Why decades of failed housing policy has held our cities back

With 100,000 stalled sites in London alone, housebuilding needs more help.

After decades of failed housing policy, the UK is now facing a housing crisis. Currently, the UK is building around 100,000 homes fewer than is required to keep pace with demand each year which is one of the reasons we are experiencing high house prices. In fact, since 1959, the UK has seen a real term increase in house prices of 300 per cent; if the price of a dozen eggs had increased as quickly they would cost just under £19 today.

Current government forecasts suggest we need to build 232,000 houses per year but the problem is that the UK has only done this once in the last 30 years. The UK’s housing shortage must be addressed as a priority to unlock valuably needed economic growth and to improve the lives of people across the country. That’s why this year, Centre for Cities has focused on how to put place back into housing policy through our annual health check of UK cities, Cities Outlook 2013, sponsored by the Local Government Association.

One of the main problems is that housing policy is set on a national level, and house building incentives are applied too widely and do not take into account the specific housing needs of each city. Some cities need new homes while other cities have plenty of vacant housing stock but need funds to retrofit or reconfigure existing development. Cities need the freedoms and flexibilities to make decisions about how best to meet the particular needs of their residents.

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Cities such as Cambridge, London and Oxford, for example, are the most unaffordable places to become a homeowner in the country, while also experiencing relatively low vacancy rates. Restricting housing in high performing cities such as these will hurt economic performance as current residents can’t afford to buy, new people can’t come to live and work, and employers are restricted in personnel. In these places, policy should focus on increasing housebuilding.

In cities such as Burnley and Hull, where housing is most affordable but vacancy rates are relatively high, a focus on the supply of housing (except where there is a clear shortage of a certain type of housing) may not help the local economy. In fact it could have the reverse effect – the supply of housing could put a downward pressure on house prices which would hurt current home owners. In these places, policies to deal with vacancy and quality of housing stock are likely to be more beneficial as they can improve the quality of life of local residents, help make areas more attractive to businesses and potentially generate jobs in the form of retrofitting and refurbishment.

Boosting housing supply requires short term and long term policies. In the short run, there is the potential to provide quick boosts to the housing market which would also increase employment and improve economic performance. There are around 400,000 units on stalled sites across England and over 118,000 of these units are found in the ten most unaffordable cities. Initially prioritising these through existing policies, such as Get Britain Building, could provide significant economic benefits in the short term. The construction of 100,000 new houses could support around 150,000 jobs (of which 90,000 are in low skilled positions) as well as providing a boost to the national economy of around 1 per cent.

Top 10 by affordability

  City Affordability ratio (2012) Vacancy rate (% of stock) Stalled sites
1 Oxford 14.7 2.30% 385
2 London 13.6 2.30% 101745
3 Cambridge 11.7 1.00% 2188
4 Brighton 11.1 2.60% 1555
5 Bournemouth 10.9 2.50% 1320
6 Aldershot 10.0 2.70% 1526
7 Crawley 9.5 1.60% 1067
8 Reading 9.3 1.80% 3136
9 Bristol 9.0 2.40% 5346
10 Worthing 8.8 1.80% 314

In the long term, issues such as opening up the house building industry, incentivising developers to use the land they currently have permission to build on and reforming the planning process will be important to increasing overall housing supply. Places should also be empowered to devise their own planning policies including, for example, the use of greenbelt land.

It will take time to reverse the consequences of decades of failed housing policy. However, the correct short term policy focus can bring quick wins for people, cities and the economy, while a focus on greater devolution of power and responsibilities to cities could help resolve the UK's housing crisis over the long term, and deliver sustained benefits to the national economy.

Cities Outlook 2013, the flagship annual publication by the Centre for Cities, sponsored by the LGA is published today. Find out more details.

Photograph: Getty Images

Alexandra Jones is the director of the Centre for Cities

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Leader: Europe and the long shadow of war

Amid the rancour, it is easy to forget what drove European integration in the first place: the two great wars in the first half of the 20th century.

Amid all the claims and counterclaims about David Cameron’s so-called renegotiation of Britain’s membership of the European Union, it is often forgotten, or conveniently ignored, just how successful the European project has been in helping to create and maintain the post-Second World War peace order.

We support continued British membership of the EU but are sceptical of the imperial ambitions of the European elites. We opposed British membership of the single currency, a decision that the eurozone crisis has vindicated. It is obvious that the Schengen Agreement is unravelling and in all likelihood is unsustainable, as embattled nation states reimpose emergency border controls and the continent grapples with its worst refugee crisis since the end of the Second World War. Like the British government, we are opposed to further political and economic integration and to the creation of a federal or quasi-federal superstate.

However, at a time of profound instability in the world, we accept that it would be foolish for the United Kingdom to retreat from our various multilateral peace alliances – whether that be membership of the EU or, indeed, Nato (as some on the left would wish) – all of which involve some kind of surrender of sovereignty.

Amid the rancour, it is easy to forget what drove European integration in the first place. The two great wars in the first half of the 20th century racked the continent, with neighbouring armies slaughtering each other on a scale that still defies comprehension. As Alistair Horne writes on page 22, “the most atrocious battle in history” began a century ago next week in Verdun, France, on the Western Front. The German army hoped to lure the enemy into a trap and then “bleed the French army white” using its superior firepower. Yet the rivers of blood flowed both ways: in ten months, over 25 square miles, pounded by heavy artillery and poisoned with gas, 300,000 French and German soldiers died.

The lessons of the battle were not quickly learned – the carnage of the Second World War was still to come – yet ultimately they were. In 1963, France’s Charles de Gaulle, who was wounded at Verdun, signed a treaty with the then German chancellor, Konrad Adenauer, binding two countries that had engaged for centuries in tit-for-tat wars in an enduring nexus of co-operation. The aim, as David Reynolds notes in his article on page 28, was “to free the next generation from the vice of nationalism”.

Two decades later, President François Mitterrand, who fought near Verdun in 1940, and Chancellor Helmut Kohl, whose father served there in 1916, attended a commemoration ceremony at one of the battle sites. In what became an iconic image of reconciliation at the heart of Europe, Mitterrand impulsively gripped Kohl’s hand during their national anthems. The two men were later the architects of the Maastricht Treaty, which created the European Union under its current name.

These are troubling times for Europe. Confidence and optimism are low. The wars in the Middle East and the rise of Islamic State, Russian revanchism and financial and economic turbulence have dented the morale of even the most committed liberal Europhiles. In addition, the EU seems unable or unwilling to control or police its borders, just as it has been unable to bring an end to the crisis in the eurozone. Nor is it any closer to forging a common foreign policy, let alone forming a common European army that might be necessary in future years to patrol the outer edges of the continent.

“Unless the EU can find solutions to the problems Europe is facing that are acceptable to its members . . . the Union will be on a glide path to collapse,” wrote the historians Brendan Simms and Timothy Less in a recent issue of the New Statesman. And yet, for all its flaws and present difficulties, the EU remains a force for stability in the world. It embodies the liberal, rules-based order without which barbarism and war are never far away, as the centenary of the Battle of Verdun so poignantly reminds us. 

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle