Building new houses - carrots and sticks

Eric Pickles scrapped regional housing targets last month, replacing "regional diktats" with people-power at a local level. 

 

Now, Grant Shapps has announced a carrot to replace the big regional stick - the New Homes Bonus, under which councils will be financially rewarded for giving planning permission for new housebuilding.  The coalition hopes this dual approach will unleash a new wave of more consensual development, and increase rates of housebuilding - currently at a historical low point.

 

This financial incentive for councils is a step which might have some impact, given the extremely tight budgets that local authorities will be working under in the medium term, but it's not a "powerful" one, as Pickles and Shapps have suggested this morning. 

 

The risk is that while communities have been empowered at an ultra-localist level, the financial incentives are directed towards councils.   Local people are more likely to think in their immediate interest - particularly if they are already a home-owner in a buoyant city such as Cambridge, and would see house prices fall if supply increased - than to make planning decisions which will help create jobs and help people to access those jobs. 

 

Housing should be planned at the level of the "real economy": smaller than regions, but larger than local authority boundaries.  Local enterprise partnerships could play a role, by enabling councils and businesses to look together at the housing needs of wider economies. 

And increasing the proportion of local government finance raised locally would make a better link between housing supply and the economic outcomes for local communities - as we suggested earlier this year in Arrested Development.  

But the real problem is that too little land has been made available for new housing, and we're not sure today's incentives go far enough.  Ministers need to start making the case for bringing forward more land for development in areas of high demand like Cambridge and London - the cities whose success will drive the UK's economic recovery.

Comments

[Things to do in York]

Housing should be planned at the level of the "real economy": smaller than regions, but larger than local authority boundaries. Local enterprise partnerships could play a role, by enabling councils and businesses to look together at the housing needs of wider economies. - I agree with this one. Thanks for posting.

[Grant Slade]

Agree that businesses and councils need to work together, but would be interesting to discuss who would be best placed to drive this forward within Local enterprise partnerships. At what stage could the process begin?

[Pre NCT test dublin]

I agree to the comments above. Both local authorities should work together to get the project done as soon as possible and so that the less fortunate people can benefit from it. :)