Lord Taylor of Goss Moor is a Liberal Democrat peer and former party chairman. Chris Walker is the head of housing and planning at Policy Exchange.

During the post war era we created both the Green Belt to prevent urban sprawl, and we built 32 new towns that are today home to 2.5 million people. Today the time has come for us to think how this two pronged ‘deal’ can be applied once more.

Can we find a new deal to both solve the housing crisis and address mounting concern that we are imposing  poor quality housing estates onto historic communities, without the consent of local people?

After the war, we faced a national housing crisis.  The new towns delivered through the New Towns Act of 1946 were a critical way of meeting housing need. Implicit in this was a deal between existing homes owners and those needing to be housed: “Greenbelt protection for the green fields around existing communities in return for new towns”.

Yet today this deal has slowly (and conveniently) been forgotten. Not a single new town has been built since 1970, yet the greenbelt has most than doubled in size and millions cannot now afford a home.

Nearly all new housing built today is through sequential development – i.e. building around existing communities. But adding endlessly to existing towns and villages and building on nearby fields directs development to the very bits of the environment the people treasure the most.

It makes new housing development unpopular with local people and politically toxic for local politicians. Such furious local opposition means that a large increase in development is the last thing local authorities want. The upshot is land for new housing is rationed and land prices rocket.

It is actually worse than this, because new housing development is set up to fail.  When a local authority allocates land for housing development, that land jumps in value – ”land value uplift”. So an acre of farmland that might be worth £8,000 could be worth around £400,000 once it has planning permission, even before any infrastructure is put in place.

Unfortunately, in the current planning system, most of the £392,000 value uplift is captured by the landowner when they sell the land to the developer. The local authority and national government struggle to pay for infrastructure and facilities for the new homes subsequently built there. Local councils are left holding the can.

The adverse consequences of this are plain for everyone to see: dense housing estates with rabbit-hutch homes and under-provision of new infrastructure, with quality design and place-making all squeezed out because the price paid for the land makes financing quality and services ‘unviable’.

In short, the NIMBYs far too often get exactly the thing they fear: an ugly dense housing estate on their doorstep with added traffic and congestion on local roads, and council tax payers financing inadequate services.

To make development more popular we need to recognise the NIMBYs have a point. We need to say so. And we need to do something about it.

The New Towns Act, which went hand in hand with the establishment of the Green Belt, allows land to be purchased for a new community in places where the detrimental impact on existing communities is less, at current use value – i.e. the £8,000 cited above. That solved how to fund homes, infrastructure, services and great place making, whilst also preventing urban sprawl.

However, the Act was part of a centralised “command and control” legislative construct created an in era when the legitimacy of the state was never more accepted.

In short, these powers are vested in the Secretary of State, who can designate and impose new towns on local communities top down from Whitehall. Today there is little desire for a Secretary of State to do so.

It is not hard to grasp that in the modern world such a decision of allocating a new town top-town would be immensely politically difficult. It would require the government to consider a huge range of possible locations, all of which would like be met with furious hostility, before short-listing and final decision taking all in the public spotlight.

It would replicate the sorts of debates over a new London runway and HS2 – wildly difficult for any government to see through.

A paper published by Policy Exchange today sets out a proposal for giving local authorities the powers instead to create new garden villages – and capture the land value uplift to pay for it in a way they cannot currently – to meet their local housing needs. This would enable them to jump over the powerful politics of the NIMBYs.

Such powers would increase the choice local authorities have about where new housing is built. It would empower them and work with the grain of localism.

Remember the National Planning Policy Framework was founded on the proposition that local planning authorities cannot be allowed to ignore their local housing needs, but should be able to decide how to meet them. Local support needs a compelling offer: build a new garden village to meet local housing need and you can rule out sequential development elsewhere, including on appeal.

Although many like to pretend otherwise, we face a housing crisis today just as we did after the Second World War. If we are to accept the premise of localism, we need to equip local authorities with the right tools. We need to build 240,000 homes a year just to stand still . We are currently building less than half that.

As a result house prices rise inexorably, such that homeownership has fallen from 71 per cent in 2003 to 65 per cent today, social housing waiting lists are 1.7m households long, and 0.7m more 20-34 year olds are living at home with mum and dad than in 1997, despite no increase in the population of that age group.

So imagine if England’s 353 local authorities each built just one new garden village of just 3,000 homes during the next decade. That’s well over a million desperately needed new homes or 100,000 plus extra homes built a year.

We can strike a better deal. It’s a return to the very roots of planning, its first principles, its very DNA – and it would deliver the homes we need, without doughnutting historic towns and villages with vastly more unwanted poor quality estates.