Re-evaluating the Greenbelt will deliver more homes

27^th May 2014

Christine Whitehead, Professor of Housing Economics at LSE, sets forth her recommendations for Greenbelt landuse

Mark Carney’s comments on the dysfunctionality of our housing market are only the latest in a long line of warnings about our incapacity to increase housing supply. Indeed it has been a matter of concern for at least thirty years with the problem worsening with every boom and bust cycle.

Expanding supply will have relatively few short run benefits – except that a few thousand more households will be accommodated each year. New supply, even if it reached 250,000 per annum which is about the best than anyone can imagine, only adds one per cent to the stock each year, hardly enough to meet demographic requirements. But if we do not make structural changes on the supply side we will be putting the long-term chances of sustainable economic growth at risk (as indeed we already have in earlier cycles). Economic growth inherently means more households looking for better housing – and if supply cannot at least keep pace with this additional demand it will simply come out in even higher house prices, further increasing the chances of boom and bust. Not expanding housing supply means consciously willing lower standards of living and higher housing costs.

We continue to talk a lot about barriers to expanding supply, including the lack of funding for development, shortages of skills and materials, and holdups in the planning system, many of which are worsened by the stop/start nature of our housing system. Policies have been put in place to improve the planning system and to provide up front funding. But the most fundamental issue has to be land, which has again increased in price far more rapidly than houses, reflecting long-term shortages. Building on brownfield sites, building high and increasing densities all have their roles but their immediate potential has already been factored into the current land prices which clearly show that shortages remain. Something else has to change and the most obvious thing to do so is our attitude to development on the greenbelt. At the moment development is being forced across the greenbelt, increasing commuting and worsening sustainability or it is being crammed on to brownfield sites, providing smaller units than almost anywhere else in the developed world.

Greenbelt land accounts for some 13 per cent of land area in England, more than twice the size it was in 1979. As such it is larger than the proportion of land designated as urban at 10.6 per cent, which itself includes well over 50 per cent of that 10.6 per cent defined as greenspace. One of the big problems is the name ‘greenbelt’; it is definitely a belt but is often not at all green. A lot is low amenity, poorly managed and unattractive scrubland. Yet because it is a belt a lot of this poor quality land is in locations that are near public transport, often readily accessible to jobs and urban services so that housing built on it would have less adverse impact on existing property than current forms of development.

It is not surprising that people are afraid of this sort of change. Many feel that if they allow a few hectares to be transferred into residential use this will open the floodgates. This can only be addressed by ensuring that high quality high amenity land is even better protected – perhaps by a clearer designation more clearly identifying these qualities, and enabling additional designations.

More generally, many of us hate the idea of anything which disrupts our expectations. This is not unreasonable, especially given the quality of much of what is being built, and it applies to whatever is built almost anywhere. But 80 per cent of the population agrees that more housing is needed. Building on the less attractive parts of the green belt could often result in fewer negative effects on the neighbourhood.

Finally, if such a policy change is to be acceptable there must be gains for everyone. On the one hand it must be absolutely clear that vast amounts of green land will remain protected from development, including adding to that total where there is land which should be preserved. Equally, the additional housing must be of a higher standard than has been the norm over the years of land constraint, it must improve the locality and provide good quality housing for generations.