The City of London High Buildings Cluster is Becoming an Ugly Wall

Media preview

This is a rendering by Estates Gazette of projected tall buildings in the city by 2025.

What is interesting here is the number of mid range buildings around the same height as the Walkie Talkie.

Im no fan of the Skyline campaign however a fundamental principle of planning for tall buildings is you try to avoid a wall.  When you have a wall then tall buildings look out onto other tall buildings, have no silhouette and completely lose their landmark status through bumping up against each other.  The tall buildings are merging into one mass.

Rather it should be encouraging this kind of silhouette.

 

 

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Does Any City have a Brownfield Site Large Enough for Amazon HQ no. 2?

RFP from Amazon

33 Buildings

8.1 Million Sq’

33,000 Employees

Existing buildings of at least 500,000+ sq. ft., meeting the core requirements described above and that are expandable or have additional options for development nearby.
A greenfield site of approximately 100 acres certified or pad ready, with utility infrastructure in place. The sites do not have to be contiguous, but should be in proximity to each other to foster a sense of place and be pedestrian-friendly.

Can anywhere meet this?  This is a preserviced development pad as large as Central Park.  why would you build 1/2 million sq of offices next to a huge development site?

Only a few cities are likely to be in the running.   Most US cities surprisingly don’t have huge brownfield sites, most urban abandonment being due to residential abandonment, which if you look at cities like Flint is highly scattered rarely creating large contiguous sites.

Perhaps one exception id Detroit, which has large concentrated sites in its Down Town and Midtown areas and on the waterfront, easily connected by transit and is no somewhat on the up.  Chicago maye has a large enough area in the former steelworks site known as park 56, with rail and sewer lines running to the location and offering a dramatic 4 mile long lakefront site. St Lois also has potential large riverfront sites directly north or south of its downtown.

The Economy is like Walking -A Controlled Fall – Not Lying Down

Inappropriate physical analogies have been the curse of neoclassical economics. In 1909 Walras in his article ‘Economie et Mechanique’ used the model of a mechanical lever in equilibrium as the model for prices at rest.  This physics envy, of Walras, Edgeworth and others is well documented.  In samuelson’s hands the mathematics of thermodynamics was used to describe the deviation from and return to equilibrium of a system of prices.

In doing so it adopted the model of a system at rest.  The ability for the system to break down on occasion has led to increased attention to disequilibrium models. This is a healthy corrective, however most of the time some predictability about the broad state of economic variables is the norm.  Were it not investment, saving etc. would be near impossible.  The broad stability of expectations of the economy is the norm and fascinated economist from the  classical period as to why this was so.

The problem is not the focus on equilibrium but the wrong kind of equilibrium.  A thermodynamic equilibrium is a system at rest and at minimum energy. no external energy is necessary to maintain the system at rest.  The more common and normal situation is nature is a a steady stat, in which all state variables are constant in spite of ongoing processes that strive to change them.  This requires a continuous input of energy.  This is a dynamical system, like Sisyphus using energy to try to push his rock up a hill, only to be opposed by gravity.

Walking at a constant speed is a good example, using energy to propel the body forward through using instability, constant falling. to propel the body forward, and an input of energy to maintain the body erect and balanced.

This kind of system is a much better economic analogy as it involves the constant input of work, and a background of constant change, both factors lost in the thermodynamic equilibrium analogy, which in its most extreme form posits a universe at heat death, where nothing has changed and can ever change. Growth, change and economic cycles being essential economic attributes.

The ‘surplus/cycle’ approach of classical economics had this at its heart, and because its mathematisation involves feedback loops and state changes it is inherently suited to the modelling of dynamic systems.  Much of their usefulness is in helping us to understand the preconditions for economic growth and price stability.

Let us consider first a very simple two commodity model, or corn, a subsistence good and also acting as the numeraire, and a single capital good – lets call it lime – which increases productivity of corn production by a fixed coefficient.  This simple classical model had a hidden assumption, which Torrens as usual was first to spot.  corn was also a capital good, as it had a non zero turnover period.  As this turnover period was the same as the period of production no capital theory problems arose however.  Assuming the ‘pure’ capital good lime has the same turnover period, and fixed labour-capital inputs we produce the ricardian result that economic growth through input of capital has no overall change to the price level, as all prices are measured in terms of corn.

Let us introduce sovereign issued money, in it simplest form of a pure commodity money, fixed in supply and not produced.  The wet dream of crypto currency fans as to how it might operate.  This shows dramatically the problems with such ‘money’ with economic growth prices depreciate with a non-corn numeraire.  If you have economic growth of 3% prices depreciate by 3%.  The optimum investment rate is no longer r the rate of profit but the real rate of r (the fisher rate).  In such an economy there would be no premium on investment.  The present value of future consumption would be the same as present, so investment would be diverted to consumption.

To get investment and economic growth we need a constant depreciation of the currency at rate r.  One means of doing so is to make the currency a state currency.  if the deficit in the state currency to the private sector is equal to r then the currency will depreciate to the extent that produced the optimal investment level of r.

Introducing a multi currency model you will find that although the currency depreciates at simple interest rates the economy grows at compound interest rates.   This means that the purchasing power of a days wage in a currency with an optimum  state deficit will be greater than the equivalent amount of  a country where the numeraire is fixed but with a balanced budget.  In an important sense the central bank issuing a deficit is banking on the rising purchasing power of the currency it issues in the same way a bank loan is ‘backed’ by the expectation of productive investment. In this manner state money is backed in exactly the same way as long as deficits are run.

How does such an economy keep growing? Unless the margins of cultivation and urbanisation can continuously expand, profits will be absorbed by rent and driven to zero.  If the return from land is higher than capital then the price of land will rise and its return falls, and vice versa.  This potential arbitrage between investment and land purchase means that the natural rate of interest (as Schumpeter and Keynes argued) is only zero an economy with either no private ownership of land or where all rents are taxed, otherwise in an economy with a spatially expanding margin arbitrage will contain the rate of profit to the rate of rent at the margin of production.  In such cases there will be no differential rent, but there will be an absolute rent driven by how much the level of total production falls short of effectual demand.

Note here the ‘constraint’ on deficits is not future surpluses but future repayments of debt, the level of debt repayments being equivalent to the NPV of future repayments.  It is perfectly possible to reduce debt overhead whilst increasing a deficit.  Imagine a situation where all governments spending in one period is switched to principle repayment. But new debt if taken on to pay for some current spending.  In this case the deficit will increase but the debt decreases.  This shows how poor a metric debt/GDP is (mixing a stock and a flow).   Rather than there being a government budget constraint there is a non-binding inflation constraint.  Net flows from deficits to spending increase the denominator value of the numeraire of sovereign currency.  If this is done at a rate greater than the natural rate of interest r it is inflationary, less it is deflationary.

This kind of model is interesting in that we can produce the same class of results as a ‘Swan Solow’ growth model but without falling into capital theory traps as we are solely dealing with originary factors and technical coefficients.

Thi simple model illustrates how fragile capitalist growth is, depending as it does on the ability to expand without shortages of land and labour and with a state supported currency regime optimal for growth.

 

 

No the London Plan does not Protect Gardens as ‘Greenspace’ Nor Should it

Sorry I have taken so long to blog on this.

In a debate a coupe of weeks ago deputy London Mayor Jules pipe claimed – as now that the LOndon plan has no policy on ‘Garden Grabbing’ it was protected as ‘Greenspace’.

A reference to London Plan policy G4

‘Local green and open spaces should be protected’

As defined in Table T1

Small Open
Spaces
These include gardens, sitting out
areas, children’s play spaces or other
areas of a specialist nature, including
nature conservation areas.

Open spaces being defined in the

Town and Country
Planning Act 1990 S336:
[1]http://www.opsi.gov.uk/acts/acts1990/Ukp…

“open space” means any land laid out as a public garden, or used for the  purposes of public recreation, or land which is a disused burial ground;

The NPPF definition is not of much use defining open space as open space – so one is forced back on the statutory definition.

All open space of public value, including not just land, but also areas of water (such as rivers, canals, lakes and reservoirs) which offer important opportunities for sport and recreation and can act as a visual amenity.

Note the lack of an Oxford comma in the London Plan, Its not ‘Local Greenspace, and local openn space  ‘t think the authors of the London Plan know what a comma is.  Even if they did word it this was as it would be all encompassing protecting every last blade of grass in London, a stupid policy.

May to Create Dept of Housing and Infrastructure

Telegraph

THERESA MAY will use Damian Green’s downfall as an opportunity to relaunch her premiership in the new year by creating a legacy that goes beyond Brexit.

The Prime Minister is considering creating a new Whitehall department to concentrate on a major domestic issue, such as housing and infrastructure, rather than replacing Mr Green with another First Secretary of State.

She will also make a third major speech on Brexit to set out exactly what she wants Britain’s future relationship with the EU to be.

This comes as allies of Mr Green said his 40-year friendship with Mrs May had “cooled” as a result of his enforced resignation because he resented the way she had handled the matter.

After a turbulent 2017, Mrs May wants to seize the initiative after her Christmas break. She is desperate to avoid being remembered as “the Brexit Prime Minister” and wants to make meaningful progress in areas such as housing, education and social mobility.

One option under consideration is the creation of a new Department for Housing and Infrastructure, merging some of the responsibilities currently held by Sajid Javid, the Communities and Local Government Secretary, and Chris Grayling, Transport Secretary.

A Whitehall source said: “The Prime Minister has two weeks over Christmas to think about what to do next. She will start the new year wanting to keep moving forward on Europe but she also has a lot of domestic priorities. One possibility is creating a new Whitehall department with a new Cabinet post to go with it. It would be something big, such as housing and infrastructure. That is really important to her.”

A Ministry of Housing was created in 1951 to rebuild Britain’s housing stock after the Second World War, and was headed by Harold Macmillan before he became prime minister. It was merged with the Ministry of Transport in 1970 to form the Department for the Environment.

Mrs May could yet decide to replace Mr Green with another First Secretary of State. Mr Green feels bitter after it emerged that Mrs May had waited two days to inform him he had been found in breach of the ministerial code of conduct. A friend of Mr Green said: “It’s fair to say he was not overly happy with the way this has dragged on and been dragged out. I hope when the dust settles he and Theresa will be able to speak again as friends, but in the short term he is disappointed with the way this has played out. His relationship with Theresa May has cooled.”

Knowley Puts on Hold Plans to Sell 10% of its Parks

MJ

Knowsley Council’s cabinet ‘unanimously’ agreed last month to sell 10% of the borough’s parks and green spaces for new development over the next 15 years.

The decision was taken after the Knowsley Parks and Green Spaces Review Board said the income generated from the sale would help maintain the rest of the borough’s parks.

However, the plan will be put on hold after its scrutiny committee suggested a full public consultation was necessary.

‘The Sustainable Borough Scrutiny Committee met to consider the call-in of the cabinet decision regarding the future funding of Knowsley’s parks and green spaces,’ said a council spokesperson.

‘Following in-depth consideration, the Scrutiny Committee have unanimously decided to refer the decision back to cabinet for reconsideration — this will take into consideration the additional information and evidence presented at Scrutiny Committee.

‘Members of cabinet can consider all details before making a final decision.’

Time to Get Real on Bed in Sheds – There are Far to Many to Enforce Against

Standard

Around 9,000 illegal “beds in sheds” housing tens of thousands of people have sprung up across London over the last five years, a report says today.

London Tories warn the unregistered dwellings provide sub-standard living conditions and conceal illegal immigration, trafficking and benefit fraud.

Around the world where the poor cannot house themselves lawfully those with land will provide housing, and charge rent, unlawfully.  Until recently once exception was the UK, where informal settlements were unknown, enforcement was strict, and a safety net for the homeless existed.

No longer. The universal dynamics of urbanisation equally apply now to England.  The shortage of housing, the weakness of the housing safety net (which Grenfell showed cannot even absorb the contents of one tower block) and the number of those who cannot work in the white market and hence qualify for a safety net are such that favelas have emerged on a large scale in London.

We need to get real about this.

Is the scale of the problem such that we we only ever enforce against a small part of it – yes.

Is it impractical to expel anything larger than a tiny proportion of illegal immigrants – yes.

Do we have any alternative housing for the residents – No.

Given this what choice do we have?

Indeed globally we find in many cities where this is an issue – such as San Francisco and Los Angeles operate effective moratoriums where units can meet basic standards.

Indeed the problem in the first place is zoning in land constrained areas causing a shortage of housing.

One of the solutions found is to allow ‘accessory dwellings’ – these households don’t need parking or amenity space, as long as basic fire safety and other standards are met they should be tolerated and the best units should be permitted. It is much better to have a ‘white market’ of architect designed units that might stand a chance of meeting fire regulations than creating a black market which doesn’t.  Remove the black market and you remove much of the criminality – such as slave labour and benefits fraud – that goes with it.

In public policy terms we need to distinguish between the action against slum landlords from action against tenants.  In the past we would evict the landlord not the tenant and improve the housing – why not now ?

Indeed the pragmatic solution would be to use the taxation system to improve standards, taking over units that don’t pay enhanced taxation.  We know where these units are – so they are taxable.  Taxing 100% of land value uplifts and ringfencing the proceeds to improving the units- being the only long term approah which stands a chance of success.

 

Now Released the Alternative MOAN Housing Needs Model

Here it is

The Model for Objective Assessment of of Need (Moan) arose out of work conducted across most of 2017 anticipating the need for return of ‘Big Planning’ (Strategic Planning) in England.

I have outlined the model on here before here and here.

The model is demographically based – extending the thinking behind the demographic model devised by the late Alan Holmans and then extended by the NHPAU to include affordability.  So the starting point is the the spreadsheet model by the ONS – the 2014 based household projections. 

These projections are then projected forward over 35 years.

It should be stressed these are trend projections not forecasts.  Based on past rates of house building by area which in turn reflects on household formation.

The problem with this of course is that areas which have seen low housebuilding and higher housing costs will see lower household formation in the future.

The government consultation on a new method last year partially attempted to tackle this by redistributing the crude difference between households and home based on affordability.  It had no demographic or statistical basis for this – it was based on a hack – a global fudge factor. As such it didn’t distinguish between areas that were genuinely land or environmentally constrained and areas that had constrained house building because of slow plan making performance.  Hence it produced ridiculously huge uplifts in land constrained areas such as Greenwich and unsupportable difference such as a 5% uplift in Berkshire and 90% in Bedfordshire.

As an alternative the MOAN model takes estimates of house building actually likely to be achieved in major cities such as London and Manchester – whilst maintaining the broad form of the Green Belt – and then redistributing this based on the proportion of non Green Belt non NPPF constraint areas with commuting distance of each city.

 

 

As a final step allowance is made for second order effects on the economy of house building, on supply chains etc.  In a key change from the initial national results published last months these figures are calculated after redistribution away from land and environmental constrained areas.

A fundamental difference from the DCLG consultation is that it doesn’t see housing need as an ‘atomic’ issue to be added up from local calculations.  Rather it sees housing need as a national issue, and therefore if the political will is there to resolve it if it cannot be solved in one local area then it must be resolved by an uplift in another.  As such its is based on a balance sheet based approach.  if there is compensation for failing to meet the stock of housing need in one locality it must be exactly matched by a flow to raise a stock of housing target exactly pro rate to another area.  In other words it is stock flow consistent.

The geography for the calculations is explained in this post.

England is divided into 44 Housing and Planning Areas -based on ceremonial counties or travel to work areas

in the vast majority of cases county or combined authority boundaries will do just fine for strategic planning areas and for defining housing need. Only in a very few cases do they need to be adjusted where they widely diverge from Travel to Work Areas, in most cases there will be small areas at there edges in other TTWAs (such as the small part of Oxfordshire in the Swindon TTWA) but who cares.  As long as the requirements of the Duty to Cooperate are clarified to ensure that the needs of nearby land and policy constrained settlements are taken into account they will do.  Indeed in my mapping of areas for housing need – which I term Housing Planning Areas (HPAs) I have based on them always on counties (ceremonial) or combined authorities, with just a dew necessary adjustments as follows:

-Halton and Warrington assigned to Merseyside rather than Cheshire. as they fll within the St Helens TTWA and form part of teh Atlantic Gateway

-Cheshire and North Staffordshire merged as North Staffs looks toward Manchester and jointly plans with Cheshire as part of the ‘northern gateway’

-Part of Suffolk merged with Cambridge as falling within the Cambridge TTWA and the existing Cambridge Policy Area arrangements for assigning Housing Numbers

-Part of North West Essex merged with Herts (around Stansted) to enable joint planning around the London Stansted Cambridge corridor.

-Warwickshire merged with Coventry because of major overspill from Coventry.

-Leicestershire merged with Rutland, Rutland falls within the Peterborough TTWA but culturally much more an Midlands rather than East of England area.

These areas can in turn be gathered into regions, such as the Midlands Engine, Northern Powerhouse etc.  In the South and South West I gathered them into regions based on rail corridors (Great Central – Oxford-Mk-Cambridge and London Stansted Cambridge Corridor), Southern, Great Eastern andreat Western.  Calculations for each of these regions are also presented.

The methodology for reallocation away from land and environmental constrained areas is as follows.  The latest housing targets for areas such as West Midlands, Black Country, Greater Manchester and Greater London are used, together with where available estimates of how much of this need will be overspill.  In Greater Manchester and Greater London realistic estimates of how much of the need can be dealt with in City are used.  for example in Greater London that there will be a 20% uplift on typical post recession housing completions.  In Greater Manchester that 5,000 units will be in the Green belt rather than the initially planned 20,000.

The overspill is distributed by region, for example for London to areas outside the Green Belt without restrictive NPPF designations within 1 hr (120km) of London depending on the proportion of unconstrained and not already urbanised areas within this radius.  for example 50.85% of such ‘planagons’ (areas teh size to contain a new community) are in the ‘Great Central’ area to the North West of London (roughly equilvalent to the Oxford-Mk_Cambs and London-Stansted Cambs corridors) emphasising its importance) whilst only 12.4% of the overspill goes tothe Southern Area (Kent, Sussex and Surrey) as it is much more constrained, more urbanised and has large areas of sea.  Outside the Great central Area the areas getting most overspill are Hampshire (because of its less constrained northern area), Kent (because of its less constrained Central Area) and East Suffolk.  So by this method is it fairly clear where the broad locations of large Garden Cities would have to be.

Simplifying England’s Confused Strategic Planning Geography

Planning for Homes in the Right Places Page 22

every local planning authority produce a statement of common ground over the Housing market area or other agreed geographical area where justified and appropriate. It is proposed that the statement will set out the cross-boundary matters, including the housing need for the area

Very few existing strategic planning arrangements cover exactly housing market areas, which in any event are based on the 2001 census and badly need to be updated to be based on 2011 Travel to Work Areas.

In parts of England with many similar sized towns Housing Market Areas can be highly complex – for example Somerset has 11.   In many areas startegic planning arrangements need to cover more than one HMA, for example Banbury and Oxford in Oxfordshire.  Even in parts of the country with single dominant towns in an HMA this does not avoid the need for cross boundary arrangements.  For example right on the edge  of the new Cambridge TTWA (which a future HMA will be based ) is now Harlow – yet the main areas for expansion of Harlow are to the South in the London TTWA.  Another good example is Telford and Wrekin, outside the Greater Birmingham TTWA as the model trip end is Telford, but where the inspector said rightly that it need to accommodate some Black Country /Birmingham overspill.

What is worse although the government states that housing need exists at HMA level its consultation doesnt publish calculations by HMA, forcing complex GIS based recalculations.

This illustrates that strategic planning areas need to be defined with flexibility and pragmatism, and that cross boundary issues for cooperation will arise however they are defined.

Having looked at this in some detail in my MOAN model – where I will publish the spreadsheet today in a separate post, in the vast majority of cases county or combined authority boundaries will do just fine for strategic planning areas and for defining housing need. Only in a very few cases do they need to be adjusted where they widely diverge from Travel to Work Areas, in most cases there will be small areas at there edges in other TTWAs (such as the small part of Oxfordshire in the Swindon TTWA) but who cares.  As long as the requirements of the Duty to Cooperate are clarified to ensure that the needs of nearby land and policy constrained settlements are taken into account they will do.  Indeed in my mapping of areas for housing need – which I term Housing Planning Areas (HPAs) I have based on them always on counties (ceremonial) or combined authorities, with just a dew necessary adjustments as follows:

-Halton and Warrington assigned to Merseyside rather than Cheshire. as they fll within the St Helens TTWA and form part of teh Atlantic Gateway

-Cheshire and North Staffordshire merged as North Staffs looks toward Manchester and jointly plans with Cheshire as part of the ‘northern gateway’

-Part of Suffolk merged with Cambridge as falling within the Cambridge TTWA and the existing Cambridge Policy Area arrangements for assigning Housing Numbers

-Part of North West Essex merged with Herts (around Stansted) to enable joint planning around the London Stansted Cambridge corridor.

-Warwickshire merged with Coventry because of major overspill from Coventry.

-Leicestershire merged with Rutland, Rutland falls within the Peterborough TTWA but culturally much more an Midlands rather than East of England area.

This leaves 44 Housing and Planning Areas – which form a fabric for sub-regional planning.  These are not so different from the 65 areas from the Radliffe Maud report – with many of the HPAs being mergers of the Radcliffe Maud City regions (i.e. Kent is one rather than two).With the greatest discrepancies of historical counties being resolved through combined authorities none is going to argeu the toss – as they did then, whether Burton on Trent belongs with Staffordshire or Glossop with Derbyshire, ceremonial counties post 74 are good enough.

 

 

 

These areas can in turn be gathered into regions, such as the Midlands Engine, Northern Powerhouse etc.  In the South and South West I gathered them into regions based on rail corridors (Great Central – Oxford-Mk-Cambridge and London Stansted Cambridge Corridor), Southern, Great Eastern amd Great Western.