6 thoughts on “Brick shortages come and go. Planning restrictions are the real obstacle to house building”

  1. Posted 13/08/2014 at 16:08 | Permalink

    Kristian,

    I have said it before – we use land inefficiently when it comes to housing. Contrary to your assertion about planning policies, there are major – and I mean huge – developments on formerly green belt land all around the modest size town where I live in the South East. The gap between my town and the next has almost disappeared. These were forced on the area by central government and the council has had to plan accordingly. But you know what – these developments are overwhelmingly of low rise two-story small houses. There is barely a flat and barely a building over two (or occasionally three) storeys. We could accommodate many more families in less area were developers allowed or required or incentivised (via a land value tax) to build three or four storey terraced houses, or houses with basements, or four or 5 storey flats.

  2. Posted 14/08/2014 at 11:10 | Permalink

    Urban sprawl and small new homes are both the symptoms of capitalised land rent. We wouldn’t need planning regulations if “Regulation Tax” (State(all of us) created value), was used to pay for the services share, instead of being privatised. Thus necessitating taxes on work and enterprise. A huge double whammy. I don’t agree that planning constraints are responsible for housing affordability issues. But, for arguments sake, lets not quibble about that. Instead, let’s ask a simple question. One which Glaeser, Cheshire, Hilber etc fail to ask, let alone address. What happens to a) affordability b) land use efficiency c) NIMBYISM d) planning e) net welfare f) economic growth, if “Regulation Tax” is no longer privatised? I’m genuinely puzzled why anyone wants to blame State regulation for our ills, before asking this question first. Perhaps you’d like to break the mold Kristian and give it a go?

  3. Posted 14/08/2014 at 11:52 | Permalink

    “There is a consensus in the empirical literature that ultimately house prices are determined by land use policies: Places that release enough land for development experience stable house prices, places that unduly restrict land for development experience property price inflation (for a review of the literature, see pp. 74-80). It really is as simple as that.”

    I know I said, I wasn’t going to quibble, but it isn’t a “simple as that”, because the authors of said literature start off with a premise and then fabricate a narrative to fit. All of which can be easily refuted by correlating wages, taxes, coastal locations, natural supply restrictions etc. And there is also are welfare and economic gains from planning constraints that needs to taken into account too. At least Hilber fesses up and says why he isn’t necessarily recommending relaxing planning. But, as I said above, it’s pointless even arguing about this. Let us instead start off with the premise, land rents are State(all of us) created value. Something we all agree on. What problems occur when this value is privatised(state subsidy/monopoly income), and what happens when it is not? Free-marketeers should want to answer this question first, and move on from that. Baffling why they don’t.

  4. Posted 18/08/2014 at 11:13 | Permalink

    @HJ – Yes, quite, we are using land inefficiently. I suppose compact settlements make sense in a lot of circumstances, not least when in places like London, it is already a nuisance that everything is lightyears away from everything.
    However, most of the time, I hear the precise opposite criticism. The conventional complaint I hear goes something like: ‘I’m not against all development per se, but I wish the developers would stop squeezing so much into small patches of land. If they built a few nice, spacious, custom-built family homes, our community would be more relaxed about development.’
    Personally, I’m agnostic on these matters. Development should be demand-driven, it should be determined by what people want, not what some economist thinks they should want. I don’t care if people want to live in high-rise flats or in detached homes with gardens, I want the planning system to get out of the way, so that the industry can provide whatever it is that people demand.

  5. Posted 21/08/2014 at 11:39 | Permalink

    Kris – why wouldn’t developers build upwards if they could? They could build a lot more property – much of it more spacious than at present – in a given area if they did, and therefore make a lot more money for the same investment in land. Spreading low-rise housing out creates more congestion, inconvenience and pollution as people have to travel further for facilities. A removal of most height restrictions and a land value tax would make sense.

  6. Posted 22/08/2014 at 12:47 | Permalink

    HJ, yes, I think so too. Just saying, whenever I write anything on the subject, within minutes I get people in the comments section whining about high-rise/high-density development.

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