So the entirety of our housing policy is wrong is it?

For decades now we’ve been told that we should all live in mixed neighbourhoods. Mixed in terms of socio-economic class that is. That there should be council houses in the middle of Westminster, that to have the poor living in cheap areas, the rich in rich ones, would be a terrible betrayal of something or other. It now seems that this is entirely wrong:

Britain has prized the ideal of economically mixed neighbourhoods since the 19th century. Poverty and disadvantage are intensified when poor people cluster, runs the argument; conversely, the rich are unfairly helped when they are surrounded by other rich people. Social mixing ought to help the poor. It sounds self-evident—and colours planning regulations that ensure much social and affordable housing is dotted among more expensive private homes. Yet “there is absolutely no serious evidence to support this,” says Paul Cheshire, a professor of economic geography at the London School of Economics (LSE).

And there is new evidence to suggest it is wrong. Researchers at Duke University in America followed over 1,600 children from age five to age 12 in England and Wales. They found that poor boys living in largely well-to-do neighbourhoods were the most likely to engage in anti-social behaviour, from lying and swearing to such petty misdemeanours as fighting, shoplifting and vandalism, according to a commonly used measure of problem behaviour. Misbehaviour starts very young (see chart 1) and intensifies as they grow older. Poor boys in the poorest neighbourhoods were the least likely to run into trouble. For rich kids, the opposite is true: those living in poor areas are more likely to misbehave.

This entirely makes sense. Imagine that it really is inequality that causes so many problems. Inequality is going to be felt most keenly about those one lives cheek by jowl with. Forcing the poor to live in “affordable housing” among the mansions of the rich is therefore going to exacerbate problems, isn’t it?

Not that these facts are going to make a blind bit of difference. Facts never do when ideology is involved.

A Labour Party policy we look forward to

In the interests of being fair handed, for recall that we are not a party political organisation, here is a Labour Party policy just announced that we thoroughly look forward to:

He added: “David Cameron’s ideological selloff has ended a public sector service which has delivered over £1bn to the Treasury, kept fares down, had record passenger satisfaction and engaged the workforce with unparalleled success.
“It is clear that when it comes to transport, people have a straight choice – the status quo or Labour’s better plan. Labour will start the process of legislating in the first 100 days of a new parliament to allow a public sector operator to be able to take on lines and challenge the private sector on a genuinely level playing field.”

We have no problem with public sector organisations applying to run anything at all. Nor with capitalists, cooperatives or Uncle Tom Cobbleigh. Our desire is that there should be that level playing field so that the best people for the job do the providing. And we’re just overjoyed at the idea that there might be competition between forms of organisation just as much as there might be between individual examples of the same type of organisation.

So, yes, we fully support this.

However, in the same story:

Stagecoach has pledged to invest about £140m to deliver what it calls “an improved service and a more personalised travel experience for customers”, and is scheduled to pay £3.3bn in premiums to the government.

That capitalists are pledging to give the government £3.3 billion over 8 years, the public sector organisation gave the government £1 billion over 5. So this is actually going to be a level playing field is it? That the privatisation would have gone ahead anyway as the capitalists are quite obviously offering the better deal?

Good, excellent, glad we’ve got that sorted then.

The housing question isn’t just how many, but where

I usually like Policy Exchange’s work but its new paper on solving the housing crisis is a little disappointing. Its main argument is that “Over one million new homes could be built over the next decade if each of the 353 councils in England built just one garden village of 3,000 new houses”. The arithmetic checks out, but that still wouldn’t do much to solve the housing crisis.

The problem with England’s housing market is not simply that not enough houses are being built. It’s that they’re being built in the wrong places. According to Paul Cheshire, twice as many homes were built in Doncaster and Barnsley (where there isn’t much demand for housing) as in Oxford and Cambridge (where there is) in the five years to 2013. In 2002/03, it was three times as many!

This is why national house construction numbers can often be misleading. The crisis of unaffordable houses is mostly centred on places like London, Oxford, Cambridge and the rest of the South East. People want to live where the jobs are. (As it happens, an older Policy Exchange paper recognised this, suggesting policies designed to make it easier for people to move from North to South.)

Spreading housing development around the country will hence end up doing much less than we might hope. If your problem is a housing shortage in London, building more in Hull won’t help much.

A second problem is that building entirely new villages is expensive, because of the new infrastructure that needs to be built. The report suggests paying for this with levies on the new builds, which just reduces the downward pressure on prices these houses would have. Building all that extra infrastructure is needless when there is already so much empty land around existing train stations to be built on in the South East (enough for one million homes!), where there really is demand for new housing.

I also wonder how much people want to live in villages which really would be very small. At the UK average household size of 2.4, we’re talking about villages of 7,200 people, far enough from existing towns that those residents won’t object to them. As someone who grew up outside an Irish town with a population of 6,666 (seriously), take it from me – these places can be a little dull.

There are 138 authorities in London and the home counties. Building new homes there – even if they had to be in new villages – would be better than nothing, although I don’t know how you’d go about building new villages in central London. Building new homes in places like Scunthorpe and rural Cornwall would be a lot less good, and policies that do not recognise that will distract us from what we really need to do.

Maybe there’s no such thing as a bad policy that results in more housing, but is it too much to ask that they also be houses that people want to live in, in places they want to live?

Oh well done, well done here!

One of the little problemettes that we have with government is this left hand, right hand, thing. The entire beast is so complex, intervenes in so many different ways, that that left hand can be doing something entirely at odds with what the right hand is tyrying to achieve. And so it is here:

Landlords will be banned from renting out England and Wales’ draughtiest homes from 2018 in a bid to cut energy bills and carbon emissions. The new regulations are expected to help around a million tenants who are paying as much as £1,000 a year more than the average annual bill of £1,265 because of poorly insulated homes.

Campaigners hailed the move as potentially the most significant piece of legislation in a generation aimed at improving building stock in England and Wales, which is some of the oldest and leakiest in Europe.

We’re told, in increasingly screeching tones, that the major problem facing the country is the lack of homes available for people to live in. In response to which the government decides to take 1 million homes off the market. Or, in an alternative formulation, insist that large investments be made in extant housing to the detriment of investment in the more housing needed.

Oh, well done there, well done indeed!

Housing in London

In The Green Noose, Tom Papworth has argued persuasively for loosening the green belt. Another way to goose up the supply of housing in London would to deregulate the construction aspect of provision.

We welcome competition in local government, so let HMG pass legislation encouraging London Boroughs to bid for time-limited privileges. The idea would be that the first (as it might be) eight out of thirty-two London Boroughs would obtain the full extent of incremental rates on new housing arising, if they bid for temporary relief from taxes and regulatory restrictions.

New construction is already exempt from VAT, so the targets would be to suspend officious HMRC registration of subcontractors, so as to reduce labour costs; taxes on capital gains, profits and dividends arising out of qualifying developments, so as to incentivise developers and investors; and suspending stamp duty on associated property transactions, so as to cheapen costs to purchasers.

This is however likely to be less effective than deregulation of land-use and construction practices. As to land-use, we would advocate suspending

  • Height restrictions, protected sight-lines, listings, change-of-use consent and the whole paraphernalia of JNCC restrictions;
  • The rights of occupants of collectively owned properties to form blocking minorities refusing market compensation (this is with a view to easing the consolidation of building lots); and
  • Judicial review of compulsory purchase and planning decisions.

To conclude on this score, we would argue for a presumption of planning approval unless a reasoned refusal is delivered within fourteen days; developers’ access to an appeals tribunal with a presumption of summary reversal; and stricter tests for reasonability and timeliness in the exercise of neighbours’ rights, including local impact, party-walls and natural light.

Finally we turn to construction practices. These are hamstrung by obsolescent and intrusive restrictions by way of building and fire regulations. It’s an open secret that the latter are honoured in the breach, with new residents removing smoke-detectors and door-closers and demolishing corridor and lobby walls as soon as they can. As to building regulations, these are largely a cloak to defend time-expired practises and uncompetitive suppliers. Instead, let developers show that their proposals comply with best practice in the form of building codes elsewhere (eg. Vancouver, Melbourne or Chicago).

To those who argue that this encourages builders to resort to regulatory arbitrage, our answer is “why not?” More competition in local government!