Why building homes – but not enough – makes Housing Affordability worse

It was the greatest act of political cowardice in Planning post war.

To what am I referring.  John Prescott’s response to the Crow/Whittaker report on the South East Plan in 1999.

The background.

SERPLAN had issued a draft South East Strategy to build no more than 660,000 homes to 2016, against household growth of over 900,000.  They only proposed one growth area.  milton Keynes, and deferred that to further study.  Figures were based on aggregated ‘capacity’ rather than need.  A capacity set by highly restrictive policies.  The term ‘sustainable development’ was tortuously redefined to mean a shortage of development.

Naturally The Late Professor Crow and Rosamund Whittaker would have nothing to do with it. They increased the requirement to 1.1 million (household growth plus allowances for non completion etc.  all rather standard and required these days), with a realistic target of 50% of this coming from Brownfield sites  The response was outrage from the shires.

The Council for the Protection of Rural England called it “a nightmare future of sprawling development, traffic congestion and urban decay”

John Gummer then in opposition concluded

 “the truth is that the electoral arithmetic is absolute. The seats in the South East that the Conservatives need to win are seats where people are implacably opposed to development. They are, of course, also the seats that Labour needs to defend. So neither party is going to look with any favour on the idea of more than a million new homes where voters don’t want them.”

Prescotts ‘compromise’ response was to build 860,000 homes.  Of course we have built half that in the South East outside London.

It simply made matters worse.  Unlike the US where there is a strong correlation between improvements to housing affordability and rate of housebuilding in the UK there is a negative correlation.

Those areas like London and Cambridge that have seen the greatest increase in population, and highest levels of housebuilding, have seen the greatest increase in unaffordability.

What is going on?  This seems perverse.  Think about it.  If you are building houses but at less that the rate required by OAN all you are doing is increasing you population baseline for housing need.  You are adding over time more people in need of homes as children age and adults divorce and retire.  Compromises, very British compromises of the Gummer and Prescott variety simply make matters worse.  If you are going to build build to at least need but never less.

I suspect the debate will flare up again with the NICs forthcoming Oxford-MK-Cambridge Arc competition.  My estimate of how much housing this area (South midlands + London Stansted corridor) will need over 35 years – just under 1.5 million new homes.  I suspect though this time the political arithmetric will be different.  In the motorway corridor seats the conservatives lost seats.   They plus London now firmly outweigh the reclacetrant shires.


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