The value of planning

Earlier this month there was a small flurry of comment in the media about the impact of planning on house prices (for example, here). The question was why house prices in Britain have grown faster than most other countries over the last forty years. A big chunk of the answer was “planning”, in the form of development planning and development control. If only the planning regime had been more lax more houses would have been built and the escalation in house prices would have been attenuated. The commentary was triggered by the imminent publication of a paper in the Economic Journal by Hilber and Vermeulen, which in turn is – I presume – a version of a paper that has been available as a SERC working paper for a couple of years.

This is the latest in an intermittent series of papers, largely generated by economists based at LSE/Reading, making similar sorts of points. The headline message is that the planning system is at the heart of the British housing supply problem. It is the primary cause of our sluggish housing supply response.

The “planning is the problem” position is making most of the running in this debate, and seemingly is never far from the heart of policy thinking.

If you have been reading this blog for a while you will know that it is a position that I don’t have a huge amount of sympathy for. It is too simplistic. It leaves out consideration of the influence and divergent interests of the range of stakeholders in the housing supply process.

Back in June, partially as a counter to this dominant strand of thinking, a report entitled The Value of Planning was published by the Royal Town Planning Institute. I’ve only just had a chance to read the report properly.

Publication through the RTPI might elicit a sceptical response – after all they would say that wouldn’t they? But that would be unfair. [Read more...]

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Attitudes towards new development soften

There is a broad consensus among politicians, analysts and commentators that Britain needs to build more housing. You can encounter dissent from that view, but it tends to be on the fringes – in deep UKIP anti-migrant territory or the paramilitary wing of the rural lobby.

The debate opens up when we start to examine why Britain is plagued with a relatively unresponsive housing supply system. On the political right and among many economists the problem is seen to lie with the planning system. Full stop. Economists with a more subtle understanding of the issues will argue it is the mismatch between the underlying spatial dynamics of economic growth and the planning system. For the more institutionally inclined, the analysis has to be broadened to encompass not just the planning system but also industrial structure of housebuilding and the concentrated nature of the market for land. Weakening the planning system without attending to the other components of the housing supply system won’t get you very far. It is very likely to lead to anger in local communities as their areas are trampled over by insensitive volume housebuilders throwing up unsympathetic developments which place additional strain on under-resourced local infrastructure.

The attitudes of local communities towards new development in their area is an important part of the equation in encouraging new supply. Because when we refer to “the planning system” it should be seen as a short hand for the way local political preferences are embedded in the systems for controlling spatial development. NIMBYism isn’t such a huge problem unless it has an institutional outlet and can affect what happens on the ground.

The publication today of the results of the 2013 British Social Attitudes survey evidence on attitudes towards new development suggest that things may be changing. [Read more...]

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Home, security and locatedness

Bishop_James-003There seems to be an awful lot of housing news and comment circulating just at the moment. And it isn’t just more of the same. The arguments for a change of gear on housing policy seem to be growing louder and more frequent. The housing sector, it’s argued, needs to come out fighting. Some of this is no doubt about manoeuvring for position in the run up to the next election. But I don’t think it is only that.

Concerns about the consequences of current policy directions are growing. There’s a lively debate going on about the significance and consequences of the Government’s Affordable Rent programme, and whether or not participation in it means housing associations are complicit in the demise of social housing. There are suggestions that a change of government might herald a reorientation of housing policy. And there are growing concerns about the levels of gearing in the owner occupied sector and the impact that increased interest rates, as and when they arrive, are going to have on household budgets.

But perhaps the most interesting and important element of the debate is the discussion over housing supply. [Read more...]

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The government is solving the housing crisis, apparently

frameOn Thursday Kris Hopkins, the Housing Minister, published a post at the Spectator entitled This government is solving Britain’s homes crisis. The post was designed to coincide with the publication of statistics about the unlovely, and largely unloved, Help to Buy scheme. When I saw the post I was intrigued. It seemed, superficially, to be making a rather implausible claim. I anticipated an orgy of spin and statistical chicanery.

As it turns out I wasn’t too far off the mark. [Read more...]

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Housing pathology and paralysis

A few weeks ago Janan Ganesh in the FT described the UK housing market as an ‘institutionalised pathology’. The problems that the housing market is causing for the British economic and political system seemingly become ever more apparent by the day.

There is an increasingly strong coalition of opinion uniting behind the sort of radical action that is needed on housing supply to deal with the problems. The recent intervention by KPMG/Shelter, or the RSA, or today at the BBC website all set out prescriptions that bear more than a family resemblance.

And as a similar message emerges from different quarters it throws into sharper relief the timidity and short-term self-interest of the political class. The political economy of housing may have led politicians to a predictable level of inactivity. It may be that it is only if and when the private renter vote is effectively mobilised that change will occur. Perhaps only then will a government be brave enough to take on the countryside preservation lobby. But the problems intensify in the meantime. [Read more...]

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Shaping housing policy post-2015

Building Site - New Home ConstructionIt’s clear we’re already entering what is going to be a very long election campaign in the run up to May 2015. In the housing policy field we’re seeing plenty of organisations pitching ideas at the moment, with the aim of influencing the content of the manifestos for 2015. But we’re also seeing thinking aimed at shaping the programme for government post-election, whichever flavour of government we are landed with.

All the parties are ostensibly signed up to the idea that we need to increase housing supply dramatically. So setting out the steps likely to be needed to achieve that objective is a worthwhile exercise.

Enter the novel partnership of KPMG and Shelter. [Read more...]

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Dissent in the ranks

Modern HousingYou’d expect lefties to kick up a fuss about the Coalition’s austerity-justified policies. An agenda that is having serious negative impacts upon the most vulnerable, while at the same time transferring wealth to the already wealthy, will have a tendency to annoy those who prioritize solidarity, dignity and security over the search for profit and the appeasement of plutocrats.

But that can be dismissed as just so much hot air from the naïve and irresponsible.

The problems really begin when your own people start cutting up rough.

And perhaps we’re beginning to detect that that is what is happening in the housing sphere. [Read more...]

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Doing something about housing

Modern HousingWhat to do about the housing crisis? It’s a question that, should you have been so inclined, you could have focused on throughout much of yesterday’s proceedings at Liberal Democrat Spring Conference.

A motion on the reform of planning policy was passed, unamended, during the morning’s official business. The motion was particularly critical of the role of the Planning Inspectorate and the Communities Secretary in overriding local democracy and aspirations.

The programme for the conference fringe offered you a near overdose of housing. The lunchtime fringe included a session on social housing jointly organised by CentreForum, The Fabian Society and the Joseph Rowntree Foundation. On the – metaphorical – platform were Sir Michael Lyons, Tim Farron, and Kathleen Kelly of JRF. The session was packed.

The early evening fringe offered a session asking where new housing should be built, organised by the Green Liberal Democrats. Mid-evening allowed you to move on to consider private renting, in a session organised by ALDC, before finishing up with a reappearance of Tim Farron among those at a late evening session on Liberal Democrats in Housing – the future of the priced out.

I have to admit I didn’t manage to stay the course. I was feeling a bit too rough and had to have a very early night – not at all appropriate behaviour at conference, I realise, but I couldn’t do much about it.

What points would I draw from the sessions that I attended? [Read more...]

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Policy Unpacked #2 – Housing shortage and housing supply

Policy Unpacked logoThe issues of housing shortage and increasing housing supply feature prominently in current debates over how to deal with the UK housing crisis. Housing analysts often seek to place these urgent policy problems in the context of the longstanding issue of excess volatility in the UK housing market, and alongside an exploration of how we might make better use of the existing housing stock.

In this podcast I discuss a range of issues around housing supply with Ken Gibb, Professor of Housing Economics at the University of Glasgow and Director of Policy Scotland.  (Running time: 45′ 56″) [Read more...]

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Vince on “social housing”

6162309761_6e59bfde6d_nVince Cable made a substantial speech to the Royal Economic Society at the beginning of this week. The speech is worth reading in full because it represents one of the most thorough, thoughtful and wide-ranging perspectives on the economy that you are likely to hear from a front bench politician. Vince very clearly differentiates his position from that of the Conservatives on a whole host of points. He also, in my view, provides a more balanced assessment of the nature of economic policy under Coalition than you are likely to get from any member of the Quad. Vince does not pretend that the Coalition has adhered resolutely to plan A in the face of temptations to change course. Rather he acknowledges that things have not played out in the way that was anticipated in May 2010. He acknowledges that the recovery, though real, is not balanced and consequently places a welcome emphasis upon the continuing need to rebalance the economy and upon investment.

Vince identifies four major areas of policy action in pursuit of a sustainable, balanced recovery. These are “boosting the disposable income of low and middle earners; stimulating business investment (with the help of public investment); taking action, including through the industrial strategy, to tackle bottlenecks in skills, business finance, exports and UK supply chains; and building lots of new homes”. There is much that could be said about his thoughts under each of these headings, but my eye was inevitably drawn to his comments on housing. [Read more...]

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