Centre for Cities: Planning for the Future Report

Given current headlines about certain controversial planning decisions, the Planning for the Future report on the problems with our discretionary system could not be more timely. With a pandemic and continued severe housing shortage in many places, we desperately need to boost growth and level up different parts of the country.

Anthony’s report sets out the many disastrous effects of the housing shortage caused by our failure to build or plan well – not least inequality, speculation, and bad, unaffordable homes. He explains that land banking is a symptom, not a fundamental cause, of our problems, and that contrary to our intuitions, it would be better to have more vacant homes, not fewer.

He examines why clear, predictable rules are crucial to lower the costs of development and make homes more affordable. He calls for much more land to be made available for housing, and joins others in recommending that plans should have clear and unambiguous rules. We should frontload the hard questions with the public when writing the plan, like the French, Japanese and many other systems: then anyone can quickly know exactly what they can build, by consulting a clear and precise code.

Anthony boldly calls to replace the Green Belt by phasing non-developed land into the zoned area, depending on local population growth: subject to conditions ‘[d]evelopers in growing cities who come forward with unzoned, greenfield large sites that can provide significant amounts of additional housing legally must have their land added to the zoned area.’ The report suggests simplifying developer contributions with a new flat-rate 20% levy on the value of development.

This all raises many interesting questions, not least the oldest and hardest in planning reform: how, in the cold hard world of real life politics, do we get there from here? How would we actually implement it?

It is easy to envisage a zoning code for new greenfield or large brownfield sites. But what about urban intensification, where the existing buildings and spillover effects often vary drastically between plots?

Councils have powers to do a kind of zoning now, through Local Development Orders, but rarely do. Many would prefer to avoid controversy by picking zoning rules like parts of the US, where the building envelope permitted by the zoning rules is smaller than the existing buildings, so nothing more can be built. If ‘most ordinary neighbourhoods [are required to] allow slightly denser housing than their existing form’ as the report recommends, that is effectively a supercharged new permitted development right. That might be a bit controversial.

Another question: who will decide on conservation and other special areas? How will his suggested ‘economic cost-benefit analysis’ value the existing heritage and amenities? The Roskill Commission famously fluffed that question.

And if development will still be constrained at all by zoning, which will still be set by discretion, might it still suffer from the Kornai critique that Anthony eloquently explains?

It would be brilliant to see a follow-up report addressing those questions in more detail.

One way to get to zoning and more homes might be our suggestion, which Centre for Cities and many others have already recommended for trial: let residents of each single street (or each city block) decide by a two-thirds majority to adopt a design code and allow more housing on their street or block, subject to limits to protect others.

Those new rules for that street or block would be a form of ‘zoning’. It would spread organically as more homeowners see the benefits of giving themselves permission to do more with their plots – hopefully in some cases choosing to replace, say, suburban semi-detached houses with mansion blocks holding five times as much housing per acre.

Similarly, many parishes would be happy to permit some more good homes in their own green belt, but are blocked by planning rules. That is another potentially easy way to get to zoning.

If building more homes would be more ‘efficient’, in the technical meaning of economists, then by definition in some places you could design the new housing well enough, and share enough of the benefits with locals, for a majority of them to support it. (Otherwise, the housing shortage is unfair, but not technically inefficient.) If so, lowering what economists call ‘transaction costs’ by making it easier for people to negotiate win-win solutions might lead to much more housing of the right kinds in the right places. It must be worth a try.

Planning reform has a trilemma. Fast; big; no house price crash: choose two. If you really want to fix things once and for all, perhaps you need to start soft and slowly build irresistible force, like a heavy snowfall.

You might call the report’s approach ‘policy analysis’, ‘institutional economics’, ‘applied political economy’ or ‘systems thinking’. I hope a sequel will use the same approach to give detailed, shovel-ready reforms. For too long, systemic thinking has been in even shorter supply than the homes themselves.


This post first appeared on the Centre for Cities website.