The Land of the Flee

It is time to revive Royal Commissions

A disclaimer: the title of this blog is not mine. Its latest usage is from the New York Post to describe the flight of New Yorkers from Gotham City to the suburbs and beyond as Coronavirus hollows out the metropolis. When I wrote my first blog for HQN in June 2019, I promised to cover a wide and eclectic range of topics, sometimes looking beyond the UK, so I was interested in this story as it seems to reflect what is happening here, where there has been a surge of interest in suburban, rural, and coastal properties. The solicitor I used for my recent house purchase is dealing with loads of London buyers seeking a place along the Kent coast. In local parlance they are known as ‘DFLs’ (Down from London).

Whether this change in the property market will be a long-term trend remains to be seen but one thing that seems certain is that homeworking is here to stay. For the housing sector, at least, this was confirmed by HQN’s recent survey of members which found that 80 % of staff have been working from home during the pandemic, and that around 60% would work from home in the future. The post-pandemic world will be a very different place. If I had any spare cash I would invest in companies doing loft extensions and garden offices. Their business will boom as people seek more space at home to work and self-isolate.

All of this will have profound implications for the property market with millions of square feet of office space becoming available. It will decimate public transport systems and have profound impacts on city centre services – pubs, sandwich bars, gyms, and others.

One of the key lessons of the pandemic is the deep housing inequalities that have been exposed, with bad housing and high density neighbourhoods being linked to much higher death rates, something I wrote about here. The second wave appears to be repeating the pattern. This recent report about how people in newer homes have been less happy during lockdown is also revealing. Access to a garden or terrace was found to be the most critical factor in feeling comfortable at home, and people living in newer homes were also more unhappy with their neighbourhoods. The truth is that we have been building a lot of rubbish in recent years – something that needs to be investigated in depth once this is all over.

Another key lesson, for me at least, is that our centralised system of government has failed. Over the past 40 years Whitehall has taken on more and more power to itself, while local government has been defunded and marginalised. In my first blog I also mentioned that I would write about Germany, a country I have visited several times in recent times. There, Covid-19 testing is devolved to GP practices. If you feel unwell you have to seek a test, at risk of a hefty fine. If you are positive, the GP will refer you to the locally-run tracing team who follow up contacts and ensure people self-isolate. Local mayors issue daily bulletins on cases and local rules. By contrast, my town and district council have been found missing in action during the pandemic, as has the local GP practice. A neighbour of mine had Covid-19 very badly back in March. He called 111 and his local GP. Neither was interested, and so he does not appear as a ‘case’. It is therefore hardly surprising that the number of cases is now going up as testing increases. By contrast, the decentralised German system works well. The £12bn spent on the UK’s failing test and trace scheme would have been better spent in funding local GPs and supporting town halls to set up local tracing services.

I saw David Dimbleby being interviewed this week and he had one word to sum up the national mood: “introspection”. We must, he said, reflect on how we live; what we eat and where it comes from; what is important in life; the value of friends and community; and reject the chimera of wasteful foreign travel and useless consumption. I agree, but we need to take forward this mood for introspection in a serious and exhaustive way.

Going back to the future, I would do this by setting up two Royal Commissions to inquire into both of the key issues I have mentioned: the failure of housing policy and the failure of centralised government. Royal Commissions have fallen out of favour in recent years – the last one was over 20 years ago – but in the past governments would often set them up to deal with issues of major national concern. The unprecedented crisis of 2020 would surely justify their revival? There needs to be a bi-partisan recognition that the past 40 years of housing policy have been a terrible failure at every level. The last Royal Commission on housing was in 1884 when the Royal Commission on the Housing of the Working Classes was set up. It held 51 meetings, asked 18,000 questions, toured the country extensively to look at the slums and to speak to witnesses, and produced a comprehensive report that fed into the Housing of the Working Classes Act of 1885. This allowed district councils to obtain Treasury loans, empowered the Local Government Board to shut down unhealthy houses, and made it illegal for landlords to let houses that fell below a basic sanitary standard.

Can you imagine a similar inquiry being set up now, to inquire into the failures of housing policy and the excess deaths caused by bad housing? It could tour the country, talk to hundreds of expert witnesses and provide an in-depth analysis of what went wrong. Bring it on, I say.

Planning for a better future?

The Planning White Paper, published last week, promises radical reform “unlike anything we have seen since the Second World War” to create “a whole new planning system for England”, a system that will encourage “sustainable, beautiful, safe and useful development”. It is perhaps unfortunate, then, that the front cover of “Planning for the Future” shows an aerial view of Tregunnel Hill in Newquay – a new estate plonked down in the middle of the town without any reference to its surroundings, with box-like houses, pitched roofs with no eaves, tiny fenced-in gardens and not a scrap of greenery to be seen. If this is a vision of the future, heaven help us.

But to begin with, there are some positive aspects to the White Paper. For me, any government that wants to “build, build, build” has some merit, although this obviously depends on what is built and where, and whether it is affordable and of a high quality. The government is promising 300,000 homes a year but the danger is that the proposals will churn out Barratt boxes for first time buyers and executive homes, with few affordable homes in the mix.

The government also recognises that small builders have been in terminal decline in recent decades with the proportion of new homebuilding by SMEs dropping from 40% 30 years ago to just 12% today. If the proposals do unleash a new generation of smaller housebuilders, so much the better. But whether this decline is due to “planning red tape”, as claimed, or wider issues such as land prices, skills shortages or finance is debatable.

The proposals to digitise the planning system to make it smarter and more accessible and comprehensible to the layperson (no more notices on lamp posts), with visual plans rather than abstract policies also have some merit. As a member of my local town planning committee I have scrolled through loads of applications and the system is clunky without doubt.

Finally, the proposals to speed up the local plan process (down to 30 months and published plans shortened by two thirds) and to require local authorities both to have a local plan (only 50% do at present) and to enforce housebuilding numbers are to be commended.

But what exactly is the problem with the current system? Boris Johnson’s introduction makes the bold claim that “Thanks to our planning system, we have nowhere near enough homes in the right places”. Really? Nothing to do with right to buy or a failure to invest in affordable homes or our dysfunctional land market? A key theme of the paper is that planning takes too long. But an investigation by the BBC fact check unit found that 89% of major applications were decided within 13 weeks, or an agreed time (planning departments and developers may agree an extension to the 13-week time limit). It is true that larger developments take longer, but it seems that planning has become the scapegoat for wider failures (just as the scientists are likely to be blamed for wider Covid-19 failings).

 The two key proposals in the plan are a new zoning system and replacing the Community Infrastructure Levy and section 106 with a new Infrastructure Levy.

Continue reading

Slums for today and tomorrow

The government’s decision to go ahead with further relaxation of planning rules defies logic and will create a new generation of slums.

I touched on this in my blog in June when I wrote about this government’s obsession with planning red tape. I also suggested that, post-pandemic, there would be opportunities to turn offices into homes, but “not through the disastrous policy of Permitted Development Rights, which has created so many sub-standard homes”.

Now the government has issued new statutory instruments and amendments to the planning rules allowing wider use of Permitted Development Rights (i.e. development without the need for formal planning permission). All of this is part of their aim to streamline the planning system to churn out new homes. The problem is that it seems to contradict entirely their aim of building beautiful homes.

The first change will allow homeowners to add two storeys to houses and detached blocks of flats (one storey for single-storey houses) without the need for planning permission. (Trebles all round for flat freeholders, especially in London). There are some exemptions: they must  have been built between 1948 and 2018, the roof pitch and materials on the new extension must match existing, there must be no side windows, and the new roof must be no more than 3.5 metres higher than adjacent properties.

The second change will also allow purpose-built blocks of offices, flats or business premises to be demolished and replaced with a single purpose-built detached block of flats, or a purpose-built detached house up to two-storeys high, again without the need for planning permission. The existing building must be no more than 1,000 square metres or built after 1990 and must have been vacant for six months. Rooms must also have natural light (but can be single aspect).

This comes on top of existing Permitted Development Rights that allow offices to be converted to residential and shops to be converted to residential (up to 150 square metres) – all without permission.

 

Continue reading

You ain’t no Roosevelt, bruv

Ignore the hype. This week’s “Rooseveltian” New Deal is no such thing. The Prime Minister’s “build, build, build” reboot of the economy amounts to no more than £5bn of existing money, and even reduces the budget for social housing, spreading the existing programme over eight years instead of five (although this has been denied by Downing Street).

 

By contrast, Franklin Roosevelt’s New Deal was gargantuan. By 1933, gross domestic product in the US had fallen by nearly a third and unemployment rose from 3% to 25% percent. Between 1933 and 1939, the New Deal injected around £625bn in today’s money into the US economy. It created dozens of new agencies, such as the Tennessee Valley Authority, which built dams and new towns, the Public Works Administration, which built schools and roads, the Rural Electrification Administration, which brought electricity to rural areas, and the Federal Housing Administration, which set new standards for construction and stabilised the housing market to allow millions of Americans to buy their own homes.

The New Deal also funded artists like Diego Rivera to create hundreds of murals in public buildings. One of the prime causes of the US depression was the crash of 5,000 banks. Many had been speculating in shares using customers’ money, so the Glass Steagall Act of 1933 split commercial from investment banks to prevent them from speculating with customer accounts. The banking system was stabilised. The New Deal amounted to around 40% of US GDP by 1939. By contrast, this week’s announcement from Boris Johnson amounts to about 0.2% of the UK’s 2019 GDP. So, Boris Johnson’s £5bn stimulus package is the dampest of damp squibs.

I was in Germany last week where the pubs, restaurants and shops are booming (masks are obligatory). The German stimulus package amounts to over £100bn, amounting to 4% of GDP. You can expect the German economy to bounce back pretty quickly.

It is worth noting that Rishi Sunak is set to spend up to £300bn (OBR figures) on propping up the UK economy during the pandemic, as a result of furlough and other support schemes for closed businesses during what has been (in my view) an unnecessary lockdown.

 

The planning changes announced this week are also deeply worrying. Yet again, the planning system is being blamed for our failure to invest in housebuilding, a topic I wrote about two weeks ago. In the name of “cutting red tape” Permitted Development Rights (i.e. removing the need for formal planning permission) will be extended to brownfield sites, and will allow extensions, demolitions and conversion of commercial units to residential. This will result in thousands of awful sub-standard properties being churned out and will lead to all kinds of neighbour disputes, something I also wrote about in this report for the Intergenerational Foundation on micro-homes.

Continue reading