8 thoughts on “Why brownfield development is overrated”

  1. Posted 27/05/2014 at 18:09 | Permalink

    @ KN

    Just wondering what you make of this?


    Aggregate land rents should only be seen as the market measurement of the impact of all State regulation. Indeed some economists call it Regulation Tax (privately collected).

    All good State regulation increases land rent, and all bad regulation decrease them.

    So, from the two options of a) build, build, build, or b) institute a land value tax(and untax Capital), which one raises aggregate land rents the most?

    The higher aggregate Regulation Tax is, the better. The trouble all starts when this State created value is privatised.

    This defacto subsidy is the ONLY reason housing is unaffordable in the UK.

  2. Posted 28/05/2014 at 08:48 | Permalink

    This sarcastic resume does nothing to advance the debate other than annoy those (including me) who want to protect open spaces and the Green Belt in particular. It would be more helpful if the IEA would address itself to free market solutions to the problem instead of just supporting the building industry PR campaign, which Grant Shapps has enthusiastically endorsed, to build, build, build on open fields.

    My suggested routes for further investigation:

    Deny to the state sector the exclusve right to provide social housing. They laughably call this “affordable” housing when it is neither especially low cost to build or to rent/maintain.

    Private sector providers would probably get more units per acre (sorry! hectare) than current box-loke two storey social housing and do so to a higher standard at lower cost. Evidence – look at anything produced in the private sector and its improvement over the past 10, 25, 50 years then look at service levels in the public sector, project achievement in public procurement, etc.

    Introduce zoning so the voters (remember them?) can endorse or reject development in their area and builders can have greater certainty as to what will/not be allowed. This would cut a lot of cost out of the system for planning departments and builders.

    Zoning would give the opportunity to build in explicit increases in infrastructure to cope with increased demand. In many areas a powerful and valid reason for objecting to developments is that hundreds of new homes are proposed with no increase in local transport, health or schooling. For the last two at lease, builders could and should find solutions with strong private sector financing and operations.

    Recognise the statist forces at work. Local councils are keen to promote development on land they already own to the exclusion of other sites proposed during local development consultations. Zoning would reduce the scope for this and so would local referendums on development plans.

    Investigate the underlying cause of increased demand. It is surely the rapid increase in population. I doubt the IEA would even try to claim there is any correlation between population size and economic efficiency or output per head.

    The immigration debate is fundamental because it is a cause of pressure on local housing and infrastructure and a principal cause of distrust of politicians. The need for labour mobility to meet particular shortages of highly specialised workers does not imply or require unlimited immigration.

    Higher teaching / training quality and selective work permit type workers would resolve any economic questions; unlimited immigration is a political decision which local communities are suffering.

    Your sarcastic response is not helpful.

  3. Posted 09/06/2014 at 19:24 | Permalink

    You’re making the usual mistake of assuming that more supply of housing – be it brown or greenfield, would reduce house prices in the area the houses are built.

    Fact is, building more homes (and indeed shops or offices of factories) on brownfield sites where they are most needed, i.e. London and South East would only lead to house prices everywhere else in the country falling slightly and boosting rents and prices even further in London and South East. It is quite simply because house prices = land values + build cost, and land values are highest where there are most people. Just try looking at a map for once and ask yourself, where are land values highest, London, New York, Tokyo or perhaps Outer Mongolia or Siberia? So if people move from Siberia to Moscow, land values fall (even further) in Siberia and go up in Moscow. Those are observable facts, whatever your O-level economics tells you about “supply and demand”.

  4. Posted 10/06/2014 at 20:36 | Permalink

    Mark is, in my view, at least partly right. Building more houses would do nothing to reduce the prices of homes unless the demand for them also decreased or was coincidentally matched exactly – an unlikely scenario.

    For so long as we allow unlimited immigration into Britain and require the existing population to pay for the consequential additions to all sorts of required infrastructure, the incease in population will continue until the cost of taxation and levies to fund the building makes habitation here unattractive. Given the low incomes of millions around the world and the relative insecurity of their lives, the level of tax and levies on the resident population here would have to be penal to achieve that result.

    The basis for unlimited demand for housing and other infrastructure is largely the increase of population. If income per head here was increasing that too might add to demand (bigger homes, second homes, etc) but income per head is still below what it was before the last crash. This increase of population is a decision of the political class without popular endorsement.

    The reasons why politicians favour unlimited immigration may be either (a) to change the nature of our society, which they self-evidently do not like or respect, (b) in the mistaken belief that free trade in goods and money is no different to free movement of people – as if widgets and human beings are of equal moral value and entitlement. I suppose there might be a third, mercantilist, reason that the bigger the aggregate GDP the better for them, regardless of the per capita income and the destruction of our open spaces.

    Whether “brown field” means used industrial sites or just under developed urban districts, there is clearly a lot of scope for additional homes without destroying open spaces. But if immigration continues unrestricted the increased density (yes, Mark is right – especially in London) will become very unattractive.

  5. Posted 11/06/2014 at 06:11 | Permalink

    Oh dear oh dear oh dear. We are now sinking to Kindergarten level economics and blaming everything on immigrants. How come that the house price bubble was pretty much a global thing – and happened in net emigration countries as well as net immigration countries?? For clarification – it makes no difference whether it is native, pure-bred, Epping-approved, British born people moving to London or Johnny Foreigners, building more homes and offices in London pushes up rents in London.

  6. Posted 11/06/2014 at 09:57 | Permalink

    It is clear that the UK population has been growing at a faster rate than other European countries. The cause has been immigration. Indeed some European countries have seen a significant departure of residents to the UK which has left unused housing and a depleted demographic and skills profile.

    The point about the effect of immigration on housing and other demand for services is that most of the ones currently coming to the UK arrive with little assets. It is therefore clear that they cannot pay for the required services and facilities. It is the established population which pays for them.

    Mark’s sneering attempt to characterise my case by references to immigrants and racial issues is surely beneath him. The point is not a nationalist or a racial one as he must know but like so many who engage in this debate he has chosen to attribute attitudes and values to his opponent which I am sure are not applicable. He is better than that and I am disappointed in him.

    Let’s be clear: for any country a large increase in population will cause a commensurate increase in demand for various facilities and services. If the new residents are unable to pay for these themselves it is the existing population which will be required to pay.

    if a significant increase in housing is required, as typically happens when a population increases due to extraneous causes, there has to be an increase in housing density or the use of more open space. Given that the UK and especially the South East of England already have a high population density these are clearly important issues.

    Mark may value open space less than others but the Green Belt, for example, was conceived following careful thought and much debate. The areas assigned as Green Belt (itself a form of development zoning) was done after due process of consultation and authorisation. The thinking seems to me to have been valid – politicians knew they could not be trusted to resist pressures to develop open spaces which objective analysis showed should be kept open. The public did not want to see London stretch out to Harlow in the north or to (say) Guildford in the south.

    Mark is entitled to disagree and to argue for unlimited building on any land owned by anyone, but I doubt he would find much support outside the building companies, some land owners and Grant Shapps.

    So if not unlimited building on open space what does Mark want – higher density? Well that seems the most likely short term solution. And in respect of population does he favour continued unrestricted increases in our population.

  7. Posted 29/06/2014 at 07:41 | Permalink

    I am a property developer and someone that values our countryside. You can build in a responsible way, not because of any government policy, but because its the right thing to do right. To call everyone that wishes to protect the countryside a ‘nimby’, just shows how little some people understand the issues. Sensible planning laws that encourage brown field first are to the benefit of both the environment and people. Many but not all developers prefer green field sites because they deliver bigger profits!

  8. Posted 29/06/2014 at 11:55 | Permalink

    “Build properly” is right and it is not only on brown field sites where the thought applies. Much of Britain is not in the Green Belt yet still local planning authorities restrict development for unacceptable reasons and promote development in the wrong places. Local opinion is ignored so the planning authority can get its way; some suspect that may be because the authority itself owns the favoured land, or others suspect something altogether less savoury may be going on. The experience of , for example Chicago, shows that zoning is by no means an easy option but I do believe it would be better than what we have now. Planning authorities consider themselves best placed to determine the size, shape, aspect, design and material finishes of proposed buildings deposit the fact their staff are not architects and appear to have very conservative views on design.

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