Why brownfield development is overrated
Planner: Forget it. Don’t even bother applying, it’s not worth the effort and expenses. We can’t allow it, our local Nimbys would crucify us.
Developer: That’s a shame. Is there anything else I could do?
Planner: Actually, yes. There’s a brownfield site nearby, a derelict industrial area, where you could build about the same number of houses.
Developer: And the Nimbys won’t object to that?
Planner: Much less. You may even get a few supporters, because the site is an eyesore. Your application will probably get through.
Developer: Then where’s the catch?
Planner: There isn’t one, really. Well, there are clean-up costs involved, but they shouldn’t be exorbitant.
Developer: Is the site contaminated, or something?
Planner: Oh, no. Just old factory buildings, girders, and stuff like that.
Developer: So I would still turn a handsome profit.
Planner: I would assume so. Sure, the development cost is higher than for greenfield land. But bear in mind that Section 106 payments would be a lot lower, because the area is within an existing settlement. All the infrastructure is already there.
Developer: And the land itself will also be considerably cheaper.
Planner: Of course. And last but not least: The local press loves our Nimbys. A clash with them will not be good PR for your company at all.
Developer: So let me summarise. I’ve got a choice between an unattainable first-best solution, and a second-best solution that is only mildly less attractive, and easy to attain.
Planner: Exactly. So what do you say?
Developer: Why, it’s a no-brainer. If I can’t get permission for greenfield development, I will, of course, not build anything at all.
Planner: But if you don’t build anything, you will make zero profit.
Developer: I know. But I’d much prefer zero profit to a perfectly workable second-best solution.
…said no developer ever. Absurd as the above dialogue may sound, if you read the campaign materials of Nimby organisations, you get the impression that dialogues like this are taking place every day up and down the country. There is no need to build on greenfield land, they cry, when there is so much brownfield land around. Developers could easily build millions of homes if they were prepared to use brownfield land. But they won’t do it. They just won’t.
For the Nimbys, ‘brownfield sites’ is not just a land classification, but a mystical incantation. At CPRE (Campaign to Protect Rural England) meetings, they probably dance around a fire dressed up in tunics, chanting the words ‘brownfield sites’ and ‘urban regeneration’ to the beat of a drum.
Note that the brownfield cult is a very young cult. Its practitioners claim that they have never practiced anything else, but that is rewriting the recent past. Until very recently, the Nimbys claimed there was nothing wrong with housing supply. When the Barker Review called for a modest liberalisation of the UK’s planning laws in order to get more houses built, CPRE replied that building more homes
‘would make very little difference to house prices – which depend far more on demand-side rather than supply-side factors. […] At the time of publishing this report, house prices were stable or falling. Homes were expected to become more affordable for first time buyers as earnings rise. But the Barker Review argued that there has been a long-term undersupply of new homes for sale. We disagree. […] [T]here is not a long-term undersupply of market homes. But if Government now believes there is, and changes policy accordingly, result is likely to be an oversupply. […]
‘[T]here is an adequate supply of new homes for sale. […]
[T]here is no chronic, nationwide undersupply of market homes. It follows that implementing the findings of the Barker Review would lead to excess housing.’
In the meantime, the undersupply of housing has become so obvious that continuing to openly deny it would damage CPRE’s reputation. So, for PR purposes, the organisation quickly had to change its tune. They now claim that they had always been in favour of building more homes, and that their only query was that those homes should be built on brownfield rather than greenfield sites.
Unfortunately, for the most part, build-on-brownfield is just another Nimby excuse. Firstly, brownfield development already accounts for the bulk of what little development we have, and it has enjoyed a lead over greenfield development for as long as we have comparable data (see Figure 1). We are currently building next to nothing, and less than a third of next to nothing is built on greenfield land.
Figure 1: New dwellings built per 10,000 inhabitants, previously developed vs previously undeveloped land
(Author’s calculation based on data from DCLG and the National Land Use Database)
Secondly, there isn’t actually that much brownfield land around. The total area of brownfield land that is judged by the respective local authorities to be, in principle, redevelopable, is about 312km2, out of which 90km2 are in London and the South East. For comparison, greenbelt land (much of which is, of course, not ‘green’ by any stretch of the imagination) accounts for 16,394km2.
Figure 2: Brownfield land vs greenbelt land, England
90km2 is no small amount of land. Housing isn’t actually very land-consuming. The DCLG estimates that given current dwelling sizes and densities in newly developed areas, if every square inch of developable brownfield land was used for housing, it would be enough to fit 1.5m new homes. That would indeed go some way towards solving the problem.
But not every development that is physically possible is also be economically viable. Some of those brownfield sites will, for now, be prohibitively expensive to decontaminate. Others will be in the wrong place, even some of those in the South East – the regional level is still a high level of aggregation.
There will be no meaningful solution to the housing crisis in which brownfield site redevelopment does not have a role to play. Indeed, there are intelligent proposals for how brownfield development could be boosted. But it cannot be more than one element in a much broader package. The brownfield potential is currently vastly exaggerated and overhyped.
And there is a reason for that. The Nimbys’ continued stranglehold over housing depends crucially on our willingness to engage in a peculiar form of double-think. Most of us know that the housing market has gone crazy, and most of us understand that we need to build a lot more to bring it back to normal. However, as soon as somebody actually puts a shovel to the ground, we instinctively side with those who scream bloody murder. But this is an unstable equilibrium. People will eventually realise that if they want development, they have to stop cheering on its enemies. We cannot moan about rising housing costs, and at the same time egg on those who are causing them.
And once that realisation hits home, the Nimbys’ time will be up. The brownfield hype is their last lifeline. Let’s sever it.