The cost of the housing shortage to London's economy is well over £1bn, says this week's report from Fifty Thousand Homes, a new campaign backed by over 100 business leaders and supported by organizations as diverse as London First, CBI London, and Shelter. They publish data compiled by the Centre for Economics and Business Research (CEBR), data that shows the annual wage premium caused by high housing costs is currently £5.4bn annually, and will rise to £6.1bn by 2020 unless action is taken. Furthermore, the unnecessarily high cost of housing is diverting an estimated £2.7bn from annual consumer spending, a sum that could be creating many thousand jobs in the capital. The ASI has repeatedly called for planning changes to make house-building in cities easier, including our most recent paper, "The Green Noose." David Cameron's conference pledge of a national crusade to build 200,000 affordable new homes will be no more than a pious intent unless it is backed by real changes to make new housing possible in and at the edge of cities - the places where people want to live.
As we have said before, significant parts of the green belt are by no means green or environmentally friendly. Building homes on some of this non-verdant land will save many middle and low income workers the long and expensive commute which high housing costs impose upon them.
Now that good economic data has emerged revealing some of the economic costs of poor housing policy, the case for change becomes overwhelming.