The Role of Local Government

A theme running through these case studies is that the role of local government is generally rather important, both for overall housing supply and for affordable/inclusionary housing. Local government is generally at the front line in the implementation of land use planning, and it generally plays a significant role in the provision of infrastructure to support new housing. Planning is about the mediation of conflicting i nterpretations of ‘the public interest’ as well as potentially conflicting private interests. Forward planning entails projecting or forecasting future needs and demands and assessing options for meeting those, as discussed in Chap. 10. However, the ability of local government to perform these roles will be conditioned by its scale, scope and resources. In some of the country case studies (such as in Australia and the USA), local government units can be too small in scale, too local in a sense and too limited in terms of their scope in terms of responsibility for the social problems associated with housing—hence the need for more positive governance at regional or city-regional scale. In many countries, fiscal autonomy is bearing particularly hard on local government, leaving it with inadequate resources to undertake effective planning.

The fiscal system supporting local government seems to be important in terms of the incentives it provides to encourage housing development. If local government has access to only limited taxable resources, it may perceive new housing (often for ‘outsiders’) as a burden in terms of the services expected. If development and land ownership are predominantly private, then it will be difficult to capture enough of the increment in land value to fund the infrastructure and social costs of developing new communities. This tends to support our argument that a stronger role for local and regional government in the land development process is more conducive to effectively planned development. The Hong Kong model exemplifies a system whereby comprehensive land value capture can fund both good quality infrastructure and affordable public housing. In mainland China, local government sees land development profits as a principal source of local revenues, and is strongly motivated to support development, sometimes beyond the level of justified need and demand (as with ‘ghost cities’).

If we ask what it is that motivates governments, whether at the local, regional or national level, then most often the answer we come up with is ‘economic development’. Raising the economic growth of a locality or a region offers the prospect of satisfying more aspirations of voters, for more or better jobs, incomes and prospects. At the same time, it will be the principal aim of key local economic interest groups, representing important local industries as well as sectors such as real estate, to promote growth. Very often, the networks of local or regional governance will be some form of ‘growth coalition’. It follows from this that a key motivator for actions through planning to promote housing development or upgrading will be the belief that this can contribute to economic growth. In areas which are economically weak, these arguments will generally prevail, as is confirmed, for example, by evidence from the UK that attitudes to new housing development are more positive in inner cities, declining industrial areas and deep rural areas (Matthews et al. 2015). In more affluent areas, this kind of motivation is still present, but it has to compete with the protectionist wishes of the comfortable existing residents. This can lead to lopsided planning, where business development generally gets a green light whilst housing continues to be stuck on red, leading in turn to further regional imbalances with ever-higher house prices and affordability problems in the economically more prosperous areas. The South of England is a very clear example of this syndrome.

We argue that a way forward here must entail recoupling the planning of housing to planning for the economy and associated infrastructure. The strength and drive of the growth coalition need to lend some weight to the case for housing in general and affordable housing in particular. Inclusionary housing can play a role here, by delivering affordable housing for key workers, young locals entering or becoming established in the labour market, and other diverse groups. The promise of better transport infrastructure, education and health facilities, and accessible green space and recreation, can help to persuade reluctant residents of the benefits of growth options which they can share. Some current UK thinking about promoting city-region growth zones away from London, including offering incentives through retention of the business property tax base, reflects this vision. But it also involves a move away from narrow localism towards more of a collaborative city-region focus (the case study of Bristol in Chap. 10 provides an example).

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