The coming war on affordable housing


5:06 pm - June 6th 2010

by Imran Ahmed    


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Vincent Moss at The Sunday Mirror has revealed government plans to scrap rules insisting that new housing estates are built with a minimum density of homes and that at least 25% of homes are affordable.

This would wreck communities across Britain.

As a resident of Hammersmith this came as a particularly horrifying surprise. Cameron has been closely tracking the radical Conservative initiatives being tried out in their flagship London council, Hammersmith & Fulham.


(Council leader Stephen Greenhalgh with Boris Johnson and PPC Shaun Bailey)

In fact, Mr Greenhalgh is the head of the Tories’ Councils Innovation Unit and author of the radical pamphlet ‘Principles for Social Housing Reform’.

In that pamphlet, among other things he suggests council rates go up to market rates, and solves the problem of a “risible return on assets” for social housing by suggesting selling it all off to “exploit” the “capital value”. His policies have already had dire consequences.

Earlier this year at a hustings, the incumbent Labour MP Andy Slaughter, Merlene Emerson for the Liberal Democrats and Rollo Miles for the Greens lambasted Shaun Bailey the over-hyped Cameron poster-boy and Hammersmith & Fulham Tories for their obscene plans to knock down up to 3500 affordable homes across the borough, to the horror of residents, and replace them with luxury flats.

At the time the Tories had slyly suggested this couldn’t possibly happen as they would be bound by rules to build affordable housing. These rules are now conveniently being scrapped.

It’s true that Labour don’t have much to crow about on housing. Despite the admirable Decent Homes initiative, dogged though it was by cost inflation, the party’s own propaganda doesn’t mention how many affordable homes were built under Labour.

In fact the number is around 3000. Measures were put into place for many more to be built, but the visible effect after 13 years was negligible. It is then to the credit of some of the more outspoken new intake, like the MP for Wigan Lisa Nandy, who I saw arguing forcefully at a recent conference on Labour’s future for a radical rethink on housing.

Regardless of Labour’s failures though, this proposal would reshape housing across Britain. Gated communities would flourish. Councils like Hammersmith will have carte blanche to start major projects to forceably gentrify areas. Families and communities would be irrevocably disrupted. It would be Dame Shirley Porter on an epic scale.

It’s often said that we can’t define Britishness any more. To my mind, mixed communities are an absolute hallmark of British urban culture. Not for us the banlieues of Paris, the favelas of Rio. It underpins and energises the solidarity and compassion that are the hallmarks of our progressive movement.

And it is a disgrace that this may now end. These plans would have far-reaching and dangerous consequences for the fabric of British society, finally bringing to life Thatcherite dreams of eradicating society, leaving only atomised, alienated communities of us and them.

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About the author
Imran is an occasional contributor and Labour party activist. He blogs here and is on Twitter here.
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Story Filed Under: Blog ,Conservative Party ,Economy ,Local Government ,Westminster

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Reader comments


1. Paul Boizot

Surely this misses the underlying point, which is the way that house prices in general have risen so that the cheapest houses in some areas are far less affordable than they were 20 or 30 years ago (I am assuming that is so, I admit to not checking any stats). I can think of no other item – except stocks, which are hardly a basic consumer must-have – where front-page newspaper headlines say it’s good that the price has gone up. There needs to be some radical re-think of the housing market – don’t know what, the issue does not even seem to be on the agenda, even though the house-price boom seems to have fuelled the fake expansion which then crashed a couple of years back. This is one of the Labour governments’ greatest failures – it did not see this as a problem.

Presumably at a minimum lending standards could be tightened up so next time people cannot get higher and higher mortgages to feed higher prices. Buy-to-let needs to be discouraged as “an investment” too – houses should be seen as first and foremost for people to live in, and policy should clearly reflect this. Second-home ownership can be dodgy too.

But how many newspaper journalists and members of parliament had a vested interest in the current system?

Paul’s right, though that doesn’t necessarily mean that Imran is wrong. Mixed communities are a good thing for all sorts of reasons (wasn’t there a Fabian pamphlet last year that did a reasonable job on identifying some principles and context, if not quite delivering the solution), but the core problem of housing not being affordable isn’t best addressed by regulation of the mix – that’s a solution to a wholly different problem. The problem of affordable housing is best addressed by

1) Increasing the rate at which the number of houses is going up, and/or
2) Decreasing the rate at which the number of people is going up, and
3) Reducing the number of people who use more than one house.

And maybe making it simpler for people to be/have lodgers, as well. Anyway, across most of England, affordable housing is about quantity, and it’s rented or social rented, we can forget building a £300k flat in Hammersmith, calling it “shared ownership”, telling someone they can “own” it for £75k, and pretending that makes it affordable. It’s a fantasy.

3. Plain Speaker......

“To my mind, mixed communities are an absolute hallmark of British urban culture. Not for us the banlieues of Paris, the favelas of Rio.
Quite.”

Why have the banilieus of Paris when you can have the parallel cultures of Bradford ?

“It underpins and energises the solidarity and compassion that are the hallmarks of our progressive movement. ”

What on earth does that mean ? Are you employed in a public sector non job involved with state sponsored “diversity”

4. Mike Killingworth

Imran, all the parties are now agreed: social housing is an idea whose time has gone.

Labour signed its death knell, at least as far as London is concerned, by bringing in a rule that claimants can reasonably be expected to commute 30 miles to work and back home again. At a stroke of the pen, this destroyed the rationale for social housing in London.

“Mixed communities” may be a “hallmark” of British urban culture to you, but to the 60% of voters who support coalition they are absolutely undesirable – people want to live in a neighbourhood that is wholly made up of people like them, whether this leads to favelas or not.

This is a country in which a man who has a beef with the taxman, his lawyer and with a professional colleague deals with it by murdering not only the lawyer and his colleague but also handfuls of wholly innocent people. Watch him become a folk hero.

“Watch him become a folk hero.”

Only in the eyes of idiots will he become a hero.

This yet again, proves that for all the PR and bull about the Tories changing, scratch the surface and below it they are the same old right wing, money above everything party.

It also kills Nick Cleggs announcement this morning, in it’s tracks, that it would be a “Progressive” government and not a Thatcherite one.

http://redrag1.blogspot.com/2010/06/red-rag-tory-housing-policy-to-take-out.html

There is a huge housing crises coming in this country. There just are not enough houses and the “I got mine …..fuck you” mentality will now insure that fewer houses will be built.

The average age of first time buyers has gone up and up, and many people in their 30’s now think they will never be able to buy their own house.

” all the parties are now agreed: social housing is an idea whose time has gone.”

Then all parties are wrong.

“social housing is an idea whose time has gone.”

Oh yeah? And I thought the debate over the past few years had been about how key workers in the public sector, such as teachers, nurses and police cannot afford to gain a foothold on the property ladder and we need more ‘affordable housing’.

These people have little or no hope, even with joint incomes from partners, of affording a home when the average cost of a house in the UK is £224,064 and a the average price of a property in London is £395,436. And in London there is a high demand for and short supply of social housing.

There have even been arguments by some that the boom and bust of the property bubble has been the prinicipal reason for the economic crisis. Certainly countries that relied overly on the property boom, like Ireland and Spain have come out of worse in comparison to others. Yet the Tories, predictably want to re-inflate this bubble.

And:

“Most people want more done to improve the image of social housing, our exclusive Ipsos Mori poll has revealed……Seventy-four per cent of those surveyed said that more work was needed to boost the sector’s standing.

Professor Alan Murie from the University of Birmingham said the findings showed that social housing was viewed as a valuable service. ‘Ministers have got the agenda wrong. They should think about how we improve the image of social housing rather than attacking it,’ he said”

http://www.insidehousing.co.uk/news/care-and-support/social-sector%E2%80%99s-greatest-downfall-still-its-image-problem-poll-shows/6500027.article

Sounds like an idea which is very much alive to me.

Not enough suitable and / or affordable housing to rent in the social market?

How did we get to this situation after a Labour government has been in power for 13 years?

“Houses are less affordable than 50 years ago although the quality of homes has improved, according to the Halifax. The lender, now owned by Lloyds Banking Group, said that over the last five decades UK house prices have risen by 2.7% a year, allowing for inflation. This was above the 2% annual increase in real earnings over the same period.”
http://news.bbc.co.uk/1/hi/business/8468605.stm

This news report shows that the government was warned about the house-price bubble back in April 2002:

“CHARLES GOODHART, a former member of the Bank of England’s monetary policy committee, warned yesterday that the Bank is failing to take sufficient account of the house price boom in setting interest rates.

“His warning comes amid growing fears among economists that house prices, fuelled by the lowest interest rates for 38 years, are getting out of control. Yesterday, new figures showed that homeowners are borrowing record amounts against the rising value of their homes.”
http://www.telegraph.co.uk/finance/economics/2758979/Goodhart-warns-on-house-price-boom.html

Ivette Cooper, an economist educated at Oxford, Harvard and the LSE, was the minister responsible for housing 2005-08.

10. Nick Cohen is a Tory

This is a country in which a man who has a beef with the taxman, his lawyer and with a professional colleague deals with it by murdering not only the lawyer and his colleague but also handfuls of wholly innocent people. Watch him become a folk hero.
I get a horrible feeling to the falling down libertarian individualist right. You might be correct.
Cumbria could be the UK’s Waco.

Gawd Almighty.

The reason housing costs a lot in the UK is because getting permission to build on a piece of land costs a lot. It’s planning permission that costs the money, not whacking up the bricks and mortar. Relax the planning rules, you make land with planning permission cheaper and thus make housing cheaper.

It’s hardly rocket science folks.

Much of the fantasy boom of recent years was fuelled by rising house prices and those who borrowed against the perceived rise in the value of their property and the ease with which they were able to obtain credit. The government was quite happy with the boom in taxes and consumerism until, like all bubbles, it burst leaving a huge mess

The real issue preventing fairly priced housing being built is the lack of land reform in this country, vast tracts being owned by families whose ancestors shagged or fought with the right person. 69% of the acreage of Britain is owned by 0.6% of the population, 158,000 families own 41 million acres while 24 million families live on 4 million acres. Read Kevin Cahill’s superb Who Owns Britain? Land is not scarce in this country.

13. John Whitley

The whole issue of housing and the lack thereof makes me want to go and lay down for a year or two. I’ve now pretty much accepted the fact that I will never own my own home, hell I’ll probably never see the inside of a house and it is highly unlikely anyone in my family will either.

Both the problems, and the potential solutions have been outlined here already but no one has asked a very important question: why aren’t people protesting about this? Why is there such a palpable silence across the political spectrum as well as the media?

I know there are very many in this country who would applaud a total moratorium on newbuilds for the next five years and suspect that is where we’re going but even still, someone must surely take a pause and ask what are we doing here?

And even here, in the hallowed halls of Liberal Conspiracy, how many would entertain a relaxation of planning restrictions and scrapping of the green belt and a review of SSSI’s? Knowing LibCon’s penchant for all things green just how firm will your belief in social housing be when much needed projects start springing up where once resided cute furry animals and ‘ancient’ treelines?

The Right to Buy policy in the ’80s went a long way decimating council housing stock. As people bought their homes as a discount the gov didn’t bother replacing the houses and obv the private sector moved in to fill the gap. What we see now is the legacy of that ill-thought populist policy.

*at a discount, I mean.

“Relax the planning rules, you make land with planning permission cheaper and thus make housing cheaper.

It’s hardly rocket science folks.”

Yes, but that is where your so called market theories come up against “I got mine …fuck you” nimbys. It is the very people who tell us they support market forces that want to stop more building of houses. Ie most Conservative councils.

17. Mike Killingworth

For those who do own houses, in most cases it represents most if not all of their wealth (other than their occupational pension).

I look forward to Tim’s explanation of why such people would want more housing to be built, thus reducing their own wealth.

Oh silly me. I forgot. If no socialists had ever been born, this planet would be Paradise. Tim says so and he’s always right about everything, you know.

18. Paul Boizot

Post 2 lays out the key basic options – more houses, fewer people (any discussion on immigration should be part of a discussion on population policy, in my view), or fewer people using more than one house. There may be other issues related to the third point, e.g. size of households etc.

Post 11, 12 and 13 relate to the first point, and assume that we need more houses. Ignore for the moment the second point, which needs a major shift in political debate over a number of years before anything intentional could be done about it. Do we actually need to be building more houses and/or need more land for housing? Yes I know some houses get old and need to be replaced, but it seems that these posts are basically talking about newbuild. Have we got broadly enough housing stock if we could tighten up on the second-home culture and bring down the price of houses somehow? I am asking from a position of ignorance, but form a position which prefer this option to an ever-increasing expansion of built-on land. I accept that the planning permission point may also apply to building a house on brownfield sites too. But I find it hard to believe that an existing terrace house in Sheffield increased in value (not adjusted for inflation) from £21K in 1996 to £90K in 2007 due to the cost of other people getting planning permission for new houses.

Oh, and don’t forget the chap in charge of the country doesn’t know how many houses he’s got. A fine example to us all! Though with an estimated fortune of £30,000,000 I guess it doesn’t bother him so much.

“Watch him become a folk hero.”

“I get a horrible feeling to the falling down libertarian individualist right. You might be correct.”

No, we wanted to shoot him, but you freedom-hating lefties took all our guns away (boo hoo), and if he’d been captured alive, we’d have hanged him for murder, but you moral relativists abolished the death penalty (curses!).

Don’t disagree with the thrust of this post bit you’re mistaken on the number of new affordable homes delivered under Labour. The post says 3000 but in fact between 1997 and 2008 Labour delivered on average just under 18,500 a year – a radical difference. (Here’s a source http://www.insidehousing.co.uk/ihstory.aspx?storycode=6508656 couldn’t quickly find the offficial data – you are right about Labour not championing it enough!

I suspect the difference comes from the poster only viewing council housing as affordable, whereas affordable rented housing is also provided (and in far greater numbers) by housing associations. These homes are of similar quality and price, are provided by not for profit community focused organisations, and offer security of tenure. You’re missing a major part of the housing solution to ignore the contribution of housing associations.

22. DisgustedOfTunbridgeWells

The reason housing costs a lot in the UK is because getting permission to build on a piece of land costs a lot. It’s planning permission that costs the money, not whacking up the bricks and mortar. Relax the planning rules, you make land with planning permission cheaper and thus make housing cheaper.

Apparently it costs £111565 for planning permission for one thousand houses.

Given an average profit margin on new houses of 10%, well, you can figure it out.

You don’t even need to build new houses, there are half a million sitting empty, whilst I wouldn’t be naive enough to claim these are all in particularly desirable areas, the fact is something could be done with them.

Lets not forget NL’s regional spatial strategies (now scrapped by the ConDems, afaik) were met with opposition (sometimes legal) by nimbys, environmental groups and those who want to preserve housing scarcity in order that their property should retain its exchange value.

“Apparently it costs £111565 for planning permission for one thousand houses.”

Not quite what I meant. A hectare of agriculturla land in the SE costs around £8,000. That’s the good stuff, for arable farming.

A hectare of land with planning permission in the SE costs £500,000-£1,000,000.

That’s what I mean by the cost of planning permission.

Oh, and “ruining the Green Belt” and all that. Something like 9% of England is built on currently. Something like 11% is Green Belt. If we switched 1% of the land from one designation to the other, making 10% each, not sure that would really be a terrible thing in the “concreting over of the countryside”. But it would increase the land available for housing by over 10% which would have a hell of an effect on the price of land for housing.

24. Mike Killingworth

[23] It’s a funny world, Worstall’s, isn’t it? He thinks that all land is the same no matter where it is. According to this theory an airport runway in Caithness and one at Heathrow are exactly the same thing.

The airport industry’s so stupid it’s not noticed that…

25. John Whitley

Another issue that doesn’t seem to be addressed here is the anti-construction sentiment amongst local authorities where it seems you can’t place one brick on top of another without 3 years of consultation and general faffing around. I’d go so far as to say there is an in-built bias against housing construction in most planning departments where the default position is simply to say No to any new project. Often on very spurious grounds like the protection of ancient trees or not ruining the view from the bathroom of Mr and Mrs Stiffarse of 33 Dailymail Avenue.

All best summed up with BANANA: Build Absolutely Nothing Anywhere Near Anything

Mike Killingworth – indeed it is.

How many people do you suppose *even bother* applying for planning permission on land that’s slap bang in the middle of some field, two or more miles from the nearest road, water main and electricity supply?

@ 24 and 26. Oh very good, yes, tee hee.

So. Let’s look at urban land shall we?

http://www.thefreelibrary.com/Taxpayers+foot+pounds+1.6m+bill+for+bomb+site+after+dispute%3B…-a0182055369

“Council tax payers must foot a pounds 1.6 million bill for a former bomb site even though its current market value is just pounds 15,000, the Court of Appeal ruled.

The judges said it was “utterly deplorable that the London Borough of Wandsworth must pay compensation to the owner of the land as if there was planning permission
for the nine houses which stood there before they were destroyed by German bombers during the Second World War.

They called on the Government to urgently review the law “to avoid the risk that taxpayers of other municipalities would have to fund windfall gains to developers which cannot, on any rational basis, be justified”.

Greenweb, a company registered in Wallingford, Oxfordshire, bought the land in 2001 for pounds 30,000, a month before a public inquiry dismissed appeals against the refusal of planning permission for five mews houses.

The company then served a purchase notice on the council and the Lands Tribunal awarded the compensation last year.

Lord Justice Stanley Burnton said in yesterday’s ruling: “The parties were agreed that the value of the land in question in the open market was pounds 15,000. It is being used as a park, and has no subsisting planning permission for any other use, and it was unlikely that any such planning permission would be forthcoming in the future.” ”

Leave aside the fairness of the decision, the old law and all that. Look just at what the difference in values is.

No planning permission for housing? £15k. With planning permission for housing? £1.6 million. For 9 houses.

So, that’s £177,000 on the price of each house just for the right to build a house. No, not for the price of the land, that’s £1,666 a house. Not for the cost of building a house, that’s in the £100,000 to £150,000 range (depends upon materials used, level of finish, size, number of bathrooms etc).

So, my contention that it’s the cost of planning permission that leads to the high cost of housing in the UK….well, let’s just say that this doesn’t exactly disprove it, does it?

“So. Let’s look at urban land shall we?”

Why, becuase your assertions about rural land are quite obvious horseshit?

29. John Whitley

@Tim Worstall: Ditch the Town & Country Planning Act! Or is that suggestion a little too radical even for a libertarian?

@ 28.

What horseshit? Start at the very beginning.

1) There is a price for land without planning permission.

2) There is a price for land with planning permission.

2) is higher than 1). The difference between the two is the amount that the cost of planning permission adds to the price of housing in the UK.

What’s horseshit about that?

@ 29: ditch, perhaps too extreme. Alter, certainly.

Here’s one suggestion from the ASI.

http://www.adamsmith.org/images/uploads/publications/landeconomy.pdf

Jesus wept Tim, I don’t know why I bother. I’ve explained this once already, and so did Mike K, *and* it only took us one paragraph each.

So, until your next lofty pronouncement needs shooting down in flames, see you!

33. julie lowe

It is not the cost of Planning Permission but the perceived increase in value once planning is granted. The problem for affordable housing is the control of land and the greed of developers. 1% of the population own 90% of the land and this is the reason you cannot live and work on your own property, raise a smallholding or live collectively. Take back the land stolen at the Enclosures and make it all available to those who want it to live on !

Tim Rand you have still not addressed the real problem. You can bang on all you like about market forces, and making more land available to build on, but you don’t deal with the fundamental issue. NIMBYS. Most of whom are the same people who tell us they believe in market forces, but don’t want anything built near them.

You are right about the amount of land that could be made available. 75% of the land mass of the UK is given over to agriculture. Yet it returns less than 1% of GDP and employs less than 1% of the workforce. It is a no brainier but , organisations like the preservation of rural England and Prince Charles and all the other morons who are hell bent on museumising the UK won’t let it happen.

35. Paul Boizot

Sally (post 34), you seem to be saying that agriculture is not worth bothering with and it’s no problem giving more land over to housing. But presumably if we grow less food here we have to import more from somewhere else? That has implications.

Also one reason agriculture “only employs 1% of the workforce” is because it is incredibly efficient, in conventional economic terms, compared to what it used to be – huge numbers of jobs in farming have been shed over that last 100 years or more due to mechanisation and intensive farming.

If things get really bad, and many of the luxuries that we no take for granted became unavailable, we would still need to eat. I believe we should grow as much of our own food as is possible.

Please note none of my arguments here are to do with preservation or museumisation of the land for the sake of its appearance.

Paul,

I think it is a bit of stretch to claim that by pointing out that agriculture takes up 75% of the land mass that I am saying that we should “give up” on agriculture. Of course we should not give up on agriculture . But does it need 75% of the land mass of this country? When it produces so little in return of both GDP and jobs. If you are concerned about feeding our own population , and that is quite a sensible concern, maybe agriculture should stop exporting so much. But then we are in to issues of trade and protection.

70% of the food grown and consumed in this country is produced by 30% of farmers. Mostly largi agri business’s. Make more land available for houing and the price of land will come down and therefore so will the price of housing. But a lot of vested interests don’t want cheaper housing. As someone above said, most home owners have their wealth tied up in the value of their house or second or 3rd house. They do not want cheaper housing

37. Paul Boizot

Re post 28 and others on the cost of planning permission; perhaps it might be more accurate to say that there is currently a cost for land on which you cannot build, and a higher cost for land on which you can build. The argument seems to be that if you scrap some or all planning controls, the price of land on which you can build will come down. This may be so. But what happens to the price of agricultural land? – land which could in theory be built on but which is actually being sold for continued farming purposes.

Tim Rand you have still not addressed the real problem. You can bang on all you like about market forces, and making more land available to build on, but you don’t deal with the fundamental issue. NIMBYS. Most of whom are the same people who tell us they believe in market forces, but don’t want anything built near them.

Sally, please sit down.

I know this is going to come as a great shock to you but I think you and Tim are actually on the same side here.

Yep, I know……..

39. DisgustedOfTunbridgeWells

Not quite what I meant. A hectare of agriculturla land in the SE costs around £8,000. That’s the good stuff, for arable farming.

A hectare of land with planning permission in the SE costs £500,000-£1,000,000.

Well, it doesn’t, does it, because 8000 + 2789 (the apparent price of planning permission for 25 houses, as explained below) does not equal 1000000 (I’d also assume that’s dependent on what you get permission to do).

So, lets say an average plot is 3000 sq ft with a moderate back garden, just for the sake of argument, 20% of any development is going to be road (which is in line with urban proportions).

A hectare is 107000-ish sq ft.

So 80000 sq ft for actual building, 25 or so houses? In the SE you’re easily going to clear six million in revenue off that (obviously I haven’t taken into account the cost of the road or utilities connections).

I’ve no doubt it’s a long, drawn out, pain in the arse to actually get the permission but the monetary cost alone doesn’t appear to be excessive.

40. DisgustedOfTunbridgeWells

Whoops.

Tim,

Often you talk sense, currently you are talking rot.

There is a price of land without planning permission and a price of land with planning permission. The difference between them is not the cost of planning permission it is the increase in value that comes from being able to build houses on a piece of land rather than grow oats on it.

Arable land costs roughly £25,000/ha and all you can do is grow things on it. However, if you can build 30 homes with a value of £250,000 each and it only costs £70,000 to build them then the value of the land is greater. However, the builder also needs to make a profit – generally 15-20% of Gross Development Value (this is the assumption built into most banks funding formulae and into Council projections). Therefore, in the above example the value of this hectare of land is £4,000,000

Nice and simple

However, the developer must also provide all the servicing to connect his site to the grid and to the road network, he must provide a contribution towards school paces for the children who will live on the development and the planning rules state – quite rightly that – say – 30% of the homes will have to be affordable. However, without generous grant subsidy, the value of an affordable home is typically less than the cost of construction and there isn’t always that subsidy available.

Let us say an affordable home is worth £100,000 (to the developer – its “value” as social housing is rather less that but there may be subsidy available)

So now the value of the development is £250,000 x 21 = £5.25m plus £100,000 x 9 = £900,000 for a total of £6.15m. However, the build costs stay the same. £2.1m. and the developer still needs to make a profit or the banks won’t take a risk on funding him and because, well, why would he bother otherwise. Let us say the profit is reduced to £1.2m (because affordable housing is less risky). The land is now worth about £2.9m

But we still have to service it and we still have to contribute to school places and doctor’s surgeries. Let’s say £25,000 a home all in.All in all, the value of the land with planning permission for houses is, in fact a little over £2m.

That represents a big increase over the value of agricultural land but we don’t want to build on agricultural land. We want to build on brownfield land. But brownfield land has a value. It might be offices or it might be homes built at lower densities. The value of that land might well be more than £2million/ha. If that is the case the owner won’t sell it to you at a price you can afford to pay so you can’t build houses here (or you have to accept less affordable housing).

Moreover, the planning system is clear – you can’t build just anywhere. In any given location there may be only a few sites that are suitable. The owners know that their sites have scarcity value and they may not decide to release them for their current market value as offices or a hotel or whatever. After all, house prices always go up don’t they? If I am the landowner and I want £3m for my land I can try to persuade the Council to accept less affordable housing now or I can just wait for house prices to rise. And by and by the land will indeed be worth 3 million. All I have to do is wait.

The astonishing thing is that our planning system delivers so much scarcity power to landowners that the housing boom leads not to an immense rise in the construction of houses (as in Spain and Ireland) but actually makes it MORE difficult to secure land for construction of houses (affordable or otherwise).

In response to the original post, the Tories are right to recognise that social housing does not perform as advertised. It concentrates poverty and as the gulf between council housing and non-council housing has widened, it has opened a massive schism in society. Radical solutions are required and there isn’t much money to deliver them. These Tory proposals are not, in my view, correct but this is a pamphlet – not government policy. If you need radical solutions then you shouldn’t pillory people who make them – even if you don’t agree with them.

If you want to put up your own radical proposals, do so but it should consider this.

Two workers apply for the same job – one has a Council flat, the other is on the waiting list but isn’t sufficiently in need to have been allocated one. The rent on the second worker’s home is twice the social rent. The Council housed worker can therefore accept a lower wage than the privately housed worker. For the latter to be successful in securing the job he must therefore accept the same wage and a lower standard of living than the Council housed worker.

This isn’t fair but there simply isn’t enough money to provide social rented homes for all those who want them at the current social rent levels (which do not meet the construction costs of a new home ). How therefore do we remedy this injustice.

You may wish to consider, when answering that, if he does get the job, the applicant who is currently renting privately will probably never get allocated a Council flat and the related question of whether it is therefore in his interests to apply at all.

“There is a price of land without planning permission and a price of land with planning permission. The difference between them is not the cost of planning permission it is the increase in value that comes from being able to build houses on a piece of land rather than grow oats on it.”

Err, one man’s cost is another man’s value. Houses cost a lot because planning permission is valuable.

This is exactly what I’ve been saying. And if we reduce the value of that planning permission then we’ll reduce the cost of housing.

No Tim,

Planning permission is valuable because houses cost a lot.


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  1. jacqui thompson

    RT @libcon The coming war on affordable housing http://bit.ly/9BV6Ox

  2. Oxford Kevin

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  3. Sheryl Odlum

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  4. Don Paskini

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  5. auntie_mabel

    RT @politic_animal: RT @libcon The coming war on affordable housing http://bit.ly/awRUNg <Hammersmith & Fulham goes national.

  6. The Old Politics

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  7. Malcolm Evison

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  8. RobSimmons

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  9. Hayrr X

    RT @politic_animal: RT @libcon The coming war on affordable housing http://bit.ly/awRUNg <Hammersmith & Fulham goes national.

  10. sdv_duras

    ah the return to the Thatcherite version of neoliberalism begins: The coming war of affordable housing http://bit.ly/bFguJL a @libcon note

  11. Naadir Jeewa

    Reading: The coming war on affordable housing: contribution by Imran Ahmed
    Vincent Moss at The Sunday Mirror has r… http://bit.ly/dAUab9

  12. Liberal Conspiracy

    The coming war on affordable housing http://bit.ly/awRUNg

  13. aaron peters

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  14. Tweets that mention The coming war on affordable housing | Liberal Conspiracy -- Topsy.com

    […] This post was mentioned on Twitter by Liberal Conspiracy and caebrwyn, aaron peters. aaron peters said: RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg […]

  15. yorkierosie

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  16. earwicga

    RT @libcon The coming war on affordable housing http://bit.ly/9BV6Ox

  17. Political Animal

    RT @libcon The coming war on affordable housing http://bit.ly/awRUNg <Hammersmith & Fulham goes national.

  18. Adam Bates

    RT @libcon: The coming war on affordable housing http://bit.ly/awRUNg

  19. Christopher Roussel

    RT @sdv_duras: ah the return to the Thatcherite version of neoliberalism begins: The coming war of affordable housing http://bit.ly/bFguJL

  20. Any Calforinia do you need to be in a certain area to own a chicken coop[.? | Build A Chicken Coop House

    […] Th&#1077 coming war &#959n affordable housing | Liberal Conspiracy […]

  21. Stephen Whitehead

    Over at @libcon, Imran Ahmed has found deeply worrying portents on Tory housing policy. An end to social housing? http://bit.ly/ciaHbA

  22. ALFIE SMITH

    RT @libcon The coming war on affordable housing http://bit.ly/9BV6Ox





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