So, Just Kill The Damn Green Belt Already
Blow up the Town and Country Planning Act 1947 and successors. Proper blow up, kablooie
Politics is the art of adamantly refusing to do the right thing until everything else has been tried first. That might be a misquote but it seems appropriate in Dear Old Blightly these days.
If you say, as I have been for a couple of decades now, that we should blow up the Town and Country Planning Act 1947 and successors - proper blow up, kablooie - then you’re looked at as if you’ve got two heads. Well, even more than the usual bien pensants look at me in that manner that is. But it is, absolutely and wholly, the solution to our woes.
For what the 1947 Act - and successors - do is nationalise planning. Nationalise the use of land that is. Which, as ever, means that we end up with grossly expensive and in short supply land with which we can do things. The best example of this being the green belt.
That’s the green belt around Bristol and Bath. The light brown bit in the top left is Bristol, moving diagonally down and right the little island is Keynesham, the bigger one Bath, the teenie one Bradford on Avon. The green bits are where you cannot build.
Just, you know, verboeten. Sure, there are bits around there which are simply gorgeous, delightful. If you look at the bottom bit of that Bath area, that’s where we get to Midford, Combe Hay, that sort of area. Really exquisite little areas in fact.
So, we should allow people to live there, right? Instead of cramming them into 80 square foot of Twerton. But that would upset the bien pensants and haute bourgoisie.
But we are, finally, beginning to see some movement. Here’s John Harris (who, as it happens, lives just south of that green belt area around Bath, in Frome):
The average monthly rent in England is now £1,276 and £944 in Scotland. If you are unfortunate enough to be renting from a landlord in London, your monthly outgoings may well appear hopelessly unrealistic: there, average monthly rents have risen by 10.6%, to a truly eye-watering £2,035. Given that the median UK monthly wage currently sits at about £2,200, the dire affordability crisis all this points to is glaringly clear.
Yep.
And so here we are. We all know the essential nature of the contemporary British condition: that unending sense that nothing is reliable, even as we are told to shell out more and more money. The crisis in private rented housing might be the most grimly perfect example to date: the cost of one of life’s most basic essentials endlessly going up, while the people who have to pay get no corresponding increase in everyday security and stability. These are the kind of things that eat away at what used to be called the social contract. If they are not fixed, the anger and resentment that has recently washed through our politics may only be the start.
Quite so. The reason for this expense - and coming revolution - is that no bugger is allowed to build anything of a size anyone wants to live in anywhere any fucker would like to live.
It’s that nationalisation of land use - recall what nationalisation did to the cars? The trains? - causing this. You can’t build houses where people want to live.
The Resolution Foundation also reports on this:
The UK’s “expensive, cramped and ageing” housing stock fares poorly compared with other advanced countries, analysis by a thinktank suggests.
Households are paying more than other countries – but getting less in return, the Resolution Foundation said.
“When it comes to housing, UK households are getting an inferior product in terms of both quantity and quality,” the thinktank said.
The Foundation’s housing outlook used OECD data to compare the UK’s housing issues with other similar economies.
It said that while there was “limited cross-national data” on floor space, homes in England had less average floor space per person (38 sq metres) than many similar countries, including the US (66 sq metres), Germany (46 sq metres), France (43 sq metres) and Japan (40 sq metres).
No bugger can build where people want to live. Further, when anyone does get planning permission for land the required - you know required by law - density is such that nothing more than rabbit hutches without gardens can be built.
The full report:
An alternative approach is to combine actual rents paid with an estimate of the cost of housing that owners would pay if they were renting their home on the open market – what is known as ‘imputed rent’ (we can also make the same adjustment for social renters to reflect the implicit rental subsidy that they are benefiting from). Having done that, the UK stands out when we look at actual and imputed rents together as a share of total consumption. If all households in the UK were fully exposed to our housing market, they would have to devote 22 per cent of their spending to housing services, far higher than the OECD average (17 per cent), and the highest level across the developed economies with the solitary exception of Finland.
That’s a good method of measurement.
There are a number of potential reasons why UK households spend more on housing services (actual and imputed) as a share of total consumption than their counterparts in all but one other OECD nation: we could, for example, simply be consuming more housing. There is limited cross-national data on floorspace per person, but it does not seem that households in the UK (or accurately, England) are consuming more residential housing space than in other developed countries (see Figure 2). In 2018, for example, the floorspace per person in England was 38m2 , compared to 43m2 in France (in 2020) and 46m2 in Germany (in 2017). We have been overtaken by Japan, at 40m2 , and have less space per person than households in Taiwan, at 49m2. It is unsurprising that our homes are far smaller than in the US overall given its land mass but, strikingly, English floorspace per person is no bigger than that of residents of the central city district of the New York metropolitan area, who on average enjoy 43m2 of room.
We pay more for worse shit. As we would, could and should assume from the nationalisation of the use of land.
It costs - about, and yes I have done it - £130k to build a reasonable 3 bedder. Add £5k for an acre of even the best farmland in the country (and obviously bad land is cheaper) and a house fit for a Briton should have a production cost of maybe £150k. Older houses should be cheaper. If supply were free then we should see houses like this on sale for, oooooh, £180k? That sorta level? For in a free market supply does expand to where the marginal production just about covers marginal production costs including the cost of capital.
So, cheaper houses for Britons, houses of the size and type Britons want to live in, will be achieved by reversing the nationalisation of land use. Blow up the Town and Country Planning Act 1947 and successors. Proper blow up, kablooie.
As, you know, I might have said before.
We’re also really rather certain that we need a bit of an economic boom right now. Some GDP growth, more tax revenue, that sort of thing. And how did Britain come out of the Great Depression?
Well, we didn’t do the idiot things that Roosevelt did in the US. Instead we depreciated the pound, thereby loosening monetary conditions (recall, gold standard). We also cut government spending - no, really, we did not do the Keynesian thing of demand expansion. We *cut* government spending. We sliced the deficit while doing so too. And because we had a free market in land use we had a vast housebuilding boom. The private sector alone was building 300k new houses a year. We did expansionary fiscal austerity in fact - but with that crucial point of no nationalisation of land use.
The British economy came out of the Great Depression in some 18 months or so. Plus lots of homes folk wanted to live in. Actually, those fine mock-Tudors that litter the Home Counties and that people pay £1 million and up for right now. The 1930s were the last time we were free to build houses in Britain, houses that Britons wanted to live in where Britons desired to live. The results of that were excellent. So, you know, we should do that again.
Uni-answers in both economics and politics are dangerous because they’re never, really, single answers. There’s always a lot more complexity to an economy than the one point or answer. But the uni-answer to Britain’s housing woes really is the Town and Country Planning Acts 1947 and successors. So, kill it. Blow it up, kablooie.
Given that this is all now becoming a point of political contention be careful and aware. Anyone who proposes anything other than kablooie is wrong. Flat out, simples, wrong.
To return to the Bath example. Until it’s legal to build a new house in Combe Hay we will not have solved the problem. So, measure policy proposals by that metric.
Although there is a lot to like with your idea, wouldn't putting people in the position to build a "decent 3-bedder" for £180K instantly put just about every mortgage-payer into massive negative-equity? And if it did wouldn't that stop the "second-hand" housing market dead in its tracks as nobody could afford to sell..?
Isn't there some sort of tax (I'm sure someone like Adam Smith or Ricardo would've worked it out) that would partially solve this...