Build, build, build – in the right places

I had a letter in Friday’s Guardian calling for more public investment in housing:

Zoe Williams is right: if politicians want to address the country’s housing crisis, they must build more homes (Let’s build more homes – who wouldn’t vote for that?, 7 March). As it is, the government’s only serious remedy is to weaken the planning system and hope that the private sector does the job. It won’t. Developers’ profits and land banks are growing, but there is no evidence that they will build good-quality new homes on the scale needed. They certainly will not do so while the economy remains in the doldrums.

For 30 years after the war, the public sector built at least 130,000 houses a year in England, accounting for over half the new homes built. Since 1979, relatively little public housing has been built and there has been no significant growth in private sector house building to compensate. Bashing the planning system and arm-twisting local authorities to release rural land for housing will not alter that.

No one is suggesting a return to mass council housing, but if the government really wants more houses, it must find a way to build them. And if it commits to high standards of design and quality, and to well-planned new developments largely within existing towns and cities rather than sprawling into the countryside, it will find it much easier to get local consent.

Of course, money is a problem.  Even when the Treasury was earning billions in stamp duty and capital gains tax on property sales, it invested relatively little in house building.  The percentage of public expenditure devoted to house building fell from 5.6% in 1981 to just 1% in the year 2000.  It now stands at around 2.2%. 

The money we used to spend on building houses we now spend on housing benefit, around 40% of which goes to private landlords – a sizeable state hand-out to people who do not need hand-outs.  As with the Private Finance Initiative, governments have kept public expenditure down in the short-term by shifting from capital spending to revenue subsidy.  But ultimately you end up with a bigger bill.   

Is it politically feasible to think we may find the money to build the houses we need to build without slashing housing benefit and inflicting unacceptable pain on families who are already suffering enough pain?  It seems it may be.  Support for serious public investment in new housing now includes senior Conservatives and Liberal Democrats. 

Vince Cable is calling for a capital injection into house building in the region of 1% of GDP.  Boris Johnson has called on the Treasury to hand over London’s stamp duty receipts to enable the building of a million houses, at least 80% on brownfield land.  There is no real justification for favouring development in London in this way, but with stamp duty receipts on property sales predicted to rise from around £3 billion a year to £12 billion by 2018 (another housing boom before the next bust…) there should be money to invest in housing even without borrowing.

The social and economic arguments for a state-funded house building programme are overwhelming, but what of the environment?  Conservationists should support new housing if only because a consistent under-supply makes politicians desperate for development at almost any cost, making it much harder to resist damaging developments.  But we should be more positive than that, actively promoting well-planned, high-quality development predominantly within existing settlements. 

The problem now is not that we are seeing too many houses built – far from it – but that we are seeing too many built on greenfield land, most of which are only affordable to those already a few rungs up the ‘property ladder’, and too much greenfield land allocated for future building, when the market has picked up and the developers are ready. 

Money is one problem, but there is also a lack of capacity in the house building industry to build on the scale and at the quality we need, and an ideological resistance to intervening in the market in a concerted way.  So the temptation will be to give more bungs to the big developers in the hope that they will use the weakened planning system to get building.  What is really needed is a serious, worked through vision for how to fund and build many more new homes in an environmentally sustainable way, which means largely within existing settlements. 

Harold Macmillan would have understood that.  The debate on housing is slowly shifting and I hope that his successors will come to realise that the system is not working – too much loss of countryside, too much aggro, too few homes – and that it is time to intervene more vigorously in the market.  



4 Responses to “Build, build, build – in the right places”

  1. 1 Arthur Franks March 11, 2013 at 9:28 am

    I agree with most of what is said, but more council housing IS needed. For some reason the economy seems to depend on house prices constantly rising. Why? The only people to benefit are the government, estate agents solicitors and The lenders. Mass council housing worked in the 1930s and 1950s it should work now.

  2. 2 Michael Monk March 11, 2013 at 11:07 am

    Quite right to suggest that we need more housing to accomodate an increasing population and even more significantly more (although smaller) households. We certainly need to address the chaotic housing market of London, driven in part by the influx of wealthy outsiders which prices out so many people and causes a ripple-out impact on the market in the Home Counties (and well beyond). I agree with Shaun that we do not want a return to the socially divisive public housing estates of the 1950s/60s/70s which created deplorable social ghetto conditions.

  3. 3 Arthur Franks March 11, 2013 at 3:24 pm

    Not all Social housing was or is ghettos. I grew up in the 50’s and 60’s and it certainly was not a ghetto. If that estate was not there I would have been bought up in a Victorian back to back.

  4. 4 Arthur Franks March 12, 2013 at 5:10 pm

    Housing is one of the CPRE’s major concerns especially in inappropriate places. Why is nobody commenting? Our feed back is important to these posts.

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