Many years ago, when the Tories were last in power, they had a bright idea. Their friends in the construction industry were fed up with not being allowed to build anywhere they liked, so the Tories imposed targets on the local authorities. They had to approve the construction of so many thousand houses each year. One might have thought that this was a godsend for the planners. At last they could actually plan something, a new town here handy for the motorway, a new village there round an isolated church or railway station and indeed, many of these were mooted.
But this wasn't what the developers wanted. They didn't want the planners planning settlements on bits of land they didn't own, they wanted the planners to get back in their box and approve the applications they had pending. So what if the development wasn't anywhere where you would logically plan to build housing, it was on a bit of land they owned, and that is what counted.
So, from everyone else's point of view, the Planners, the Councillors and local people, it's always Hobson's choice: this or nothing. There's never a chance to say, not here, but next door, or just down the road, because the developer putting in the application doesn't own next door, or just down the road, nor can the planners say, we don't want housing there, we want industrial units, because the developer is a housebuilder, not an industrial developer. Nobody actually gets to do any planning, no-one has any say in how their built environment looks, except to say "no".
That is why there are so many NIMBYs.
So in a sense, the plans to devolve more development decisions to a community level are heading in the right direction, but they don't go far enough. "Planning" is still reactive, not proactive. If the decisions were taken at community level and the windfall gains from change of use stayed in the community and were not siphoned off into some speculator's pocket, I don't think there would be a problem with the provision of new housing. No vast estates, just many, many small developments all across the country and suddenly, we'd have all the new houses we need. But the Tories' friends in the construction industry wouldn't be happy, so it's not going to happen.
Thinking ahead
2 hours ago
9 comments:
And there was me thinking developers made their money out of building houses that people wanted to buy! How silly of me.
There wouldn't be "windfall gains from change of use" if there wasn't a super-restrictive planning system.
The most attractive towns in England weren't planned as such - they grew naturally. For ones "planned by town planners" see Britain's awful "new towns" or indeed the nasty tower blocks of the 1960s.
AC, property developers make more money from the windfall gains on change of use as they do from actual building. Of course, this requires that the builder buys land without planning first, and then gets the planning, so it's hardly surprising that they want planning for 'their' bits of land, is it?
B: "... if the windfall gains from change of use stayed in the community and were not siphoned off into some speculator's pocket,"
Another problem that LVT would fix :-)
AC, developers make most of their money by buying land at agricultural rates and selling it with a house on it. Yes, they make some money building houses, but the value of the house, as opposed to the plot, is not hugely more than the cost of building it.
"There wouldn't be "windfall gains from change of use" if there wasn't a super-restrictive planning system."
House prices, which are mostly plot prices, are controlled by people's ability to pay, not by supply and demand, so yes, if we had a credit bubble and no planning restrictions, we'd still have a housing bubble.
Agreed about the horrors of planned towns and housing; that's why planners should be kept away from the detail, which is the only thing they currently have any control over, and stick to the broad brush approach of what goes where. Tower blocks are going to look like tower blocks whoever plans them. You have to remember that back in the days of "the white heat of technology" people liked tower blocks.
If the decisions were taken at community level and the windfall gains from change of use stayed in the community and were not siphoned off into some speculator's pocket, I don't think there would be a problem with the provision of new housing.
Yes but there are speculators living locally as well.
Small developers - one of which my dad was - would love it as it would not hurt them. From the small local spec house builders point of view it would level the playing field again.
B, "House prices, which are mostly plot prices, are controlled by people's ability to pay, not by supply and demand"
That's only true right now, because supply is artifically constricted by the planning system so that demand always exceeds supply. If the market were allowed to set supply as well as demand, then prices would fall regardless of credit bubbles.
And by the way, clearly the developers would in that scenario make their money from building rather than speculation.
JH, LVT would sort them out as well.
L, love what?
AC, of course planning restrictions have some impact on house prices, but (having trawled the evidence) it is far less than you think. In any event, faced with the choice of having lots of nice houses or fewer nice houses and not even enough grotty ones, I know which I'd prefer.
Developers do NOT buy land at agricultural rates, get planning permission and make huge windfall gains. They usually take options on agricultural land that are exercisable IF planning is granted, and then at the price of land with planning permission, less their costs (usually 'bribes' to the local authority in the form of Section 106 planning agreements), and a discount (usually 15%). I have in intimate knowledge of this, having spent the last 15 years dealing with such developers who have options on land I own.
The windfall gains from planning permission are split three ways really - about 40% to the landowner (me - yay!), 40% to the local authority in 'bribes' (ie things the developer has to pay for in the locality in order for the LA to grant planning - so called 'planning gain') and 20%ish to the developer.
So the local community already gets as much out of a development as the landowner does.
I'm really interested to hear that However, it may be the case today, because nearly all landowners who own land on the edge of towns and villages are wise to its housebuilding potential, but in the past, when NIMBYism really got going, many big developers had huge land banks built up when organisations like the Church of England were selling off lots of farms years previously.
I'd take slight issue with the Council's 40% going "into the community". Sure some of it is things such as bypasses that the LA wasn't going to build for years, but some of it is things like "land for a school", "land for a community centre", which is no damn good if the LA hasn't the money for said school or community centre, but you are right, it's all just bribes really.
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