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The Planning Factor (Part II)

08 October 2015

As we suggested in a previous post, solving the housing crisis, particularly in London, will involve measures to increase supply but also crucially giving greater consideration to how we can guarantee the quality of housing and the broader quality of places.

We diagnosed some of the problems, going beyond what can often be reductively assumed in some media articles (that ‘planning is the problem’ and so more planning deregulation is the ‘solution’). In this post, we draw on this diagnosis to put forward some solutions that have planning and planners at their centre.

Lack of metropolitan level of planning

The first point we made in our earlier post was that we need to think about the city more broadly, rather than focusing on just on inner London. Population projections for London, taken together with the most recent assessment of development capacity, demonstrate that over the next 20 years it will not be possible to meet the requirements of the city’s growth within inner London alone.

As a result, the need to look toward outer London to meet the city’s housing targets means it’s crucial to foster cooperation between local authorities within the London boundary. The duty to cooperate provisions of the Localism Act have worked in some areas, but in nowhere near enough.

The RTPI has suggested that government create powerful incentives for local authorities to plan properly for the long-term, and to plan collectively. There is already a mechanism to achieve this with the money awarded through Growth Deals and City Deals. Future resources and powers of this kind should be made available to areas which can demonstrate jointly-agreed plans to respond to housing need. This would be a much more substantial incentive to collaboration on housing planning than has been employed before, and would have the additional advantage that it would be focussed on issues related to housing growth.

Turning land into housing

Our second point was that the slow rate of land release that the current system facilitates contrasts sharply with the rapidly expanding population and concurrent demand for housing in London. One reason for the shortage of land is that as it stands there is an incentive for landowners to hold back land from development in the expectation of rising prices. We suggested that one way around this which simultaneously addresses a number of other issues is to tax land values rather than property. This would both encourage development and discourage land banking, as the owner of any site would be encouraged to build and sell quickly in order to avoid paying the tax.

Importantly, this would also incentivise density and give the often criticised ‘Compact City’ agenda some teeth. However, on its own this is not sufficient. If we want density to deliver places where people want to live rather than just more housing, planning is crucial to the process. A high concentration of people can be vital for city life, economic growth, and prosperity, but density alone does not produce healthy communities. To avoid problems associated with density such as crime and pollution, we need to make conscious decisions as to what kind of housing development increased density in London will lead to. Using all the tools in the modern planning toolkit, such as urban design and community consultation, planners can ensure that higher densities yield vibrant communities.

A market that can deliver sufficient housing

Our third point was that we need a much more sophisticated understanding of the housing market, in particular the structure of the house building sector.

As a result, after having established forecasts for how much housing is required in an area, we need to develop a shared picture and understanding about through which delivery mechanisms this housing might be built. If, as noted in our previous blog, there are indeed structural insufficiencies within the UK house-building sector which mean that the private sector cannot deliver the required homes each year, then the public sector will have to step in to fill the void, both to deliver the houses themselves and to ramp-up the underlying structural capabilities for input requirements.

The planning factor – ensuring quality as well as quantity

One of the key roles of planning is to coordinate the delivery of these components of the built environment and ensure that they are readily accessible in urban areas.

As a result, the policy challenges are complex, centring on finding radical solutions to increase the supply of housing whilst ensuring that housing quality achieves both social and economic objectives. Here we’ve suggested some ideas for how increased housing supply might be achieved, but as a society we are yet to achieve consensus on the methods. However, what we should all be able to recognise is that regardless of the supply-side policies pursued, professional planners and the planning toolkit need to be at the heart of development.

Joseph Kilroy and David Pendlebury work in Policy and Research for the RTPI, specialising in Housing and Economics respectively.