For far too long, we have built too few homes at a price which people can afford.
As a result, homelessness, hidden homelessness, over-crowding, families and individuals occupying unsatisfactory housing or living in insecure tenancies have all increased. It has a massive impact on employment, on schooling, on social care and on the housing benefits bill.
We cannot, we should not, continue like this. It’s the mark of an uncivilised society.
To build new affordable housing – to buy and to rent – we need to address the availability and price of land. Over the last 20 years, the price of housing land has risen by more than 5 times, far in excess of general inflation.
Not only does this mean that fewer households are able to secure homes they can afford. It also means that we end up paying a higher proportion of the housing bill for the land, squeezing the money available for building standards (for example, rooms getting smaller and smaller) and community infrastructure (for example, schools, parks, roads).
Public and private money is going in to the pockets of a relatively small group of landowners who are simply benefiting from changes in the planning status of that land, mainly from agricultural to residential.
Last year, the all-party Housing, Communities and Local Government Committee, which I chair, published a report1 which highlighting how many other countries, for example Germany, use land to deliver high quality new homes, rather than preventing it as happens in England.
The scale of the suffering caused by a shortage of safe, secure and affordable homes should give any government the courage to take bold action, both to lower the cost of land and then to build the next generation of social homes that we so desperately need if we are to truly solve our national housing emergency.
Land value increases from the granting of residential planning permission are not small. Agricultural land granted planning permission for residential use increases in value, on average, around 120 times from £22,300 to £2.7 million per hectare.
Who should be the beneficiaries of these increases and in what proportion? Should it be the person who owns the land, but who potentially did very little to contribute to the windfall profit? Or should the community seek to claim the greatest share.
The present rights of landowners simply serve to distort land prices, encourage land speculation, raise house prices and reduce revenues for affordable housing, infrastructure and local services.
Think back to the first generation of New Towns. Development Corporations were empowered to acquire land at, or near to, existing use value and capture uplifts in land value from the infrastructure they developed and subsequent economic activity to reinvest in the local community. We need to apply these principles to all development land, enabling a new generation of garden cities, towns and villages.
There has been no sign in this government of this sort of bold thinking. None of the Conservative Leadership candidates has demonstrated a determination to take the necessary action.
We are in the midst of a housing crisis. It is vital that the government meets its target of building 300,000 new homes every year.
Reform of development land compensation and a new social housing programme to deliver affordable homes to buy and rent securely have to be at the heart of the response.
This week, housing charity Shelter has published its contribution – Grounds for Change – to the case for land reform. I am pleased to have been invited to contribute a chapter.
If you are not convinced of the need for bold change, please read this for free at:
1 Land Value Capture https://publications.parliament.uk/pa/cm201719/cmselect/cmcomloc/766/766.pdf