A while ago, a colleague had an idea for a multi-authored IEA book (which has been delayed, but will still happen later this year) for medium-to-long-term policy proposals across a range of different policy areas. Forget about the current parliament or the next one, and think about the next decade. A policy manifesto for the 2030s, as it were. The idea was also to do this in an upbeat, optimistic tone: to highlight opportunities, rather than just complain about how terrible current policy trends are.

I was asked to contribute a chapter on housing and planning. Under different circumstances, that would have been an easy task. Housing is one of my old hobbyhorses, a subject on which I can easily bore you to death over hundreds of pages. But I knew right away that I would struggle with the “optimism” bit. I don’t do “optimism”, unless I have a very good reason. I can’t even pronounce the word without switching to a contemptuous tone of voice.

Baseless optimism rarely ages well. Take NIMBYism: The Disease And The Cure, a booklet by the Centre for Policy Studies originally published in 1990. It is a pioneering study, which brilliantly analysed the problem of NIMBYism and its consequences long before this became a mainstream subject. For the most part, it aged so well that you could almost describe it as prophetic. The one exception, though, is the optimistic future outlook in the final paragraph:

“Perhaps joining the exchange rate mechanism of the European Monetary system may finally prove the catalyst. If we are to enter a system designed to force our inflation rate down to that of Germany, then we soon will no longer be able to afford the self indulgence of nimbyism.”

There’s a lesson in there: don’t dilute an otherwise perfectly good analysis with forced optimism. If you think things are unlikely to improve – say so. If that makes you sound grumpy, so be it. You’re just the messenger.

But then I found a solution: how about setting the whole thing in a hypothetical future, where all the good things have already happened? It does not need to be a likely future. It just needs to be a possible future.

This changed the whole dynamics of the chapter. Instead of a long list of complaints about how terrible the status quo is, I now got a long list of solved problems and big improvements.

But while this format was initially a makeshift solution to work around my disdain for cheerfulness, I realised, at some point, that it worked really well to get the point across. I’m as much of a nerd as the next YIMBY, but it is occasionally worth taking a step back, and remind ourselves of what we are doing this all for. What would a version of Britain which builds things look like, in practice? What differences would someone who left today’s Britain, and entered a hypothetical YIMBY Britain, notice? What would it be like to live in a version of Britain where housing is plentiful, and cheap?

These are some of the questions I try to answer in the chapter, a version of which has been released today as a standalone IEA Discussion Paper, Home Win. The future I describe is obviously hypothetical. But the economic literature and empirical evidence I am basing this on is not. I think it is safe to say that a YIMBY Britain would be a much richer and more productive country than the one we currently live in. The housing crisis is making us all poorer in countless ways. Even homeowners who bought their house before the big price explosion are, in some ways, negatively affected. They still need to pay for other people’s rents, via Housing Benefit. They pay higher consumer prices, and earn lower wages, than they otherwise would. And like everyone else, they feel the macroeconomic effects of enforced housing scarcity, which is to make the British economy more volatile.

The effects of Britain’s housing crisis go beyond economics, though. Britain’s housing crisis has driven political polarisation, especially along intergenerational lines. A Britain of cheap and plentiful housing would also be a more relaxed and less angry place.

In short, the housing crisis is not just one problem among many. Britain’s inability to build things is the bottleneck issue which is holding the country back. Apart from being a huge problem in its own right, it is causing a raft of second-order and third-order problems, and even where it is not the primary cause of a problem, it still acts as an amplifier. Solving it is the single biggest issue of our time.

I won’t end on an optimistic note, because I do not believe that the future I describe in Home Win is a likely one. But I have no doubt that it would be a worthwhile one.

 

Recommended reading/watching/listening:

• “Home Win: What if Britain Solved its Housing Crisis?” | IEA Discussion Paper


• “How Britain Solved the Housing Crisis” | Explainer video


• “Fixing housing won’t solve all our problems – but it’s a start” | The Telegraph