Space to build

At Shelter, we’ve been arguing for some time that to build the homes we need it’s going to take a bold approach to the opaque land market. Last night, the Chancellor set out quite radical plans to shake up the use of urban land across the country, with permitted development for almost all brownfield land suitable for homes and a new prospectus  for ‘Housing Zones’ in London’s urban areas. In a great many ways, this zoning approach reflects the KPMG and Shelter proposal for New Homes Zones made in May – but we’ll of course need to digest the detail further to understand the overlaps.

First, though, let’s take a step back.

Even just a few years ago, there were few bold solutions coming through to get more homes built, and fewer still that took a fundamental look at the key problem of land. Now, we have Labour’s influential Lyons Review, the leader of the Liberal Democrats and the Chancellor all saying within just one week that land is the major issue and that they’re prepared to offer bold solutions.

  • Labour’s Lyons Review is calling for Urban Development Corporations which would require land to be sold close to its existing use value or land owners. This bold approach would unlock land value for affordable homes, infrastructure or green space.
  • In a keynote speech at Bloomberg, Nick Clegg identified housing supply as a major issue for the Liberal Democrats, promising to prioritise it for capital investment and stating: “ I just don’t see how you can do it without the muscle of the state …”
  • And last night, the Chancellor in his Mansion House Speech identified housing supply as a major challenge for the country, with the need for radical solutions to unlock development land through permitted development and Housing Zones.

Of course, each of these announcements can be questioned. The Lyons Review needs to develop proposals to incentivise local authorities to work cross-boundary on development corporations and indeed to use them at all. While Nick Clegg has rightly identified housing supply and seen that some intervention is required, the Lib Dems now need to join the other parties in putting forward a signature policy to unlock land for homes. Finally, it is easy to understand why the Conservatives want to focus on brownfield land in the run up to an election – but as many have identified, brownfield alone can’t provide all the space we need for homes (though it can provide a decent amount).

From Shelter’s perspective, we’re clear we want new Housing Zones to unlock the value of the land they sit on to build high quality homes that are affordable to families on normal incomes to rent or buy. Using some of the extra value from the permission to build homes can also ensure that new development has decent infrastructure and green space. This approach is ambitious, but possible. It’s how high numbers of homes have been built in Germany and Holland for example.

That isn’t exactly what was proposed last night, and there are two major areas where we believe government could go further, or where there is a need for more information:

  • The Chancellor’s approach of using Local Development Orders means that councils can impose conditions on the development of brownfield land, but there are no development corporations to co-ordinate the building or buy the land at close to its existing use value.
  • There is also a real danger that the urgent need for affordable housing could be overlooked in this approach.  We have long been clear that any new house building programme has to have a significant affordable housing component if it is to deliver for those on low incomes. And we know that this is possible – just look at proposals for Housing Zones in London, for instance.  It is absolutely critical that, when it comes to the fleshing out the detail of tonight’s announcements, the government makes clear its commitment to affordable housing.

However, it is important to recognise that this is a very promising first step towards even more ambitious approaches to the land market.

It’s an exciting time to be working on housing policy as the parties start to compete. Let’s hope that these plans and policies start to translate quickly into many more attractive and affordable homes.

 

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