Tuesday, October 18, 2011

Evil developers conspiring to build homes

Hands Off Our Land: the 'huge' lobbying war chest behind the builders

Property developers have mounted a “huge” lobbying campaign backed by the rich and powerful to alter radically planning laws in favour of development, the head of the National Trust has said ... The National Trust and other groups are campaigning to persuade the Government to rethink the changes to planning rules because of fears that they favour development.

Posted by quiet guy @ 08:18 AM (1599 views)
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12 thoughts on “Evil developers conspiring to build homes

  • sibley's b'stard child says:

    Lobbyist complaining about lobbying; the irony is almost poetic.

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  • stillthinking says:

    It’s not particularly relevant to this post but it occurred to me, that if you make some of the green belt available, then that would cause a kind of pull towards that outside perimeter ring because pricing is usually based on the distance from central london. But that pull would become stronger for each concentric ring going into london, concentrating in effect (each outside ring pulling on a smaller inner ring), so that the effect on prices in the very centre of london would be disproportionately huge after a couple of years.

    As an alternative, if you imagine a kind of peaking bell curve the highest point being the centre of london, and then pull out this bell curve at the edges, then naturally the very peak would go down, but you can imagine the mid-way to centre prices perversely going up.

    Or not, just an idea.

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  • mark wadsworth says:

    ST, the ‘peaking bell curve’ is easily observable and borne out in practice, we get the same effect around any centre of attraction, i.e. huts right on the cliff edge are worth twice as much as the ones in the second row without the view, but the ones in the third row are worth nearly as much as the ones in the second row etc. And, prices in Central London are disproportionately huge – as I always like to say, the difference in rental value per square yard of retail space on Bond Street is almost exactly a million times as much as per square yard of Scottish grouse moor.

    Returning to the post, they really are a strange lot, these Home-Owner-Ists. They refer to other people’s fields as “our land” and that to them seems normal (to be able to dictate what other people do for their own narrow benefit), but if a Georgist points out that land values are generated by society as a whole, and hence morally belong to society as a whole (via LVT-CI) then the self-same Homeys start screaming “No, this is MY land and it belongs to me alone”.

    “What’s yours is mine and what’s mine’s my own” seems to be the Homey mantra.

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  • There’s a good piece by Tim Worstall today:

    Tim Worstall’s blog

    Think it through for a moment. Would property developers like to have restrictive planning processes or unrestricted?

    Restricted, obviously, for two reasons.

    1) Much of the profit comes not from the building but from the successful gaining of planning permission. That scarcity value of the right to build goes not to those who grant the planning permission, but to the person applying for it. And of course, there’s only that value to be gained if planning permission still has scarcity value. So, property developers would prefer to have a restrictive planning system, one that did not degrade the scarcity value of the planning permissions they are able to gain.

    2) Planning permission is tough to get. Tough in terms of dotting is and crossing ts, knowing how to get it. This obviously favours those already inside the planning system, those who are already developers because this is their specialist knowledge, what they make money from. A simple, transparent and obvious planning system would be anathema to the current system’s insiders.

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  • Not every non-home owner regards a developers’ charter as a good idea. With so many empty buildings around, and the cause of the house price bubble being credit supply in the first place, it doesn’t seem to me that there is really a good case for substantial newbuild as a solution to affordability, Necessary newbuild can happen through existing planning. Look at Ireland, loads of the extra new buildings are now lying empty after the crash. And they sprang up like measels over the countryside because of a lack of spatial planning. Be patient, prices will come down here too.

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  • nickb,

    Ireland has lots of empty buildings because they built an incredible quantity. At the peak, Ireland was building 81,000 houses per year while Britain was building just 200,000 a year, despite a population 14 times greater! There simply aren’t that many empty properties in the UK – it’s a myth peddled by the anti-development crowd.

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  • Prices have dropped about a third in real terms haven’t they? In the past 4 years? Isn’t that a crash already? Just a few more years of stagnation and rising inflation it’ll be a 50% drop.

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  • Drewster, how much of a housing shortage is there really? We don’t have mass homelessness, so surely most of the demand for housing comes from people who are renting but would prefer to buy but are priced out. If we built enough new homes to create enough of a surplus to impact prices significantly enough for people to buy, everyone would move out of their rented accomodation leaving a mass of empty houses. Sure the upside would be lower prices and a bunch of bankrupt BTL’ers but personally I’d rather see efforts made to occupy empty homes and cut off credit to BTL’ers first.

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  • timmy,

    You make a good point, and I don’t have numbers to prove otherwise, but anecdotally….

    I know lots of people in flat-shares, house-shares, living four or five to a property. I know some South African immigrants who live three to a room. There are people living in garden sheds, people living in caravans on driveways. Attic rooms and tiny box rooms are converted into single bedrooms. Partitions are built to divide large bedrooms into two smaller bedrooms. In student houses, front living rooms are converted into bedrooms. The situation is worst in London and the south east. The Mayor of London’s office recognises the problem of overcrowding and has some figures to back it up, but even their numbers only cover social (council) housing.

    If we build enough new homes to create a surplus, the worst that would happen is everybody would have a spare bedroom / study / storage room.

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  • Drewster,
    If you don’t have figures, on what basis do you contradict the “anti-development crowd”? Anecdote? It’s just assertion.
    Nick

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  • nickb,
    I don’t have figures on overcrowding. It’s a subjective term anyway, since what we consider overcrowding might be perfectly acceptable or even luxurious to somebody accustomed to the densely packed slums of Delhi. Nevertheless the Greater London Authority gives some figures for overcrowding [PDF]. 207,000 households are overcrowded, which is made up of 1 in 8 social rented (102,000) plus 1 in 10 privately rented and 1 in 30 owner-occupied. There’s no measure telling us how many houses have used tricks like converting living rooms into bedrooms or splitting larger rooms into two small rooms.

    However there are figures on empty homes. Here’s the government’s Homes and Communities Agency’s answer to “How many empty homes are there in England?”: 734,000 of which 301,449 (or 41%) have been empty for six months or more. Looking at the capital alone, this article says that there are 84,596 empty homes in London. No further breakdown is given, so let’s assume 41% or 34,743 homes which have been empty for more than six months. That article states that there are over 1,000 empty flats on an estate which is scheduled for demolition, so we can’t count those.

    All told, there simply aren’t that many empty homes in areas of high demand. Sure there might be empty homes in depressed parts of Merseyside or former mining villages in County Durham, but there are few jobs there and no demand to live there. We need to either build more homes in places people want to live (largely London and the South East), or we need to adjust the tax system to encourage people to move out of London if they couldn’t afford to rent there (LVT).

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  • What this misses out is the empty properties that are not classified as homes. For example, space above shops, banks and so on, that is underutilised but counted as commercial premises. It also misses out underoccupancy and second homes. If you take all that into account it is going to be significant.
    Second point, suppose you build more in or around London. Then you will attract more migration into London, in the same way that building new roads generates more traffic… a kind of rebound effect, negating the temoporary improvement in conditions.
    Nick

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