Hints from the Government that England will shift to a new zoning system could end the housing crisis – but we must learn from other countries abroad to avoid their mistakes.
In our new report on the problems with the planning system, Planning for the Future, we call for its replacement and the introduction of a new flexible zoning system. Although this would be a big change from the current approach, zoning systems are common around the world.
Unlike our discretionary system, where planners and planning committees make decisions case-by-case for each proposal, zoning systems typically frontload far more decisions into the creation of the initial plan. In principle, if a proposal complies with the zoning and building regulations, it should be given planning permission.
The government’s suggestions that we may move to a new zoning system in England is a chance to learn from the experience of others from around the world and adopt best practice, while avoiding the pitfalls some countries have found themselves in.
Zoning systems are common across the US, though due to its federal and highly devolved government their zoning systems vary significantly, even within the same state. In general, housing is more affordable across the US. Despite higher GDP per capita and bigger houses than the UK, the median house price is cheaper than in England.
However, similar to the UK, this national average hides large differences in housing costs and inequality between cities. A cheap, downtown, one-bed apartment in Detroit will set you back £15,000 – a similar flat in downtown San Francisco will cost £380,000. These housing shortages are local because, like the UK, their planning systems have disconnected local housing supply from the demand for new homes driven by urban labour markets.
This is mainly because their zoning systems have replicated many of the problems of the English discretionary planning system. Although there is a greater supply of land for development, the suburbs of American cities are dormant and in the same way that the suburbs of cities in England and Wales see no development.
The culprit here lies in the diversity of zoning systems across the US. Cities and local governments will usually write their own zoning code. They are both “referees” and “players” in their housing market, and so therefore write and apply inflexible codes which block new development and protect high house prices for existing homeowners. “Single-family zoning” which only allows massive, detached houses to be a built is a major problem across America, and economic and racial inequality is deepened by a tendency towards discriminatory “exclusionary zoning”.
Recent years have though seen the emergence of a strong “Yimby” movement which seeks to overcome these barriers and make their zoning systems more flexible. Minneapolis and Oregon have both formally abolished single-family zoning and other places are following suit, with reformers focusing on the state and the federal level.
In terms of lessons for reform in the UK, the American experience shows how important it is to have a flexible zoning code, and to maintain a strong role for an upper jurisdiction such as the UK or devolved government to write and oversee the implementation of the code. It is not centralisation or anti-localism to for national government to have a clear role as a referee of the planning system. For devolution to succeed, the right responsibilities must sit at the right level.
Unlike the United States, the zoning system in Japan is set at the national level. It sets out a dozen zones, which each allow multiple and more uses as the “intensity” of their use grows. Polluting industrial uses are segregated. Zones also determine the density of development, and set out Floor Area Ratios (how much floorspace can be provided on the land area) and the maximum height relative to the width of the road. Proposals which comply with this zoning code and the building regulations legally must be granted planning permission.
Housing outcomes in Japan are extremely successful. Housing is much more affordable in Japan than it is in the UK, even in Tokyo. This is primarily because they build far more new homes. Although the UK saw about 194,000 houses start construction in 2018, Japan saw 942,000 housing starts. Japanese homeowners and renters therefore have far more choice than their British counterparts – so much so that the vacancy rate in Tokyo is higher than that in Burnley, the urban area with the highest vacancy rate and most affordable housing in England.
One consequence of this approach is a rather more jumbled urban fabric and little historical preservation. As a result, Japan’s built environment is charming, but it is different to what the UK is used to. Design codes, especially around facades and materials and some heritage protections, could maintain key bits of the British built form while allowing housing supply to grow.
In terms of lessons for reform in the UK, the Japanese experience shows how a flexible zoning code would work in practice, and that Britain’s housing shortage is ultimately a political choice. The certainty of Japan’s process is key – that planning permission is guaranteed minimises planning risk and makes high supply possible.
Somewhat similar to the United States, there are big differences in the details between the systems of the Netherlands and the German federal states. But together they showcase a common European typology which provides a much greater role for the local authority in assembling land and master-planning it.
Self-build is much more common in Germany in particular. As Germany has strong protections for renters, one of the primary benefits of owning your own home is seen to be the ability to build your own home to your own design, relative to renting. Design codes are common in both countries, and those in the Netherlands in particular are “light touch”, striking a balance between individual freedom for homeowners while maintain a supervisory role for the local authority.
However – affordability problems in cities in Germany and the Netherlands are growing. Rents across the seven major cities in Germany rose by 6 per cent in 2018, and house prices by 12 per cent. Despite their zoning systems and their strong role for local authorities, they still face problems building enough homes.
It is possible that their mid-rise model, which though more efficient than American-style single family home suburbs, is starting to come under pressure. A lot of European cities are reluctant to build high-rise housing and offices, even though land values are signalling that this density is what residents, workers, and firms want.
In terms of lessons for reform in the UK, the German and Dutch experience show that design codes and mid-rise housing can be implemented well and with minimal fuss. However, they also show that it is not enough for the local authority to take on a master-planning role; “more planning” is not necessarily the answer. Furthermore, a new zoning code for England must continue to allow skyscrapers. While they are not suitable nearly everywhere in the country, they are the right choice in a few special locations – city centres with high land values where there is high demand for floorspace.
As a close neighbour of the UK, the experience of Ireland is instructive for Britain. Ireland has a form of zoning, but it also has one of the worst housing crises in Europe.
This crisis emerges from primarily from a lack of new housing supply. Although there is a lingering memory of Ireland’s “ghost estates”, many of these developments were in low-demand locations. Though Dublin has experienced rapid annual population growth over the past decade, the amount of new housing has barely budged.
The problem in Ireland is that though their system now has zoning, Ireland has an English-style planning system. Ireland’s 1963 Local Government (Planning and Development) Act was originally based upon Britain’s 1947 Town and Country Planning Act. Getting planning permission is still uncertain as in the British approach. This discretionary element is the opposite of the Japanese model, as an Irish developer may be denied planning permission even if they follow the rules.
These zones are also inflexible. Even generalised into broad types by national policymakers, there are at least 52 possible zones, each corresponding to a unique use – and that’s before considering local variations. Ireland therefore has the worst of both worlds. It has unpredictable, case-by-case decision making thanks to the discretionary element, and the stickiness of inflexible zoning.
In terms of lessons for reform in the UK, the Irish experience shows that the design of the zoning code matters. It is not good enough to simply rename a part of the system as “zoning”. Introducing a form of zoning while not tackling the discretionary element would be a mistake.
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Lesson from New Zealand may also be useful and perhaps more comparable given the similarities in the origin and culture of the planning system. Otherwise useful
This is a helpful analysis of the issue of zoning – on its own terms. In terms of housing though, it ignores the fact that major housing developers operate on the scarcity principle; by drip feeding small amounts of housing into the market they keep prices and their profits high, while numbers of new units remain low. This will be unaffected by the governments proposals, whatever their theoretical merits.
Japan’s urban areas are not ‘charming’. They are often chaotic & ugly. And your other comparisons (Tokyo & Burney) are misleading. In this as in so many things you seem to carefully select ‘evidence’ to fit your priors.