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This cowboy job is no way to fix our housing crisis This cowboy job is no way to fix our housing crisis
(about 20 hours later)
Sometimes, planned legislation seems too stupid to be true. It looks so palpably dumb that you wonder if there is not some profound and subtle intelligence that has escaped the attention of the commentators, experts and interested parties lining up to condemn it. So it is with the housing and planning bill, recently announced with a fusillade of cliches from the housing and planning minister, Brandon Lewis.Sometimes, planned legislation seems too stupid to be true. It looks so palpably dumb that you wonder if there is not some profound and subtle intelligence that has escaped the attention of the commentators, experts and interested parties lining up to condemn it. So it is with the housing and planning bill, recently announced with a fusillade of cliches from the housing and planning minister, Brandon Lewis.
It will allow a “one-nation government”, said Lewis, to “kick-start a national crusade” that will “get one million homes built by 2020” and “help deliver the homes hard-working people rightly deserve, transforming generation rent into generation buy”.It will allow a “one-nation government”, said Lewis, to “kick-start a national crusade” that will “get one million homes built by 2020” and “help deliver the homes hard-working people rightly deserve, transforming generation rent into generation buy”.
In fact, it is more likely to increase the divide between the nation of people who own their home and the nation who have no prospect of doing so, while enriching landowners and others not in the greatest need.In fact, it is more likely to increase the divide between the nation of people who own their home and the nation who have no prospect of doing so, while enriching landowners and others not in the greatest need.
Its most eye-catching proposal is for “starter homes”, to be sold to first-time buyers at 80% of market price. Local authorities will be under a legal duty to “guarantee their provision” on “reasonably sized new development sites”. This seems to address a real issue, which is the struggle of young people on low-to-middle incomes to get on the housing ladder, but, as Shelter has pointed out, people on average incomes will not be able to afford them in over half of the country.Its most eye-catching proposal is for “starter homes”, to be sold to first-time buyers at 80% of market price. Local authorities will be under a legal duty to “guarantee their provision” on “reasonably sized new development sites”. This seems to address a real issue, which is the struggle of young people on low-to-middle incomes to get on the housing ladder, but, as Shelter has pointed out, people on average incomes will not be able to afford them in over half of the country.
Related: The housing crisis – and why a house is so much more than somewhere to live | Letters
Starter homes can only come at the expense of other forms of affordable housing currently provided through planning gain, whereby developers have to provide a proportion in return for getting permission to build. These include shared ownership, a proved way of achieving what starter homes are supposed to do. The bill proposes that buyers of starter homes can sell them at full market value after five years, giving a windfall to the lucky recipients but removing forever their benefit to first-time buyers of the future. They also give housebuilders the headache of selling identical products at dramatically different prices.Starter homes can only come at the expense of other forms of affordable housing currently provided through planning gain, whereby developers have to provide a proportion in return for getting permission to build. These include shared ownership, a proved way of achieving what starter homes are supposed to do. The bill proposes that buyers of starter homes can sell them at full market value after five years, giving a windfall to the lucky recipients but removing forever their benefit to first-time buyers of the future. They also give housebuilders the headache of selling identical products at dramatically different prices.
Starter homes come on top of the idea, first announced in an attempt to spice up the Tory election campaign, of selling housing association homes to their tenants at reduced prices. Housing associations have since got some concessions out of the government in return for dropping their opposition to this plan – individual associations can opt out and those that do sell will be recompensed for the full value of the property sold – but this will create a shortfall that has to be paid from somewhere.Starter homes come on top of the idea, first announced in an attempt to spice up the Tory election campaign, of selling housing association homes to their tenants at reduced prices. Housing associations have since got some concessions out of the government in return for dropping their opposition to this plan – individual associations can opt out and those that do sell will be recompensed for the full value of the property sold – but this will create a shortfall that has to be paid from somewhere.
The current idea is that the money will come from forcing councils to sell their properties in high-value areas, when they become vacant, and handing over the proceeds to central government to, in effect, pass on to housing associations, but it has been pointed out the numbers simply don’t add up. As high-value areas are also those of the greatest pressure for affordable housing, the effect of this circuitous subsidy to housing association buyers will be to remove resources from places where it is needed most. It will increase the division of rich zones from poor.The current idea is that the money will come from forcing councils to sell their properties in high-value areas, when they become vacant, and handing over the proceeds to central government to, in effect, pass on to housing associations, but it has been pointed out the numbers simply don’t add up. As high-value areas are also those of the greatest pressure for affordable housing, the effect of this circuitous subsidy to housing association buyers will be to remove resources from places where it is needed most. It will increase the division of rich zones from poor.
At the same time that the government wants to stimulate demand with new subsidies to buyers, it is trying to ease supply by relaxing the planning system. A temporary provision that facilitates the conversion of offices into housing will be made permanent, which will continue the effect that has already started, of hollowing out cities of places of work and of the cafes, dry-cleaners and other businesses that serve them. It is essentially a gift to people who already own such properties, who will see their values rise by millions.At the same time that the government wants to stimulate demand with new subsidies to buyers, it is trying to ease supply by relaxing the planning system. A temporary provision that facilitates the conversion of offices into housing will be made permanent, which will continue the effect that has already started, of hollowing out cities of places of work and of the cafes, dry-cleaners and other businesses that serve them. It is essentially a gift to people who already own such properties, who will see their values rise by millions.
This provision will compound another weakness of the bill, which is its flimsiness when it comes to positive planning and the design of new houses. It seems likely that, in the rush for units that the government hopes to prompt, such matters as balancing homes with schools and places of work and leisure will suffer. The danger is of getting dwellings lined up as if on supermarket shelves and there is not much comfort in the bill that this will not happen.This provision will compound another weakness of the bill, which is its flimsiness when it comes to positive planning and the design of new houses. It seems likely that, in the rush for units that the government hopes to prompt, such matters as balancing homes with schools and places of work and leisure will suffer. The danger is of getting dwellings lined up as if on supermarket shelves and there is not much comfort in the bill that this will not happen.
There is much else in what is a sprawling piece of proposed legislation. There are sensible-sounding ideas for controlling rogue landlords and encouraging small and medium size construction companies. There are plans for releasing more public land and for making planning and compulsory purchase more efficient. There is a striking willingness to refer decisions back to the secretary of state, which looks much like the coup de grace for any lingering pretensions this government has to localism.There is much else in what is a sprawling piece of proposed legislation. There are sensible-sounding ideas for controlling rogue landlords and encouraging small and medium size construction companies. There are plans for releasing more public land and for making planning and compulsory purchase more efficient. There is a striking willingness to refer decisions back to the secretary of state, which looks much like the coup de grace for any lingering pretensions this government has to localism.
But the gist of it is this – the government wants a lot more homes to be built. In order to do this it will provide short-term benefits to some groups at the expense of others. The winners will be more visible than the losers – there will be plenty of opportunities to photograph ministers handing the keys of new homes to smiling buyers but few images of those people, as “hard working” as anyone else, pushed further away from a secure home. There is nothing in the bill about managing inflation in house prices, which could defeat its purposes: if prices go up by 15% or 20% in a year it soon wipes out the starter homes’ discount for new buyers.But the gist of it is this – the government wants a lot more homes to be built. In order to do this it will provide short-term benefits to some groups at the expense of others. The winners will be more visible than the losers – there will be plenty of opportunities to photograph ministers handing the keys of new homes to smiling buyers but few images of those people, as “hard working” as anyone else, pushed further away from a secure home. There is nothing in the bill about managing inflation in house prices, which could defeat its purposes: if prices go up by 15% or 20% in a year it soon wipes out the starter homes’ discount for new buyers.
The bill may not be as effective as it hopes in encouraging building. It subscribes to the belief that, if demand is stimulated and the planning system is relaxed to encourage supply, the market will step up and deliver. In this, it reworks ideas that have been tried for at least 30 years, in which time the market has consistently not delivered. For sound commercial reasons, housebuilders will never flood their own market with huge numbers of new homes.The bill may not be as effective as it hopes in encouraging building. It subscribes to the belief that, if demand is stimulated and the planning system is relaxed to encourage supply, the market will step up and deliver. In this, it reworks ideas that have been tried for at least 30 years, in which time the market has consistently not delivered. For sound commercial reasons, housebuilders will never flood their own market with huge numbers of new homes.
So in fact the bill does look stupid in many respects. Where, apart from the electoral cunning of securing the votes of the subsidised buyers, is the smart part? It could be something like this: by accruing powers to the secretary of state and bending housing associations to the government’s will, it paves the way for future state intervention at a large scale.So in fact the bill does look stupid in many respects. Where, apart from the electoral cunning of securing the votes of the subsidised buyers, is the smart part? It could be something like this: by accruing powers to the secretary of state and bending housing associations to the government’s will, it paves the way for future state intervention at a large scale.
The hard-hatted, hi-vis chancellor of the exchequer has shown his willingness to invest in high-speed rail and nuclear power. It wouldn’t be a huge leap for George the Builder to turn his powers to housing. It remains to be seen whether he would do this in a way that benefits the country as a whole.The hard-hatted, hi-vis chancellor of the exchequer has shown his willingness to invest in high-speed rail and nuclear power. It wouldn’t be a huge leap for George the Builder to turn his powers to housing. It remains to be seen whether he would do this in a way that benefits the country as a whole.