Thinking beyond the market: housing, planning and the state

Allan Cochrane
Allan Cochrane

by Allan Cochrane, Open University, UK

Everybody seems to accept that there is something wrong with the way that housing is delivered in Britain, particularly in England. In some parts of the country house prices are stubbornly high and rising; elsewhere there seems to be housing nobody wants. All political parties are committed to enabling people to live in homes that they own, yet levels of home ownership are falling as the proportion of the population living in private rented housing rises. More people now live in private rented accommodation than in social or council housing. The massive decline in council house building since the 1980s has not led to a significant rise in the building of new homes for sale.

The solutions on offer by the major political parties seem to circle around the provision of some sort of subsidy to first-time buyers, as well as looking for ways of persuading (sometimes effectively bribing) local authorities and neighbourhoods to allow developers to build in their areas. Under the last Labour government, regional and local targets were introduced for new housing, albeit with few levers to ensure that the targets would be met. The latest proposal from the Conservative Party is to allow tenants of housing association properties to buy the homes they live in at discounted rates, with little reflection on the extent to which the sale of council houses has brought more private rented property onto the market, rather than increasing home ownership.

There is a powerful rhetoric that blames the planning system for the problems. Planners are said to be too slow to grant permission for development and to impose unnecessary conditions on any development that takes place when they do, whether through regulatory requirements on the buildings themselves or through demands for financial contributions to deliver social or other infrastructure. There is a danger that this is a rhetoric that will simply become the dominant common sense.

Our research – which draws on the experience in the Greater South East (London’s city region) – suggests that it is highly misleading. This is widely recognised to be an area in which the demand for (and need for) housing is high. Indeed some (such as the Centre for Cities) argue that the provision of housing on the edge of the region, where our research was conducted, is necessary to underpin wider forms of growth. It is also an area within which new houses are being built.

In Milton Keynes and Northamptonshire there is already a great deal of land with planning permission. It is hard to believe that there is a shortage of such land. Yet the rate at which new houses are being built remains far below any of the targets set in the past or the assessments of housing need being identified locally. So, rather than finding the explanation for this in the behaviour of the planners or the vagaries of the planning system, it is necessary to focus on the business models of the house-builders and developers (who often work closely with planning agencies in practice). The restructuring of the industry since 2008 has left it dominated by ten main players.

This is a managed market, but not just because of the planners. The house-builders are actively engaged in ensuring that they have a supply of land with planning permission which they can bring into productive (and profitable) use as and when they want. They have little incentive to launch large scale housing projects which may disrupt the market and even bring prices down. As a result land is released for development in a controlled and limited way, rather than to meet expressed housing need or even demand. Operating in this way also makes it easier to fudge infrastructural issues, since new developments are able to piggy back on existing social and hard infrastructure in terms of transport, as well as education and health services.

Once this is acknowledged, it becomes possible to think more creatively about what is to be done about housing. The attempt to nudge the house-builders to deliver through promises of land with planning permission and infrastructural investment, whether offered by Labour or Conservative led governments, has not been successful. Where there has been development on any scale (as in Milton Keynes) public ownership of land seems to have been a prerequisite and the new town (or even, the garden city) model continues to offer possibilities. There is also potential (as Danny Dorling suggests) to rethink the way in which existing housing supply in cities is used, as well as the regional imbalances in development which help generate shortages in one area alongside empty homes in another. But this requires active engagement by the state and on a significant scale, rather than simply the identification of abandoned sites for development, in Ebbsfleet or elsewhere. There are, of course, recent examples of just such engagement, perhaps most obviously in the investment (and planning) associated with the 2012 London Olympics. Often this has resulted in dramatic effects on urban – including housing – development, but these have generally been justified as one off initiatives or mega projects rather than as part of a wider urban strategy. Such examples nevertheless confirm the need to reframe the debate in terms that are not mesmerised by the search for solutions through free market models in areas where there is not and cannot be a free market.

If you enjoyed this blog entry, you may be interested in reading the author’s article entitled Governing the Ungovernable: spatial policy, markets and volume house-building in a growth region by Allan Cochrane, Bob Colenutt and Martin Field which was used as a springboard to develop the wider arguments in this blog piece.

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