Jul 13, 2016
Policy Exchange discusses the challenges facing the housing sector and what do we want from the new Government. Panel includes:
- Alex Morton, Former Special Advisor to the Prime Minister on Housing and Planning; Director, Field Consulting
- Sir Stuart Lipton, Partner, Lipton Rogers Developments LLP
- Miles Gibson, Head of UK Research. CBRE
- Nicholas Boys Smith, Director, Create Streets
- Dr Demitri Porphyrios. Principal, Porphyrios Associates
Introduction: Dean Godson (Director, Policy Exchange)
Good afternoon and thank you all very much for coming at short notice. My name’s Dean Godson. For those of who don’t know, I’m Director of Policy Exchange and we played an important part in this debate in recent years and look forward to continue to do so. And the salience of it is obviously underlined by both the exchanges that some of you have seen at the last Prime Minister’s Questions of David Cameron and also the remarks and two recent significant pronouncements by the incoming Prime Minister,
Theresa May, both when she announced her candidature and at the launch event earlier this week for the shortest-lived campaign in Conservative history, the consequence of Andrea Leadsom pulling out. But she highlighted there, and David Cameron also, a) the need, the priority for more housing, more quality housing and for making it more available and affordable, particularly obviously for younger people in the market. And we’ve got at very short notice, a star-studded panel here and indeed a star-studded audience as well from looking at many of those who’ve played so important a part in the debate as well. I think many of the people here, many people in the audience, could easily have also been on the panel but in the interests of brevity and in the interests of getting this thing –
I’ll happily swap!
We can have an [1:16] tag contest when we really get the debate started.
So a great pleasure to be able to welcome back Alex Morton, who was our Head of Housing for many years, subsequently Special Advisor to the Prime Minister on Housing and Planning at No. 10. I’m going to just remind all our panellists because there are so many people here with so many contributions to make from the audience, six minutes apiece. I’ll give you an indication at the four minute marker, just so we can have as many interventions from the floor as possible. So over to you Alex.
Alex Morton, Special Advisor to the Prime Minister on Housing and Planning
Thanks Dean. So I’m going to try and obviously keep this concise. So there a huge number of overlapping dysfunctions around housing and planning and if you want more detail you can read the various papers I wrote because I don’t think lots have fundamentals have changed.
But I’ll start with number one which is we have in theory a planning system. A planning system is where each council is supposed to build enough houses, most places don’t have an up-to-date plan, there is no system of sanctions in place for not hitting your target and the local plan itself is a large, waffly document in most places, that is only tangential to delivery throughout most of its pages, so the first thing you need to do is fix the structure, you need to have short, targeted, local plans that focus on delivery. Everything I’m going to say here, all of it sounds really simple, until you start unpacking it when it becomes horrendously complicated, partly because it all interrelates and partly because on each of these things I could speak for six minutes on its own, but effectively you need a local plan. If you are going to keep the 1947 Town & Country Planning Act structure you do need to have a system where that cascades down to each area, having a target, having a system of sanctions, having a properly delivery mechanism. There is a very weak sanction called the [2:52] for Sustainable Development. In 2011 I argued against it, I didn’t think it was going to work for reasons that are set out elsewhere; it didn’t work in the 1980s when a variant of this was tried; essentially you need to have much more of a hands-on approach in terms of making sure places actually hit it.
However, this then links to the second major set of dysfunctions which is the land and development model, developers in this country, the private sector (I’m going to park social housing which has its own problems) but the private sector is largely, basically land speculation. They obtain planning permission, they build these really slowly, they build fast enough so that it covers their cost of capital and makes profit but then not so much that they chomp through their land because most of the time their land is rising in value and therefore the longer between point A and point B, then the more they make and even if they have to go back for planning permission, they’re quite happy to do that. The council usually are happy to re-grant it; the council, of course, doesn’t have to find extra land if they just keep rolling over the same sites over and over again, so it’s a sort of mutually beneficial relationship between a dysfunctional developer and a dysfunctional council.
There is no SME sector as there is in other countries or rather there is an SME sector but it is not the same size or scope, there is no provision of land for SMEs in the way that there is in other countries. This is trying to be rectified by something called the Right to Build, which I wrote about in 2013, Nick Boles took it up with great passion, Frank Lewis has taken it up with equally great passion. It didn’t really get much debate in the Housing & Planning Act, it was ignored, I think, by lots of the vested interest because the social housing sector doesn’t want it because why do they want SME builders, the big councils don’t want it because why do they want SME builders? Actually I think one of the big, fundamental things, is trying to get land to a different target of the developer structure. So fixing that, the way that developers work, is a big problem and the way we do that… there are a whole variety of measures. Some people think taxes, I personally foremost think you need to switch planning permission to some form of contractual basis where you contract out to develop, so if a council is giving permissions there is some kind of penalty for not building, probably something to do with loss of land at a pre-agreed, reserved price or something similar on those lines. So if I say I’m going to build 20 homes a year, I only build 10, that land gets leased to someone else at a pre-agreed reserved price which is low enough to incentivise building but not so low that it totally cripples me financially and puts other projects in jeopardy, probably using custom build or other smaller builders. But that’s only one set of theories, you could come up with a different set of ways of doing it and of course the developers will cry blue murder. This kind of thinking is not totally unknown to government but has been up ‘til now, blocked by various people. Hopefully Theresa May and her team will be more open because we need to do something to fix the way the big developers work and I think there’s a lot of justified anger, even from people who are very pro-development like Nick Boles who to great credit put his career on the line and went and argued for more planning permissions and then, quite rightly, was horrified when it didn’t translate into the large uptake we hoped for.
So 1) is have a local planning system that deliveries, 2) is then fix the land development models, 3) is then the politics. The politics of this is very difficult, the people who are very powerful in the system are both the big vested interests of the house builders and to some extent, the housing associations, although they’re not necessarily the bad guys in terms of development, they could build more and they could be more efficient but they do genuinely want to build, they have other problems instead.
The quality of design in this country is not good enough, that’s partly because if we go back to the point developers are land speculators, it’s partly because the people who are planners are obsessed over the technical side of things, whereas planners basically used to go, ‘This land is roughly suitable for housing, it’s not going to flood, we can build a road here, job done.’ There is far too much micro-management in the planning system, it’s going to solve everything from climate change to social cohesion, to our aging society. This is, quite frankly, a load of crap. It drove me made at No. 10 trying to battle off various departments which just because they couldn’t be bothered to write their own press release were muscling into my area and trying to say planning should be all about X, Y or Z. Basically planning should be about the core things which are design and infrastructure. The design has to get better, it’s not right to go across the Southeast of England, it’s politically [7:08 possible] to go round the South of England saying we’re going to build 250,000 homes, [7:11]. The only way you’re going to build more homes, particularly in high demand areas, is by building homes which are attractive enough that there is less objection to them.
There is the question as well about who gets them, the starter homes initiative is massively popular, I think we got 80,000 people registered within a few months because people were wanting discount market homes, not just social housing, and I think particularly in the South there is a way to try and get more shared ownership, more starter homes in villages, town, suburbs, that would reduce some of the political opposition because you start to create a localised network of people who would benefit from those houses. Whereas at the moment you often go to villages and what you hear if you listen to people, rather than dismissing them outright, is, ‘We do accept there has to be houses but what we don’t want is just 30 homes that will be giant, executive mansions that go to someone else and there will be more pressure on our schools.’ That’s sometimes used as a smoke screen but there are genuine reasons why people are NIMBY’s and you have to address those if you are going to push housing through from the centre. The infrastructure point, an equally important design point, there’s just not the… You have to be careful what you wish for because CIL hasn’t really worked that well outside of London. It’s worked quite well in London. This is getting quite technical but the CIL, there are different payments that you can make as part of your planning permission. Section 106 which is very much a contractual-type obligation has worked quite well, where you say, ‘I want this.’ The council says, ‘I want this,’ the developer then says, ‘I want that,’ and you come to some kind of arrangement but there is still not enough of a proper assessment of infrastructure needs in all cases.
So basically that’s what the tripartite model is: have a local plan that has focus on delivery, that has sanctions; then we want to fix the land and developer model to make sure they actually build, that there’s contracts and other things; and then finally fix the politics. The difficulty of course, I said that all sounds really easy, all three of them interlinked, all three of them need to be done at once and given the scale of the housing crisis, all three of them need to be done quickly. So fingers crossed that whoever Theresa May appoints, personally, fingers crossed Ben Lewis, then let’s hope that they get stuck into that and they move forwards as quickly but also as politically intelligently as possible.
Thank you. Sir Stuart Lipton.
Sir Stuart Lipton, Partner, Lipton Rogers Developments LLP
Alex, firstly I’ll start by agreeing with 99% of what you’ve said but the 1% is new legislation. So every piece of housing legislation since 1947 has essentially failed because we’re still in this chronic shortage and to me this is all about increasing supply so that we don’t have those points you made about house builders. I completely agree with you but if we had a surplus of supply, we’d have quality with it, people would start competing with each other and they don’t really do that and I think we’ve got to find some mechanism but new legislation never seems to get it right.
So I’d like to talk about what we all know from the past, quality; community, which I think has been missed out of this conversation; and reform of the planning system. We all know the past, we love it dearly, Nash, Cubitt, 1930’s bow-fronted, and village greens and town squares, and importantly for me in this conversation bizarrely, Victorian schools; all loved, all here, all fit for purpose, all converted where they aren’t schools, all grossly out of their context in density, but they’re fine. So we can do it and one could repeat Listed department stores, Selfridges, Derry & Toms, they’re all completely out of scale, so there is opportunity, even bizarrely 1930s telephone exchanges built by the government, brick and stone dressings. There is something from the past to learn and I personally feel that as this legislation comes on it forgets the past. I hope we can find some way of remembering the past in a new vernacular.
So just talking about communities, we need to build communities not just housing. We seem to be in the position where we’re building new ghettoes. There are a lot of new estates, they are remote from their society, they’re about large groups, 500 flats, whatever, they don’t communicate in the way that traditional towns and cities used to communicate. The seamless flow from one project to another just isn’t there and yet infill allows that. And for me we need to start inventing places which reflect the real world of technology, our social change in the community. Everybody wants to have a decent cup of coffee, not just those people that can afford to pay £3 at Starbucks. How can we bring in a place and places where you feel civilised, you feel uplifted. And we forget these people. If we look at estates in London or in any town, people in these estates are forgotten. As Nicholas will tell us they have no roads, which cuts them off, no streets and they’ve literally been left, they’re not all bad. Unemployment is high. So let’s put quality back into the ordinary, good design costs no more than ordinary and let’s get some government passion about this. It’s not for me who’s the new Housing Minister, it is who has got the commitment? So in the past seven years no one’s taught me a word, no architecture at all, and for me I’d change the system, a red line drawing around a site showing mass and height and bulk. You only get your permission if your design is approved. That would be very simple and make sure that quality is always the denominator.
At the other end of the planning system it needs radical upgrade, more officers, more power to the planning director, more certainty. If I go to a planning authority and say, ‘How long?’ it used to be eight weeks, it could be four years. The 106 and the author of CIL is sitting to my right. To me CIL is a failure. It was meant to be simple, a good idea, but it’s ended up with 106, affordable, we’re in the same mess that we were. We should have a system… the guidelines for CIL were great, tariff, payment, off you go, but we need much simpler approaches. And I’m going to be a devil and talk about greenbelt. If we had Sean Spears here from … he would say you can designate greenbelt one, two and three; one and two are untouchable, three (which is brown belt really) should be capable of use. So for me it is increase the supply, free the political games somehow, Alex, I don’t know how, I’d like to feel local councillors could not participate in their ward, but go for quality.
Thank you, Stuart. A very warm welcome back to Miles Gibson, distinguished public servant, now Head of Research at CBRE, returned to the private sector via a very distinguished past as Director of our Wolfson Prize on Garden Cities; you win the prize today for making the effort to get here against the odds today Miles. I very much look forward to hear what you have to say on what you want from the next government in the area of housing.
Miles Gibson, Head of UK Research. CBRE
Well thanks very much Dean and good afternoon everyone. I want to agree with quite a lot of what’s already been said as you would expect because there aren’t really that many surprises in this field, if you ask me.
I think the place to start is to ask the question whether Theresa May cares about housing policy at all, whether she will prioritise it, whether she has any interest in it. Just to come back to Stuart’s point about greenbelt, she is firmly opposed to any change in the greenbelt policy the last time I heard her talk about it, so I don’t think we’ll see any action there. But is she interested? And if she’s not interested, if you’ll follow my argument for a moment, because the answer to all our woes, as Alex and Stuart have already made clear, is a supply side answer not a demand side answer and if you are going to supply into the hottest housing markets in the UK then you are going to supply into the wider Southeast of England and if you’re going to do that then the political questions immediately come to the top of the pile, not the technical and economic questions, to my mind, the political questions. If you do not have a political strategy in which you can persuade a very large number of voters to accept something that they feel is bad for themselves, then they will not do it. And there are all sorts of blockages and barriers in the system to enable them to do it, and they will use those and they have used those for decades, in order to avoid housing supply being provided in their areas. And I’m not saying that’s wrong, that was their democratic choice but if Theresa May wants to sort this problem she is going to have to sort that problem first, to my mind.
And I say that because one of the things that I found during my time as Director of the Wolfson Prize and I had to read all the 279 entries, was that there were very few that talked about the politics first. And this is no longer an economic problem, the problem is well-described and we don’t need any more papers with that charted showing how dreadful housing supply has been over the last 50 years, if I had a penny for every one of those I’d be a millionaire by now, it’s the political questions that I think need most focus. And during the Wolfson Prize the thing that struck me very firmly was the lack of a debate about those kinds of things and the lack of a debate about, I’m going to use the word, incentives; and I don’t mean by that the Boles bung, I don’t mean by that CIL or Section 106 or Planning Gain Supplement or any of the other models, I mean a wider question, a political question to do with how do you persuade people to accept development when the incentives upon them to do so are low and the costs upon them to do so are high? And these are very, very diffuse, emotional, cultural questions.
So change, what we don’t like about change. Uncertainty about the future, the future of our community, some of the points that Stuart was making just then; control or the lack of it over the destiny of their communities, a big theme in the Referendum, taking control, people feeling alienated about the political mechanisms that they have; quality, a really important theme from both Alex and Stuart, that they don’t have control over quality and they can’t secure quality and quality has been poor in the past, and crucially, the private interest, the value of my house, which the planning system is not legally allowed to take account of because it’s the private interest, not the public interest. So how do you construct a system which talks about the private interest in an intelligent and compassionate way and recognises that people do have those concerns? They also have concerns about building on the cricket field that they used to play on as a kid, nothing to do with the plan or any of the other technical things that we as planners concern ourselves with, but with some really deep-seated worries about the future and if the planning system and all of the government architecture and public policy is not able to introspect on those questions, I fear that we will get nowhere.
And I have said I think we should focus on supply rather than demand. There was a moment when demand was very important and stimulating demand was very important, 2013 was that moment and I think that the Help to Buy Mortgage Guarantee was the right thing to do at that time. I still think that it is probably going to be useful over the next 6-12 months but it’s time to turn the demand side tools into much more focussed tools to my mind. So for example long-term fixed-rate mortgages could probably do with a |Help to Buy-style guarantee around them because that’s a market that doesn’t exist in the UK and Professor David Miles argued for that a few years ago, I think very convincingly. So there might be some technical issues where we have to act on the demand side but if Mark Carney cuts interest rates tomorrow then we won’t need to worry about borrowing costs any time soon, for example.
I guess the third major point that I want to make, this is my final point, is about the providers and Alex and Stuart have both made this point already, we need to diversify our provider base but to me the word provider is not about the builder, but about the land owner. So it does not really matter who the builder is, we can procure from the volume housebuilders, we can procure from self-builders or from pre-fab-type builders or from housing associations, there is already a wide range of potential builders, but there is not a diversity of land owners and it’s that that I think is worthy of a bit of introspection. And the most interesting thing about the last 10 years is that you have started to see significant numbers of institutional land owners coming into the picture as well. So I really think it’s very interesting to watch what Legal & General are doing, for example, because they are focussing on the prospect of housing development and community development and garden cities and all the rest of it, large-scale development, as being a hedge against their pension liabilities, which are long-term, inflation linked, and if you can construct a financial model that allows you to invest in something that is of quality that will sustain over 30 years, which is their kind of timescale and which allows them to invest in a thing that they know is going to mature slowly over time, that is relatively low risk once it’s established, once all the planning risks are removed, etc., then I think there is some promise of us being able to have a different model. But that is quite a slow-moving exercise and it may be that the civil servants and the ministers should be looking at whether we can speed that one up.
Just a couple more really specific things, local authorities and the capacity of local authorities is a theme that we sometimes come back to. I think the Wolfson Prize convinced me that you need some kind of separate delivery vehicle of one sort in order to provide the necessary focus, particularly larger scale development. I’m not saying that that has to be an urban development corporation, I have some doubts about whether that is the right model at all but nevertheless that’s one option that has been used recently.
And then finally another specific, the private rented sector. As far as the financials are concerned and CBRE is quite involved in PRS, we feel that this is a growing sector, there is plenty of money out there. There is a wall of money ready to buy real estate in the UK and fund real estate development in the UK both domestically and also from overseas, unbelievable amounts of cash and the question about how we can harness that into build to rent style housing I think is a very important one. The government may not actually need to do very much in order for that to happen, except not knock it. So the risk is that the messaging about home ownership which I guarantee you Theresa May will continue with, is air cover to allow those of us in the PRS industry to get on with our jobs and build some of those kinds of developments.
Thank you Miles. Nicholas Boys Smith, put in a formula for housing acceptable for communities at the heart of your mission, from Create Streets, I just wonder whether you want to –
Nicholas Boys Smith, Director, Create Streets
Try to make that work because it’s not. Thank you. I think, putting it in a political context, I profoundly agree, indeed that was why we set up Create Streets.
I was just going to quickly ask four questions which I think respond to quite a lot of what we just talked about. What might the impact of Brexit be in the short to medium term, what’s the problem? I’m going to skate over that because I think we’ve covered that quite profoundly, I’ll just make a couple of tweaks, perhaps, on the logic we’ve heard so far. What’s the perfect urban design, which is deliberately going to that point about popularity and then finally what should the government do? I’ve come up with perhaps a couple of short to medium term suggestions within, I think, the same [23:59] carapace of logic we’ve heard so far.
I’m afraid we’re out of range, can you give me the next slide, thank you. So just quickly on Brexit and I think this has all been in the media so I’m not going to [24:09] talk about this at length. Lots of [24:09] negative things in the short to medium terms about uncertainty and lack of supply. That’s clearly true. I was having breakfast only today with a developer who is funding has been pulled for a scheme that he was doing, interestingly by a funder who had been a supporter of the Leave campaign, who backed it financially, so make of that what you will.
But I think there are some positives, I mean not just the reduced pound, I think there’s an opportunity if… The luxury market in London is clearly grotesquely over-supplied. As that comes off I think there is an opportunity to build better stuff in London with more political consent because we’re not being commercially pushed to these ludicrously super densities, which are definitely leading to a popular backlash against development in London. There’s also, I think, an opportunity… There’s a big risk in the short to medium term because so many of the actual people building, physically building houses, are EU migrants, if that gets turned off I think there’s an opportunity to have those being built by different people which might be useful for the base of the UK economy. And there is some upside, there are some regulations in Europe which are probably not quite right in the UK, Great Crested Newts is always quoted, I certainly think that’s true in the South of England, perhaps less so in the North. So there are some upsides as well as some downsides, I think, in the medium term.
You could have a debate about the long-term economic growth. What’s the problem? We’ve heard a lot on the economics, we see the problem as fundamentally political. A couple of you have seen this before. A reader poll done by MORI showed that two-thirds of people said they’d never even consider buying a newly-built home. That is self-evidently ridiculous, there’s no other part of the market economy outside of the antiques market where that would be true. And it shouldn’t be true, they’re better built, they should be better built, they should be more efficient, there should be lots of good things. A survey only from last year showed nearly two-and-a-half times as many people saying that they’d rather an old home versus a new home. This is just nuts.
I’ll jump over that in the interests of time. There we go, I’ve gone too far, let me just try and go back, can we just go back one please? Thank you.
This is just touching on some of the themes that Alex and Sir Stuart have touched on. We see it as a circle, a vicious circle spiralling out of control, and I think historically I’d put it as, if you like, the worst of the free market and the worst of socialism, as opposed to the best of both. So we’ve got a 1940s piece of legislation, very all-encompassing in its ambition, socialism, and then we’ve got necessarily in the UK, 70 years of common law and god knows how many other pieces of legislation layered on that. The consequence is (and we’re currently advancing a community right to build order) the consequence is that even when you’ve got a council very supportive of what you’re trying to do (which is our situation) the unpredictability of the planning and building system in the UK is almost infinite and I think that goes to the heart of it. There is an issue about constraints of supply clearly, it’s very profound, but actually it’s the certainty and predictability and thus the barriers to entry to the whole range of players. The reason that the big players dominate is because they can currently carry the planning risk and the planning cost of development, that’s a very hard thing for SMEs or community builders to get into because the cost of land and that planning risk and unpredictability is so profound. So just to anticipate myself a bit, I think the case we’re making in many ways next to the political point, is that we need to get to a system, I won’t say that’s simpler, but which is more predictable.
About 10 years ago I helped write the Tax Reform Commission paper for the… I think probably for the about-to-be outgoing Chancellor, and I spent the first seven months actually asking the wrong question, thinking it was about tax complexity, it was actually about tax predictability, companies can cope with complexity if you can see an easy way through it and that’s what we’re seeing, I think. And again the UK has a very strange planning system in historical, comparative terms. Quality isn’t placed an emphasis on but we need to get to a system where you can embed what is permissible, if you want to go beyond that then you go back into a more complicated system. So if I build as a developer within this carapace, a built-form, typology design, it’s pretty straight through and you link what is within that carapace, [28:15] three times now, to really clear data on what people like.
And that brings me to my next point, if this works, sorry, can I go forward one? So we in our research and again, a couple of you know this and I apologise, we ask five key questions, we’ve more focussed on three of them than the other two. Is it popular, will people like this if they see it, will they want to live in it, will it correlate with high wellbeing? I take Alex’s point that we’re not trying to solve every problem but let’s not have a planning system that leads to the opposite and we’d argue in some cases it does at the moment. Does it maximise value in the long-term; can it be built at sufficient density to help solve the housing crisis, we can’t just have mansions; and is it environmentally sustainable, which is a whole other debate in itself.
Can I have the next slide please? That’s impossible to read! However, you will all be pleased to know I’m like a good tinker. This is a summary, this book here which I have in my bag, it is available at £10; I might even give you a discount if you’re nice enough! And the good news is there’s a lot of data about where people want to live and what they like, there’s an explosion of data over the last 20 years of this, if you like, this is our summary. But where we’ve got to, I think, pulling literally hundreds of reports together, is that a place which is historically referenced, although not necessarily a straight pastiche, in fact not a straight pastiche, a finely grained network with green space interspaced without, a good mixture of terraced houses and flats in smaller blocks with very clear sense of private and very clear sense of public. And I could go on, I won’t, basically are things that correlate with far more good outcomes and better long-term investment because in the long-term where people most want to live is obviously going to be a better investment. So let’s get a planning system that doesn’t stand in the way of that, which it does at the moment.
I’m just going to jump ahead, let’s jump ahead another slide. There’s lots here I could talk about which I won’t but just at a rush… Can you go forward one slide, I think it’s one, another one, there! So in a survey with did with MORI last year, we asked people, what would you want to see near where you live? So first of all we asked would you support new building on a brownfield site near where you live? We got 73% yes. And then we said, fine, would you support building this, and the 70… Sorry, the 65% went up to 73 and 75% for [30:41] homes but down to 51 or 34 and 23% for other homes. It’s worth adding that that 23%… the lady who is head of the firm that designed that has just been put in charge of design for HS2. So design is not the only issue, infrastructure does matter but design really matters and there’s other data on this as well, I’ll just cite this one, in terms of people’s propensity to support them. We’re seeing that… there’s a lady over there shaking her head but I can guarantee in the work we’re doing with neighbourhood forums and local plans we’re seeing that almost every week at the moment. There’s a neighbourhood forum we’re working with right now, I’m wont say which one so I can be very frank, they started out I think it would fair to say, as pure NIMBYs; the point of this plan is to stop anything getting built in this part of London. We’ve just finished the process of allocating sites for them, together with another firm we’re currently drafting the design code. So now they’re comfortable, they’re saying, now we understand what the development will be and what it will look like or will feel like in this bit of London, not only do we not oppose it, we are going to positively insist upon it. So that’s a 180 degree turn.
Can I just go on two more slides, keep going, and I promise this is the last slide. Stop there. So what should we do? I think the government needs to say… There will be lots of things that need to be de-prioritised with all the work on Brexit but fixing the housing crisis is too longstanding and structural a problem for that to be one of the things that hits the cutting room floor. so that is strategically the first point. Strategically our second point would be let’s move to a more certain and more predictable planning system that is less historically and comparatively peculiar. I won’t touch on public sector house building although I think there is a case to be made for that in the current situation. And then just one non-legislative point, implement the permission in principle from the current or the recent piece of legislation in such a way that it links through to design codes and to data on what people like and the government should be doing research on that. What will people support, what will people be most inclined to support?
I could talk about future legislation but I won’t talk about that because I’ve gone on for far too long. Thank you.
Thank you, there will be a chance in the questions. I’m also very delighted to be able to welcome Dr Demitri Porphyrios as a last minute addition to our panel, to talk about aspects of design quality and style as well, so Dr Porphyrios you’re very welcome, we look forward to hearing what you have to say.
Dr Demitri Porphyrios, Principal, Porphyrios Associates
Thank you very much, thank you for inviting me. I will not talk about numbers, I’m very good at numbers, I was a mathematician [33:07 IA]. I’m not interested in numbers. I’m not going to talk about politics, it’s very important but I’m not really qualified to talk about that although my own forefathers said that every civilised man must be able to talk about politics. So what I would like to talk about actually is two or three major paradigms in making cities and in making housing, paradigms which have lost… We lose their origins because they go back to a [33:50 simpler time], they go back to Greece, go back to Italy and all of that. But most people actually think these are old things that we can throw away and my feeling is that it’s not.
Next please. Before that is the issue of actually talking not about numbers, I’m sorry, I’m not interested in numbers I’m interested in values, I’m not interested in cost, I’m interested in the values and by values not monetary or fiscal values but human values. So cities should be human otherwise they are unlivable. And when they’re human they encourage civility, when they encourage a sense of scale and proportion and when they are marked by a sense of place. Ultimately cities are livable when they are conducive to good life for everybody.
Next please. Now civility, we don’t hear that word today because it’s out of fashion. I’m not sure it is out of fashion or I’m not sure it should be out of fashion. Civility in architecture and cities is very similar to civility in human relations. Civility refers here in my mind to the moderation of the individual ego and the balance between the individual good and that of the collective community. If you take that sentence that civility refers to the balance between the individual good and the collective community I’m sure that my colleagues will agree that what most of them have actually been speaking about is about that.
Now why I don’t give prescriptions is because prescriptions are for doctors. I am a doctor but not a medical doctor, but it is really for doctors, doctors actually find the symptoms and they want to solve that. That would be good, I don’t think life is so easy, it takes ages to solve something, you get a build-up. And so if we are moving now and live in a situation, in a period which is rather sort of dark, although today is rather better, it’s not because of value, of cost and lack of this or lack of that, it’s because we are not, as humans, able to understand what is happening in the world around.
Next please. I will refer to three types and as far as I am concerned you can be the best architect and by the way I’m an architect, I’m a master planner, I’m an urban designer, as I said before I’m a mathematician and I’m a teacher and out of all of those I value much more the teaching aspects of my life. The courtyard house. You can actually look at this which is in Olynthus about 200BC or you can look at other similar projects which are, to take a very good example, China, the other way round. Now with Olynthus, what we have here is the principles not only of architecture, not only of life, but the principles of private and public. You can see the courtyard house defines a cell within which is private life and around which civil, civic life and public life unfolds. And that unfolding already, those people 3,000 years ago, they’ve actually sorted out how that life should unfold. You can see the individual courtyard house, you can see the block, you can see the street, you can see the service in the centre and you can see how these are not old, these are actually things that we build today also.
Next please. Similarly and I’m not going to go into that, you have the Chinese, Beijing courtyard house.
All the rest of the presentation slides are all blank –
Sir Stuart Lipton
Demitri, you’ve been hacked!
We’ll have to carry on.
Dr Demitri Porphyrios
Thank you very much but I think the next model which is very important for us here, it is really the terraced housing and then the model after that is how we densify the terraced housing, how we densify the terraces which exist all around here. And we’re in a very good position in Great Britain to actually talk about a new model for housing and a new model for urbanisation.
Thank you. I’m grateful to all the panellists here for moderating your egos and limiting yourselves all the seven minutes, so thank you for the exemplary display of civic virtues. Over to the floor now for a further display of civic virtues and moderation, no question too outrageous, you just have to give your name and organisation.
Do I see anyone, first taker, the gentleman at the front. We’ve got a microphone for you. Name and organisation.
Abdul Choudhury, Royal Institute of Chartered Surveyors
Thank you very much for the talks, there have been very interesting points raised. My question is regards to quality of design that essentially comes with a cost. Now given the price of housing and the lack of affordability how do we negotiate those two issues, so delivering quality homes but at the same time as –
Sir Stuart Lipton
Sir, the RICS should know better than that: it’s nothing to do with cost, it’s about care. A brick is a brick, nothing wrong with a brick, it’s cheaper than a piece of stone. It’s about good design. I’m really surprised the RICS doesn’t know about value.
There is an element to which high land prices squeeze out good design so obviously as developers become more and more land speculators because of the value of their property is…the value of the house is basic planning permission, actually housing is one of the only things in the world, because of the way it works, that as the price goes up the quality on average, not at the top of the market, will go down as shown by the truly horrendous, plastic-clad crap that’s been put up on London as prices spiralled out of control, but basically all that matters is getting planning permission, therefore why bother spending a little bit more time to make it look a bit nicer because actually you’re going to make just as much of a margin if you don’t bother, so I do agree with the rest of the panel. And even if your point was true it would just come off the land values anyway because the way that land markets work is that you pay a price at the end to the land owner based on what it would cost to build. And we certainly can, in almost anywhere that needs to, say even if it costs an extra £5,000 to make houses nicer or actually it would probably be slightly less than that, that would just come out of the land value which would mean slightly less Section 106 social housing and slightly less money to the developer and slightly less than 20% margin for the house builder.
Nick, did you want to say anything?
Nicholas Boys Smith, Director
No, I don’t, I think the key points have been made. I think there are situations in which it can be a problem. Nearly all housing in the South of England is only a problem when people don’t understand value. Certainly based on our research anyone looking at the value of place in the medium to long-term that won’t be true, I think with very high land values and with a, in consequence necessarily a largely speculative model, yes it does matter but the problem is the land values, so why add in extra cost on the cost of build? But were you in a bigger and much better situation I think the interesting question is how then, given that we are where we are, do you unpick it? You can only unpick it by… I mean quality is a dangerous word, I talk about popularity because quality can get subverted into the fashionable which is dangerous. So I’d talk about let’s link it into clear, visual information about what people like, that has to be our proxy of quality and then insist on that and do you know what, most of the stuff will still get built.
Very quickly Miles, just to come in and then Sir Stuart.
I just wanted to make a very simple point which is that we all know that there’s an increase in land value when planning permission is granted but the question as to whether quality should be prioritised in using that value seems to me to be one for the community themselves. And I think the Wolfson Prize persuaded me that you have to get into that engagement, you have to have the conversation with local people about what they want because they are much more likely to support it a) if they’ve been asked and b) if they feel that it contributes to their own values. But it is a choice, there is only so much money in that pot and there are real, hard choices for communities to make about whether they prefer affordable housing or more infrastructure or a school or a greater built environment quality or whatever, it is not a limitless pot and the danger is in asking for too much.
Sir Stuart Lipton
But there is a possible opportunity from the past, so if we look at terraced housing Nicholas, from the past, it was essentially chassis housing. You agree the form of housing, a terrace, and that can be commoditised today to build all of the virtues of the past at an affordable cost, there is no standardisation in the present system. Every planning consent requires an individual building, so if we went back, Demitri, to some Georgian style, very good value, fitness for purpose, energy efficient, not difficult to do if we could be permitted.
Thank you. If there’s anyone wants to direct their… Sorry Alex, did you want to –
One point on that because there is standardisation amongst the big house builders, they do have a sort of… but the problem is that they’re not linked at all to what actually people want. I mean part of this is that the [44:45 IA] … I love terraced housing, I think it’s really good value, I think we have to do lots more of it in London particularly where land is scarce. On the other hand I do think moving from one set of prescriptions to another set of prescriptions will not be the way forward, so what you need to do is empower certain groups at certain times. You don’t say to local people you have the ability to say no housing at all because that’s wrong because you’d never build anything but you should say to local people you have the power to say what the housing in your area looks like and what housing do you like in your area and what would you like to see more of as long as it’s not being used in a way to just drive down the numbers, that is a good thing.
The one thing that I missed off within this is that we are all agreeing quite a lot, don’t let that fool you, the vast amounts of vested interests in this sector and the vast amounts of people who hate the idea of giving more control to local people are battling everything. Everything I did at No. 10 was for or trying to push for, was fought by 1) inertia and 2) by huge numbers of vested interests who say that they care about the housing crisis but if it means changing the system which is totally broken they would rather keep the same broken system rolling on and not solve the housing crisis. They’ll sort of cry crocodile tears but they won’t really get to the heart of what needs to be done. There is almost no institutional apparatus against the vast ranks of the big house builders who are mostly interested in protecting their model; the housing associations who are good and bad but again, they’ll do it if it suits them; the planners who are obsessed… I remember my favourite bit at No. 10 was I used to read all the planning journals and I hope my successor has carried on because it gave you a fascinating insight. There was an annual review and it said, the number one issue of course in the housing crisis is climate change –
And it literally was like, well, you would have thought the fact that home ownership is collapsing, no one can afford to have a family, but no, I learned through I think it was the [46:31] RCPI’s official journal that the number one thing is climate change. So everything that we’re all agreeing on will be fought tooth and nail and there is a very limited… Here at Policy Exchange Nicholas and various other people scattered in the private sector who intellectually fight back against all this but they are massively outgunned, massively outspent and the DCLG itself is not part of… It’s not good or bad, it’s not part of this problem but it’s not part of the solution but the institutional pushback on this is so weak compared to everything else pushing back and that is actually probably one of the things… We’ve talked a lot about politics, we have failed, those of us in the Centre Right, to create an institutional apparatus in the way that say, Michael Gove had, with the New Schools Network and various other things, we have not created a similar set of apparatus for housing and planning and therefore everything we are doing is constantly spitting into the gale and being blown back.
If I can just exercise Chairman’s privilege a moment because you rightly emphasised politics in the context of the Wolfson Prize, without it being factional, but just the importance of politics per se, is why on the basis of the incoming Prime Minister’s remarks so far you’re erring on the pessimistic side, just to pushback for a second, why would she say the things she did, for example, in recent days, to highlight the whole issue? Now there’s not a very great deal of detail there and so on but it’s something, she’s raising the expectation in a way that might be difficult for her later on if she wasn’t serious.
Well, let’s hope she is, it remains to be seen. I just think that if I was still sitting in No. 10 the advice I would be giving her is you’ve got four years, you said you won’t call a snap election, take some time to think about this. You probably do need some air cover so if you want a bit of initiative-itis (as we civil servants love to call it) there are plenty of very talented civil servants in DCLG who can deliver you a barrage of policy announcements for the Tory Party Conference which will give you time to think. But think, because the success here is to give communities the kind of housing that they want and the kind of communities that they want and the kind of economies that they want and by god they want their economies to grow. There’s always this fascinating disjunction between, when asked, ‘Do you want your local economy to be successful?’ ‘Absolutely, we do.’ ‘Do you want any housing to support that?’ ‘Absolutely not.’ So finding a way to synthesise all of that, I think, is very important.
And if I had my time again in No. 10 I think I would say, ‘No, I need to go away and get the emotional temperature of all of that and understand in forensic detail…’ Part of the point the Nick and Demitri have been making, what it is that people will accept and the fact that you haven’t even bothered to ask them turns out to be quite important. So neighbourhood planning, initially I was a sceptic, but I am now persuaded that that sort of structure although it was heavily over-legislated for, is probably the best thing and might actually be faster than some of the other more bureaucratic stuff.
Can I just ask Miles a question because there’s [49:29] –
Of course –
I’m sorry [49:32] we did the same job, one after the other. Your point about neighbourhood planning is an interesting one partly because when that was being discussed there was an attempt to just make it consultative whereas at the Policy Exchange we’re always very much like there has to be a referendum because if it isn’t a referendum this would just get lost in the waffly consultation documents that come under local plans. And it strikes me again that part of the problem is that your time because you’ll know, at No. 10 you have barely any time to think and there is not an institutional set of bodies that are pushing back on all this, all of the stuff that we’re all agreeing on, we all agree with it and then we go back to our day jobs. There is no institution or apparatus or network pushing back on this but there is a vast network pushing back the other way all with a vested interest who have no interest in changing any of this stuff.
Forgive me, that’s the house builder model –
But it’s not just that, it’s the planners, it’s… there is not an intellectual push other than us on this panel –
No, you’re quite right, let’s separate the house builders who are formulaic, so if I lived in Cirencester and along came a house builder and said, ‘I want to build 50 boxes,’ I have no doubt that I would object. If on the other hand I invited a local architect and a local builder to build a modern vernacular off Cirencester, I might agree, but there is no incentive in the system. And one other point we’re all avoiding the community feels disenfranchised from the system because CIL payments, 106, the tax is huge, they see no benefit from it at all.
Demitri, did you want to come in?
Well, it was basically these issues. The other way… the parallel way of looking at it is to look not at a prescriptive system but at a typological system. I mean history would be very, very useful and the history of each country is the best way to start. Don’t look at books, don’t consult architects, I’m an architect, don’t consult engineers, don’t consult economists, look at the tradition of that city or of that… what is called morphology. What we build today is totally different, what we build today is… anybody has dreams or rather nightmares at night and then they wake up because they have an incredible facility for drawing and they do things which are nightmarish. And we need really to focus on the typology of a certain area.
So to use a [52:12] no experts?
Well, you have to be an expert to know about typology.
<Laughs> Very good.
Can I briefly, just on that point, because he’ll talk better than I will but part of the problem is, going back to the point about institutions, planners are not interested and there’s lots of architects, modern architects, don’t want to give power to communities, they like having the power and they service it, they say they will fix the system but if that means that they will build things that they as a group of architects don’t like, they withdraw, they just try and keep on. And Nicholas had some interesting stuff, you’ve done a polling on what architects like versus what the public like and it’s often much more opposed than it should be.
Nicholas Boys Smith
I was keeping quiet because I was conscious we weren’t letting many questions in.
No, we’re going to, don’t worry. Come in on it though because it’s an important subject.
Nicholas Boys Smith
Two very quick examples, one is the one Alex referred to and there’s another one. I was at an event, actually Alex was at the same event, a few months ago which was on the launch of a popular planning tool. And I actually I will say where but perhaps don’t tweet this, I spoke to someone, an important person from Locality which is a private sector organisation, I don’t think she’s present that actually helps administer lots of very good planning for the government and I said, ‘What do you think of this, it’s tool for communities to get what they want.’ And her response was, ‘I don’t like this it will stifle innovation.’ Now that’s probably a legitimate perspective but to have an instinctive antagonism to a tool to empower communities when you’re facilitating that part of government policy is deeply perverse, I would argue, so yes, point 1).
Point 2) again a couple of you have heard me say this before and I’ll give one example but there are other data sources on this, there was a lovely piece of research done some years ago by David Halpern who now runs the Nudge Unit, the Cabinet Office behavioural insight unit, when he was asking individuals what they liked and didn’t like in faces and in buildings. He was actually researching what impact repeated exposure to images had to your perception of it. Faces was all the same, quite predictable, buildings he found two distinct groups. He was doing it on students because they’re cheap. He found there was group a) that had a favourite building, a) had a favourite building; a least favourite building was d) and e); and group b) which was the absolute opposite. And group a) was everyone and group b) was the architecture students. And I’m not making this up, it’s in page 162 of [54:23] if you distrust me, and 163, it goes across the page. And the longer people had been architecture students the more disjointed they were from the rest of the population. And we’ve done research and there’s other bits which are a bit more recent, so there is an issue there, I think. And we gave money to the [54:38] that’s the worst thing. They gave money, yet they didn’t like what we were trying to get as a government [54:45 IA] –
Sir Stuart Lipton
You force me though, just briefly, to defend architects, there are damn good architects in this country. Letting them exercise their skill is not in the planning system.
Nicholas Boys Smith
Well, it’s more that they… I think it’s –
I just want to get… because there are a lot of people, we’ve got 15 minutes left, could I ask people to do a brace of questions each time, then the panellists to answer them. The gentleman at the back, the gentleman at the front.
Paul Smee, Council of Mortgage Lenders
The first point, I think, is about long-term mortgages. I think the market can provide them, there are regulatory influences which work against them. I think one of the tasks of the new government should be to see where its housing agenda has been adversely affected by regulation in what may well seem to be totally different parts of the forest. Second quick point, what can be done to prevent the older generation from over-occupying space and remaining in properties which are too large for their current needs, can the government assist this?
The gentleman at the front, here at the very front.
Keith Boyfield, Centre for Policy Studies
How far do you think there’s scope for direct compensation to people to mitigate their objections to new building, given that this is what they do in France and the Netherlands, and it’s been quite successful?
Very good. Alex, and then we’ll go through in order.
Very quickly on direct compensation, I used to be a sort of vague believer in it. We did lots of studies that were never released. I don’t know if I’m allowed to say this?
What happened to them?
But suffice to say, I’m not going into detail, but they changed my mind, I think the money is better spent on higher quality design and other features or giving discounts to local people to buy the properties. I was convinced by what I think was reasonably empirical data done by civil servants that might… Because I used to vaguely believe in this, I no longer believe in it, I certainly think the money is better spent elsewhere.
On Paul’s point, I’m not sure, I don’t want to get into … in some ways I think long-term mortgages reminds me of the Japanese housing bubble where they started getting long… Do you mean long-term interest rates fixed or longer term than 25 years?
I just think that America’s had problems, a bubble, because I don’t think it makes a huge difference one way or the other. I’d have to talk with you privately why you think it would but I just think for me it strikes as a tangential issue. And finally when you say architects, I also think there are some good architects, I just mean that architects should be at the service of local communities not dictating to them with local council planners, that’s all I mean.
Sir Stuart Lipton
If we put the tax into a local pot and let the community have real facilities, what I call village greens, return to civic values, invest in the community, I think many people would be very happy with that. They’re not looking for the swimming pool syndrome, that’s gone, but why have we got rid of libraries, all the nice, comfortable things that have actually changed… So the library is the new technology centre, let’s go back to some civic values.
Miles, and the question about the elderly being ejected from their homes has been studiously avoided…
What can we do about those people over-occupying? Nothing, and why should we, it’s a choice they made. You could, I suppose, do something to the tax system if you were a brave politician but why would you do that? It seems to me that that is the wrong answer to the wrong question, if I may say so. The problem is not that people are enjoying the space that they have but we simply don’t have enough space who can’t afford it.
Sir Stuart Lipton
So double stamp –
In fact I would go even further, I would say it would be anti-democratic to try and do too much about that.
Sir Stuart Lipton
But Miles, double stamp duty, people who’ve had a huge amount of equity created in their home don’t value that directly. If they could sell and not pay double stamp duty, there’d be a bigger range of housing on the market and the bank of mum and dad, which is very active at the moment, would successfully finance a lot of people in their thirties who could then afford to buy.
OK, but I think that’s a slightly different question which is, is the housing tax world correctly constructed and I would agree on that point, that it absolutely isn’t and there are plenty of things that a Chancellor could do to move money around in order to change incentives.
Sir Stuart Lipton
Nicholas Boys Smith
In the interests of time, I could add but –
Demitri, anything? Thank you, I can see a gentleman there, a lady there on the side.
[59:36 IA] Associates
I agree first of all that there is a supply issue and a demand issue and I also agree that it’s not an issue where we need additional legislation, there are plenty of tools in existing legislation from design codes to neighbourhood plans, neighbourhood development orders, local development orders that can increase certainty. What I am struck by is that nobody really talked about increasing the role of the public sector in the delivery of housing and Nicholas had a bullet point. And it seems to me that moving from the house builder model to a land development model where house builders, whether they’re housing associations or volume builders, are treated as contractors and the public sector or other developers takes the land through planning, impose good design and construct infrastructure and then capture the value of that, it’s a model that has worked in the commercial sector and may work in the residential.
Thank you, the lady by the window.
Ramona, Blackstone Consulting
My question is about the private renting sector that Miles mentioned and build to rent, where would you see the advantages are in that scheme versus traditional land ownership and where would you see the community aspect that you all talked about being more fostered through that kind of scheme versus traditional ownership schemes?
Thank you, there’s a gentleman been waiting patiently there as well,
John Punter, Whitehouse Consulting
John Punter from Whitehouse Consulting. I’ve been in planning comms for about 10 years and lots of things have come and gone. One thing that’s stuck with me (and I work for a disability charity) no one here has mentioned about future proofing housing and lifetime homes and the fact that most people’s disabilities are acquired during their lives and we’re building houses which may not be suitable for them throughout their whole lives.
Thank you. Can I start again, the same order, Alex.
Legislation, I agree, I don’t think we need the mass of legislation… I think there are some bits that you probably need (over the next couple years) tweaking but I don’t think a huge thing is decent [61:45] structure, I don’t think the 1947 Act is necessary or desirable, for that matter.
On the commissioning, the government did announce it’s going to do some bits in December, sorry January was when they made the announcement, I think there’s a very interesting question around that, I think it has to be very careful. I think we’ve got a lot of crap, the fifties and sixties was a low point where we got lots of, basically state owned, state built, and it’s basically blighted… made it even more hard to build houses now because people look back at these big, concrete or innovative… And there’s always a disconnection, in my mind, between if people aren’t basically paying for something or buying something, there’s always some of them who are prepared to go, ‘It’s not my money, I don’t have to sell it to anyone so I can just do whatever the hell I like.’ So I’m not sceptical of it in principle, I just think you have to do it really carefully and really well, otherwise it can be a real problem.
The PRS, I do worry that the PRS stuff is partly a function of very low yields across asset markets in general which has made temporarily PRS work. PRS doesn’t work in the UK for… basically because land prices go up, which gets capitalised into expected prices now. So I as a speculative house builder can outbid you as a PRS person. I don’t think that’s going to go away fundamentally unless you fix the housing market, so PRS to me has always struck me as a silver bullet. Once you don’t need a silver bullet you can get PRS to work, once you fix the land market, but PRS is the way that we fix the land market, so it kind of drops out by a process like that.
[63:12 Unknown speaker]
I don’t agree with that otherwise it wouldn’t be happening.
Because of the Bank of England holding base rates so low, asset prices are being manipulated to the point where things that are not probably in the long-term going to be viable, are being temporarily viable.
And the final point on lifetime homes, this is part of the reason that going back to… I don’t think lifetime homes, I don’t think future proofing homes… I would like to remove almost all of the regulations that currently exist, I don’t always think that they are valuable. I think there should be a set percentage of homes that have to fulfil particular criteria. But this is it, everyone is prepared to talk vaguely about more housing but they’re not prepared to talk about things that don’t make sense, so, for example, having to install a toilet in every house on the ground floor is not sensible, it’s a waste… it could be used to make the house slightly nicer or pay for community infrastructure facilities. There’s stuff around lifetime homes in London that they should have lifts because lifts are necessary if you’ve got flats on different floors, this is deeply unhelpful and just adds cost to terraced housing but no one is prepared to say it because then they get attacked by particular lobbies –
You’re prepared to say it but I would like is politicians who are prepared to say, ‘I’m serious about house building, I’m going to have to do things which will be annoy some of the big house builders and will annoy some of the other lobbies…’ Like, we should make every development a walkable village, where actually some places we don’t care, some places it might be old people who just drive everywhere and that’s fine. If that’s what the local people generally want to choose, I personally think that’s not great, but I’m not going to live there and I don’t want to. And this, ‘We want this but we also want this and this,’ and we don’t want prescription but we want to prescribe this and this, has to go and there has to be a politician who is brave enough to go, ‘This is the basic structure, this is what I’m going to spend my time on, I’m going to make sure the core things work and these things are not core things and therefore I’m going to downplay them.’
Sir Stuart Lipton
I can only think of one architect in my lifetime employed by a local authority, Hampshire Schools, do you remember the name of the chap? Brilliant, he commissioned the best schools in the land but to think of any other local authority as a client, they’re just not good clients and it’s a problem. There are very few design officers left, underfunding again we haven’t talked about, we need more skills in local authorities. I just don’t think that would work.
Lifetime homes, let me support what Miles was saying and give you an example. In America they have what they call garden apartments, they’re timber-framed, four storey walk-ups, they’re very inexpensive, they’re very spacious, they have no handicap facilities and they are incredibly popular. We have no rule in our system for decent, low-cost housing and if you go into the world of lifetime only one person in ten is physically handicapped but the range is vast, mentally, all sorts of others, visually. We’d be much better off putting a pot of money per development, let’s say x pounds goes into amenities and when somebody comes along with a particular requirement, we take care of them really properly, not in this sort of half-cocked way that we do now where actually it’s lowest common denominator and they get nothing.
Can I just come back to the public sector and the land development model. I think that’s what I was trying to get at in my comments about the diversification of land owners and diversification of providers, I do think there is something in that model where you have a master promoter who is taking a long-term view and procures house building from a variety of providers, including the volumes, the housing associations, self-build, custom build and all the rest of it, so the question then becomes what is the public sector role in facilitating all of that? And I think the public sector development that Danny Alexander, I think, announced a few years ago, was an attempt to see whether the public sector could do that for itself, the MOD sites and all the rest of it, but I do think there’s something in it. It seems to me that the public sector role has got to be systemic and facilitatory and not targeted and precise and specific. The problem is that targeted and precise and specific is the most announceable kind of thing for a politician to do and the systemic stuff takes forever to do but once you’ve done it, once you’ve got all of the levers and incentives and systems well designed then you can hand that over to a competent local authority and an interested, and let’s face it they’re never not interested, local community to do the rest. And my worry is that particularly at the boundary of the land use planning system and the tax system, where I have worked for most of my civil service career, there aren’t very many people thinking about how the money and the planning work together and that is the killer and understanding how the money flows round the system and who benefits is crucial. And I don’t disagree with Alex, there are plenty of vested interests here who are determined that that money does not find its way to the community that would really need it in order for them to say yes.
Nicholas Boys Smith
I won’t touch on PRS which I think has been touched on but on the public land and the lifetime homes, given where we are, the only way in the medium term that we can dodge what I call is a land value wallet, is on public sector owned land… well, not quite but it’s the easiest one certainly and is the greatest one at scale. As Lord Adonis pointed out, as we’ve pointed out, the amount of public sector owned land is vast, it’s enormous, it’s far more than we realised until quite recently, it’s more than we realised when we started. So notwithstanding all the historical concerns and the points Miles makes, I think it’s too big an opportunity and too easy a way, particularly in London where land values have just got to such a ludicrous degree, [69:01 IA] has to be done. I wouldn’t [69:03 IA] some of the right ways to do it, but it clearly is about setting a framework linking into data and popularity, rather than becoming a fetish for certain interest groups.
On lifetime homes, I think it’s a tricky one. The Habinteg and Rowntree Foundation when they set up the lifetime home rules twenty years ago or so, completely well-intentioned, quite right that we should be building homes that are accessible to people with disabled needs or for wheelchair access, it’s right we should be doing that. It was designed, as I’m sure you know, in a suburban setting or in really rural settings as Habinteg are mainly based. One of the areas, there are a couple of others in the country where it has been implemented with the most rigour, is in London, and it just doesn’t work with a finely grade, high density model. The consequences are that when we build terraced houses (we don’t really anymore) they’re either… there’s much less of them inside you can use or they’re just wider and shallower. The light rules are also very important there. So there is… good things intermingle. It is right to want to have accessible homes, the consequences on the urban form and the type of popular, finely grained density that we can build today is very maligned, so there has to be a trade-off. Packington estate in Islington, certainly when we went round it a few months ago, six months ago now, not one of the wheelchair access homes in it was occupied by someone with a wheelchair. An 1825 terraced house will have the same gross internal area which is 5.5 metres wide, as a modern house which is 7.5 metres wide, that is a measurable impact on the density that we can build. By the way that first house I quoted which happens to be my house, has got… my own son is disabled and he’s fine. So it’s more complex, because I’ve had my head bitten off on this several times, but the figures that are used to justify lifetime homes in London are misused because it includes people who have got hearing impairments, all sorts of impairments which aren’t access control. So it’s the right thing to be doing in principle but in practice we’ve got to think about it in a more subtle way.
Did you want to say anything in response or more general…?
Sir Stuart Lipton
More general, we’ve biffed house builders, quite correctly, with what you said, very easy life. We haven’t biffed government and local government. Who has got the land that you’re talking about? Hospitals are the best land speculators in the business, every London hospital has had land sitting around for twenty years which they’re betting on additional value, local government’s got very low density sites, government, the Ministry of Defence, there’s land all over the place which isn’t being released.
Nicholas Boys Smith
I wasn’t biffing, I think the house builders basically have just responded in a very predictable, once you understand it, rational way. To be honest some of the more intelligent ones, if you can get some senior people in the house building industry privately, take them out for a drink, they’ll admit, is their model working as well, do they get that things are not working? There is sometimes a political issue around housebuilding [72:08 IA] So they do but the problem is that everyone is trapped within the current system that they work within. I don’t think they’re being… I think maybe Miles’s point about Theresa May, she has to do something about this, I think if she doesn’t lots of the anger around lots of the economic problems will be just be so great for the Tory party by 2025. I think this is one of the things that could lose them the next Election.
The Chief Executive of Barratt wrote a blog a few months ago where he, to his credit, openly and publicly admitted that they only build houses at the rate they can sell them without depressing the price and within the constraints of what he’s trying to do that’s perfectly reasonable, it’s impossible to blame them for that. But clearly that isn’t enough, we can’t solve the problem with people behaving rationally in that framework.
Last word Demitri, in response to any of the questions, just if you have anything to say?
Well, there seems to be partial agreement but basically this agreement as to who may be responsible and where should we be looking and all of that. I do believe that we should really try and introduce, not an architectural education course, but a course on homes, houses, neighbourhoods, cities, and if we do actually look and see how all the generations before us actually dealt with that subject matter, I think the solution is there, it’s in front of us. There are all these remaining buildings that we have here and in all these other countries and there are systems which exist and assistance which actually provide fantastic amenities and we just don’t look at any of those. So it may be interesting but also more important that one actually has a local course, a local educational course on these issues.
Ladies and gentlemen we’re now 20 minutes over the advertised end of the schedule and it’s a tribute to the quality of our speakers that not one person has yet left the room during the whole course of this, because normally there’s a trickle and as I say, that says much about their interventions. And remembering what Senator George Mitchell taught me in the United States senate that when you’ve got everyone still in a room before they start getting anxious to go back to their states and to their congressional districts, you should immediately call a roll call or a vote in the United States Senate. So all I ask is for you to join me and call a vote of thanks to our speakers.
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