RSA – WIDER COMMUNITY WILL PAY THE PRICE FOR DISCOUNT STARTER HOMES

Jonathan Schifferes here

The way that property developers will achieve the saving, and pass it on to buyers, is through an exemption from legal requirements to contribute money to the physical infrastructure, amenities and facilities in the place they are built. When we start talking about Section 106 agreements and the Community Infrastructure Levy most people glaze over. But please pay attention: before the crash developers were contributing £5bn per year to build affordable housing, roads, schools and libraries, and fund apprenticeships, bus services and other key facilities.

The law is set up to ensure that new developments don’t dump new problems, like overcrowded roads and schools, on inadequately prepared neighbourhoods. As we argued in a paper last year, planning is a ‘doorstep issue’ that links to a whole range of important public concerns. The implication of the Starter Home scheme is either that everyone else pays for this infrastructure, or that it doesn’t get built at all. And it is this problem that often leads local people, who understand the big picture, to object to specific planning applications: “we need more housing but our streets and public services can’t cope”. (The government has yet another scheme premised on this problem: a New Homes Bonus is paid to local authorities based on the number of homes built).

We label people as NIMBYs, but people often have other rational reasons to oppose new housing. More than two-thirds of adults in the UK are investors in homes as assets that appreciate greatly in conditions where demand is growing faster than supply. This represents a strong disincentive for these individuals to support additional housebuildingin their local market.

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