It is this tension which has perhaps come to define the role of councils in development during austerity. PBSA offers a useful lens to examine this because whilst it offers significant economic and development potential in secondary cities, it is typically unwelcomed by local residents. This tension is a key area which requires further empirical, actor-focused research through close attention to the practices and tactics of the local state.

Oversupply and opportunity: The future of PBSA

The amount of PBSA built far exceeds what NCC had planned, and there is evidence of oversupply, meaning some buildings may become obsolete. A report by Cushman and Wakefield (2020: 21) states that ‘obsolete stock [is] exiting the market’, highlighting that a 50% increase in bedspaces since 2015 has not been accompanied by similar student growth. They write that a third of all UK discounted schemes are located in Newcastle and Liverpool (Cushman and Wakefield, 2020: 35). In Shieldfield, we found that the market is, as one developer stated, ‘pretty saturated’ and they ‘had to get out’, with yields decreasing as more developers moved in, whilst a manager of a recently built block stated that it was only 50% full. NCC is not aware of levels of occupancy, yet one planner stated that ‘the market is now drying up significantly; the number of applications we receive has reduced in the last two years’.

Planning has been complicit in this, yet the longer-term effects of oversupply are born by both residents and councils. Weber’s (2015: 75) work on boom-and-bust cycles in Chicago finds that whilst councils might facilitate growth and oversupply, when the bubble bursts they are forced to intervene, calling this the ‘underwriting of creative destruction’. Yet student housing is not just a matter of supply and demand attached to forecasted student numbers; instead, demand is impacted by the migration of students from HMOs to PBSA and the promotion of PBSA to new students, causing spatial migrations which are often not easily predicted. Attending to this complexity, NCC has had to intervene through policy amendments, with the 2017 MSCSPD stating that PBSA blocks should be designed to be adaptable for alternative uses, covering room layout and size, refuse and cycle storage and parking requirements (NCC, 2017: 27). Beyond this, there is evidence that hybrid schemes are beginning to emerge which mix PBSA with other use classes (Taylor Wessing, 2019: 4). In Newcastle, NCC’s aim to deconcentrate HMO numbers in certain areas has been partly successful. Since 2011, there has been no material growth in the number of HMOs in studentified wards of the city, despite continued student growth (NCC, 2017: 8).

PBSA is clearly not the panacea for the social concerns of studentification that many councils believed it to be, and whilst it does offer some economic advantages, these are often offset by a piecemeal approach to facilitating urban renewal through private interests and developer contributions, and the absence of long-term strategies for creating truly sustainable neighbourhoods. Yet there are opportunities for change and intervention. Revington et al.’s (2020) Waterloo case study shows that integrated PBSA can be a positive addition to urban landscapes in secondary cities. Ruiu (2017) advocates for greater collaboration between universities and councils to minimise the disruptive impacts of students whilst also leveraging the benefits. However, as we have found, and as Revington et al. (2020: 199) highlight, ‘university–municipal collaboration fails to directly incorporate private capital, which has been hugely influential in the development of purpose-built student housing’. Many secondary cities lack the necessary resources to effectively steer global capital, especially at a time of fiscal crisis. The interplay between international finance and economically stretched councils bound to pro-growth agendas and government policy makes it difficult to imagine alternatives that better serve local communities, instead of the interests of international capital.

As our research reveals, many planners have a dissatisfaction with pro-growth approaches to development. Most interviewed officers recognised the failure to plan for the long term or to properly consult with residents. However, there was also a sense of stasis – an inability to break the planning status quo, hampered by national policy and funding shortfalls. Yet there remains an important role for planning in student housing, not just as a regulatory body but also as a propositional one, which utilises policy and development management to propose types of development which capture and retain the social and economic value of development locally. Strong local government is needed to play a more interventionist role in real estate markets. Yet this requires thinking beyond pro-growth logics, and towards models of social and economic development that retain value locally (Heslop et al., 2019; Manley and Froggett, 2016). Facilitating development is not about planning adopting a laissez-faire approach; instead, policy should be used to implement requirements regarding size and design, supporting the reuse of existing buildings where possible. Environmental concerns (in terms of the energy efficiency of new buildings and the embodied carbon within the construction of buildings) should be central to this. PBSA should be built with the wider community in mind, so that it is better integrated into the existing physical and social fabric. To facilitate this, there is a need for better consultation which involves residents in the development of policy. In areas that lack ‘social capital’, councils should develop community capacity and planning literacy, so that those affected by new policy can feed into its development. Beyond the powers of local planning policy, there is a need to look at more progressive forms of development taxation, not based on negotiation between developers and councils (negotiation which is often more challenging for secondary cities which have less means for, and choice over, development), but instead capturing a percentage of the value of new development. In Shieldfield, PBSA buildings are frequently sold as one investment fund expires and a new one is formed; yet in cases when they are sold by offshore funds, investors are exempt from Capital Gains Tax (CGT). Therefore, there is no mechanism to capture a percentage of the profit from the sale for the UK state (Fernandez et al., 2016). Extending CGT could be one way of capturing the value extracted from localities over time. Finally, within urban scholarship, there is a need for further actor-centred evidence which reveals interconnections between financial crisis, austerity and planning in secondary cities, and how these enfold on the ground through local actors. This work should also examine the tensions and ambiguities at play within the competing economic and social role of councils. By offering ‘thickly textured’ accounts, there is potential to offer much-needed empirical attentiveness to how the micro-politics of the state and the enactment of its policies have shifted due to economic crisis.

Conclusion: Planning for communities

Austerity and the financial crisis have played a key role in ushering in new, more rapacious forms of urban development and governance. Scholars have highlighted the role of the financial crisis in bringing forth new niche, low-risk investment sectors, such as PBSA, when other development types were not so lucrative (Newell and Marzuki, 2018; Revington and August, 2020). There has been less attention to how the political and economic impacts of the financial crisis on local planning led to the facilitation of PBSA. Rather than merely theorising PBSA development as being a fully ‘decontextualised’ process, dependent on deregulated markets and international actors, through our case study of Shieldfield, Newcastle, we have highlighted a need to attend to local factors, understanding that the effects of austerity and the implementation of policy are relational and context specific. Through this, we have sought to highlight the experience of the planner working within a centralised and under-funded institutional context. This has involved twinning a political economy reading of the local state with an empirical attentiveness to the micro-politics of the state, and a ‘thick description’ (Geertz, 1993) of its tactics – an approach that requires further empirical analysis beyond this study. Our focus on the ‘secondary city’ of Newcastle has offered a useful lens to examine these trends because secondary cities have often used PBSA to stimulate urban development in otherwise stalled real estate markets, at a time when large regeneration budgets are not forthcoming. The rise of PBSA provides particular opportunities for investment in these cities which often have weaker housing markets but large student populations, and in which the education sector plays a key role in economic and urban development. There has been a reliance on PBSA within secondary cities to stimulate stalled development sites and urban densification on inner urban brownfield land. Furthermore, financial rewards were also offered through building housing and returning HMOs to family homes for NCC. Yet residents have felt a loss of local control, with NCC, under financial pressure, failing to undertake in-depth community engagement, particularly at the policy-making stage. With community participation in planning becoming de-privileged in an austerity era, Shieldfield, as an area with a lack of community resources and ‘social capital’, has seen planning decisions on PBSA displaced from the arena of public debate and democratic decision-making. Therefore, the deep sense of place that communities may contribute to strategic planning visions was largely dismissed. However, our analysis has shown that planners also feel powerless in the face of (national) policy or ‘big capital’. Whilst officers are often aware that their actions are a short-term fix, motivated by regulation, economic need or urban densification, they feel powerless to act differently. This highlights the ‘double bind’ of many secondary cities, between facilitating urban densification and blind economic growth through policy levers, as well as representing communities. Austerity has thus shaped the development of PBSA, and in this process has foreclosed spatial decision-making, both to the actors who facilitate it (officers) and to those who live around it (local residents). Change inevitably needs to occur first on a policy-making level, with councils supporting neighbourhoods which lack community resources to intervene in the policy-making process and beyond.