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With the election campaign now fully underway, the parties are busy pulling together all their ideas and promises for voters in their manifestos. Housing will see some of the boldest commitments, as the sense that things must change opens up the space for fresh thinking and big reforms.
The main parties all understand that ending the housing crisis is crucial not just in its own right, but because so many other parts of their domestic agenda can only be unlocked if the growing pressure from housing costs is reduced. Each party will tailor their offer to fit the voters they have in mind, but any MP, policy wonk, or voter who is serious about solving our housing shortage should look for at least three things.
As regular readers will know, the housing crisis is not national, but urban. Housing affordability varies across the country along with the performance of local economies. Although the average house in Hull costs five times average annual incomes in the city, the average house in Aldershot costs 11 times average incomes in Aldershot, even though local wages are higher.
The housing crisis is actually many local crises. These emerge from the way the supply of homes is controlled by planning permissions, which effectively cap the amount of homes which will be built within a local authority. The result is that even though house prices are high in Southend, Brighton, and Oxford, signalling that demand for new homes is high, all of these cities have built housing at a slower rate than cities like Mansfield, Wakefield, and Telford, where housing is already inexpensive.
Solving this will require supply to increase in expensive cities. This should be done through planning reform to reconnect local supply with local demand. A flexible zoning system, where most development can proceed unless the council blocks it, rather than our current system where very little development can occur until the council grants permission would solve this.
But new social housing must also be concentrated in these expensive cities. Investment in new council and housing association homes should go mainly to the households facing the greatest affordability pressure.
There is no way that our cities’ housing shortages will end without reform of the green belt. Building hundreds of thousands more homes becomes far more difficult if 13 per cent of the country is off-limits to development, whether they’re for homeowners or council housing.
Fortunately, we have a plan at Centre for Cities to build up to 2.1 million houses in the green belt, next to existing infrastructure and within easy commuting distance each of the city centres of London, Bristol, Manchester, Birmingham and Newcastle.
The idea is to grant the right to develop land within 800m of existing railway stations in the green belt to railway infrastructure companies (such as Transport for London, and Transport for Greater Manchester, rather than the franchises like Virgin Rail). By possessing this right, the companies would be able to purchase this land for a fair, yet discounted price. Other protections would remain in place, and some of the land would be set aside for parkland and open space.
These railway companies could then build millions of homes on just 1.8 per cent of the existing green belt. The railway infrastructure companies could then develop and sell and rent new homes on this land. A straightforward 20 per cent Land Development Charge on the sale of this housing for infrastructure and new social homes would apply.
Not only would this tackle the housing shortage these cities face, but it would be climate-friendly too. While the energy efficiency of new and existing is a common topic in housing policy, the decisions we make about where we put new homes have an impact on carbon too. By adding new homes next to train stations, we can minimize commuter journeys by car, cutting down on unnecessary carbon emissions.
It’s easy for national politicians to promise building hundreds of thousands of houses every year across the country. But it’s another thing entirely for local government to take the political risk to get them built when local anti-housing activists organise a frothy campaign to defend a patch of dirt or block some new flats where people could live.
When local government officers and elected members listen to these powerful groups, the supply of housing is ratcheted downwards, and affordability and inequality worsens. Ironically, these campaigns wield significant influence even though they are a small minority. 57 per cent of people in 2018 say they support new homes in their local area, up from 28 per cent in 2010, while opposition has fallen 47 per cent to 23 per cent.
National government can help give local government more breathing space. Policy should shift the opportunities for consultation and participation from local residents into the beginning of the local plan process. Instead of granting a potential veto to residents after the plan has been agreed, the political risks facing councils when trying to address housing shortages would be reduced while still allowing for input and discussion of trade-offs from the local community.
This problem goes beyond local government though. Each party is promising to invest billions in housing, not just to reduce the housing costs faced by voters, but to provide the economic growth that can power other parts of their domestic agendas. If Nimby campaigns continue to bog down and block housebuilding, everything else the parties are promising will become much harder to reach.
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