The ‘Great Resignation’ Caused by Housing Boom

Further evidence housing shortages are harmful to growth

SSRN

Following the Covid-19 pandemic, U.S. labor force participation declined significantly in 2020, slowly recovering in 2021 and 2022 — this has been referred to as the Great Resignation. The decline has been concentrated among older Americans. By 2022, the labor force participation of workers in their prime returned to its 2019 level, while older workers’ participation has continued to fall, responsible for almost the entire decline in the overall labor force participation rate. At the same time, the U.S. experienced large booms in both the equity and housing markets. We show that the Great Resignation among older workers can be fully explained by increases in housing wealth. MSAs with stronger house price growth tend to have lower participation rates, but only for home owners around retirement age — a 65 year old home owner’s unconditional participation rate of 44.8% falls to 43.9% if he experiences a 10% excess house price growth. A counterfactual shows that if housing returns in 2021 would have been equal to 2019 returns, there would have been no decline in the labor force participation of older Americans.

Calderdale Inspector Approves Loss of Green Belt

Report

Principle of exceptional circumstances for the release of land from the Green Belt for housing and employment development

99. The Council has carried out a thorough assessment of potential capacity to accommodate housing and employment development in the borough. This work is based on evidence in the Strategic Housing Land Availability Study (2014) and Employment Land Study, and further refined by site allocation assessment work undertaken as part of plan preparation. The Council has sought to optimise site densities as part of this process whilst adjusting capacity to take account of site-specific constraints and other factors. Reasonable density multipliers seeking higher rates in town centres and accessible locations were used as a starting point, with bespoke assessments applied where feasible.

100. The assessment work shows that there is insufficient capacity within built-up areas or on suitable, deliverable and available non-Green Belt sites in the countryside in the area around Todmorden to deliver the identified housing requirement and employment land needs. As set out in Issue 1, the supply of suitable sites in the west of the borough is constrained by a number of factors, including topography, flooding and the SPA/SAC. Suitable and deliverable nonGreen Belt sites in the west of the borough were selected before options in the Green Belt.

101. The NPPF 2012 states that Green Belt boundaries should only be altered in exceptional circumstances. The Council is aiming to meet identified housing needs in line with national policy and to deliver employment needs within the borough. The Council has held discussions with other authorities about accommodating needs but many of these authorities also have Green Belt land. The Leeds City Region Statement of Common Ground confirms that authorities in the sub-region have agreed to accommodate their own identified needs. The delivery of identified housing needs within Calderdale would help to provide homes for people and facilitate the delivery of additional affordable housing. The release of Green Belt land for employment would allow the Council to deliver its employment strategy and meet employment needs by offering a range of job opportunities. Without the release of Green Belt land in Calderdale a substantial amount of new dwellings and employment floorspace would not be delivered. Furthermore, the release of Green Belt land would align with the spatial strategy in the Plan which seeks to focus development in the eastern Calderdale Council, Calderdale Local Plan Inspector’s Report 26 January 2023 28 part of the borough where there is access to jobs and services, planned investment in infrastructure and higher market demand for employment space.

102. The Council has identified that 489 hectares would be released from the Green Belt. This includes some 371 hectares of land for housing and employment allocations (including the additional housing allocations). Site-specific modifications elsewhere in this report would reduce this figure slightly. The total figure of 489 hectares equates to about 2% of the total Green Belt land area in the borough. The proposed reduction is therefore relatively small and the overall integrity of the Green Belt would remain. The Council has identified its commitment to a number of environmental, access and open space projects in the Green Belt that will enhance the beneficial use of the Green Belt in line with paragraph 81 in the NPPF 2012.

103. In the absence of reasonable alternatives, and given the benefits associated with local housing and economic growth, it is concluded that exceptional circumstances exist in principle to justify the release of land from the Green Belt to deliver housing and employment needs in Calderdale

Are Examinations in Public now a Waste of Time?

Maidstone Inspectors Letter

One of the key tests for the submitted spatial strategy is that it is an appropriate strategy for securing a sustainable pattern of development in the Borough. In contrast to previous tests of soundness, it does not need to be
demonstrably the most appropriate strategy. That said, in order to be an appropriate strategy, it needs to perform well against Sustainability Appraisal (SA) objectives when compared against other reasonable options and so result in ‘sustainable development’ in a Maidstone Borough context.

Hence the inspector didn’t at all cover the many days of hearings on alternative and rejected sites – so what was the point?

If the justified test goes the chosen sites dont even have to be evidenced. To be honest the deliverable test is not that important, if plans are not deliverable they will be quickly out of date. They will l be delivered in practice.

So the only real and necessary tests are effectively a nullity and the evidence of comparative environmental effects in teh SEA can be ignored.

The days of sitting in herings will just be pantomime nd the ability of inspectors to take robust views will be watered down. The purpose of a genuine consultative process with independent examination will be nullified as what the LPA says sticks and cant be challenged by other views. In this circumstance who could defend the need for examinations – they will become a waste of time and money.

Italian Minister wants to Protect San Siro Stadium – But has no Power to

Dezeen

The reason being buildigs have to be 70 years old in Italy to be classed s herutage assets.

Italy’s undersecretary for culture Vittorio Sgarbi has stated that Milan‘s iconic San Siro stadium, which was set to be replaced by a Populous-designed building, will not be demolished.

The minister promised that the Stadio Giuseppe Meazza stadium, widely known as San Siro, “will not be torn down,” reported online newspaper Milano Today.

At the end of December, Sgarbi said that his powers as undersecretary cover the San Siro stadium as a “heritage of contemporary architecture” and that he will submit an “issue of historical restraint” this month.

This would see the building protected against demolition based on it being a historical landmark. The year the demolition is set to begin, 2024, marks 70 years since a major post-war renovation was carried out at the stadium.

“I am convinced that the stadium should not be demolished, not so much for its architectural value as for the importance as a symbol and for the protection of memory,” Sgarbi told Italian newspaper Il Giorno.

“For this reason, as far as I am concerned, I will take all the necessary steps to prevent it from being torn down.”

Decision lies with mayor of Milan, says culture minister

However, Italy’s minister of culture, Gennaro Sangiuliano, has stated that there are no restrictions on the stadium and that decisions about San Siro’s future rest with Milan’s mayor, reported Italian financial news website Calcio Finanza.

“The state of the art is this: at the moment, there is no constraint and it will have to be the mayor of Milan who decides what he wants to do, possibly also on the basis of ‘sentimental’ evaluations, given the reference to the iconic value as perceived by the football sentiment with which the superintendency itself invited alternative solutions to demolition,” Sangiuliano said this month.Read:Populous-designed Cathedral stadium set to replace Milan’s San Siro

The stadium, which was designed by architect Ulisse Stacchini and built in 1925, was extended between 1948 and 1955.

In 1990, ahead of the World Cup in Italy, it was extensively remodelled by Milan studio Ragazzi and Partners.

Populous stadium part of wider redevelopment of site

Football teams Inter Milan and AC Milan, which share the stadium, announced in December 2021 that it would be demolished and replaced by a stadium designed by architecture studio Populous.

The new stadium would be part of a redevelopment of the site and would be built next to San Siro, which would then be torn down.

Called the Cathedral, the Populous stadium design was informed by two of Milan’s best-known buildings, the Duomo di Milano cathedral and the Galleria Vittorio Emanuele shopping arcade. The area around the stadium would become pedestrian-only, with existing parking moved underground.

The San Siro replacement has previously been criticised by architects, critics and heritage bodies. In 2020, architect Angelo Renna suggested the stadium could be turned into a tree-covered coronavirus memorial.

Planning Reform has succeeded in New Zealand – How?

Brookings

Over the past decade, many cities around the world have experienced a significant rise in housing costs, and the large cities of New Zealand are no exception. The small nation’s median house price rose by approximately 130% between 2011 and 2021, far outpacing household income growth and eroding housing affordability. 

Undersupply has contributed to these rising housing costs. Census data reveals that New Zealand’s population increased by 10.8% between 2013 and 2018, but the stock of occupied dwellings only increased by 6.6% over the same period—indicating that there are chronic shortages of housing in the locations where people want to live. 

In response, the New Zealand government recently passed sweeping zoning reform legislation to permit medium-density housing in all of the country’s major cities. This policy builds on the earlier success of upzoning in the country’s largest city, Auckland, to redress housing shortages by encouraging higher-density housing. The reform is also part of a broader policy shift to encourage housing construction by allowing cities to build up. 

New Zealand’s past zoning restrictions have led to increased housing costs and decreased homeownership rates 

In October 2021, New Zealand’s center-left Labour government announced the zoning reform to stimulate housing construction through redevelopment. The so-called “Medium Density Residential Standard” will require the country’s most populous cities to permit up to three stories and three dwellings on all existing residential parcels of land. The policy would allow a parcel with a detached single-family dwelling to be redeveloped into row houses or a small apartment block.

The reforms represent a significant reversal in the nation’s approach to urban planning and development. Since the 1980s, New Zealand has adopted land use policies that encouraged low-density housing in residential areas, entrenching detached single-family housing in its suburbs. Consequently, construction of high-rise apartment buildings has been limited to central business districts and areas zoned for commercial use. Construction of medium-density housing, such as the rowhouses that are commonly found in the cities on the East Coast of the United States, has been missing from the mix. 

Although local governments are responsible for the design and implementation of zoning regulations, the prevalence of low-density housing was underpinned by national-level legislation governing land use. The 1991 Resource Management Act restricted urban development and has been repeatedly criticized for insufficient recognition of housing and infrastructure in its purpose and guiding principles. The act not only presented an impediment to building vertically, but it also hampered the ability of cities to grow horizontally. A long series of official inquiries has identified its shortcomings.  

The Resource Management Act restrained housing supply and attendant infrastructure during a period of significant population growth. Between 1991 and 2018, New Zealand’s population grew by approximately two-thirds. Over the same period, the social impacts of increasing housing costs have become more acute. Housing costs for low-income New Zealanders have doubled as a proportion of their income since the 1980s, and homeownership rates have fallen while household debt has increased substantially.  

Encouraging redevelopment is a bipartisan issue 

Over the past decade, both center-left and center-right governments have deployed policies intended to rein in runaway house prices. These include both demand- and supply-side policies, such as a capital gains tax targeted at housing speculation, a ban on foreign investment in residential housing, fast-tracked inclusive housing developments, and state-subsidized housing development projects.  

The effect of monetary and macro-prudential policy on house prices has also increasingly been put under the spotlight. Upon the onset of the COVID-19 pandemic, the country’s central bank dropped interest rates to all-time lows and removed macro-prudential restrictions on mortgage credit, fueling a further 20% to 40% increase in house prices in different regions across the country. The government reacted by pushing for the central bank to consider house prices when setting interest rates, raising concerns that the long-held independence of the central bank was being undermined.  

Typically, a political party’s housing policies are criticized by the opposing party. However, the original announcement of the Medium Density Residential Standard in October was notable for being bipartisan. The minister for housing, Dr. Megan Woods, shared the podium with members of the opposition National Party when making the announcement, who made their own statements voicing their support. The bill was subsequently passed in December with bipartisan support. 

Bipartisanship lends the zoning reform credibility. Policies to promote redevelopment and densification are often unpopular with local residents, which raises the possibility that the policy will be overturned after the next election. But the opposition party’s public support for the bill indicates that the law will remain in place even if it wins the next election in 2023. A bipartisan commitment removes political uncertainty and encourages developers and homebuyers to incorporate the policy changes into their decision making.  

Construction in New Zealand’s largest city is booming 

This is not the first time New Zealand has turned to zoning reforms to encourage housing construction. In 2016, the nation’s largest city, Auckland, upzoned approximately three-quarters of its residential land area under the Auckland Unitary Plan (AUP). Auckland houses about a third of the nation’s 5 million people, and is also the country’s commercial capital, accounting for 38% of the gross domestic product. 

Although motivated by a variety of factors, the undersupply of housing and erosion of housing affordability were the prominent justifications for the zoning reforms introduced under the AUP. The municipal government for the entire metropolitan area, the Auckland Council, estimated that the plan tripled the dwelling capacity of the city. 

My work with Peter Phillips shows that the AUP has enabled a construction boom. New housing units permitted have increased every year since the policy was enacted, with all of these increases occurring in the city’s upzoned areas. 

Immediately prior to the plan, new housing units permitted peaked at about 6,000 in 2015. By 2020, that figure had climbed to over 14,300.  

The policy also shifted residential construction into attached multifamily housing. Immediately prior to the plan, new dwelling permits for attached housing peaked at 1,300 in 2015; by 2020, that figure had climbed to 8,100. This means that most of the 14,300 new dwelling permits issued in 2020 were for attached housing. The policy also stimulated an increase in detached housing, but the increase is not nearly as great. Prior to the policy, detached permits peaked at about 4,700 in 2015; by 2019, that figure had risen to just under 6,200.   

Upzoning also encouraged a more compact city by stimulating construction in Auckland’s inner suburban areas, which span a radius of approximately 20 to 25 kilometers from the central business district. In 2015, about two in three housing permits issued were in the inner suburbs. By 2020, six out of every seven permits issued were for construction of a home in the inner suburbs.

The success of upzoning in Auckland provided the blueprint for more recent national zoning reforms, with the business case for the policy change based on construction activity and outcomes in the city’s medium-density zones. 

Transit-oriented housing development further encourages more compact cities 

The Medium Density Residential Standard comes on the heels of another national policy directive to encourage housing densification along public transit corridors. In 2020, the Labour government issued the National Policy Statement on Urban Development, which requires large cities to zone for residential structures of up to six stories within walking distance of rapid transit stations (approximately 800 meters, at the minimum recommendation).  

In addition to redressing the housing shortages that have accumulated over the past three decades, transit-oriented housing development is intended to lower energy consumption through shorter commutes and increased patronage of public transit, assisting the country to meet its carbon neutrality goals. 

New Zealand’s reforms have increased housing construction, but home prices are still high 

New Zealand’s three zoning reform policies enacted over the past five years—the Auckland Unitary Plan, the National Policy Statement on Urban Development, and the Medium Density Residential Standard—add up to a shift to encourage more housing construction through a more compact form of urban development.  

Horsham Leader Resigns After Vote to Delay Local Plan

Sussex World

Jonathan Chowen resigned as leader of Horsham District Council earlier this week following the vote by his own group in a private meeting.

He felt the move to delay was a ‘grave mistake as it leaves our district and residents vulnerable to speculative, spasmodic planning applications by developers’.

The Lib Dems called the decision a ‘gross dereliction of duty’, while Labour suggested the Conservatives were merely delaying potentially unpopular announcements until after the council election.

However the Conservatives have now explained their reasoning behind the move, pointing to recent announcements made by Secretary of State Michael Gove.

Lynn Lambert, cabinet member for planning at HDC, said: “The Council has been lobbying Government for many years regarding the challenges that our District faces. We feel it is a very positive move by the Government and shows they have listened.

“For too long house building has focused on the overheated south-east, which has raised house prices and forced more development onto green fields.

“The proposed changes will make significant amendments to the national planning process, including re-directing targets towards and levelling up the Midlands and north of England.

“We had been due to bring our draft Local Plan to cabinet and council in January, however these announcements have given us sound reasons for more consideration of the plan and have driven our decision to pause the process.

“It would not be appropriate to continue at the moment with the possibility of a lower housing number and developments only in areas favoured by local communities.

“This decision has not been taken lightly but we have decided that it is in the best interests of our residents to pause and to take the opportunity and time to see what changes will take place.

“Residents can now be clear that we are protecting the countryside and putting the needs of local residents first, protecting our open spaces and respecting Neighbourhood Plans.

“In the meantime, we shall take this opportunity to have further consultation with stakeholders and our communities.”

A spokesperson for the Save West of Ifield group welcomed the delay as they think more time is needed to consider the potential benefits of Michael Gove’s recent statements around modifying housebuilding targets.

Half Baked Zombie Zones – what remains of Investment Zones

Confusion is epitified by Guardian using a photo of Slough – which never bid

Guardian

Hundreds of bids by councils to be granted tax exemptions and liberalised planning rules under the “investment zones” scheme have been killed off, as Rishi Sunak’s government dismantles another of Liz Truss’s projects.

Sources said ministers were trying to scale down the scheme, which was a key part of the previous government’s growth strategy, while salvaging some aspects of it as a sop to the former prime minister and her allies.

Fewer than 20 zones, which will probably be focused instead on universities, are now envisaged. Following alleged disagreements between the Treasury and the Department for Levelling Up, a planned announcement last week about a replacement scheme was called off at the last minute.

In a letter seen by the Guardian, the levelling up minister, Lee Rowley, revealed that the idea of investment zones had been reviewed by both No 10 and the Treasury. He said the policy was “going to be refocused on productivity, improving growth and job creation”.

Despite hundreds of councils and combined mayoral authorities submitting bids to be considered for zones in their patch, Rowley admitted the “previous expression of interest process will not be taken forward”.

He insisted the government would “work closely” with all local authorities and businesses to consider how best to identify and support them, promising further details shortly.

It was revealed last year that the government received bids to become investment zones from about 80 local authorities. Arranging these came at a cost with councils already under financial strain; the Local Government Association estimated that each competitive funding bid would cost about £30,000 to put together.

Ministers still want to salvage elements of the investment zones scheme, sources said, given the amount of time councils put in to their applications and the extensive information they provided about specific wants and needs.

Redesigning the scheme is also seen as a bid to keep Truss and her former cabinet ministers happy, given that they have become increasingly emboldened at making interventions critical of the government – most recently on childcare and onshore wind power.

Investment zones were initially billed as a way to drive growth by cutting red tape, including planning regulation, and offering time-limited tax incentives.

A government source said it was “Liz’s policy, she wanted it, was in the meetings and had all the details”. After Truss called her critics the “anti-growth coalition”, another insider admitted: “There’s a desire now she’s gone not to be seen as innovation killers.”

However, those believing the project to be doomed have nicknamed the schemes “zombie zones”.

Discussions have been held between the Treasury and the Department for Levelling Up for several months about rebadging the schemes as research and development zones, innovation zones, or academic zones. Various sectors have been considered as potential targets, including key industrial sites, but the most likely to benefit are universities.

Several Whitehall officials suggested there had been disagreements between the departments, with some iterations rejected for being “half-baked”.

However, a government source denied any accusation of a dispute, saying: “Investment zones will be an important part of the government’s mission to level up communities across the UK and drive economic growth. An announcement on the new investment zones programme will be made soon.”

Labour claimed the debacle had been a “complete shambles that exposes the weakness of [the] prime minister”.

Lisa Nandy, the shadow levelling up secretary, said: “Investment zones were the Conservatives’ big idea, then they were scrapped, then back on, and now seemingly off again. It is shocking that so much time and money has been needlessly wasted on applications because of Tory chaos.”

Nandy criticised “the sticking plaster policies” and pledged Labour would deliver a “proper strategy to grow the economy and back every community to contribute to rebuilding Britain”. She pointed to the party’s devolution plans, claiming they would “deliver the biggest ever transfer of power out of Westminster”, and investment in green jobs.

A government spokesperson said the new zones would still “boost levelling up, productivity and job creation”, and vowed to work with local authority leaders to “leverage expertise of research institutions in areas that have been left behind”.

The spokesperson added: “The information gathered from councils has been invaluable and is helping to inform the new investment zones programme. We are grateful for all their efforts to support their local communities.”

Further details are expected to be announced in the coming months.

Harrow goes down Croyden Nimby Route

Harrow Conservatives

Harrow Council’s new Conservative administration is formally reviewing the Council’s planning and regeneration policies as well as improving the quality and living standards of proposed new developments. The Conservative Council is committed to protecting the suburban character of Harrow.

Cllr Marilyn Ashton, Deputy Leader of the Council and Cabinet Member for Planning & Regeneration said:

“We must protect our suburbs – it’s what people expect the council to do. That’s why we are working hard to get this right and stop tall buildings and inappropriate developments from being built.”

In the last decade, the previous Labour leadership of Harrow Council did little to protect our suburbs from inappropriate tall and dense developments. They did not properly use policies and powers they already had to resist tall buildings in our suburban neighbourhoods.

Conservatives will not make the same mistake. The new Conservative Cabinet will use every means possible to prevent inappropriate high-rise developments in our suburbs.