Planning for decent homes

This essay was first published in Ordinary Hope: A Mission to Rebuild (Download PDF)

The new government has placed housebuilding at the heart of its strategy for economic growth, setting itself the ambitious target of building 1.5 million homes in England during the five years of the new parliament . This makes a lot of sense, because the need for more and better homes is right at the centre of both an urgent social crisis and many of our national economic problems. More than that, our homes, the neighbourhoods they make up and the towns and cities they are built in are the centre of our family and community lives. When we get housing as wrong as we have been doing for at least 40 years it undermines our prosperity, our health, our sense of community, our very identity.

But by the same token we can make millions of lives better and happier if we get housing right. What hope could be more ordinary than that of a decent home to raise a family in? Housebuilding has been central to every major drive for social and economic progress since at least the Victorian era. So why are we still wrestling with worsening housing poverty and skyhigh rents, while struggling to build the number or the quality of homes we so obviously need?

It really should not be that hard. Housebuilding is not that technically complicated. Many of our homes are well over a hundred years old and still perfectly functional. Nor does it change rapidly in response to scientific breakthroughs, like, say, healthcare: we’ve been piling rocks on top of each other for at least 10,000 years without the technology changing that much. So it’s odd that we’ve managed to make this basic need such a contested policy challenge, one that successive governments have tried and failed to resolve.

I think the main reason is precisely because housing cuts across the personal, the economic and the social: its very centrality to so many aspects of our individual and collective lives. That leads us to overload it with conflicting objectives which can’t all be met at once. Polling shows most people think we need to build more homes, but also that we don’t want them built in our area. We cheer every increase in our asset wealth that rising house prices bring, but bewail the inability of first time buyers, or our own children, to afford a home.

Rediscovering the Ordinary Hope of a decent home for everyone means we have to face up to these contradictions. The hardest fact to accept is that we cannot all be decently housed and all get rich from our homes at the same time, because property wealth is a non-productive, zero sum game. The classical economists knew this, and devoted much of their intellectual energies to solving the problem of economic rent, such as with property taxes, albeit with little success: by the start of the First World War the vast majority of people had to rent a home from tiny majority of landlords, often paying most of their wages for cramped and squalid rooms. The pioneers of late 19th and early 20th century social reform responded to the poverty and squalor of urban slums with more radical intervention. Public housebuilding programmes provided decent housing as a route to health, economic security and respectability for the masses, while regulation tightly controlled banking and private rental markets.

But housing quickly came to be seen as more than just a safe, decent place to live: ‘a property owning democracy’ offered the prospect of wealth accumulation and social status for all. For a while rising homeownership seemed to deliver on this promise, as property taxes were scrapped and deregulated mortgage markets channelled more credit into stoking the asset values of the new homeowners. But this inevitably created a boom-bust housing market that fatally undermined the settlement that had delivered so much Ordinary Hope in the middle decades of the century. Within twenty years of the liberalisation of mortgage credit in the 1970s, and only ten years after the Right to Buy, the rise of homeownership had stalled, social housing was declining fast and landlordism was returning. Today, we remain on a course heading back to the Victorian era, a world of huge property fortunes held by a few and housing-induced poverty for millions. Having abandoned the powerful tools of public interest development programmes and market regulation governments were only able to make endless tweaks to a failing system.

If we are to rediscover the Ordinary Hope of a better housing system, we have to revive the central elements of that mid-century settlement: a mixed economy in housebuilding and careful regulation of credit and property markets. In the twenty-first century the details of this outline prescription offer huge potential for a more diverse and relational economy by expanding the tiny points of light that pepper our housing system. Older people’s and multi-generational co-housing schemes like OWCH in Barnet are a friendly, efficient alternative to isolation and failing care homes. A few public spirited stewardship landowners have created thriving – and wildly popular – new communities, like the Duchy of Cornwall’s developments at Poundbury and Newquay. Brave councils have started building beautiful and sustainable social housing again, like Goldsmith Street in Norwich.

These pioneers may be exceptions to the rule of mediocre, profitmaximising development here, but they are increasingly the norm in many other countries. The car-free, green streets of new urban developments in Germany are wonderful places for kids to play and families to thrive. Singapore’s government enables almost everyone to buy a home by tightly controlling the property market. Vienna’s legendary mix of high quality social housing, regulated private renting and co-operative developments make it one of the most liveable and economically successful cities in the world. The Dutch are building whole cities based on active and public transport in which individuals and families can buy a plot and build their own home the way they want it. The Mayor of Barcelona is launching an ambitious, multi-stranded strategy to make housing more affordable, while Paris has revolutionised urban transport and replaced failed suburban estates with beautiful new neighbourhoods of mixed tenure housing. These models do very different things in very different contexts, but are all shaped by governments that are not afraid to intervene strategically in the market, to set the rules of the game firmly in the public interest, and then hand control over the details down to regional and local authorities, communities and individuals.

If these places can learn from past success and mistakes to make housing work better for people, so can we. But to embrace them we will have to let go of some deeply entrenched beliefs – primarily the assumption that housing can simultaneously be a secure family home, the basis of a vibrant, thriving community, and a tax-free get-rich-quick-scheme. Surely, we all know which one of those three we should rather let go of.