Single Aspect Blog

This is the record of a live blog conducted by Su Butcher of https://www.justpractising.com/riba-housing-2011/ at the RIBA Housing Conference at Robinson College.

Anna Minton is going to talk about her work with the RIBA on a report on the future delivery of housing – ‘Homes Fit for a New Century’.

She’s going to talk a bit about the historic legacy, but also solutions for the future. This is a work in progress so please get in touch with her if issues raised here prompt you to want to be involved.
Thursday October 13, 2011 11:10 Su Butcher

The RIBA Report:
– was born out of the frustration with UK housing.
– Issue of quality and quantity including insufficient supply
– Issue of land speculation at the centre of the problem.
– Tired debate – Kate Barker identified the issue, but these were not taken on in any proper way ‘to my mind’

The Opportunity?
There is clearly a massive opportunity in looking seriously at new directions in regard to the delivery of land, planning policy and localism.
Thursday October 13, 2011 11:12 Su Butcher

The report looks at:
– The historical context
– The policy context
Land value
The UK house-builder is both land trader and Manufacturer
-Looking at opportunities
How to bring forward land for development.
Thursday October 13, 2011 11:13 Su Butcher

Quick skate through the historic context – how we built housing in the past and the roots of the supply problem.
‘What we’ve seen in the last few years is an unholy alliance between the intervention of the planning system and the lack of regulation of the housing market’
This isn’t a bash of house-builders, we need to unpick the policy decisions that have led us to where we are today’
Thursday October 13, 2011 11:15 Su Butcher

The post WW1 homes fit for heroes campaign was funded through a penny rate for housebuilding.
in the Interwar period there wasn’t a planning system and small private firms were subsidized to build homes for workers. By 1939, one in 3 households lived in a new house. Pretty much inconceivable today.
Thursday October 13, 2011 11:17 Su Butcher

The 1947 Planning Act laid the basis for the internationally admired planning system, but laid the foundations for the land value issue.
“It is one of the key shortcomings of the current planning system… that no satisfactory system of capturing value has been implemented” RTPI
Into this vacuum came the notion of planning gain and Section 106.
Thursday October 13, 2011 11:18 Su Butcher

Post war there was also a council house building boom and the new towns which captured land value.
In 1968, 350,000 new homes were built. A high point, and a low point, e.g system building and the Ronan Point collapse.
During that period there was a huge housebuilding emphasis in electoral materials.
Thursday October 13, 2011 11:19 Su Butcher

In 1980 there was a mixed economy of private and public sector housebuilding delivering 250,000 a year. The 100,000 council homes has been obliterated by the right to buy, but the 150,000 private houses remained relatively constant until recently.
Over the last decade only 11% of new homes since 2008 were affordable (compared to 50% in the 1980s)
Thursday October 13, 2011 11:21 Su Butcher

The housing crisis is a combination of:
The end of public housing (e.g. the 80% of market rent definition)
A Restrictive Planning System
Section 106 contribution skew the market even further
The lack of availability of mortgage finance and the uncertain stock market have fueled house price inflation.
Thursday October 13, 2011 11:22 Su Butcher

The inflationary crisis in the housing market in the UK has been as bad as Ireland and Spain, but we didn’t have a collapse in the market due to the restrictions in the planning system we have.
This story is all about unintended consequences…
Thursday October 13, 2011 11:23 Su Butcher

The Role of Land Speculation?
Granting planning explodes land value
UK housebuilding is both land trader and manufacturers
Main profits are from land, not from quality of product which comes second (Kate Barker recognised this)
Even so, at the height of the property boom, private house-builders were not building sufficient new homes. That which was being built was often a poor quality.
House-builders were trickling out homes to keep prices high (Kate Barker)
So in boom times not building enough, what about now when we face a global financial crisis?
Thursday October 13, 2011 11:25 Su Butcher

So how do we capture land value?
This issue has dogged the history of housing since the turn of the century and the garden cities movement.
The two garden cities were underpinned by the financial land value system, bu they were very complex and costly arrangements and they failed to last.
The post war (1947 Act) planning system put land value at the centre, and new towns did capture land value.
Since then there have been various attempts to introduce land taxes and they were very unpopular. Nigel Lawson got rid of them in the mid 1980s.
The Section 106 agreement doesn’t work for any stakeholders, and it skews the market and means we don’t build enough affordable homes.
Thursday October 13, 2011 11:28 Su Butcher

Mechanisms for capturing land value now proposed:
1. Land auctions proposed by coalition government.
2. Public sector captures land value (e.g. there is an announcement due)
The report has looked at how these might work. and other examples.
Thursday October 13, 2011 11:29

Land Auctions – Anna has spoken to the economist at the LSE about how it work work:
– landowners will offer land without planning for development (on their initiative)
– Local authorities would choose the lowest bids within their planning criteria
– LA would grant planning permission
-LA would sell on using the windfall gains to pay for the first purchase, plus community benefit.
– blue sky thinking? – use gains to pay for social housing and remove burden from house-builder? Anna thinks this is unlikely to happen given affordable housing situation.
Thursday October 13, 2011 11:31 Su Butcher

Criticisms and concerns:
– Would lead to unsuitable land coming forward as the majority has been already optioned for developers. Anna thinks that not all land has been optioned.
Alternatives for capturing land value?
– Land auctions are of merit, but local authorities would need to take a lead role.
– Public land – coalition plans to bring forward public land – statement planned before Christmas.
– RIBA might recommend that publicly owned land would be sold on with infrastructure and master-planning provided (a model used in Europe, e.g. City of Amsterdam).
– The role of Local authorities to deliver land in this way has been seriously undermined – what do we do about that?
– Community Right to Built worth looking at
– Self Build – the UK doesn’t invest hardly anything compared to European counterparts.
Anna thinks that public sector leadership will be key to bringing these initiatives forward.
Thursday October 13, 2011 11:35 Su Butcher

We don’t seem to have the attitude to treat our public sector the way the Europeans do, but if we could raise finance it might be possible. e.g. raising finance, retention of business rates.
Is there an alternative? The current model sees central government funding the private sector to manage projects, and that isn’t a good deal for the taxpayer.

Community ideas

Community Land Trusts also capture land value, and are starting to work but very slowly. It is uncertain whether there is the political will to make it work.

Community Right to Build – referendum requires a 75% yes

Communities are already capturing land value, e.g. the Norfolk Flood defenses initiative between farmers and the local authority ploughing the profits from housebuilding into building flood defenses. (anyone have a link to information about this?)

Thursday October 13, 2011 11:39 Su Butcher

Self Build:
In Sweden 18% of new housing is self build, in Germany 6%.
The government wants to remove the land value barriers to entry for self build
Thursday October 13, 2011 11:41 Su Butcher

Investor Housebuilder Model:
The housebuilder would be a long term investor in the houseing that they build. A suitable model in particular for shared ownership and shared equity.
The long term involvement would raise the quality of the housing built.
Currently the trad housebuilding model is inextricably linked to land trading –
If we can move the housebuilder into a manufacturer model… but would they be interested? we’d need to encourage new, smaller players.
The post-war housing boom was fueled by smaller local players rather than large national ones.
Thursday October 13, 2011 11:44 Su Butcher

The RIBA hopes that there will be as many people as possible involved in the discussion of mechanisms to capture land value and new housebuilder models.

Anna welcomes feedback and involvement – anna@annaminton.com please email her.

Question to Anna: You didn’t mention rural exception sites which works very well – do you know why it isn’t being mentioned in policy discussions?
Thursday October 13, 2011 11:46 Su Butcher

I don’t know much about rural exception sites – would be interested to address that in the research.

Thursday October 13, 2011 11:46 Su Butcher

Q: Any examples of large sites masterplanned by the LA to a high quality?
Anna: Not that I’m aware of, please let me know of examples to inform the research.
Thursday October 13, 2011 11:47 Su Butcher

Great talk by Anna Minton. Keen to talk to her about rural exception sites now!
Thursday October 13, 2011 11:48 Su Butcher