Critiques of Planning and Housing System Performance

The Barker Review

Criticisms of British planning system performance in delivering new housing are not new. There was an element of such criticism in Hall et al.’s review in 1973, particularly as this coincided with a significant house price boom. There were further concerns from the late 1970s and 1980s, which focussed on issues of land availability, the proliferation of Green Belt and other less formal constraints, and the unwillingness of local authorities to pay attention to ‘market signals’ (Bramley et al. 1995; Cheshire et al. 2014). However, this was a period when, as previously noted, housing supply was not a national policy priority. The Barker (2004) review marked a more serious change, in perception and policy (Bramley 2007). Barker argued that there was a persistent undersupply in England, relative to underlying need and demand, and that this was leading to a long-term real rise in house prices of around 2.5 % a year. In effect, this meant that despite economic growth people’s ability to afford housing was not advancing at all. Barker also argued that the evidence showed that supply was ‘inelastic’ in England (i.e. unresponsive to changes in demand), which meant that increased demand translated into higher prices rather than higher output. This particular critique has been reflected in a wider subsequent literature on housing market volatility (Stephens 2011; Hilber and Vermeulen 2010; Glaeser et al. 2008). In addition to unaffordability and the inability of younger households to access home ownership, Barker also argued that there were wider e conomic and social disbenefits resulting from housing undersupply, including labour immobility frustrating regional growth, wealth inequality, and homelessness and other forms of housing need.

Figure 5.1 shows the historical record of housebuilding in Britain since Word War II, distinguishing the contribution of the three main provider sectors. Several conclusions can be drawn from this figure. Firstly, in the periods when Britain produced a high level of new housebuilding output, in excess of 300,000 per year, for most of the 1950s through to the mid-1970s, a large part of that output was driven by the local authority sector. Once that source of supply was withdrawn after the mid-1970s, the private sector barely increased its output to significantly replace that source of supply, so that as a result total output has rarely exceeded 200,000 since that time.

Secondly, although housing associations have grown in importance, their contribution is still relatively modest in the bigger picture. Thirdly,

Housing completions in Great Britain by sector, 1949-2013 (Source

Fig. 5.1 Housing completions in Great Britain by sector, 1949-2013 (Source: DCLG Live Tables 241)

private sector output does respond to some extent to market conditions, with increases apparent at the end of sustained booms, as in 1988 and 2007. However, the relatively low and not increasing performance in the period 1996-2003 was the context for the Barker Review. One can discern from the chart two periods when housing associations were used to some extent as a counter-cyclical element, in the early 1990s and again after 2008. Although the chart does not show this, the increase in output in the 2004-07 period largely took the form of smaller apartment units. The chart does show that recovery from the post-2008 financial crisis and recession was slow, with private housebuilding numbers nearly halved. At the time of writing, this continues to be the case.

Evidence that the undersupply issue is serious, especially in England, is underlined by a recent comparative study finding that Britain had one of the lowest levels of housing completions per adult population in European comparisons (Whitehead et al. 2014, Tables 1 and 4), despite having at the same time virtually the highest population growth rate (ONS 2014; Bramley 2015). These and other key indicators were compared for selected countries in Chap. 3.

Why is Britain, and especially England, so bad at producing enough housing? Perhaps the most common and widely accepted explanation sees the planning system (and underlying public attitudes which affect local planning decisions) as the main culprit. That was effectively the position of the Barker Review, although she did consider a number of other issues in varying depth. Other commentators suggest that part of the blame rests with other factors, particularly:

  • • the structure of the housebuilding industry and its mode of operation
  • • the poor quality and unsustainability of the housing products of the industry, which are understandably unattractive to local communities
  • • the financial sector, which promotes excess credit and acts recklessly to cause periodic crises
  • • the political establishment, which wants to keep house prices high and rising to foster a ‘culture of contentment’ amongst older middle class voters, which in turn underpins a debt-financed consumption boom which makes the economy appear to perform better.
 
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