There is a growing volume and diversity of analysis, commentary and empirical work on relationships between planning and the housing market. This literature is important, because understanding how planning processes and regulations influence the supply of new homes—and potentially the wider market impacts arising from this new supply— can inform changes to planning systems. However, much of the literature derives from an economic tradition that struggles to conceptualise the comprehensive nature of planning systems. As outlined in Chap. 1, these systems seek to promote multiple objectives whilst balancing complex risks. Further, the nature of private housing provision—and the ways in which different sectors in the land and housing development industry—finance and produce new homes, differs profoundly between nations and regions, as do systems of planning regulation. In addition, because of the localised nature of housing markets (reflecting the fixity of land and buildings and the limited geographical substitutability between locations) and, very often, of planning agencies and decisions (typically subject to local political pressures), there can be significant differences in the dynamics of housing supply and demand even within nations (Barlow 1993). Whilst some studies and commentaries on the relationships between planning regulation and the housing market fail to recognise these considerations, others make use of local variation as a laboratory to study these relationships.
Further, whilst ubiquitous, planning is only one of many factors influencing the production of new housing. New housing itself only amounts to a small proportion (typically between 1 and 2 %) of the entire dwelling stock. In the case of the UK, where homes are traded on average every 6-10 years, it has been estimated that new housing as a proportion of transactions on the market at any one time is around 10 % (Leishman 2015). Therefore, the impact of planning on the market may be expected to be limited, especially in the short term, and disentangling the price (or other) effects of planning on the housing market is extremely difficult.
In this context, this chapter samples the diverse literature on relationships between urban planning and the housing market. It first summarises this literature in relation to the evolution of planning practice and systems of new housing provision over the past five decades. It considers the nature of urban housing development in the hypothetical or historical context of ‘no planning’ and reviews the intrinsic rationale for planning, recognising both its private and public forms. This helps to situate planning as one of many factors influencing supply and demand for housing, and seeks to isolate the potential effects of regulation as a constraint or cost to new housing production. The second section of this chapter reviews empirical approaches to measuring these potential impacts, highlighting implications for designing planning regulation which accommodates and enables housing development in response to population growth and change. The final section of this chapter considers this empirical research in the light of ongoing political debates about the impacts of planning on housing supply in nations affected by specific affordability pressures.