Political Barriers to Housebuilding in Britain: A Critical Case Study of Protectionism and its Industrial-Commercial Effects


An ISR Business & the political-legal environment study


Over the years, political barriers have severely hampered housebuilding in Britain. Governments have blocked urban expansion, stymied new low-cost housing production methods and materials, and restricted the supply of new housing to the market in other ways. The result has been the artificial raising of prices and the exclusion of many lower income households from owner-occupation.

This study analyzes political barriers to housebuilding as a special form of political-economic protectionism – the equivalent of quotas and tariffs on international goods imports. It will interest anyone concerned about shortages in the supply and the high costs of good new homes – not just in Britain but in other industrial countries also.

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CONTENTS

1. Political Barriers to Housebuilding In Britain: a Critical Overview

Introduction* Aims and motives* Barriers to housebuilding as a special case of political-economic protectionism* The land shortage/countryside protection fallacy* The main negative effects – on land and housing costs, housebuilders, housing quality and consumer choice, the economy and society at large, and the natural & built environment (etc.)*

2. Greenbelt Barriers to Urban Expansion

Introduction and overview* The rise of the greenbelts and other geographical development prohibitions* Barriers to brownfield land use and urban housebuilding* The case for the abolition of the greenbelts*

3. Housing Output Planning and Quota-Fixing

Introduction and overview* Political planning versus the market* Policy contradictions and conflicts in UK housing planning* The multiplication of authorities* Inter-authority protectionist disputes: cases*

4. Housing Development Taxes and Quasi-Taxes

Introduction and overview* Nature and impact of land, greenfield housing development, capital gains, landfill, and value-added (etc.) taxes on the supply and costs of new housing* Quasi-taxes: demands for “planning gain extras”* Other compulsory development costs*

5. New Housing Class Discrimination

Introduction and overview* Economic class, regional, race, and age (etc.) discrimination* Political discrimination against particular dwelling types* Political discrimination against particular suppliers* State versus commercial housebuilding/letting* Selective government housing development subsidies, contract allocations, and infrastructural spending*

6. Controls on Technological Development and Product Innovation

Introduction and overview* Controls on dwelling sizes, space, facilities, and site densities* Bans on new industrial materials and production methods* Restrictions on aesthetic appearance/design* Prohibitions on converting low-cost temporary and mobile homes into permanent dwellings*

7. The Effects on the Land Market and New Housing Location

Introduction and overview* Effects on land supplies, demand, and prices* Brownfield land decontamination: problems and costs* Effects on urban and exurban housebuilding* The hampering of suburbanization*

8. The Effects on Housebuilders and Housing Production

Introduction and overview* Reductions in housing production* Increases in housing and land supply rigidities* The politicization and rentierization of housebuilders* Effects on the average size, growth, and efficiency of firms* Technical-product conservatism* The growing threat to British housebuilders from external industry competitors*

9. The Effects on Household Consumer Choice, House Prices, and Housing Quality

Introduction and overview* Gainers and losers from high housing prices* Reductions in new housing locational convenience and desirability* Negative effects on the size, space, facilities, and technical-structural modernity of new dwellings* Negative effects on new housing design and aesthetic appeal*

10. The Removal of Political Barriers to Housebuilding

Review of proposals for the removal of barriers* Recent liberalizing reforms*

PRICE & SPECIFICATIONS


Print book

2nd edition 2002. New impression 2012

ISBN 9780906321218

107 large pages

Hardback

Price £74.95 including free postal delivery

E-book

E-book price £16.15 (British pounds 16.15)

E-book ISBN 9780906321645


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Sample passages

While recognizing their existence, environmentalist opponents of new housing developments may argue that housing shortages, high house prices, and wider economic costs (etc.) are a price worth paying to preserve unspoilt countryside (etc.)

However, political barriers to housebuilding are often unnecessary and indeed negative in terms of their impact on the physical environment.

The massive greenbelts certainly control the growth of existing towns and cities. However, this imposes major industrial-economic and wider social costs – and results in substantial additional land consumption. As said, natural organic suburban growth is frustrated but many households and firms are unwilling to accept being crammed into existing old urban centres. Thus, there is extensive displacement of development to other places. This urban development dispersal effect is the precise opposite of the one that environmental protectionists intended.

High and rising agricultural productivity, changing household consumer demand, and global free trade have made much farmland in Britain uneconomic or redundant for food production purposes. Even when it is in use, a great deal of agricultural and other greenfield land has little or no aesthetic merit. This is especially the case around the large towns and cities. Much officially protected greenbelt land is actually derelict and despoiled. Far from detracting from environmental attractiveness, good well-designed new housing in leafy and landscaped settings would often enhance the visual appeal, amenities, and recreational value of rural landscapes.

Meanwhile, in urban districts, official policies of town cramming (suburban containment, prohibition of normal organic expansion) often result in building on existing scarce open spaces – and in generally unsightly and unhealthy developments. Development planning controls and high land costs frequently mean constructing less attractive dwellings and reducing the overall value for money of new housing.

Allowing suburban housebuilding would reduce or remove the competition for space with industry and commerce. More abundant housebuilding land would result in new homes being larger, cheaper, and more attractive to middle-income family households (etc.).

Finally, far from raising overall architectural standards, political intervention in housing design in Britain often lowers it. The considerable talents of modern industrial designers hardly come into play where housing products are concerned. Indeed, it pays housebuilders to deliberately adopt old-fashioned and mediocre housing designs and try to appear conventional. They know that avoiding novelty and controversy will ease the passage of development proposals through the planning control process… (pages 15-16)

Housing shortages and high house prices are a significant indirect handicap to businesses and the economy in general. They push up wages, raise general living costs, and reduce expenditure and investment on other things.

Paralleling the net exodus of middle-income families from inner city areas, there has been a net exodus of firms. Major specific disadvantages of inner cities as a location for industrial-commercial firms have been:

· high property prices, rents, and taxes;

· locational inconvenience;

· smallness, and lack of modern specialist facilities;

· inadequate car parking, traffic congestion, and difficulties accessing motorways and other arterial routes;

· shortages of suitable skilled labour; and

· lack of physical space for expansion, often compounded by political-legal development constraints.

Movements of households and firms from inner cities have been mutually reinforcing. Older urban areas have lost households as employment opportunities have diminished. In turn, declining urban populations have exacerbated the labour recruitment problems of firms.

Meanwhile, substantially growing household numbers and high rates of job creation have resulted in booming local housing markets/prices elsewhere. Around the turn of the century, the main area of new household formation and housing demand was the so-called English Shire Corridor stretching from Wiltshire in the West, through Oxfordshire and Northamptonshire, and on to Cambridgeshire in the East.

Politicians and planners cannot easily override such basic socio-economic forces. In free economies and societies, the actual preferences and market demands of households regarding new dwelling location etc. are very important. In market economies and democratic polities, public preferences will eventually out. In the end, the people and not official establishment elites will determine such things as household settlement in particular areas… (pages 24-25)

As said, protectionist barriers to new housing are the dysfunctional equivalent or analogue of curbs on foreign imports and investment. Likewise, domestic inter-authority disputes over new housing developments have their parallel in the protectionist inter-governmental disputes occurring in the foreign trade and investment area.

In Britain, there are disputes amongst authorities over everything from the size and nature of proposed new housing developments, through their location and timing, to the general desirability and legality of schemes. Reports of official conflicts and blocking attempts are commonplace. Around the turn of the century for example:

· Hampshire County Council frustrated a plan to develop a village into a new town even after central government-appointed examiners had recommended that the development should take place. The council did this by insisting on first undertaking a lengthy process of consultation with all interested parties – from local residents to the unitary authorities for Portsmouth and Southampton. The council also refused to accept the basic premise that 56,000 new homes were required to meet growing demand up to 2011, and said it was only prepared to make provision for only 44,000… (pages 33-34)

On top of regular taxes and providing planning gain extras or additional, non-housing facilities and money in return for building permission, housebuilders incur various other official costs at the start, finish, and during the course of projects.

All of these can be significant obstacles to development.

Payment of bribes or speed money to politicians and officials in return for development permission is illegal in Britain. However, even before beginning work housebuilders have to pay councils for processing planning development applications.

Builders have to pay fees to lawyers and other professionals necessarily involved in development planning applications (etc.).

The cost and risk of appeals against planning decisions can also be a significant burden… (page 41)

Over the years, the general ban on small bungalow building has been a major de facto constraint on the supply of specialist retirement housing.   Many elderly householders are disabled. There are laws against discrimination against elderly and disabled persons. Officialdom often insists that new properties have downstairs lavatories, minimum-width doors and corridors, and slopes instead of doorsteps to ensure access and mobility by persons in wheelchairs. Nonetheless, official concern in this area does not currently extend as far as removing the political-legal block on building small bungalow-type dwellings.

Cheap, compact, one-story houses or bungalows are by far the most elderly/disabled-friendly type of dwelling – but amongst the most difficult to get through the development planning control system.

There are close similarities between specialist retirement and holiday homes. In both these sub-markets, there are strong demands for small individual detached dwellings (bungalows, cottages, chalets) and for large multi-household complexes with comprehensive on-site facilities and services.   Modern hotels and holiday home developments often feature high levels of innovation – from the design of buildings to pre-fabricated factory production using new industrial technology and materials. However, technical-product advances here have yet to spill over into the retirement housing sector.

Meanwhile, there are separate legal prohibitions on households converting holiday lodges and mobile homes into their main, permanent residencies… (pages 50-51)

The law specifically requires that mobile homes retain their mobility. As said, there is a legal ban on people occupying any holiday home on a permanent, year-round basis. Meanwhile, the general development planning-control regime often prevents the construction of the retail and other facilities that would be necessary for the regular, permanent settlement of sites.

Local councils have to give formal planning permission for all new mobile home sites with hard concrete bases, permanent supplies of water and other services, and accommodating more than five caravans at a time. The site owners must have licences to operate them, and comply with general planning laws and environmental health regulations if they want to retain their licences. In some cases, the authorities will demand that the mobile homes be painted in unobtrusive colours and fast-growing hedges and trees planted to screen the sites from outside viewers… (page 60)

Rural living suits many people. However, traditional villages tend to have far fewer amenities than modern suburban settlements do. Old country cottages are often much smaller and more expensive than typical suburban family houses – and much less convenient for work, shopping, recreation, and schooling.   Living in the country does have obvious natural attractions. However, good well-paid jobs are fewer and household living costs are higher. Many goods and services are only available from distant, urban-based suppliers. Locally, there is limited competition and consumer choice. There are significant diseconomies or higher costs in operating small local community facilities of all kinds.

Building a sizeable new town in a rural area might solve many of these problems. However, in Britain, a new town in the countryside might be even less politically acceptable than a greenbelt bursting suburban expansion.   In practice in the UK, most new rural housebuilding takes the form of relatively small, ad hoc, pepper pot developments – pushed through as and when suitable plots with building permission become available… (page 72)

Years of political protectionism and bureaucratic regulation have stymied normal technical-product development. Housebuilding firms have not experienced the intense market pressure for innovation that competition and customer choice has produced in other industries. Protection and regulation have reduced productive efficiency, increased costs, and lowered sales turnover across the board.

In the Netherlands, there are still major average technical-production and size differences between housebuilders and other durables manufacturers. However, there is far less state protectionism and control here than in Britain. More technologically advanced Dutch housebuilders have made much greater use of new industrial methods and materials to produce cheaper and better quality dwellings. Housebuilding costs in the Netherlands are more than 25% lower per unit than in Britain even though labour is about one-third more expensive.

Looking to the future, more technically advanced, cheaper competitors are likely to pose an increasing threat to traditional British housebuilders. More cost-effective foreign housebuilders could enter the country to produce and sell cheaper, better quality traditional dwellings. There could also be imports of innovative low-cost, high specification prefabricated dwellings (housing kits, components). Alternatively, advanced automated manufacturers in industries such as steel, plastics, and motor vehicles might enter into housebuilding. Many durable goods firms in other industries would be capable of adapting their technical-production and distribution systems to manufacture cheaper, more innovative housing products for the UK market… (page 80)

High land costs have resulted in high-density building, cramped dwellings, and the use of poorer quality materials as cost-saving measures – reducing the aesthetic appeal of new housing developments.

Traditionally, such things as large gardens, low overall building densities, and high spending by builders on good quality materials have been major attractions of new suburban and garden city housing developments. Architectural design standards have kept relatively high and rising without government intervention in housebuilding as they have in other consumer durables industries. For centuries, private housebuilders have put up attractive dwellings based on their own good tastes, well-known customer preferences, and popular architectural pattern books. Competition and customer choice have maintained aesthetic standards without government officials dictating housing styles.   In Britain, official housing design regulation as part of the overall development planning control regime has had a conservative and standardizing effect on the appearance of new dwellings.   Housebuilding has not experienced the considerable improvements in design and general product innovation that have occurred in other consumer durables industries.

So restrictive are official controls that self-censorship by architects and housebuilders is normal. Housebuilders tend to present traditionalistic, bland designs for official approval because they know that to propose anything innovative will significantly increase the chance of rejection… (pages 89-90)

Governments are entitled to ban any objectively dangerous housing designs, materials, and building methods.

However, there is no justification for routinely blocking technical-product innovations in housebuilding generally. Through new technology, it is possible to mass-produce cheap dwellings in factories that easily better the design, health and safety, and technical performance standards of conventional new homes. Modern industrial materials can greatly improve the aesthetic appearance as well as the structural shape, layout, and facilities of dwellings… (page 109)