His prescription is more housing supply to accompany environmental improvements. But we need to think a bit more carefully about this to get the medicine right for places like London.

As he points out, the economic benefits of making an area more desirable will largely go to existing home owners and landlords as the value of the land, and therefore the rent they can charge, increases. Lower income people will be forced to move, presumably (according to Jim’s argument) to less liveable areas. Council and housing association tenants who are secure in their homes gain a nicer environment, but they have no direct stake in the increased value of the land their homes sit on.

Building more homes as Jim suggests could help to keep prices down, meaning less of a windfall gain for land owners and possibly more stable rents. But in practice, due to London’s policy of “mixed and balanced communities”, deprived areas tend to see council housing demolished and replaced overwhelmingly with housing for sale in order to “balance out” the social “mix” of people in the area. There’s no way anyone with an average income and average wealth would be able to buy a new flat in most areas of London on the open market.

The flats will be bought by wealthier-than-average people, and probably many then let on the private market, with a good number of those subsidised by housing benefit. So while more supply might dampen the economic consequences of making an area more liveable, and while it might spread the wealth a little more widely, the economic benefits will still mostly go to wealthier people.

You would need to increase house building across London to 50% higher than Boris Johnson’s aspirational target just to stabilise prices. It would be interesting to know whether there is enough spare land and available development finance to raise supply levels high enough in order to gradually reduce prices so that the benefits of new homes would be principally accrued by ordinary Londoners.

But there are other ways in which we can reduce unequal access to nice local environments while maintaining or reducing levels of economic inequality. Housing supply is undoubtedly part of the picture, but policies need to be a bit more sophisticated to achieve this aim.

One simple policy would be to try to build lots more council housing in wealthier areas that already enjoy high environmental quality. That would require a government to reinstate an adequate housing capital budget; the new budget for London in 2011-15 is two-thirds lower than than the budget for 2008-11!

Another would be to ensure all the new housing is put into the control of a Community Land Trust, which owns the land and so can keep homes permanently affordable. Members of the Trust, usually a co-operative, use any rise in land values to benefit the local community and not private individuals. To date, there is only one example of this in London – Coin Street. Despite valiant efforts and credible plans from various other communities, the HCA, GLA and government have done little to make this concept happen.

A third more radical solution – radical as in dealing with the root of the problem (from radix, Latin for ‘root’) – would be to bring back taxation on land. Winston Churchill and Lloyd George both tried, and failed, to do this at the turn of the 20th century. They were blocked by wealthy landowners in the Lords, whose ancestors got rid of them as the power of the Crown diminished.

We have a tax system that raises income off hard work and consumer goods, and that leaves people to rake in huge gains from increases in land values and capital gains with comparatively little or no tax. If we brought back “schedule A” taxes, land values wouldn’t rise so much, the benefits could be clawed back for investment in affordable housing, all local residents could therefore benefit including council tenants, and people might be encouraged to invest their savings in productive stocks and shares rather than dead bricks and mortar.

These solutions have all been applied in the not-too-distant past. But as with the debate over the National Planning Policy Framework, they seem to get overlooked in simplistic debates over false choices like “housing supply vs. conservation”.

Jim’s post is much more sophisticated, looking at the relationship between environmental improvements and the housing market. But his prescription – more supply – needs to be equally sophisticated to ensure that we deliver environmental and social justice side by side.

Put aside the fact that at 36% of the UK’s GDP, the current tax level is lower than under Margaret Thatcher (when it dipped to 40%) and much lower than the Swedish level of around 50%.

How does tax affect me? Well my income tax and council tax, which pay for all the basic public services, the roads, waste collection, public transport investment, welfare for people in harder circumstances and much more account for less than my rent, which pays for my half of a flat with my fiancee. My national insurance and pension contributions that are hopefully securing my retirement add up to much less than my rent as well. Since I don’t spend a great deal on clothes, cars, TVs and the like, I’m not too affected by indirect taxes like VAT either.

After all those taxes and basic life expenses, I still have 35% of my gross income left over for fun, holidays, personal savings and the like.

If I were to get pissed off about someone taking all my money, my first target would be the property market. Look how much money I have to spend just to afford a reasonable flat in an area I like! Then there’s my inability to afford to buy a home making my future less secure, low interest rates on my ISA bond and in the short term the likely rises in bus and train fares due to spending cuts.

Yep, all things considered I think tax is the least of my financial worries.

Anyone on similar or higher incomes who crows about tax levels should stop for a moment and think about the majority who earn less and stand to lose a great deal from public spending cuts.

This is the increasing cost of housing adjusted for increases in income; or adjusting for inflation to state rises in real terms, for economists. Imagine if food or heating bills rose that quickly compared to incomes!

Whilst the property-owning journalists hail this rise in house prices, more and more people are squeezed out of the market, or forced to sacrifice huge chunks of their salary to repay mortgages.

Jenny Jones published a report on the housing crisis in London recently. She shows that over the past decade the cost of buying a home doubled in London, well above the national rise of 63%. This makes the misleading boasts of our Tory Mayor – as he fails to even meet his own modest housing targets – all the more sickening.

Unless we double the number of homes we build, which is pretty unlikely, or we make a radical shift away from home ownership, this trend is set to continue for another decade. But our Labour government and this Tory Mayor are both  committed to mostly building homes we have to buy, with a very small minority available for affordable rent, almost no land being held by communities to keep it affordable, and pretty much no support for alternative models like co-operatives.

Most journalists and commentators are wealthy middle class home owners, so they are heavily invested in maintaining this trend of above-income-inflation house price rises. There are two main reasons for this trend: first, house building supply never came close to meeting demand; second, cheap credit created a bubble that massively over-inflated the value of homes.

Here in London, households with incomes up to an incredible £74,000 are soon to become eligible for “affordable housing”, which you can buy up bit by bit. Us paupers on a mere £74k are no longer able to buy a home otherwise.

In the past year this trend has very slightly eased, with falling demand matching a slight recovery of housing building numbers after the recession kicked them off a cliff. That’s Labour’s reaction to the recession – not a Green fiscal stimulus, but at least not cuts followed by a depression. Still, this slight reversal doesn’t please Geoffrey Dicks, chief economist of Novus Capital Markets, who warned in The Times that recent trends are “exacerbating an emerging supply-demand imbalance”. Cripes!

But just before you got too upset, Dicks evokes Tiny Tim to cheer on the possible return of above-income-inflation house price rises. God bless us, every one! Perhaps after being adopted by Scrooge, Tim would have reason to cheer on the rise of grossly unfair home ownership.

All the evidence shows that London needs a mix of new social, intermediate and market (private) housing that is evenly spread around the city – much like this photo, which I took in south Camberwell. The most pressing need is for social housing, and to end “segregation by tenure”, where your income determines which ghettoised community you can live in. Thankfully my patch is pretty integrated, but go down into Dulwich or up to Elephant & Castle and you quickly enter predominantly rich and poor areas.

But Boris’ plans only deliver around half the needed social housing in the next ten years. His  Strategic Housing Market Assessment, partly based on central government research, says we need roughly 18,200 new affordable homes every year, and that 80% of these should be social housing. But Boris’ Housing Strategy and his London Plan set targets for only 13,200 new affordable homes, of which only 60% will be social. Market and intermediate housing for middle class and rich people will exceed targets, whilst social housing falls disastrously short. We won’t even meet growing demand, let alone deal with the backlog of families in overcrowded homes, B&Bs and temporary accommodation.

That’s not all. Alongside the lack of supply, parts of London suffer from terrible segregation by income. Rich people live in one area, poor people in another. Dave Hill has exposed the contemporary vanguard of this old Tory policy in Hammersmith and Fulham. Boris has removed the requirement to build affordable housing into every new development, and his London Plan only recommends that more private housing is built in predominantly social housing areas. No word on building social housing in wealthy areas.

Until Boris delivers a strategy that meets the demands thrown up by his own analysis, London is just going to keep getting less affordable for the average Londoner.