John Myers is co-founder of London YIMBY, a grassroots campaign to end the housing crisis with the support of local people, allied with the rapidly growing YIMBY movement around the world
The 15th Housing Minister since 2010, Rachel Maclean, has an overflowing in-tray. The Department faces immense challenges. But, despite setbacks, there is some hope on the horizon, including the street votes initiative included in the Levelling-up and Regeneration Bill.
Her problems include continued problems with cladding, unaffordable homes, mould issues in social housing, and of course the fact that the UK has about the oldest and worst overall housing stock in the developed world. Notwithstanding our fine tradition of public and private building, since the Second World War we have built far less per head than other nations. Far too much of our spending on new homes has paid for expensive and scarce planning permissions rather than well-designed and insulated buildings.
Taken together, the land under existing UK homes, plus the scarce planning permissions that allow those homes to exist, are now worth some £5.4 trillion. And that’s not including the buildings themselves. Of that £5.4 trillion, most of the value is in the planning permissions. We can see this because farmland without the hope of planning permission is relatively cheap; less than £20,000 per acre.
By contrast, the buildings – the homes we all live in – would cost less than £2 trillion to rebuild at today’s construction costs. In unaffordable areas, merely granting planning permission and using it to build homes creates enormous new value, because housing is so scarce. Some of that value goes to the people who build. The rest of it goes to tenants through slightly lower rents than they would otherwise pay, to workers who can access higher-paid jobs where previously they could not afford to live, and to employers who can find extra workers. Some of it is paid to local government for local infrastructure.
So you can understand why many economists believe that our failure to build has played a significant role in the low growth that we have faced for over a decade. In the 1930s, a wave of housebuilding boosted growth. The eminent economic historian, Nicholas Crafts, estimated that housebuilding created a third of the increase in GDP between 1932 and 1934.
The new Minister already has some experience of infrastructure and planning from her time at the Department for Transport and the Treasury. As a successful entrepreneur, she will also understand the value of letting the private sector deliver as much high-quality housing as it can. But in housing she will be confronted by the same problem as all of her predecessors: politics.
The simple fact faced by every developed nation is that most voters often do not like new construction near them. That is especially true for homeowners, but also for social housing tenants and even some private tenants. That has been the downfall of many a housing minister since 1946 when Lewis Silkin was jeered by locals who called his new town ‘Silkingrad’. You know it as Stevenage.
But today the Conservative party faces an existential threat and thus simply giving in is also unattractive. If the proportion of homeowners continues to decline, young people will continue to desert the Tories. What’s more, if a market economy does not deliver growth, voters will turn back to command and control. Overall, if the Conservatives cannot deliver hope, voters will turn to Labour.
Squaring the circle of political resistance to homes with the need to build more has defeated most previous Ministers. But perhaps there is a third way. A growing movement believes there are ways to deliver more housing with the support of local people. Neighbourhood planning was the first step. Recent community-led ideas such as street votes and community land auctions have built on its successes and lessons. The overall goal is to allow smaller groups of residents to permit new development and to share the benefits of building, while strictly ensuring that other residents are not negatively affected.
In the most unaffordable areas, receiving permission to add more housing on their plot – perhaps as little as a bedroom or a granny flat – could profoundly improve the lives of many families who are short of space or childcare.
The vision of the community-led housing movement is to let local residents take back control to give them the final say to allow more development near them in ways that they will benefit from. It will do so without interfering in normal planning processes. It will not end all our problems, but it provides a rare win-win pathway to add more homes with local support.