All posts from: December 2011
Planning and housing go together like turkey and stuffing, so what happens in the planning world should be of fundamental interest to housing professionals. But planning has had a funny old year, dominated by the furore over the draft National Planning Policy Framework, which was supported by, among others, the CIH, NHF and the housebuilders but violently opposed by the National Trust and other countryside campaigners. This week the Local Government Select Committee published its rather depressing report calling on the coalition to amend some fundamental aspects of the NPPF. I won’t dwell on the report’s implications because Jules Birch has covered it in his excellent blog.
Instead, I want to focus on the politics of this planning debate. I have a confession to make: I have been a member of the Labour Party for over thirty years and stayed loyal through thick and thin: the disastrous leadership of Michael Foot; the achievements of the Blair years; the traumas of Iraq; the election of the wrong Miliband brother - but I don’t think anything has depressed me more than Labour’s current opposition to the NPPF.
Think about it: here we have a government led by the Conservatives, supposedly the party of conservation and the countryside, proposing some brave and radical changes that could simplify and democratise our planning system and release the land that is required to meet the nation’s housing needs. In the process they have alienated some of their core supporters – the middle Englanders who read The Daily Telegraph and the 4 million members of the National Trust and the CPRE. Labour, by supporting the NPPF, could have driven a wedge into the heart of the coalition government, splitting the government from its supporters. After all, isn’t Labour supposed to be the party that supports affordable housing and progressive politics? Instead, Her Majesty’s loyal opposition seems to have taken the Pavlovian view that it is duty bound to oppose everything the government proposes. As a result of this kneejerk, unthinking response we had the grotesque spectacle of Hilary Benn, Pickles’ shadow, writing this, in The Daily Telegraph of all places:
“George Osborne and Eric Pickles seem to think that it is the planning system which is holding back economic recovery, by not producing the homes that we desperately need. In fact, they should be looking at some vested interests. Under the current system, councils have granted planning permission for 300,000 new homes that haven’t yet been built. Why not? And why isn’t George Osborne on the phone to these developers every day to get them building?”
Where to begin with this nonsense? Firstly, as a sector we have to take responsibility for our utter failure to get across the simple message that our defective housing market, which is itself the spawn of a defective planning system, is doing untold damage to our economy. Has Hilary Benn never read Kate Barker? (“the volatility of the housing market has exacerbated problems of macroeconomic instability and has had an adverse effect on economic growth.”) or this, or this? There may well be 300,000 extant planning permissions but that represents little more than a year’s proper supply of housing and the notion that a Chancellor could cajole builders into building when there is no demand and no mortgage finance is so naïve it beggars belief. It’s also worth pointing out that the Select Committee says almost nothing about the economic damage caused by the planning system.
At a time when housing is so unaffordable, when the housing market is causing untold damage to people and the economy, when the average age of first time buyers is 37 and millions of people are spending half of their incomes on rent, wouldn’t you expect the Labour Party to come up with some radical solutions to our growing housing crisis? As shadow minister, Benn should be setting out a long-term vision that accepts the need to build 5 million homes over the next twenty years. He should recognise the fact that no more than 2 million of those homes can be built on brownfield and that the remaining 3 million will have to be built in new settlements or urban extensions, in other words on greenfield land and that, as a consequence, the country is going to have to face down the countryside campaigners sooner rather than later. As I’ve said before, we are the most hemmed-in nation in Europe, with 90 percent of us living on just 9 percent of England’s area. As a consequence we are building the smallest homes in Western Europe. If the planning system is not to blame for this state of affairs I don’t know what is.
So a radical vision is required from the Labour Party. But instead, Hilary Benn finds himself in bed with the reactionaries of the National Trust (who have absolutely no answers to this country’s housing problems) opposing some sensible and much needed planning reforms. It’s as if the political world had turned upside down.
This is my final diatribe of 2011. Can I wish all readers of this blog a Happy Christmas and all the best for 2012.
If you’re at a loose end this Christmas can I recommend that you load up Google Earth and take a flight over southern and eastern England? What you see may surprise you. The myth says that we live in a built up and overcrowded island. The reality, especially in the east of England, is a vista of thousands of square miles of prairie-like fields with barely a settlement to be seen. The reason that England may sometimes feel overcrowded is because we are one of the most hemmed-in nations on earth, with 90 percent of us living on just 9 percent of England’s land area.
As a consequence, as Martin Durkin says, we “are stuffed into towns and cities like battery-farmed chickens.” The consequence of this stuffing is unaffordable property prices and a deepening housing crisis. If I had one cure for the housing crisis it would be, “It’s all about Land, stupid.”
One of the principal obstacles to sustainable housing growth are the 14 green belts that surround many of our towns and cities and comprise 13% of England’s area. They were set up with the best of intentions, to prevent sprawl, but in some places they are strangling the very cities they were designed to protect, leading to a massive imbalance between homes and jobs and causing thousands of people to “jump” the green belt every day, at huge cost to their nerves and the environment. In Cambridge where I live, 45 000 people have to commute across the green belt every day because they cannot afford to live in the city. Last week a house in my road, a modest Victorian terrace with a loft extension sold for almost half a million pounds. The consequence of this level of unaffordability is that many Cambridge colleges and high-tech firms are unable to recruit the right people, causing immense harm to the national economy. The green belts restrict development, push up land prices and have contributed to the UK having the smallest homes in Western Europe.
One of the aims of the green belts was to open up the countryside to recreation. In fact less than 2% of the green belt comprises accessible country parks. Much of the green belt is devoted to intensive farming with no amenity value or public access. As an example, take a drive along the M25 clockwise from Heathrow to Dartford. Is there any reason why London should not expand up to the M25 along much of this stretch of motorway, with green lungs to allow access beyond the city? But the green belts have also caused the loss of amenity land within the cities they were meant to protect. The brownfield first policy means that derelict sites within the city are almost always built upon rather than turned into parks and open spaces. The Borough of Islington, for example, contains almost no open space. If the green belts in London, Oxford and Cambridge were rolled back, perhaps replaced pro-rata with land beyond their present boundaries, it would allow more open spaces to be created within the cities and for sustainable development to take place.
The green belt is a 1930s concept that is no longer fit for purpose. Interestingly, one of the planners behind the green belt concept was Sir Patrick Abercrombie who also founded the CPRE in 1926, now, along with the National Trust, one of the most virulent campaigners against the much-needed planning reforms set out in the National Planning Policy Framework. As Martin Durkin argues, the green belts were essentially an act of class war, a conspiracy of the intellectuals and land owning aristocracy to prevent the stinking lower orders from spreading beyond the confines of the city. The countryside campaigners who oppose the NPPF are essentially part of this same tradition. It’s time for a re-think on the green belt.
The housing sector should learn from the report into the collapse of Royal Bank of Scotland, says Colin Wiles
As expected, this week’s FSA report on the collapse of Royal Bank of Scotland slams the “assertive and robust” management style of its chief executive, Sir Fred Goodwin, and the ineffective leadership of its 17-strong Board. But the FSA also attacks itself for the “light touch” regulatory approach that contributed to the disaster. According to the FSA, its supervisory philosophy at the time, “encouraged supervisors to place reliance on assurances from firms’ senior management and boards about strategy, business model and key business decisions.” At a time when regulatory engagement in the housing sector is retreating should the lessons of the RBS disaster be sounding any warnings for our industry?
Just to recap. It cost every person in the UK around £750 to bail out RBS – a total of £45 billion. That’s about 42% of the annual cost of the NHS. In the years leading up to its collapse, Sir Fred Goodwin repeatedly obstructed the regulator. He amended letters to the Board so that crucial warnings about risks and his deteriorating relationship with the regulator were watered down. He refused to allow the regulator to meet non-executive directors on a one-to-one basis. The RBS Board was unable to manage him, even though the Chair assured the regulator that the Board provided sufficient challenge to his ambitious expansion plans. The effect of “light touch” regulation was that RBS had only six FSA staff members overseeing its operations in 2007 when it was trying to acquire ABN Amro, compared to 23 today. Between 2005 and 2008 there were 511 meetings between RBS and the FSA, yet it still collapsed.
Can the housing sector learn any lessons from this debacle? I think it can. Of course no housing organisation is anywhere near the size of RBS, but our sector as a whole has assets of £100 billion and borrowings of £40 billion. The old Housing Corporation traffic light reports were often subject to the same kind of protracted negotiation between chief executives and the regulator that are revealed in the RBS report and I have no doubt that our sector contains several individuals with Fred Goodwin-like tendencies. Regulating the male ego is never easy! The warning signs of weak boards and headstrong executives need to identified and dealt with at an early stage.
It remains to be seen whether the TSA will be adequately resourced to handle the growing complexity of financial arrangements within the sector and whether the new arrangements for economic regulation will be sufficiently robust to expose and restrain chief executives who have too strong a grip on their organisations. But my advice to the TSA would be to read, learn and inwardly digest the RBS report.
Last night’s Great British Property Scandal on Channel 4 was good knockabout TV, with plenty of righteous anger about the scandal of empty properties. Presenter George Clarke showed us street after street of boarded up Victorian terraces, mostly in the failed market renewal areas of the North West by the look of them. But I think his anger was misplaced; the real scandal is elsewhere, and his solutions to our housing crisis seem a little naïve, in my view.
Of course it is an utter scandal that so many properties are standing empty and, regrettably, the programme made the housing profession look like a bunch of bureaucratic, blundering idiots, without a creative thought in their collective heads about how to bring these properties back into use. It also made you feel that a new squatting movement to jump-start some effective official action would be morally justified – it’s certainly what I would be doing if I was 25 and without a property to live in.
But even if all of the long-term empties were brought back into use it would still only scratch the surface of housing need. There are around 800,000 empty properties in England but only 280,000 of them are long term empties. The rest are empty for valid reasons - awaiting new tenants or owners to move in, or for probate to be sorted out. Any properly functioning housing market will always have a proportion of empty properties, otherwise it will stagnate.
Yet we have 2 million households on waiting lists and the average age of a first time buyer is 37.
What’s more, as Shelter has pointed out, many long-term empty properties are in places where people do not want to live. I have several times suggested to young people that they should consider moving to Middlesbrough, as you can buy a Victorian terrace there for £10,000. Their response is always the same; “Who the hell wants to live in Middlesbrough?”
No, the real property scandal is the decline in house building to 1920s levels, and the failure to provide enough land for new homes. I agree with George Clarke that we need dense, compact cities, but for many families their ideal home is the suburban house with a garden front and back. Because of population growth we need to build at least 5 million homes over the next twenty years, and as I’ve argued before, no more than 2 million of those can be built within existing urban areas. That means three million need to be built on urban extensions and new settlements. George Clarke’s proposed solutions to the housing crisis simply do not address the urgent scale of the problem and the real property scandal that surrounds us.
If the government wants to encourage larger housing associations it must also address stock rationalisation, argues Colin Wiles
One section of the recently published housing strategy caught my attention. On page 25, it states that the economic regulation and value for money regime for housing providers “could result in more sub contracting of services, partnership working and mergers”.
Ten years ago I wrote an article for the now defunct “Housing” magazine, called “Dawn of the Monster Age”, which looked at the rapid growth of larger housing associations. It seemed to me then that Thatcher, through the Right to Buy and stock transfer, had sought to break up large monolithic council housing departments, only to replace them with even larger (and less accountable) monolithic housing associations spread across, in some cases, scores of local authority areas. At that time the first 50,000 home landlord was some way off, but ten years on and we await the first 100,000 home landlord in England. Over the past decade growth has continued unchecked and the geography of stock ownership and management is now both stupid and unsustainable. Yet stock rationalisation to deal with this absurdity has been more or less ineffective to date. There have simply been no business or regulatory imperatives in place to make it happen.
Which is not to say that small is always beautiful either. Of 1,500 housing associations nationally, 1,100 own fewer than a thousand homes, mostly located in a specific geographical area. That fits well with the localism agenda and the provision of a responsive local service, but there clearly needs to be a balance between size and efficiency. With two thirds of tenants on housing benefit it means the taxpayer, and other tenants, are paying a disproportionate amount for the overheads and salaries of smaller providers. I know of one housing association where every tenant is paying the equivalent of £4 a week for the chief executive’s salary alone. That is neither rational nor ethical. My gut feeling is that the minimum size for housing associations should be around 2,000 homes. Housing staff and contractors driving hundreds of miles to distant properties makes no economic or environmental sense when an alternative smaller provider may have an office around the corner. If the revised economic regulatory regime aims to force smaller providers to merge it should also aim to force effective stock rationalisation, so that smaller providers can become more viable by taking on the local stock of absentee landlords.