The Spectator Housing Summit 2018
Thursday, May 17, 2018
The Spectator Housing Summit | Spectator Events.
Having cancelled my longstanding subscription to The Economist, which I used to love but which is now staffed by halfwit conventional thinkers aligned with the Leftist Establishment, I take The Spectator instead. Its Editor, Fraser Nelson, chaired the above event at the Southbank Centre this morning and I turned up because I was invited. I am a real estate man but always focussed on commercial property. Housing was not my thing professionally. In my personal life I take the view that much wrong with Britain can be traced to our weird relationship with it; seeing it as more than shelter to keep the rain off while we are eating, sleeping or watching TV.
It's a key political issue now. The Conservatives fear that if a way can't be found for twice as many young people to become homeowners as are managing it at present a generation of voters will be lost to them. That's probably true. I have heard some seriously stupid suggestions about solving that problem from Tories recently. I was hoping to hear more intelligent ones today*
I did. The Chief Secretary to the Treasury, Liz Truss MP, said some sensible things. She noted that housing in London now costs 12 times average salary. Given the UK's rising population (the only one in Europe) we must "let our cities off the leash" and allow them to expand. More importantly we must densify them. She noted that infrastructure was key to this and claimed that levels of infrastructure spending (as a proportion of GDP, the dubious way politicians always like to state such figures) is at its highest for 40 years. You could have fooled me but I suppose she would know.
She claimed, mystifyingly, that the Government was "generating more land". I assume she meant it is finding ways to encourage more of it (and Britain is only 8% built upon) into development. She said we need to overcome "the blob of vested interests" and "challenge the mentality of the comfortable" who would rather the fields near their homes stayed open while their children or grandchildren lived like students in grotty house shares.
She warmed the cockles of my old heart with talk of "streamlining the Byzantine planning system" and intervening if local authorities failed to implement their local plans to allow their communities to grow. All well and good and it was cheering to hear sensible talk emanating from the Treasury of all places. The problem is that key solutions are not in the hands of Central Government. Planning is a local competence and public opinion expects it to remain so. If a local council denied a planning permission only to be over-ridden by Whitehall, there would be hell to pay. Local electors (at least the kind inclined to make planning objections) are NIMBIES to a man and woman.
The most depressing work in my career was when I was a young lawyer in Cambridge. It's a beautiful city blighted by hordes of other-worldly academics with too much time on their idle hands. Any application for some sensible modernisation to make their medieval museum vaguely resemble a liveable modern town raises dozens of objections from such types. Some of them used to instruct me to lodge them with the Planning Committee. I vividly remember, for example, trying to stymie a slight increase in the size of the Cambridge bus station to accommodate vehicles that couldn't navigate the narrow medieval street without an increased turning circle. I was instructed to tell the planning committee that the tiny strip of land to be taken from "Parker's Piece" was sacrosanct because "WG Grace used to practice his cricket there".
In the recent local elections the Tories on my manor ran on a slogan of "keep Ealing low-rise". If London is to be more densely developed (and it's one of the least dense capital cities in Europe) then more multi-family housing is needed. Paris raises permitted building heights steadily the further one gets from the centre. At six to eight miles from Nelson's Column, Ealing would (if it were in Paris) be full of high rise buildings. The happy folk who would live here if there were a sensible planning policy, however, don't have a vote. The selfish incumbents who want to delude themselves that their pocket-handkerchief gardens make them heirs to the Romantic Poets do have a vote. They use it to ensure their grandchildren bicker over who nicked the milk in their student-style communal slums.
I am a radical on Town & Country planning as on other economic issues. I would abolish it. To me it is offensive that the value of a man's land is stripped from him by laws that deny him the right to put it to its highest and best use without grovelling to local politicians in thrall to his envious neighbours. If you fear the consequences, pray consider Prague. It's one of the most conserved and protected cities in the world. You can't move a brick without conservation types crawling all over it and – very often – bankrupting you by demanding you alter the scheme you spent millions on designing to make it a replica of some older structure, traces of which they have uncovered in their parasitical zeal. Yet almost nothing that is beautiful about that city dates from the era of regulatory prod-nosing. If a Prague building is worth conserving, it was built by free landowners who would have put any passing busy-bodies to the sword. If you want to see a screwed-up city, consider what was done to Birmingham in the 1960s by a massively empowered City Council.
Land is very valuable in cities and the people who own it are inclined to maximise that value. They may have bad taste or poor architects but some reasonable building regulations would be sufficient to ensure that whatever they build in their own interests is at least better than the sort of crap a planning authority would do.
The panel discussion that followed the Secretary of State's speech was depressing. Clive Betts MP, "token Bolshevik" and chair of the Housing, Communities and Local Government Committee in the Commons predictably denied that planning was in any way a problem. In fact he wanted more prodnosing because technical standards in the UK construction industry are low (sadly, true) and would be improved by pubic servants regulating and supervising them (sadly as false as Satan's smile).
The people on the panel from the productive sector were steeped enough in the way British planning is run to know that no radical solutions are on offer. They cringed to their public sector masters and blathered about new technologies and creativity and "careful thought". They didn't seem optimistic about technology however, For example, modular systems speed the process of housebuilding in other countries and reduce the cost but on the narrow, winding streets of Britain's cities (especially London) to deliver a house in three truckloads would involve taking down lamp-posts and other street furniture along the route. Because of traffic congestion such deliveries would even then only be permitted in the wee small hours when, of course, the local NIMBIES would raise hell at their sleep being disturbed (and to hell with their grandchildren in bedsits).
Successive governments' consistent failure to maintain and improve infrastructure to meet the needs of a growing population has created a bloody mess. It would take a generation to fix if we began now in earnest. We haven't and we won't. Hence the nervous looks as an enslummed millennial (who let him in?) asked "what can be done now to solve our problems?" The truthful answer (that nobody gave) was that what is needed to solve today's problems should have been done during the last twenty years. And wasn't.
Someone from the Adam Smith Institute suggested the "quick fix" of building on parts of the Green Belt around London based on such criteria as proximity to existing transport links. That would certainly help. The Green Belt was established in a different era for a smaller city and it's time for it to go. The city that has the most parks of any in the world is not going to choke if it expands onto that sacred turf. London is not a city in a bottle. It's surrounded by the lush, green Home Counties. The trouble with the idea (and it might have to be executed for lack of a better one) is that it involves London sprawling, rather than densifying when people increasingly want (and environmental factors suggest that they are right) to live in the cities and not outside them.
Another practical fix is to convert retail to housing. Shopping centres are emptying because of the ever growing online market. The representative of the Federation of Master Builders on the panel reported that the local authorities he works with think their high street shopping needs typically to be reduced "by half" to reflect this trend. But local busybodies will get sentimental about shopping centres they never use, just as they demanded that pubs be kept open whose doors they never darkened. Such people have votes that count disproportionately because of the low turnouts in local elections.
Market forces could sort all this more quickly than you imagine. I watched markets at work in in the post-communist capitals of the former Warsaw Pact, where things were screwed up by decades of Communism on a scale that Londoners could never imagine. My clients fixed things at an incredible pace because they could. The communist bureaucrats were banished to their dachas and there had been no time for the new democracies to build their payrolls. I remember telling an incredulous New York banker worried about where the "banking district" of the new Warsaw would be that "It will be wherever you put your building sunshine". He put one on the best site he could find and, sure enough, his competitors clustered around him.
But real estate is not a free market business in Britain or anywhere else with planning laws. Land worth X without a permission and worth 20 X with is a commodity whose true value is mostly in the public domain. Only investment in infrastructure and courageous deregulation can solve this problem in the medium to long term. Only the shattering of such shibboleths as the Green Belt can do some good in the short term. The current government lacks the political chutzpah, and I can't even blame it. Such are the demographics of its core voters that it would have to be more un-Tory than is survivable.
Which leaves Labour to "solve" it in catastrophic ways. Buckle up for a bumpy ride. And take your poor grandchildren out to a nice dinner from time to time to cheer them up in the squalor you've confined them to.
___________
*Regular readers will have noted that, despite my advanced age, I am not so much a cynic as a very disappointed optimist!
You might be right that it was Christ’s Pieces. It was a long time ago. Thanks for correcting my memory! I agree that this should be handled between neighbours under Civil not Administrative Law. It is no damned business of the state how a citizen uses land — or other assets for that matter.
Only neighbours (in the law of torts sense) have a legitimate interest. The State has assumed these powers as usual not for the public good (as it always pretends) but to bribe the very worst kind of people — busybodies who sell their votes for the right to screw up the lives of those they envy and hate.
Socialism is a hate crime in the terminology of its adherents. The joke is they can’t see it and yet a reading of Matthew 7:16 - 7:20 would make it clear. Socialism is a tree that always “...bringeth forth evil fruit” and that is all the evidence the wise need to know it is corrupt.
Posted by: Tom | Saturday, May 19, 2018 at 07:18 PM
I am all for open borders, subject to first dismantling the Welfare State. As there’s no political will for that, I think your approach to immigration is fair. But how does that get the millions of economically-inactive natives off the dole? Do these low paid jobs become so high paid because of labour shortages that they volunteer to return to the workforce? Surely the supply side still needs to be addressed. It’s obscene we pay farmers NOT to farm while refusing them permission to develop the unused land for example. There’s lot of vacant housing in the North East and other such areas where the economically inactive of Kensington could be relocated. Surely it’s still mad to use help to buy and housing benefits to drive up demand in London where it takes 12 times average salary to buy a home now? Densification is still needed there and maybe in other successful cities too. Even if contained at the levels you mention in future, we have not built homes, infrastructure and social infrastructure for the massive growth we’ve had since Blair. Only densification can drive properly values down to the level of the historic relationship to earnings. That’s politically difficult too of course as voters won’t vote for negative equity. But I think it’s more complicated than just managing future immigration. Even if you have confidence, as I don’t, that our public servants are competent to do it — or willing.
Posted by: Tom | Saturday, May 19, 2018 at 03:46 PM
Tom, I envisage much more selective immigration with the end of free movement. The numbers can easily be cut from c. 650,000 p.a. to 350,000 without compromising the recruitment of skilled workers with tertiary education. But the arrival of huge numbers of unskilled workers is nonsensical from many pespectives. The average European immigrant receives 4,000 pounds in in-work benefits which strongly suggests their work is uneconomic. We also have a lot of economic activity such as that reported in today's FT where Leicester has a huge textile sweatshop industry where wages are far below the statutory minimum. These are drains on the UK's prosperity, not additions to it. We can and should be moving to a much higher value added economy rather than feeding our addiction to low productivity activities based on endless supplies of unskilled and often grossly exploited labour. This would raise real wages at the lower end of the labour market and improve housing affordability, as I see it.
Posted by: David | Saturday, May 19, 2018 at 11:38 AM
You may be right that it was Christ’s Pieces. It was a long time ago. Thanks for correcting my memory! I agree that this should be handled between neighbours under Civil not Administrative Law. It is no damned business of the state how a citizen uses land — or other assets for that matter.
Only neighbours (in the law of torts sense) have a legitimate interest. The State has assumed these powers as usual not for the public good (as it always pretends) but to bribe the very worst kind of people — busybodies who sell their votes for the right to screw up the lives of those they envy and hate.
Socialism is a hate crime in the terminology of its adherents. The joke is they can’t see it and yet a reading of Matthew 7:16 - 7:20 would make it clear. Socialism is a tree that always “...bringeth forth evil fruit” and that is all the evidence the wise need to know it is corrupt.
Posted by: Tom | Saturday, May 19, 2018 at 11:00 AM
As a general thing, I am nervous of solutions to human problems that see humans as the problem but I am interested to know how it is perfectly possible to stabilise the UK's population. We are the only nation in Europe with rising numbers but that's because of immigration. Our immigration is higher neither because this is the most attractive country in Europe, nor the most pleasant to live in. It's because (a) our less bureaucratic labour market generates more jobs and (b) we have the highest welfare benefits. (b) also results in many of the native population disdaining to do lower paid jobs that would not pay much more than idleness. The solution to housing, like most of our problems, is to cut welfare but any talk of that would almost certainly put Corbyn in Number 10. Housing benefit is one of the most damaging distortions in the market. It doesn't subsidise tenants but landlords. It doesn't subsidise borrowers but banks. It would be reasonable to have short term housing benefits to prevent the eviction of people who lost their jobs or capacity to work while they downsized or sold their home to reflect their new circumstances but to pay economically-inactive people to live in Kensington, for example, as the Grenfell Tower tragedy reveals we do, is economically-insane. That is accommodation that should be available for productive people. And giving money to people to pay their mortgages (like help to buy schemes and other buyer incentives) just drives up demand when (at the moment, the population having already irreversibly increased without a corresponding increase in supply) it is supply that is clearly the problem.
Posted by: Tom | Saturday, May 19, 2018 at 10:54 AM
Its a population problem, not a housing problem. It is perfectly possible to stabilise the UK's population and avoid a dense, high-rise future of tiny housing units with accompanying pollution, congestion etc. We can and should reject the prmiseof all these discussions or our quality of life will continue to be undermined.
Posted by: David | Saturday, May 19, 2018 at 10:14 AM
I spent one year of my three at Cambridge living on the edge of Parker's Piece, and very pleasant it was too. I think you mean Christ's Pieces, though. They seem to have survived the encroachment of the bus station.
I recently moved my office, and became embroiled in a planning discussion that centred on whether my professional practice was the sort that clients often and routinely visit or whether it was one the clients only visit from time to time. On this distinction rests a change of planning category, and the building only had permission for one and not the other. Looking at the issue (as I did) from a lay perspective, rather than one steeped in planning law & practice, it seemed one of the most utterly pointless discussions imaginable.
It could all be solved, of course, just make a fresh planning application for a change of category, given assurances from the local authority that a change of this type is usually approved (so why bother making the distinction, then?) and then go through it all over again at the end of the lease to put it back to how it was before. All money, of course, fees for the local authority and for the planning consultants. All out of my pocket, of course.
It's really quite simple:
1) Scrap the lot. All of it.
2) Establish a good law of nuisance; give neighbours the right to sue if a building is genuinely causing a problem.
3) Sort out the civil law courts so that everyone has access to justice, not just the very rich and the very poor.
Posted by: patently | Friday, May 18, 2018 at 12:53 PM