Nudging the nimbys

The minister introduces a ‘powerful new incentive’ for local communities to approve new homes. Sound familiar?

I am of course not talking about planning minister Nick Boles and his scheme to give local communities a share of the community infrastructure levy but former housing minister Grant Shapps and the new homes bonus.

As quickly became clear, this wasn’t a bonus and it didn’t have much to do with new homes either. It was more a mechanism for creating winners and losers (affluent areas and deprived ones). In the year before the first payments were made, there were a miserable 113,000 housing starts in England. In the year after, there were 105,000.

So what’s the difference between the Shapps Sweeteners and the Boles Bungs? The planning minister could quite reasonably point out that his cash will get closer to local communities because it will go to parish and town councils whereas the bonus goes to local authorities. In theory at least that should cut out the middle man and make the bribe more persuasive.

Boles also knows his stuff. If you haven’t yet seen it, Wednesday’s Newsnight is worth watching for his demolition job on Simon Jenkins, the newspaper columnist and National Trust chairman. [Edit July 2014: Lots of people have been clicking on the link above that’s now out of date: watch the confrontation again here after the package at the start]

He completely nailed Smug Simon’s claim that all the homes we need can be generated by brownfield land, refurbishing empty homes and squeezing housebuilder landbanks.

A claim by Jenkins that section 106 agreements and CIL drive up land prices provoked this withering response: ‘That’s also not true. If Simon spent a little bit of time looking at economic theory he’d realize that the community infrastructure levy or the 106 agreement drives down the price that the developer pays the landowner.’

And Boles added for good measure that ’Simon I know has at least two homes because I’ve been to two of them.’

Little wonder then that Boles enjoys such goodwill in the housing world. In practice though, what will the real impact of his wheeze be? The DCLG press release says that parish and town councils in areas with neighbourhood plans will get 25 per cent of CIL revenues arising from the development they accept while those without a plan will get a capped 15 per cent share. According to Allegra Stratton of Newsnight, average neighbourhoods could see a payout of £200,000 to £300,000.

I suspect that this may tip the balance in some poorer areas but it seems most unlikely to persuade hardcore nimbys. The prospect of a new roof for the local school may not count for much against the fall in their house prices and the presence of ‘undesirables’ in their town or village. And if the bribe won’t make much difference, and the money goes to schemes that would have got permission anyway, is it actually a waste of money that could be put to better use (for example, for affordable homes)?

Boles must know all this and getting anything at all past Eric Pickles and George Osborne is still an impressive achievement. However, the scheme raises some deeper questions for me too.

First, there’s the nature of localism. Why should we have to bribe the well-housed at all? The badly housed and non-housed have not had chance to be part of the communities who will be making decisions critical to their futures. That’s why we have local government and a planning system so that decisions on housing can be taken in the interests of everyone. Devolving more power to the local level is fine in theory but it may also make it harder to win approval for new homes and make the ones we do build more expensive still.

In December Policy Exchange, the think tank founded by Boles and where he was speaking this morning, published research showing that the switch from regional planning targets to localism caused local authorities to reduce their housing plans by 272,720 homes across England. The biggest reductions came in the South East and South West, where homes are most desperately needed. But it appeared to see the solution as yet more localism.

Second, and more fundamentally, there’s the question of land. As Boles told Newsnight, agricultural land worth £10,000 an acre is worth £2 million an acre or more with planning permission for housing. Under our current system we are happy for landowners to make that huge windfall gain and recover a bit of it through stipulations on affordable housing and community infrastructure.

Policy Exchange sees the answer as freedom from the ‘socialist’ planning system for new garden cities built by private companies on land compulsorily purchased at up to three times its agricultural value. They could just as easily be planned communities built by not-for-profit groups with serviced plots sold to developers and housing associations and self-builders. The point is to confront the question of land.

Boles is making all the right noises about tackling the housing crisis (a transcript of his speech is here) and has already provoked hostile coverage in the Mail and Telegraph for his pains. He set out some of his ideas on new towns in a speech to the TCPA in November.

Taking the next step will require something much more radical – and much more politically difficult – than nudging the nimbys.

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5 Comments on “Nudging the nimbys”

  1. John Perry says:

    Jules

    I agree entirely and would add a further question, relating to Boles threat to planning authorities if they fail to allocate ‘sufficient’ land for housing for the next five years. Who will judge what amount is sufficent? Supposing an authority in the south-west (say) decides ten houses is sufficient? The government no longer has a mechanism for saying that the correct number isn’t ten it’s (say) 1,000 homes. In other words, they are going to make ‘top down’ decisions, but without having any mechanism for saying how their professed target to build enough homes to keep up with household formation (232,000 per year) translates into a need to build a certain number at regional or local levels.

    A simply analogy: if Sainsbury wanted to sell one million more tins of baked beans, wouldn’t they set a target level of sales per store, so that if a manager said ‘ok I’ll have ten more’ they could reply ‘no you’ll have a thousand’?

    John

  2. julesbirch says:

    Thanks John – good point. To continue the analogy, if you put all your effort into carrots rather than sticks, don’t be surprised if you have loads of them left on the shelves…

  3. Great piece Jules – of course s106 conditions or the CIL should reduce the price that developers pay for the land but this is only slowly seeping through to the landowners themselves who have not all clicked that is is they who are being expected to pick up the tab for the cost of affordable housing delivery of all tenures – an increased tab it is too with all but no central government subsidy going in to the equation anywhere any more!

    As for the New Homes Bonus – well I wonder how many local authorities actually use this money towards the costs of housing provision/delivery – it is not ring fenced of course just like so many other ‘one-offs’ are not either – homelessness prevention grant springs to mind – ? Wouldn’t mind having a bet that most if not all falls quietly into the capital pot to fund all services – understandable in these cash strapped times but not what it was intended for and not what the government razzmatazz would lead the public to believe?

    • julesbirch says:

      Thanks for the comment Carmel. Think you’re right on new homes bonus in general (also the way it’s designed sends money from north to south and funds things that would have happened anyway) but it may still have a value for empty homes. I know that in my local authority at least the prospect of cash at the end of the year has made it take the issue much more seriously.

  4. yorksranter says:

    Jules, I’d like you to read this blog post and comment on it. It is a proposal to prevent the coming crisis in London housing. http://www.harrowell.org.uk/blog/2012/12/03/tyr-rewind-slip-inside-this-house-and-fuel-the-fire/


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