Preferred Strategy

7. Growth and Spatial Options

A principal purpose of the Preferred Strategy is to set out clearly the level of growth and its spatial distribution to deliver the Vision and Objectives of the Replacement LDP.

When preparing the Preferred Strategy, the LPA is required to undertake an analysis of different growth and spatial options. The options are set out below and have been informed by a range of supply and demand factors and key pieces of evidence, such as the settlement assessment, LHMA Employment Needs Assessment and an initial viability assessment.

7.1 Growth Options

Fundamental to preparing the Replacement LDP, is to determine the most suitable level of growth for the plan to deliver over its plan period. Primarily, the level of growth refers to the scale of housing and employment growth and is influenced by social, economic and demographic evidence, needs and aspirations.

The LHMA is an essential part of the evidence base for the Replacement LDP. It identifies the level of housing need (2022-2037) for both open market and affordable dwellings across Powys and for the Replacement LDP area. The LHMA also considers needs at the local level, splitting Powys into 13 Housing Market Areas (Figure 8). It is imperative that each of the growth options considered is able to meet the LHMA's identified need of 2,682 additional dwellings (with a vacancy rate of 10% applied), of which 1,036 are for affordable tenures.

Figure 8 - Housing Market Areas

Powys County Council has prepared a Demographic Evidence Report to support the Replacement LDP. This included a demographic profile of the area with future projections of population, household, and employment growth. The report configured a range of growth scenarios for the plan period 2022 – 2037 which were demographic and employment based. For each scenario, an associated range of dwelling and employment growth outcomes was identified.

To complement the Demographic Evidence Report, an Employment Needs Assessment (2024) has been undertaken to identify the employment land requirements for the Replacement LDP. In line with Welsh Government guidance, the assessment considered several trend-based scenarios to identify need over the lifetime of the plan and identified the employment land required for each option. The assessment recommended that the Replacement LDP should include an employment land provision based upon historic take up, indicating a provision of between 32 - 40 hectares, directed to Commercial Market Areas, as detailed in Figure 9.

Figure 9 - Commercial Market Areas shown with the Settlements in the Sustainable Settlement Hierarchy

A Growth Options background paper has been prepared which considers the needs identified in the LHMA, the number of dwellings in the housing land supply (built and with planning permission) and the evidence from the Employment Needs Assessment (2024). It sets out an analysis of the growth scenarios from the Demographic Evidence Report to determine which of the scenarios is most suitable for the Replacement LDP.

Some of the scenarios detailed in the Demographic Evidence Report were discounted in the Growth Options background paper as unrealistic as they would not enable the housing needs identified in the LHMA to be met. The Growth Strategy of the Adopted Powys LDP (2011-2026) was considered but found to be unachievable given that its annual build rate (300 dwellings) had not been achieved consistently.

7.2 Growth Options Considered

Table 4 identifies six growth scenarios which have been grouped as three growth options: Lower, Medium and Higher-level Growth Options. The Anticipated Average Annual Build Rate, Housing Requirement and Housing Provision Figure is shown for each scenario.

The LHMA used household projections to provide estimates of future numbers of households, by applying assumptions on household composition and size to the population projections. In addition, the LHMA also took into consideration the numbers of households on household waiting lists (the unmet need) and added them to the forecast housing need. Therefore, in the Growth Option scenarios, the Welsh Government 2018 household projections for the Higher Variant and 15-year Migration scenarios, are based on the forecast need from the LHMA rather than the projected need detailed in the Demographic Evidence Report.

Also shown in Table 4 are the growth options for total employment land provision, identified by the Employment Needs Assessment. All growth options reflect the past take up rate of employment land (1.6 ha per annum), with the Higher Option making provision for an additional 0.4 hectares per annum.

Table 4. Powys Replacement LDP (2022-2037) Growth Options and Scenarios.

The Growth Options background paper considered the appropriateness of each of the options and scenarios by reviewing:

• Past build rates.
• Housing land supply.
• Demographics.
• Meeting the needs identified in the LHMA.
• Fit with Future Wales and the Mid Wales Region.
• Stakeholder feedback.

As explained in the Growth Options background paper, the Higher Growth Option received the most support from stakeholder participation and is considered to be the most appropriate option for the following reasons:

Comparison with Historic Build Rates – Over the 15-year period 2008 - 2024 (excluding 2014-2015), the average build rate was 240 dwellings per year, whilst over the five-year period 2018 - 2023 the average build rate was 288 dwellings per year. The Higher Growth Option falls within this range so is considered to be achievable and deliverable.

Comparison with Housing Land Supply – Taking into consideration dwellings already completed (since the start of the plan period in 2022), sites with planning permission and projected windfall development, the Higher Growth Option would give scope to allocate between 1,325 and 1,760 dwellings, to be delivered in the plan period.

Addressing the Demographic Challenges Facing Powys – The Demographic Evidence Report considered the size of the labour force and the level of employment growth that could be supported with the Higher Growth Option, using calculations derived through the application of economic activity rates, an unemployment rate, and a commuting ratio. The results forecast an annual increase of between 153 and 182 people in employment per year, equating to an increase of 2,295 – 2,730 people over the Plan period. The Demographic Evidence Report also noted that the higher growth scenarios facilitated higher levels of incoming migration which is needed to address the demographic challenges and increase the working age population.

Meeting the Needs identified in the LHMA - The Higher Growth Option enables the total housing need identified by the LHMA to be met, whilst providing sufficient flexibility to respond to changing housing needs over the plan period.

Regional Context and Future Wales - Future Wales states that under Welsh Government central estimates, 1,800 additional homes are needed in the Mid Wales Region up to 2039. It also states that when considering future housing needs, individual LDPs need to reflect on the low estimated need for housing in the Mid Wales Region and what this means for how places will change, where jobs and services will be located and the relationship between settlements. Given that the Lower and Medium Growth Options project lower levels of growth, it is inevitable that they are more closely aligned to the additional need identified in Future Wales than the Higher Growth Option.

However, the Higher Growth Option includes more flexibility to be able to deliver on other policies in Future Wales such as being able to prioritise focusing the greatest proportion of growth into Regional Growth Areas and to be able to meet local aspirations and changing needs in rural towns and villages. The Higher Growth Option has the most influence when it comes to, achieving age balanced communities and reversing depopulation. It also provides the most flexibility for responding to the needs of rural communities and will have the most impact in terms of delivering affordable homes.

The Powys LDP area typically contributes 240 (48%) of the 500 dwellings constructed per year across the Mid Wales Region, based on the average completion rate for the past 15-years. The Higher Growth Option would require an annual average build rate ranging from 264 to 288 dwellings. In terms of impact on the Mid Wales Region, the lower end of this range would not be substantially different to the 240 dwellings 15-year average build rate. In terms of economic development, it is considered that the employment provision of 40 hectares, together with enabling employment policies, will provide sufficient flexibility and support the Mid Wales Growth Deal.

Integrated Sustainability Assessment (ISA) - Of the three growth options, the ISA found that the Higher Growth Option performed the most strongly, reflecting the opportunity to meet housing demands, reduce deprivation and potentially reinforce Welsh language and culture through enabling local households to find housing in their communities. In particular, the ISA found that growth levels could support the continued sustainability of smaller communities with limited-service provision and potentially falling populations.

Table 5 indicates the anticipated growth levels for each of the two scenarios included in the Higher Growth Option: the dwelling-led 10 year scenario and the dwelling-led 5 year scenario.

Table 5. Higher Growth Option Scenarios

7.3 Preferred Growth Option

In order to deliver the Vision and Objectives to the Replacement LDP, particularly the Objectives on 'Meeting Future Needs', 'Housing Needs', a 'Vibrant Economy' and Economic Development', the evidence supports growth towards the lower end of the Higher Growth Option. This level of growth is considered to be realistic and deliverable and provides sufficient flexibility to meet the needs of communities, businesses and residents, whilst increasing the delivery of affordable housing and helping to address demographic challenges.

The Preferred Growth Option is the Dwelling-led 10 Year scenario which is based on an average annual build rate of 264 dwellings over the ten-year period 2012/2013 to 2022/2023. Employment growth is based on past take up rates at 1.6 hectares a year, plus an additional allowance of 0.4 ha per annum to better reflect an unconstrained market.

The anticipated average annual build rate has been rounded up to 265 dwellings, which results in a housing requirement of 3,975 dwellings (265 x 15 years) for the Replacement LDP. For employment growth, the Replacement LDP will provide 40 hectares of Class B employment land, which alongside other Replacement LDP policies supporting the foundational and rural economy, will serve an increase of 2,295 people into the labour force.

Overall, it is considered that the Higher Growth Option - Dwelling-led 10 Year scenario best reflects the levels of delivery achieved in recent years, and that it best supports the role of the Powys LDP area within the Mid Wales Region and the presence of its two Regional Growth Areas.

7.4 Spatial Options

In addition to determining the most appropriate or right level of growth level, the Preferred Strategy must identify the right places for locating growth.

Spatial Options have been identified as part of the development of the Preferred Strategy and these have been influenced by the policies of Future Wales and other national, regional and local plans and strategies.

It is important that the Preferred Strategy addresses the needs of communities, businesses and residents at the local level, including needs identified by the LHMA and the Employment Needs Assessment. The Strategy also needs to maximise opportunities for environmental enhancement and limit the environmental impacts of development.

Four Spatial Options were identified for consideration as follows:

• Continuation of the Adopted Powys LDP (2011-2026) Strategy.
• Affordable Housing Led.
• Population Apportionment (Dispersed Growth).
• Regional Growth Area Led (Focussed Growth).

The four spatial options are all considered to be realistic options but each would result in a different distribution of growth for housing and other forms of development. An analysis of the four options is contained in the Spatial Options Background Paper. This considered the advantages and disadvantages of each including the fit with Future Wales. Each option has also been considered as part of the initial ISA and are summarised below.

Continuation of the Adopted Powys LDP (2011-2026) Strategy
The Spatial Strategy of the Adopted Powys LDP (2011-2026) aimed to promote and reinforce proportionate growth across the network of market towns and villages in Powys. The strategy sought to distribute growth pro-rata according to a settlement's existing population / size and the services / facilities available. This approach enabled the highest proportion of growth to be distributed to what was considered to be the most sustainable locations, the Towns and Large Villages, whilst protecting important strategic resources and assets.

The Spatial Options Background paper concluded that the continuation of the Adopted LDP strategy would not be compatible with Future Wales policies as it would not enable growth to be focused in the Regional Growth Areas. It also found that it would restrict the needs identified in the LHMA and the Employment Needs Assessment from being met. However, it was considered that there were elements of the strategy that had worked well and should be carried forward into the Replacement LDP, such as the use of development boundaries for larger settlements and the policy approach used to enable development in smaller settlements.

Affordable Housing Led Spatial Option
The Affordable Housing Led Spatial Option is based on addressing the need for affordable dwellings in the 13 Housing Market Areas identified by the LHMA (2022-2037). Additionally, it takes into consideration calculations based on historic data regarding the number of people annually joining housing waiting lists for social housing. The calculations anticipated further needs for social housing, in addition to those identified in the LHMA, that may need to be addressed during the Replacement LDP plan period.

Whilst this option would address immediate affordable housing needs across the Plan area, it was considered that the option provided limited flexibility to respond to any further needs, including for specialist and open market housing up until 2037. The option received limited stakeholder support and would not enable the Replacement LDP to deliver some of the aspirations set out in the Vision and Objectives.

Population Apportionment (Dispersed Growth) Spatial Option
The Population Apportionment Spatial Option is a dispersed spatial option that would distribute growth across the 13 Housing Market Areas based on the total percentage of the population within each Housing Market Area.

This option would address the recognised needs for housing and employment identified in the evidence and would support sustainable rural communities. However, it would limit the impact that the Replacement LDP would have on focusing growth into Regional Growth Areas as required by Future Wales. Additionally, a dispersed growth option limits the opportunities available to deliver infrastructure improvements and to support services compared to a focussed growth option.

The Regional Growth Area Led (Focussed Growth) Spatial Option
The Regional Growth Area Spatial Option is a focussed growth spatial option that directs the majority of growth to the Regional Growth Areas. Lower levels of growth are enabled in other parts of the Plan area, in accordance with the sustainable settlement hierarchy, local aspirations and identified needs.

The analysis set out in the Spatial Options background paper considered this as the best option to meet the needs of the Plan area, whilst providing sufficient flexibility to avoid constrained areas and address any changing needs up to 2037. It is the option that best aligns with Future Wales, PPW, Llwybr Newydd, and reflects stakeholder feedback. It recognises the plan area's role in the Mid Wales region and would enable the delivery of the Vision and Objectives.