Over the weekend, Mark Carney warned of the threat to the recovery posed by a boom-bust cycle in housing. Today, Mark Hoban writes on this site about measures to decrease demand. As he and the Governor both point out, the other side of the housing coin is action to increase supply. The Government’s National Planning Policy Framework (NPPF) is intended to strike the right balance between building more homes and maintaining local control. When it comes to the former, it has had some success: the number of new starts is up by almost a third over the last year, though the number of completions remained very low, coming in at four per cent. As far as the latter is concerned, its record is more mixed. Conservative MPs queue up in Westminster Hall each time housing is debated to denounce the framework as a licence for housebuilders to build where they please if inspectors reject local plans – regardless of the views of local people.
What more could be done? As Alex Morton, formerly of Policy Exchange, has urged, there should be a blitz on brownfield bureaucracy: a presumption against interference should run through the planning system, and change of use should be restricted to clear externalities (for example, a home changing to a pub). But there is a limit to how many homes can be squeezed into brownfield. Morton illustrates the problem as follows: “There might be enough vacant and derelict brownfield land for a million homes, not enough for just 30,000 homes, yet more than a million extra people are expected to move to [London] in the coming decades.” Furthermore, those who live in brownfield want it to be kept green. Simply cramming more housing into it wipes out green spaces. Between 1992 and 2005, the capital lost the equivalent of 22 Hyde Parks worth of front gardens.
Even were all immigration to be halted tomorrow, demand for new homes would still soar: smaller family units and an ageing population would guarantee that. But where is new housing to be built if not on brownfield? The Government could tinker with the NPPF further to load the dice against local plans, or tear them up altogether to drive through more home-building – and ensure that the houses are simply slapped down on green belt. This would be to return to the discredited days of Labour’s spatial strategies, and to tear up the Conservative commitment to localism. Both Policy Exchange and Centre Forum have championed what Tom Papworth, writing on the this site, called “a planning regime that incentivises local communities to allow building”. This would see local communities compensated for new housebuilding if they consented to it – perhaps by referendums in which all those affected vote.
Such schemes strike the right balance between local consent and new building. But as I noted when the Policy Exchange scheme was first floated, they are not the way the Treasury likes to do business. Local opinion is variable and unpredictable by nature, while the department craves certainty and predictability: it wants more houses built – and to know how many are likely to go up in any given year. These command-and-control instincts help to explain why it will doubtless have found ways of urging the inspectors to get tough on local plans. Morton now works in the Downing Street Policy Unit, but government is clearly reluctant to take the path he has suggested. So what is to be done? As we have argued previously, the alternative to building lots of homes in many places is build lots of homes in a few places: this would certainly lessen, or at least limit, the political penalty involved.
That means new towns or garden cities. The scheme that George Osborne is pushing in Ebbsfleet confirms Government interest in the idea. The location offers a hint about the future. “If only there was a large area of derelict land that was within easy reach of London and with excellent links to the economic heart of the largest single market on the planet – and that also wasn’t of any great agricultural or environmental value,” Peter Franklin wrote on this site earlier this year. “Hang on – there is,” he continued. “It’s called the Thames Estuary…It does indeed seem ridiculous that we should be scrabbling around for land in the South East – even contemplating the destruction of the green belt – when such a large and strategically-located area is in such obvious need of regeneration. Obviously, the obstacles to development are huge – but so is the potential.” More garden cities are an integral part of the housing supply solution.