Tuesday 15 December 2009

Housing policy - a couple of modest suggestions

***

I was struck by a piece in New Start Magazine about how the UK's planning system is a drag on the development of housing - and especially housing for rent. The article draws comparison with planning regimes in France, Germany and Holland where performance is a little better than in the UK.

Thinking about this it struck me that there is a further issue - land value. We know that land values are far higher in the UK than in France (mostly a function of the amount of developable land available - France is a lot bigger than the UK) and that those land values represent a significant element in the cost of housing.

So why not eliminate land value entirely? Rather than providing subsidy to the housing associations to build affordable homes on public land (and in effect turning the subsidy into a capital receipt for the public agency owning the land) why not require those agencies to gift the land at no consideration? This would make building affordable homes affordable and the subsidy could go directly as grant for the purchase of land - a major saving and a more effective system.

And while we're about this we should extend a duty onto developers to retain an interest in the properties they build for at least 25 years - whether in the form of a freehold or an equity share. This would provide an incentive to build better, more efficient housing.

...

1 comment:

juliandobson said...

I like the idea of eliminating land value. I was doing a bit on the perversities of housing markets in Bradford this morning (you might have seen my post yesterday - http://livingwithrats.blogspot.com/2009/12/for-richer-for-poorer.html) and will do a bit more on some suggested solutions later.