Conservatives urging restrictive planning controls are planning their own demise

Liz Truss was right when she said that the Conservatives limpet-like attachment to uban containment policies would usher in a far left (and antisemitic) government:

In the early 2000s, there was only a weak connection between land-use restrictions and partisanship. Democratic places were only slightly more regulated than Republican ones. Interestingly enough, many towns that started out more Republican actually became more restrictive over time. This, for Sorens, is a key piece of evidence: “These data support the central claim of this paper: Democrats do not cause stricter zoning, but stricter zoning causes more Democrats (relative to Republicans),” he writes. In other words, when Republican towns increase land-use restrictions, they tend to drive away more Republicans.

I know this is the USA but the impact of urban containment policies is always to drive up land values (and rents and house prices) resulting in places where only the very rich and the poor can live. The less well off - especially the most marginalised such as immigrant groups, single parents and the disabled - live in social housing that is de facto reserved for such groups while the richest can afford the sky high prices and stratospheric rents. The most left-wing places in the USA are becoming, as a result of anti-development policies, the most segregated and most unequal.

As conservatives we should be pragmatic - if the result of such policies is the persistence of housing dependency for the less well off and, as reported recently, an explosion in wealth inequality as land values rocket then we should be looking for an answer that meets aspirations to own for as many as possible, that protects the poorest without enriching landlords and which doesn't featherbed the already rich. Right now, all we're getting is Onward proposing the extensive use of compulsory purchase to prevent landowners profiting from artificially expensive property as a result of those urban containment policies. Such an approach is little different from South African government seizing farms in the name of equality. Plus the, mostly left-wing run, councils in inner London will simply use the cash to shore up their client base through sustaining housing dependency.

Instead of allowing NIMBY residents on nice Surrey towns (and their MPs) to set the agenda, we should be doing was Liz Truss said and making it easier to develop in the city and easier to develop outside the city - if we don't we can expect to see the same happening to Conservative support in London as happened in Liverpool, Manchester, Newcastle and Hull.

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Why houses are expensive.

I like Peter Hitchens, he offers the same iconoclastic hammer to the centre-right's certainties as his brother did for the centre-left. Among Hitchens' common themes is a harking back to a time when we had full and steady employment, low levels of crime, stable communities and trust in institutions. Quite rightly, Hitchens tells us that these things are good things and that conservatives - whether of that party or not - should be concerned to get them back.

Sometimes, however, this enthusiasm for the essential elements of conservatism leads Hitchens to the realm of fantasy:

The homeowners of Britain are being lied to, and unfairly smeared to try to get us to accept a hideous and irreparable destruction of green space in suburbs and the countryside. They are also being blamed personally for a problem they did not cause, in a nasty war on the middle-aged. They should resist this.

This opening gambit is familiar, a justified reaction to the now too common trend of blaming 'baby boomers' for all the ills of modern society and especially for houses being so expensive. Hitchens tells us that this ain't so and the fault lies with "grabby developers", mass immigration, the "epidemic of divorce", the success of London, right-to-buy, and what he calls "targeted inflation".

Now, leaving aside the 'positive money' argument that Hitchens uses in his "targeted inflation" argument, it's hard not to see some truth, at least in the creating of demand for housing, in this list. And, as the rules of supply and demand tell us, increasing demand will raise prices if new supply isn't readily available. The problem with Hitchens argument is that he lays all the blame for house price increases on increasing demand for housing (whether as a home or as an investment) and none of the blame on the lack of housing supply.

Or more importantly, land supply. Because it is how much land we have on which to build (taking as read the increased demand Hitchens describes) that determines how much the homes built on that land will cost. After all it costs pretty much the same to build a house in Kensington as it does in Burnley but the former will sell for a few million while you'll be lucky to get a hundred grand for the house in East Lancashire.

And the supply of land for housing, across most of England, is something determined by government. Moreover, for nearly 70 years, the government - national and local - has determined that most of the land in places where people want to live will have a 'presumption against development'. Not to protect special beauty, heritage or environment but simply to prevent 'sprawl' and encourage denser development in the existing towns and cities. The name for this policy - and it's popular right across the English-speaking world - is urban containment. I saw this described in a school debating competition on this subject as a 'tourniquet for the city'.

Urban containment- even when we're laissez faire on densities - doesn't work. Indeed, it's one of the primary reasons for the housing crises in London, San Francisco, Sydney, Auckland, and Madrid. Here's work from Australia's reserve bank on the subject:

According to the research, and assuming typical mortgage provisions, (Note) the urban containment effect (our term) adds from $150,000 to nearly $500,000 to house prices in major Australian metropolitan areas --- this is not the house price, but the additional impact of urban containment ... The urban containment adds up to $29,000 to annual payments on the average house in Australia’s major metropolitan areas

In the UK this uplift would be between £80,000 and £275,000 - this is the cost of that tourniquet and represents, when multiplied by the hundreds of thousands or properties involved, billions in lost opportunity for the UK (and those other places caught in urban containment's web). And remember, simply making development more dense doesn't solve the problem (partly because building upwards is expensive but most because densification simply increases land values which are the source of our problem in the first place).

If we are to have a debate about urban containment it needs to be on an informed basis - one that recognises the social and economic costs of these policies. It isn't good enough simply to list the reasons why there's more demand for housing and then shout:

...the rape of the Green Belt and the overdevelopment of the countryside will mean our children inherit a blighted country, almost unrecognisable as the beautiful, civilised place my generation inherited from our forebears.

This is splendid polemic but doesn't answer the question as to how we offer the same deal to the next generation - how do they get that stake, a real tangible stake, in their land and culture? I agree entirely that some of the development we get today is pinched, crammed, and dominated by brick and concrete with little space for garden, greenery or the margins when kids can build a den or play out the make-believe that ten-years-olds invent. But this overdevelopment is caused by the lack of land, by the containment. London's 1890s and 1930s suburbs - the places Hitchens' waxes lyrical about - were built with space and openness because the land was cheap, there weren't planners with clipboards and rulers to tells them what they could or couldn't do. Why would future developers not do the same given space and a free rein?

The social cost of urban containment isn't a joke either - this is America, which is worse than Britain, but anyone visiting our cities will see this happening:

Homelessness has long been a San Francisco problem, and with home prices rising, it’s arguably worse now than ever. A January report on SFgate.com claimed that the city’s homeless count is close to 6,700, and a local advocacy group estimates the count at 12,000. The problem is all very visible throughout the city, and increasingly, in Oakland and Berkeley, with open drug use and fights blaring out from the encampments that rest along sidewalks and below underpasses. A recent U.N. official, after visiting the Bay Area, said that in some ways, the city’s treatment of the homeless is worse than what she saw in the slums of India.

For sure, there's other reasons for homelessness than just high rents but getting a roof over peoples' heads should be a start. And, right now, someone losing their rented place in London, is going to find it really hard to get another place, for the first time in my lifetime people are on the streets solely because there isn't a home available for them to live in.

It seems likely that we will keep these policies - the rage in Hitchens' polemic really does reflect how people feel - but I hope, in doing so, that we won't carry on pretending that there isn't a social cost to having urban containment. We'll keep large swathes of countryside - much of it not especially special - while cramming more folk into unsustainable city living, having more homelessness and a generation embittered by their inability to do what their parents did, buy a house.

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Quote of the day: Urban containment doesn't work

From a profile by Aaron Renn of demographer, Wendell Cox:

Wendell also denies that he’s anti-urban, but does believe development should be allowed on the fringes. “I love cities. I’ve lived in three of the four European and American megacities. Only London have I not lived in. I’ve lived in Paris, LA, and New York…I am not a proponent of low density or high density. I am a proponent of those arrangements that get us great affluence and less poverty. And that means low land prices. The big problem with urban planning in the United States…[is that] the competitive market for land has been absolutely destroyed on the urban fringe and we have seen unbelievable two and three times increases in the price of housing relative to incomes in some cities. I couldn’t care less quite frankly about sprawl or densification, though at the same time I do believe that in the United States we’ve made some major errors in failing to put some limits on the extent of sprawl, but that doesn’t mean we should be doing things like green belts or urban growth boundaries because those inherently destroy the market and destroy housing affordability.”

Absolutely - great profile piece too.

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