Crisis? What crisis?

The ongoing COVID-19 inquiry has given us some understanding of how the Government works. It doesn’t.

And so, the tidal wave of programmes, articles and discussions on the UK Housing Crisis is probably no surprise. Because it is a crisis. And the responsibility for it falls squarely at the door of incompetent, unqualified and mostly incoherent politicians and their self-serving policies.

Britain’s Housing Crisis: What Went Wrong 

If you haven’t seen this two-part documentary on BBC 2, you should.

As a BBC production, it is well balanced, criticising government, councils, the planning system, housing associations, nimbies, developers and many more.

It does fail to mention housebuilder’s donations to the Conservative party (a reasonable return for spending public money inflating housebuilder profits?), but in fairness, the government have the sword of Damocles hanging by horsehair over the Corporation’s licence fee.

The program also fails to mention the sterling efforts of viability surveyors in trying to get development moving. That is unforgivable.

The UK Might Solve Its Housing Shortage by 2100 

This superb article by Matthew Brooker and Marcus Ashworth was published on Bloomberg a few weeks ago, and despite the rigmarole you will encounter trying to access it, it is well worth the effort. Because they have no property axe to grind, they are a little more “realistic” than the property press.

In essence, they say we have the worst housing crisis in Europe and that between 1955 and 2015, the UK has delivered 4.3 million fewer houses than the European average.  At the UK’s current delivery rates, it will take more than fifty years to make up that deficit.

As they point out, is it purely a coincidence that the Town & Country Planning Act was introduced in 1947?

The Planning System

Of course not. Although planning is where the problem lies, politics in planning does the damage. In the same way that a cash machine dispenses money, the planning system is used to dispense votes to politicians. It doesn’t work for planning, and it has to stop.

But there are people far better qualified than me to comment on how the whole planning system should be made fit for purpose. I will focus on what I know.

Viability

Within the vast labyrinth of planning is a tiny, dusty basement office with “Viability” written on the door. Inside the overflowing and rusty filing cabinets that fill this space, you will find some of the most fantastic policies ever written (and I don’t mean that in a good way).

There are concepts such as a “reasonable landowner” to deal with. Clearly, the authors have never had to buy land.

Then there is the landowner premium. There is one, but how much should it be? Dunno – doesn’t say.

I recently spent two days at a public inquiry arguing about the level of developer profit appropriate to assess viability. Two days! And I’m not cheap.

Also, all 317 councils in the UK have to prepare, examine and adopt an area-wide viability study to support their local plan. Oh – you’ll need another one for CIL and another one for the next iteration of the NPPF. And another one whenever market conditions change.

Think of the cost of preparing and examining all of those studies. How many affordable houses would that pay for?

What’s It For?

The purpose of viability legislation is to capture the uplift in land value when planning permission is granted and then use the money generated to pay for local infrastructure and affordable housing (and libraries, bus passes, bat nests, education, police, NHS, railway tube lines etc. etc. ad nauseam).

The obvious solution to accessing this bottomless pot of gold would be a development land tax – but that has been shown not to work on many occasions in the past. Put simply – landowners will not sell if the tax rate is too high.

Disguising it in dark glasses, a false beard, a wig and calling it viability is not going to work.

And viability is worse because it wastes so much time and money.

Solutions?

Abolish viability in its current form. Replace it with a single tax levied on every new house sold in the open market. The proceeds pay for local infrastructure and affordable housing – all of which should be delivered by national or local government. Let’s hope they do a better job than they did with HS2.

On one hand, I feel like a turkey writing Christmas cards. We do a lot of viability work – especially in these more challenging economic conditions.

But on the other hand, our solution has to be delivered by politicians, which brings me back to where we started.

The last thing we should now expect from a government is governance. And so expect viability to continue for the foreseeable…….