Why do we indulge suburban NIMBYs? A rant about housing policy.

The precious green belt that we must preserve at all cost

I was thinking about doing a careful analysis of the different political parties' proposals on housing. After all, it's one of the biggest things out there and, as Jimmy McMillan said, the rent's too damned high. Not only the rent but the price of housing and the price of land.

Anyway I'm not going to bother with the careful analysis because every party's housing policy is stupid. It's fair to say that, if you want a forced choice, the Conservative's ideas are the least stupid and Labour's are utterly deranged. Out there we've got rent controls, assorted unspecified reforms to tenancy laws, 'tenants unions' (whatever they are when they're at home), commitments to build oodles of housing without making any changes to the supply of land, subsidies for mortgages and a rate fixed by the government for those mortgages which, when you think about it, is just rent control for rich people.

Everyone - other than planners and planning academics - knows full well that most of the problem with high rents and high prices goes away when you stop limiting the supply of land on which people can build houses. But those planners and planning academics invest their time telling us that 'oh no, it's not like that at all, planning is vital' - mostly by denying the basic economic premise of a relationship between price and supply.

I had an brief interchange on Twitter with a chap from a housing association about Labour's plans for zillions of new council houses. The chap (his name was Murtha) thought this an absolutely splendid idea because of inequality and vulnerable people and "evil tories". I asked a couple of questions about how it would work given Labour absolutely insist that they can build 150,000 new council and social homes every year without increasing the supply of land on which houses can be built. Just like the Conservatives and Liberal Democrats they believe in this mystic and wonderful thing called "brownfield sites" on which all the houses can go meaning that nice middle class people on the margins of the big cities (who might be tempted to vote Labour to stop Brexit or something) won't have to have smelly council estate sorts on their doorstep lowering the tone of the area.

I lose count of the number of times I see councillors who not so long ago were voting for local plans that called for thousands of new homes popping up in the papers alongside local NIMBYs waving banners opposing a few new houses in those councillors' wards. Earlier this year lots of liberal democrats, independents and groups with names like "Badford And District Residents against Overdevelopment" found themselves running district councils previously Tory-controlled having spent the campaign saying they'd stop development. These new leaderships' are finding that, despite promising the NIMBY voters there'd be no development, they are going to have to agree local plans they said were headed for the bin.

More than any other area of policy, housing is dominated by this sort of abject stupidity. It's not that we don't need new social housing (even council housing) but that, if you say that you'll do this without increasing the supply of land, your policy will result in two things - more of the sort of high rise council flats that causes so many problems in the 1970s (and are being demolished because nobody wants to live in them) and more expensive private housing because you've taken up all the land building council houses. And, just to be even handed, the same goes if you create artificially cheap mortgages with subsidised deposits - without new land supply this just increases house prices.

Meanwhile local councils - or rather their national body, the LGA - are telling everyone that it isn't the fault of the planning system that no houses are getting built but the wicked developers who get planning permissions and don't build. Nobody points out to those councils that it doesn't work to grant planning permissions for speculative developments in the wrong location (where the landowner vainly believes doing so will get him more value) while actively blocking developments by actual housebuilders in places where people actually want to live.

Just today a planning academic (this makes me cry, really it does) said this after I'd mentioned that we had more housebuilding when we didn't have a planning system:

We had mass suburbanisation and huge loss of countryside. Planning system if not continually interfered with by govt would have social justice at its heart. That is why it came into being in the first place.

Seriously - mass suburbanisation and huge loss of countryside? Here's the reality:

The urban landscape accounts for 10.6% of England, 1.9% of Scotland, 3.6% of Northern Ireland and 4.1% of Wales.

Put another way, that means almost 93% of the UK is not urban. But even that isn't the end of the story because urban is not the same as built on.

In urban England, for example, the researchers found that just over half the land (54%) in our towns and cities is greenspace - parks, allotments, sports pitches and so on.

Furthermore, domestic gardens account for another 18% of urban land use; rivers, canals, lakes and reservoirs an additional 6.6%.

Their conclusion?

In England, "78.6% of urban areas is designated as natural rather than built". Since urban only covers a tenth of the country, this means that the proportion of England's landscape which is built on is…2.27%.

Yet a huge amount of political capital is invested in stopping that 2.27% of England becoming 3%. This is the stark reality of housing and planning policies, urged on by decades of anti-suburbia snark. Politicians, local and national, are terrified by a tiny minority of suburban NIMBYs who think its more important to preserve golf courses, redundant airfields, derelict greenhouses, former race tracks and tumbledown industrial sites than to have homes for the next generation in places where that generation want to live and can afford.

Right now, in different ways, all our political parties are proposing to solve the nation's housing problems through the use of public subsidy of one sort of another just because they're frightened of these NIMBYs. Billions in taxpayers cash splurged on housing simply because politicians haven't got the guts to tell people that, if they want more affordable housing, the way to get it is to reform the planning system, end the absolutism of green belt and dump the idea of detailed local plans. And then let the private sector build new suburbs.

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Without affordable suburbs cities fail...

Cities are great places to live if you're very rich. Cities also put a lot of effort into provision for the poorest. In between these poles - nah:

From 1990 to 2010, the number of low-income neighborhoods in Chicago rapidly expanded, high-income neighborhoods expanded and stayed strong, and middle-income neighborhoods almost disappeared. An economic neighborhood map of Chicago was the perfect way to begin the conference. It was the foundation of a subtle theme expressed throughout the day. Middle-income neighborhoods are the most fragile, the most difficult to create, and the most important to a city. It is the middle class neighborhoods that are the lobby for schools, parks, services, and amenities, areas often ignored by those in the poor and rich neighborhoods. Middle income neighborhoods are made up of people that make a city run: shopkeepers, small business owners, tradespeople, school teachers, firemen and police.

Without those dull middle-class suburbs - and by middle-class I mean folk like I was growing up not people with nannies who go on skiing holidays and pay school fees - cities don't work. Yet the policies we follow - densification, building a mix of very expensive housing and social lets,urban containment, restricting permitted development rights - are destroying those suburbs.

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If your London housing policy doesn't mention planning reform it's wrong

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What follows doesn't alter the fact that London needs a lot of houses across every tenure but it does provide a little context and suggests that we need a better understanding of the drivers for housing demand in the metropolis. And hopefully gets us past articles filled with stuff like this:

She puts the micro-boom in Hackney down to the post-Olympics changes that have transformed an area which once had failing schools and high crime into a part of London appreciated for its architecture, parks and cafes, but which remains just affordable to people no longer able to live more centrally.

The problem with this is that discussing Hackney's delights (or the weird world in which it has become some sort of attractive neighbourhood) doesn't really help us understand "the heart of the housing bubble". It just tells us that house prices are going up in Hackney. Indeed, Hackney, like its next door neighbour Islington, has seen prices rise significantly faster than the London average.

This graph is something of an education for anyone considering London's housing situation (you can see a bigger version here):

The bar graph bit shows the differentials in London house prices from 2008 through to 2011. What seems clear from this graph is that the outer eastern boroughs (Newham, Waltham Forest, Barking & Dagenham, Bexley) have seen the biggest fall in house prices whereas - Tower Hamlets aside - inner eastern boroughs (Hackney, Islington, Southwark, Greenwich) have seen significant rises, in Southwark's case by over 20%.

The demand illustrated in the article above is younger, as the author makes clear:

Everyone who comes in is white, and in their late 20s and 30s, unless they are older parents accompanying their children; this demographic is repeated at each of the nine viewings and open days that Keatons allows us to attend over three days.

The question isn't just how long all this can go on before the bubble pops (the answer, if other international cities are any guide, is 'a lot longer than you think') but where are the workers going to live? Of course the folk spending £700,000 on a three-bed terrace in Hackney* will be working (very hard I suspect too) but in their offices there will be people on half the money.

For some of these people the answer is that they're at home with mum (which is not really sustainable), in expensive rented flats, probably sharing or else cramming onto a train from Southend, Chatham or Peterborough where they still have an outside chance of being able to afford either rents or a mortgage.

There's nothing new in this pattern - back in 1987 when I left London, I had a boss who commuted in from Eastborne and colleagues whose commute was from Peterborough, Maidstone and Hemel Hempstead. But it reminds us of the devil's deal we've done - constraining new build, limiting permitted development and making no compromise on London's green belt has been great news for property owners in the metropolis but not so great for the population who want to buy or rent property.

Add the time and cost of actually getting a planning permission on land you're allowed to develop and we have a recipe for a housing market so schlerotic that repeated heart attacks are simply inevitable. So I find it bizarre to hear London politicians opposing more liberal permitted development rights (converting empty shops into homes, for example), proposing daft politicies like rent controls and even suggesting tighter controls on housing development.

What we need to hear from these London politicians are proposals for planning reform. We never do though.

*We don't have these problems in Bradford. £700,000 would get you at least half-a-dozen three-bed terraces more if you're not too fussy about quality or location

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