Alex Morton is Research Director for Housing, Planning and Urban Policy at Policy Exchange.
Labour has made it clear this week that it intends housing to be one of the major issues at the next election. This is good politics. Housing in itself is now a key issue for voters, as well as being tied up with wider issues of economic growth and perceptions of aspiration. Labour’s solution to our housing crisis is tighter control of the market – centrally imposing new towns, compulsory purchase of land, and pro-housing councils imposing new homes on their neighbours.
This country desperately needs new homes. England’s annual growth in households is estimated at 232,000 a year. We actually need more homes than this as older people tend to live longer in large family homes, so net housing space for this group is rising. Yet housing completions up to mid-2013 were 106,000, housing starts were 110,000. Planning approvals are higher, but just 150,000 or so. In addition, there is evidence from the industry that planning conditions set by local authorities are becoming more onerous and numerous, slowing the system.
Too few homes destroy the opportunity and property ownership that is the bedrock of conservative thought and electoral success. Home ownership is steadily falling, creating a new divide between the housing haves and have-nots, falling from 70 per cent to 64 per cent from 2002 and 2011. Contrary to what the Chancellor says, this is not to do with lack of mortgage lending. The fall in ownership was already well underway before the financial crash in 2008. It is simply due to the fact prices are too high.
The problem is that while Labour’s top-down prescription is unlikely to work, it is not that different from the Coalition’s approach. After all, what is the whole purpose of the planning inspectorate if not to impose decisions according to a framework set out in Whitehall? On a more local level, what is the purpose of council plans if not to impose housing on areas and locations that oppose them?
At times, the Coalition has departed from this with some small liberalisations or attempts to reduce the political difficulty of new housing. Making it easier to convert offices to homes. Allowing local people to contribute directly to the local plan through voting in a neighbourhood plan. Scrapping some national targets on areas such as density.
But has there been a fundamental shift? No.
The result of this is that housing is still in crisis. Our report Making Housing Affordable’s key argument is still valid. The housing crisis is the result of a broken planning system. It is broken because it is an antagonistic and a ‘winner takes all’ system. This has released too little land, not allowed sensible brownfield redevelopment or densification, and also over time led to insufficient quality.
Guidance and diktats streaming from Whitehall are largely just weapons used by the two sides to impose or block new development. Parts (though not all) of the planning community tries to impose its own vision of what Britain should look like, often by lobbying internally that better (which invariably means more) planning and rules will build the quality and number of homes needed. The recent building regulation consultation, which started as a deregulatory process, somehow proposes extending regulation in areas around access, energy and space.
You can try to fix the system by little tweaks here and shifts there. But you will fail. Because it is not a broadly functioning system that needs a few tweaks. It needs a fundamental reworking and for power to be taken from central and local government and given to local people. Much of the institutional framework is at best lukewarm, if not hostile, to real reform. You have to cut through it.
Despite scaremongering, only 7 per cent of England is currently developed and we are losing perhaps 0.01 per cent a year to build around 50,000 homes a year on green field sites. Increase that by a factor of three to a mere 0.03 per cent and we would build 150,000 homes a year on greenfield sites. Another 150,000 homes a year from brownfield redevelopment and sensible densification gets us the numbers we need. But what is important is how we do it.
Local people need the final say within a system that works. For green field space outside of Areas of National Beauty and national parks, this means giving local people total quality control, allowing some new homes to be earmarked for local people, more custom-build, incentives for those closest to new homes to compensate them for loss of view, better infrastructure planning and a levy on greenbelt development to enhance remaining green space.
For more brownfield redevelopment, give those near to proposals the final say, again with total quality control for local people and incentives for those immediately adjacent (in this case more related to nuisance during the build). Remove the absurd rules that central and local government create, down to the size, angle, and width of staircase (which incidentally would make most of Georgian England’s high density housing impossible). Stakeholders will scream blue murder, but in the real world it is this micro-management that is crippling our ability to build quality homes.
This keeps the sensible reasons for planning (giving people a say on their immediate location, compensating those who lose from development, and ensuring quality development), whilst rejecting the idea that top-down planning is fundamentally the way forward. Beautiful homes can be uplifting. Most of our attractive pre-1947 homes could easily be built today in terms of cost. But under planning and building regulations, most would almost certainly be illegal.
Those who argue planning reform is unnecessary ultimately pave the way for the statist proposals emanating from Labour. Burying your head in the sand is not a political option. If the Tories are not prepared to engage on this and fundamentally ignore a rising economic and social crisis, they will lose. What is needed from the Tories a system of planning reform that ends central planning in favour of trying to mediate between developers and local people. The Conservatives can’t win a bidding war on using the state to impose housing. They need instead to set out a real alternative that will build the quality and quantity of homes we need.
(To pre-empt some of the likely comments two further points are made below.
* Immigration. 75,000 homes a year are needed for net migration of 180,000 or so, assuming 2.35 migrants per household. Most housing demand is not related to this.
* Empty homes. UK long term empty homes total around 330,000 or so. There are over 26 million households in the UK. So just 1% of our housing stock falls in this category.)