Young people should be wary of the Government’s planning bonfire

I have noticed a lot of young people enthusiastically supporting the Government’s proposals to radically cut down planning regulations.

They join in attacks on groups like the National Trust and Friends of the Earth, calling them wealthy NIMBYs who are protecting their own over-inflated house prices. They buy into the suggestion that the planning system has held back house building, harming a growing proportion of the current generation of young people who are now “jilted”, priced out of home ownership.

Is this right?

I don’t think so. In fact, I believe the Government’s proposals are bad for young people, and bad for intergenerational justice.

Is planning the problem?

There can be no doubt that planning regulations are a drag on housing development, adding both the cost of the buildings themselves and the process of putting them up. But that’s like saying that the minimum wage and gender equality laws are a drag on business. They may be, but they’re regulations we value.

The evidence that the planning system is a bottleneck is weak. According to London Councils there are approximately 170,000 homes in London’s planning system with permission that aren’t currently being built – the constraint being scarce mortgage finance caused by the credit crunch and high land values.

In London Ken Livingstone used the planning system to force reluctant councils to build more houses, and increased output by almost 50% in a decade, though it was still about half the level required to stabilise prices through supply. Boris Johnson has continued with this approach, albeit with more of an emphasis on negotiation than force.

Would the private sector build more homes without the planning system? The only time in the past century that the UK has seen house building match demand, and kept housing affordable, was when councils built in huge volumes from the 1950s to 1970s.If you think price bubbles are all about supply, explain the continued volatility of house prices through the 1950s, 60s and 70s. The big home builders have little incentive to build large volumes and deflate the value of land, and never filled the gap when we stopped councils building in the 1980s. Have we given up hope of persuading the public to back large scale public house building?

Figures from the Department of Communities and Local Government.

The Government’s main reform is to radically simplify planning regulations. Are the regulations and guidance the problem, or are we overlooking the understaffed local planning authorities and unduly complex or slow processes?

Actually the biggest obstacle to building more housing is the cost of land. Unless we threw away any protections for the green belt and farm land that take up most of our country, or accept much higher density levels across the board, it will always be too scarce a resource for supply to match demand. There can be no doubt that we need policies that reduce the value of land, or at least contain the rises in land values (which are in fact the underlying reason for rises in the prices of existing houses).

Planning consent for housing transforms the value of farm land and brownfield land, so the argument goes that presumed consent would somehow help. I’m not convinced it would, and anyway we could call for proposals such as councils auctioning off land and using the planning gain to fund affordable housing.

Do we need to reduce planning costs as well as tackle land values, pushing for every tool in the box to be used? Is it simply that the current Government is serious about reducing planning costs, but that no minister since Lloyd George has shown a serious interest in reintroducing land value taxation?

Isn’t planning a solution?

My greater worry is that young people are forgetting the benefits of a detailed planning system.

If they are concerned with intergenerational equity, what greater disaster for the current youngest and future generations can there be than climate change? Successive governments may have failed to keep housing costs in check, but that failure pales into insignificance when we consider that decades of hot air on climate change policy have failed to even slow the global rise in greenhouse gase emissions.

The planning system is central to mitigating and adapting to climate change.

Without tough and highly prescriptive planning rules on car parking, road layouts, renewable energy and a long list of other policy areas, councils will continue to allow development that is incompatible with reducing emissions to a sustainable level. Labour failed to go far enough with the planning system, and just as excellent new rules on renewables were ready to be introduced, this Government has decided to scrap the lot and introduce some vague aspirations through which anti-green councils (being the majority in England) will drive a polluting coach and horses.

Can you see every council in England and Wales deciding that “sustainable development” requires a reduction in car traffic, fewer car parking spaces and proper provision of cycle routes?

Allowing people to convert offices into homes without planning permission could damage jobs and lead to the worst type of housing being built, without any regard to considerations of size or quality.

Protecting the green belt and farm land is important for climate change adaptation, not only in terms of protecting habitats (if only all farms were managed well) but more importantly for food security. It’s a long time since the UK was self-sufficient in food, but there are a number of pressures on food prices that will only get worse in the years to come: global population growth and an increase in per-capita demand for meat from grain-intensive cattle; oil prices that will only go in one direction long term, which not only fuels machinery but is also the basis for fertilisers and pesticides; and longer term the potential loss of many of the world’s bread baskets due to climate change taking hold.

We need to keep all the land we can for food production, so that future generations have a chance of keeping a high level of domestic food production using systems such as permaculture and aquaponics. This isn’t science fiction, the new London Plan even begins to discuss this concern.

The planning system can also help redress longstanding integenerational iniquities, such as requiring councils to plan for extra social housing (council and housing association housing) in wealthier areas, and ensuring that homes are always built with decent sized rooms (something this Government has reversed to simplify regulations).

These and other provisions could still be enshrined by more enlightened councils in the new slimmed down system, but they could be challenged if they stood in the way of building lots of houses and promoting economic growth. The benefits of will largely go to property developers and income rich people who can buy houses.

My suggestion to fellow jilted youth

By all means call for planning regulations to be streamlined where they are excessive, and to force NIMBY councils to permit more house building. Challenge conservation groups where they block the development of decent housing in areas that desperately need it, and where the justification is weak or self-serving.

But please don’t support this regressive Government in its efforts to tear up the planning system in the name of misdirected growth. The critics aren’t hysterical, hypocritical or self-serving; the concern is genuine and justified.

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5 thoughts on “Young people should be wary of the Government’s planning bonfire

  1. Hi Tom,

    A quick response to your blog, and also some rationale as to why PricedOut is supporting the proposed planning changes.

    This is not an ‘official’ PricedOut answer – I’m just one of the volunteers, and other people may have different views.

    The first point to make is that PricedOut has always been against simple suggestions that more supply will solve everything – and have spent many, many hours raising the profile of the need to look at issues such as excessive mortgage credit, the role of Buy to Let landlords in bidding up prices and the problem of second homes and older people treating housing as an investment good.

    But there is no doubt in my mind that lack of supply has been an important factor underpinning higher prices. And the planning system has had, as you say, an important role in this.

    The second point is that we don’t view these proposed planning reforms are perfect – there is definitely room where they can be improved. For example we think the government has failed to address the problems related to the poor state of the building sector and the lack of quality and value it produces.

    But the proposals to change planning matter a huge amount – and in a positive way – for young people and the future for young people’s (and young families) housing costs and with it their future social and economic health.

    There is also the question of political realism here.

    The planning proposals we have on the table are what we have now. They are firstly better than the status quo. They are secondly much more likely to happen than the long wish lists for a perfect planning system that get churned out whenever reform is in the offing. Many of these aspirations are noble and to be supported, but not at the expense of stopping any change – they make the best the enemy of the good.

    They are also fairly tame – having a presumption in favour of development is only really reversing the planning system to where it was prior to the changes put in place by the Conservatives in 1991. It won’t touch any green belt or any AONB, which is why the Natural Trust is trying to redefine the debate around any ‘special place’ – which is a fairly big caveat in which to prevent new development.

    The question for those to oppose is what you can put on the table that is realistically going to happen? More fancy aspirations set against continued deterioration in housing affordability isn’t good enough.

    We were in a meeting to discuss planning reform two months ago when Shaun Spiers, the Chief Executive of CPRE stood up and called for everyone to campaign against more market housing, and instead support a ‘radical programme of social housebuilding’ as the true path of ‘social justice’. (Strangely, Shaun wasn’t championing this approach when Labour was in power – a much more sympathetic government to social housing – I wonder why not?)

    Of course, Shaun knew that this would never happen – that the money was never going to be there, that no party would support it and no CPRE member would wear such a proposal. But it was clever politics to position an essentially conservative and regressive core aim beneath woolly feel good sentiment.

    Just as you are concerned that PricedOut is supporting a ‘regressive government’, I’m also concerned that you are seeing good intentions where there is more cynical calculation, particularly from bodies who represent (and get lots of healthy fund raising from) a demographic of people who don’t want new housing and are prepared to campaign, give money and cause a lot of trouble to get there way.

    The anti NPPF campaign is going to be a massive profile raiser for the National Trust – and Fiona Reynolds should know, she used opposition to planning reform in the 1980s to turn CPRE from a marginal group into a major campaigning body. I suspect the Green Party is making similar calculations as a way to get disillusioned Lib Dem votes in shire constituencies (but then maybe I’m just cynical).

    So we’ve decided to take a position of ‘yes, but…’ not a position of ‘no, maybe’.

    It’s not perfect – but that is how getting change works. And for far too long the voice of younger people, who need greater housing supply, has not been represented, whilst the anti housing lobby keeps an imperfect regime in place and hounds out those who seek to make sensible change.

    To come now to the points you raised.

    First – you equate the planning regime with gender equality laws: they may hold back the market, but they achieve things we all value, right?

    But does the current planning regime strike the right balance? I really struggle to recognise your portrayal of the current planning system as a champion for the social good.

    In the village in which I grew up, the main period of house building – despite a much smaller local population at the time – was sometime between 1800 and 1820. The village grew organically in response to need and housing expanded as a result. Since the post war period it’s effectively been stuck in aspic – as a result of the Town and Country Planning Act and all that followed it. There hasn’t been a new house built for close to fifty years and the Secretary of State recently had to sign off an application for someone to upgrade a 1940s tin garage by the side of the field with one made with local stone. It took several years before this garage got to the cabinet Ministers desk – a valuable use of time for all.

    Needless to say all prices are somewhere north of £350,000 to £1,000,000 and no local could hope to life there – the new residents are wealthy, old and from London (and very active in planning and environmental matters). All the young people who grew up with me are now either sofa surfing, back at their parents or displaced to the largest market town twenty miles off. Car use has increased, as partly as all labour has to be shipped in from the cheap parts of the county.

    Is this the sign of a planning system that achieves the right balance between ‘protecting’ the countryside and desirable social objectives? I don’t think so.

    You also seem to think that everything that is wrong with the building sector is somehow unrelated to the planning system. But the behaviour of the building sector is intimately linked with the planning system – it is the skeleton to the current building sectors rather flabby and unattractive body.

    Why is the current building sector so dominated by a few major mass house building companies?

    It has a great deal to do with the fact that planning presents huge barriers to entry for new builders – who cannot afford to invest in the necessary overheads nor have a government lobby to bend the planning system to their needs. The current planning system keeps the ‘big six’ with a major competitive advantage over smaller builders (who are more likely to invest in good design and be sympathetic to local conditions)

    Why, when there is such obviously high levels of demand, is the current building sector not responding with more supply?

    It has a lot to do with the fact that planning enables builders to ensure that the supply of land is restricted, keeps prices elevated and enables builders to drip feed new supply and maintain healthy profit margins.

    With no threat of the release of new land, and no competition from new entrants, Barratts can keep produce crap indefinitely – knowing that there will always be a ‘lucky’ buyer.

    Why does the current building sector invest so little in design and produce ugly houses?

    This has quite a lot to do with the fact that land prices have been increasing at a much faster rate than house prices (due to the very restrictive nature of land allocation under the planning regime). Builders who want to make profit therefore have to focus on squeezing good design to compensate for higher land prices.

    Why have we seen attempts at housing development focus more and more on unattractive large scale mega housing developments?

    It has a lot to do with the fact that the current planning system to so restrictive and full of political obstacles that local and national government see forcing through one big development as politically easier than releasing many smaller pieces of land where they are more likely to be needed. Target housing at the unattractive town where the wealthy middle class won’t object. Try to reach the numbers by sticking up an ‘eco town’ in the middle of nowhere. This is how the current planning system works – and it sucks (although not if you happen to be a swing voter in a shire county)

    Why have large house builders consolidated their hold on the market over the past twenty years and why have they concentrated on building two bed flats?

    Part of the reason is that the effort to focus all building on brown field sites requires much higher levels of capital investment and capacity than smaller builders (who traditionally did smaller developments of four or five houses on farm land) have. Higher levels of capital investment also mean funders are seeking higher returns (hence the large blocks of shoeboxes).

    The current planning system fundamentally underpins the crapness of the current building sector – these guys wouldn’t exist without it. So you can’t really blame under performance on them alone.

    There are lots of ways in which the government isn’t tackling the crapness of the big developers, but the presumption in favour of development will help the smaller builders – as it makes planning much easier for them and undermines some of the monopoly of the big guys.

    You also say that land will ‘always’ be too scarce a resource to meet demand – and therefore there is little logic in trying to release more.

    But this is deeply flawed thinking.

    There is currently a huge yawning gap between the price of agricultural land and the price of land with residential planning permission – a hectare of arable land in England and Wales is £16,927, yet a hectare of land with residential planning permission is £1,900,000! If your argument were close to being true – this gap wouldn’t exist in any way resembling the size it currently does.

    And we are not talking about releasing huge amounts of land here. Only 9% of land in England is built on – releasing a couple of additional percent would have a powerful downward force on land prices and not cost the countryside, and would enhance not detract from quality of life. The language being used by the CPRE and National Trust of ‘concreting over the countryside’ is simply not true – and is very unhelpful in getting a sensible debate happening.

    I agree that there are questions about how we ensure that we have builders who deliver cheaper homes as a result – but here the current planning system is the as much the obstacle as anything else. And the current proposals are a better way of starting to break this down than any I have seen from opponents. But this is something to discuss more.

    I would disagree with your distinction between ‘affordable housing’ and ‘market housing’ – that the former is somehow ‘good’, whilst the later is ‘bad’. But you can’t separate the two – part of the problem is that very expensive market housing has exacerbated pressure on social housing. If you want to have a functional social housing sector, you need young people who are earning a moderate wage to be able to afford to buy a market house. And that needs more market housing. There is also, again, the question of realism – if you want a massive programme of social house building, where is the money going to come from? It is simply not a realistic option in the medium term – and social housebuilders frankly face as many planning obstacles as market builders at the moment.

    I understand least of all the proposal that we should preserve as much ‘farm land’ as possible for ‘food security’ – and a vague hint that we should be aiming for self sufficiency in food. I fundamentally think you are barking up the wrong tree here – and I spent six years working advising developing countries in agricultural trade negotiations, so I know a bit about the arguments. What you are proposing means both more expensive food and more expensive housing and is an argument that was lost about 200 years ago. But perhaps we should save another blog for that!

    I was struck by two comments under a story setting out some rather wonderful photos of the UK by satellite highlighting how little of the UK was developed. The first was from a German, the second from someone English:

    “I wonder why people say “we are a small island” when in GB is so much space to build more housing. Look at Germany we have a beautiful countryside too and houses more spaced and a far lot CHEAPER despite Germany’s wages so much higher. But when an economy is only based on high house prices and Government strict planning rules then sadly the english people are confined to live in so call “rabbit hatches” with a mortgages around their neck until they move to a coffin.”

    “This is why our houses are so small. I love our countryside as much as anyone but I would rather that we all lived in bigger houses just slightly farther away from our neighbours; instead, but other nations’ standards we live in a shoe boxes. How about some habitat for humans?”

    http://www.dailymail.co.uk/news/article-2011692/A-green-pleasant-land-Map-reveals-half-Britain-countryside.html#ixzz1Vvq09hyz

    Our planning regime isn’t working, and it’s time it was changed.

    • Tom Chance says:

      Matt,

      Thanks for this very long, considered reply. You’ve given me a lot to chew over, and certainly you’ve made me realise my perspective was somewhat urban having worked on housing policy in London for six years or so, that in the kinds of countryside towns where I grew up the politics can be quite different.

      But I fear we differ fundamentally on three points.

      The first is that you think these reforms are fundamentally good. I disagree because I see no need to scrap around 1,000 pages of policy just to introduce a presumption on favour of sustainable development and rules on NIMBY councils needing to allocate a surplus of land for development. As I said, London has got some way towards achieving this through strong regional policy that drove up supply.

      We face many other problems – the fundamental problem of finite land and excess demand driven by population growth, buy-to-let, foreign investors speculating, etc; councils and other public bodies being unwilling to release land at anything other than full market value; an unhelpful obsession in the HCA, GLA and many councils with big schemes and big developers, which is a general policy problem not simply a planning one as you suggest; and many more.

      The second point is that you haven’t paid any attention in your comment to the positive aspects of planning that I described, nor the challenge of mitigating and adapting to climate change, nor its role for positive social change. (Incidentally, you misunderstood my point about market housing – neither one is better than the other, but in a city where the majority can only afford the former it is scandalous that we build more more of the latter, and that the current Mayor is content to enshrine damaging gentrification in planning policy)

      I share your anger and frustration about the failure of housing policy in the past few decades, which has left increasing numbers of people in poor condition, expensive housing, unable to access a secure home, whether it is rented from a social landlord or bought. But I cannot share your optimism that a laissez faire system would deliver anything better. Surely converting offices into homes without any involvement from a planning authority is a recipe for the crappest of homes?

      The third issue you haven’t addressed is climate change, a much greater intergenerational injustice than the failures of the housing market. A coalition of planning experts and environmentalists think we need detailed and prescriptive planning policy, which this new framework eradicates in the name of growth. That’s a disaster, and paves the way for even less sustainable development.

      So I agree that the planning system needs reform to force house building on NIMBY communities, but I disagree that these reforms are, on balance, positive.

      Your tweets lambasting any opponent are, frankly, similar to the kind of maddening rhetoric from government ministers. I do wish PricedOut would add a little nuance, along the lines that too many councils block development but you think the reforms could do with some improvements.

      Your example of Germany is instructive. There a system of rental regulations and tax incentives mean that there is far less demand for home ownership and more supply of decent rented accommodation; concise but tough planning and building regulations combined with a much stronger focus on skills mean the quality of housing is much higher; self-build and smaller firms are much more common and better supported by policy; and they can boast some very forward-thinking use of town planning in places like Freiburg. Their system certainly doesn’t provide any evidence to support this Government’s laissez faire approach!

      Finally, on a more political note, I find your willingness to accept “realities” a bit depressing. There’s absolutely no reason that the British Government couldn’t finance a major public house building programme, the current Government just choose not to. With Labour in a deep policy review, now is a good time to pressure them to put it back on the table, along with reform of the private rented sector. As the resurfacing of the mansion tax debate shows, there’s also more than a slim chance that we may see taxation on property (therefore land) reappear.

      I’m no radical eco-socialist idealist, I like to make changes in the real world, which is why I joined the Green Party. But in the scheme of things, a world where house builders run amok building poor quality housing in sprawling semi-rural suburbs, all for the sake of a few more people like myself getting on the property ladder, is not a world I want to help bring about.

  2. Roger Hunt says:

    “A coalition of planning experts and environmentalists think we need detailed and prescriptive planning policy”

    Oh that’s alright then – they must be right…

    Germany has high levels of home-ownership – this is a complete fallacy. Their average is brought down by what was East Germany which, unsurprisingly, has very low home ownership

    I’m no radical eco-socialist idealist, I like to make changes in the real world, which is why I joined the Green Party.

    Ha ha ha – this is one of the best lines i have read in years! Excellent – keep up the good work

    • Tom Chance says:

      Roger, nice to see such reasoned arguments.

      How about some evidence, such as EU stats from 2004? Only 45% of households in Germany owned their home with 55% renting. Or Sweden, where 38% owned their home, or Denmark where 49% owned their home. The common themes in those countries are much stronger rights for tenants, much stronger regulation of the rental market, tax incentives for responsible landlords, property taxes that push down on land/property values, larger co-operative sectors and in some parts more of a culture of communal/social solutions rather than individual solutions to housing need.

      Hence there’s little point in holding Germany up as evidence to support the NPPF.

  3. [...] couple of years ago I included a chart of house building in a blog post arguing that young people shouldn’t necessarily support the removal of planning controls. The [...]

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