Debates About Urban Planning and the Housing Market

Before advancing any proposals for further government intervention in the housing market, however, it is important to consider the arguments and evidence concerning the impacts of current policy settings and regulations. For instance, it is often argued that more liberal planning systems enable producers to increase the supply of new homes in line with demand, reducing price inflation. We review this literature at some length in Chap. 3. But it is important to note that, irrespective of any constraints imposed by urban planning regulation, there will always be inherent constraints in the supply of new homes. These constraints arise because of the unique nature of housing—particularly the qualities of spatial ‘fixity’ and durability. Homes are tied to a particular place—such that demand for housing in central London is not readily satisfied by the construction of new homes in Bristol. This ‘heterogeneity’ of housing is compounded by the fact that dwellings take time to construct, and can last for a very long time—so adjustments to the quantity and composition of the housing stock in response to population change occurs slowly.

Nevertheless, it is clearly the case that if regulatory systems exacerbate these inherent constraints, through overly restrictive development controls, or even simply because of slow, expensive, or uncertain decision processes, then the amount of new homes will be reduced, leading to consequential price effects.

Concern about the impacts of urban regulation on rates of residential construction, fuelled by industry groups and sympathetic political advocates, has led many nations to pursue regulatory reform in the name of housing supply and affordability. These reforms appear to have been energised in recent years under the widespread influence of political ideologies such as neoliberalism (which opposes most forms of government intervention in the market).

Many of the policy ideas described earlier—such as the propagation of modernist public housing in post-war cities across Europe, Britain, North America and to a lesser degree Australia, the spread of growth management and urban containment approaches in late twentieth century urban planning, and most recently, debates about the impacts of planning systems on the housing market—are examples of globally circulating ideas about urban policy and housing, which have had varying degrees of influence at local levels. The ever increasing rapidity of global flows of money, information, products, and people, and competition between nation states and global cities to attract this hypermobile investment and growth under globalisation, is also infecting the policy sphere. Thus, ideas about housing and urban policy and regulation are circulating alongside increasingly multi-national firms, investment and finance for housing development. Yet housing itself is immobile, enduring and slow to change.

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