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Labour’s housing promise must invoke the spirit of 1945

Close up of Let Us Face the Future - 1945 Labour Manifesto

Recent statements by both Keir Starmer and Lisa Nandy about the need for more housebuilding, especially more council housing, together with a commitment to offer new protections for those in rented accommodation is, on the face of it, encouraging  news.  However, we await with interest the detail on Labour’s housing plans, notably how a future Labour government intend to reform the planning regime, which Labour says is necessary to facilitate its future housing programme. 

The next Labour government will inherit a housing crisis of mammoth proportions. The number of households living in inadequate and temporary accommodation is rising exponentially, whilst rough sleeping numbers continue to increase. Thirteen years of Conservative inaction and neglect on housing, particularly the gross under-provision of affordable and social housing has left Britain facing a housing crisis comparable to that of 1945. A future Labour government must be bold on housing in both quantitative and qualitative terms. A major housebuilding programme will not only provide the much-needed homes for families and individuals, it will also contribute significantly to Labour’s plans to grow the economy.  

The parallels with 1945 are substantial. The post-war Attlee government was not only bequeathed a housing crisis, it inherited an economy in almost total meltdown. Indeed, in 1945 the economist John Maynard Keynes described Britain’s economic plight as a ‘financial Dunkirk.’ Despite this, the 1945-1951 Labour government built over 1.2 million new homes including more than one million council houses. Nonetheless, the housing record of the post-war Labour government is not without its critics, with some housing specialists and historians describing it as both an underachievement and a welfare state failure. In my essay published in Labour History Review (April 2022) Labour History Review Volume 87 (2022), Issue 1 – Society for the Study of Labour History (sslh.org.uk) I challenge this notion and argue that Labour’s post-war housing record, if assessed on the basis of both the quantity and the quality of the houses constructed, in addition to the political ideology that underpinned the housing programme, far from being one of underachievement and failure, was one of radical and progressive achievement. 

The housing promise, contained in Labour’s manifesto for the 1945 general election, Let Us Face the Future, was bigger on rhetoric than it was on specifics. However, an analysis of the relevant documents of the period, reveals that Labour’s housing ethos was based on four broadly defined policy areas: quantitative performance; affordability; qualitative performance; and planning and control of land use. As we have seen, when Labour left office in October 1951, it had presided over the construction of more than 1.2 million new permanent dwellings. In addition, a further 490,000 units of accommodation of various types had also been provided, including more than 157,000 temporary prefabricated bungalows.  Moreover, the Labour government, in an attempt to make council housing more affordable, introduced a generous housing subsidy that increased the money value of the Exchequer contribution from a ratio of 2:1 to 3:1 payable over 60 rather than 40 years, easing the financial burden on local councils. The subsidy was seen also as an incentive to local councils to boost quantitative output.

Although the post-war Labour government’s priority was focused mainly on housing in the public sector, it nonetheless introduced legislation to protect tenants in the private sector. Such measures included the introduction of rent control on new houses built for private let. Such houses had been exempted from rent control during the period 1919 to 1939. Tenants of furnished properties were afforded protection by the introduction of rent tribunals. In addition, rent tribunals could extend the security of a tenant’s lease on a rented property and review payments made by the tenant to the landlord in respect of accommodation, furniture, and other items. The rent tribunals were given powers to recover excess payments, by way of a reduction in rent.  The Attlee government acted robustly to afford protection to tenants renting in the private sector.

The post-war Labour government set about ensuring that housing standards, particularly in terms of space, facilities and equipment were implemented in the new permanent dwellings built by councils across the country. Crucially, the provision of high qualitative housing standards provided a vehicle by which the health and wellbeing of tenants could be enhanced. Labour took its lead from the seminal report Design of Dwellings (more commonly known as the Dudley Report), that in 1944 recommended much improved housing standards in houses built post-war by local authorities. A standard three-bedroom house built in 1948 was typically one-third larger than its 1930s equivalent. Such houses contained two toilets, which was at the time considered a great luxury. High standards were guaranteed by way of the application of tight control over housing plans by the regional offices of the Ministry of Health and by attaching conditions to the approval of housing subsidy from the national Exchequer. 

The Town and Country Planning Act 1947 was arguably one of the most radical pieces of legislation affecting housing. The passing of the 1947 Act fulfilled Labour’s manifesto commitment to implement a full programme of land planning and the pledge that housing should be dealt with in relation to good town planning, including pleasant surroundings, green spaces, and attractive layout. This more strategic approach to planning offered support to the concept of neighbourhood planning including improved housing and community standards.  The statute was ideologically radical in that it vested the control of land use in public hands.  The 1947 Act became the foundation of modern town and country planning in Britain, and together with the New Towns Act 1946 created a system of land use control and a machinery for positive town construction. The creation of new towns facilitated by the 1946 Act not only provided a further vehicle for the building of public sector housing for rent, it enabled the creation of more heterogeneous communities. In this respect planning, as a means to enhance and shape society was crucial to the success of Labour’s housing programme.

The ideology of the welfare state, epitomised in its defining features of the malleability of society, economic intervention by the state, universal provision and the health and wellbeing of citizens, were inherently present across all four major areas of Labour’s housing policy aims: quantity, quality, affordability and planning and the control of land use.  Ideologically, the post-war Labour government could and perhaps should have gone further by, for example, bringing the private rented sector under public control. Labour seriously considered such a course in 1948, but most probably rejected the proposal not on ideological grounds but on grounds of financial economy. However, Labour did legislate to make council housing ‘universally’ available for general needs by way of the Housing Act 1949. The 1949 Act was ground-breaking in that it removed the stipulation that council housing should be designated as working-class housing, a provision that had featured, in various forms, in every previous housing statute enabling the provision of housing by public authorities. 

Labour’s housing promise at the next election must invoke the spirit of 1945 by committing to a housing programme of significant proportions in terms of quantity and quality, underpinned by a progressive planning regime and a housing ideology dedicated to helping those in the greatest housing need.

Dr John Temple is a retired housing professional, specialising in community investment initiatives and tenant involvement. He served as a Labour councillor between 1981 and 2004 and was Deputy Leader of South Tyneside Council from 1997 to 2004. He received his PhD from the University of Sunderland for his assessment of Labour’s housing record, 1945 to 1951.

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Housing has a critical role in Labour’s National Care Service plans

There aren’t many more pressing issues for Labour to tackle than the social care crisis, if we get into government after the next election. 

  • Millions without access to the care they need
  • High care costs looming
  • An urgent workforce challenge, with nearly 500,000 extra staff needed by 2035 to meet the needs of the ageing population. 

The list goes on. 

Tackling the care crisis is important in its own right. People have a right to good quality care, and staff deserve good pay and conditions. But the social care crisis bleeds into other areas of life. It’s inextricably linked to challenges in the NHS, with a lack of good-quality care resulting in people spending unnecessary time in hospital. 

Labour has started to show its ambition, launching a commission on a roadmap to a National Care Service, being undertaken by the Fabian Society. The idea is to produce recommendations for the first years of a Parliament, as well as longer-term proposals for a more total transformation. 

As well as the urgent funding issues and need to tackle the workforce crisis, there is an aspect of social care reform that we can’t overlook: the need to think differently about how social care is provided. In what settings should we look after people needing care? To what extent does the traditional model of either receiving care at home, or moving into a care home, suffice for the modern era? 

It has been pleasing to see the Fabian Society’s initial principles for social care recognising this, putting preventative models which keep people healthy and independent for longer at the heart. They have also highlighted the important role of housing. 

Because, while the social care crisis impacts deeply on other areas of life like healthcare, solving the social care crisis will itself necessitate drawing on other policy areas – housing included. 

For older people, who receive about two-thirds of the social care provided in this country, good housing can make all the difference. And housing-based models of care are emerging to bridge the gap between care at home and a care home; two ends of what should be a diverse spectrum of care options. 

These include Shared Lives Plus schemes which enable people to bring someone needing extra support and care into their home, creating bonds across the generations, and Integrated Retirement Communities (sometimes called housing-with-care), giving older people the chance to rent or buy a flat in a community with onsite staff, social care, and communal facilities. 

Supply of these innovative new options is severely limited, though. Around 14,000 people currently use Shared Lives Plus, while there are only 75,000 homes within housing-with-care. Just 0.6% of over-65s currently have the opportunity to live in this kind of setting, 10 times less than countries like New Zealand, Australia and the US. 

Demographic change demands that we do better. A recent report published as part of the Mayhew Review argued 50,000 new homes for older people need to be built each year to meet the needs of the ageing population. That’s one in six of all new homes if the government meets its target of 300,000 a year. A significant proportion of these need to be homes including social care, said Professor Mayhew. 

Putting housing-based options at the core of social care reform is not just about expanding choice for older people. It’s about keeping people healthy and well for more years: GP and hospital visits go down by an average of 38% per resident, and social care costs reduce by nearly 18% for those with lower-level needs, and 26% for those with higher-level needs. 

So, what would Labour need to do to put rocket-boosters on this type of care, to really put housing at the core of a National Care Service committed to prevention? 

Yes, funding would have an important role, particularly to grow the affordable and social rent parts of the sector. Following a growth spurt in affordable extra care housing under New Labour, there is now not enough funding to build, operate, and provide care in these settings. 

But funding is not the only answer. What is really needed is a government that backs housing-with-care with a clear definition of the sector, reforms the planning system to make it easier to build, and puts in place stronger consumer protection regulation to inspire confidence. 

It’s an area that simply hasn’t received government attention of any kind – something that has been critical to success in other countries. The government’s Older People’s Housing Task Force, due to launch imminently, will be an important step. 

When Labour’s commission on social care produces its recommendations, and when the Party plans its reforms for the next Parliament, there will be many issues at the top of the social care in-tray. Finding a fair and sustainable funding settlement, and tackling the workforce crisis, are key. 

But reimagining the social care system and creating modern options fit for the modern era are equally as important. If Labour gets into government, it has the opportunity to do something truly transformative on social care – and housing has a key part to play. 

Sam Dalton works on housing and social care policy for the representative body ARCO, and is a Labour Party councillor in Southwark. 

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Wealth Inequality Starts at Home

Housing wealth inequality is a key driver in the reduction of social mobility.

Every child deserves a chance of economic success, no matter what their background. In England inheritance has become an ever-growing share of national income since the 1970s. It is these inheritances that are to blame for increasing wealth inequality between those with richer and poorer parents. We know there are substantial inequalities in the distribution of housing wealth in Britain. Often related to social class an income.

Sadly, stringent restrictions on new housing supply effectively limit the number of workers who can access the opportunities to create this wealth.

This article explores to what extent attempts to reduce housing wealth inequality can tackle these issues and help win Labour soft Tory votes?

Neighbourhood factors and wealth distribution make or break upward mobility

We know from studies in the United States that if a child moves to a wealthier neighbourhood, it increases the likelihood that the child would go to college. It also increases earnings on average by over 30% by the time they reached their mid-20s.  We do not know exactly what the causal factor is in these studies, whether it be going to better schools or engaging with families with higher socio-economic status. But what is clear is that keeping people in places where earnings and job opportunities are not as good hampers social mobility and exacerbates wealth inequality.

Living in England means parental wealth is distributed extremely unequally. One fifth of people born in the 1980s have parents with wealth ‘per-heir’ of less than £10,000. Yet a quarter of people have per-heir parental wealth of £300,000 or more, while one in ten have £530,000 or more. Education and region are strong predictors of parental wealth. Children of Londoners have parents with over twice as much wealth, on average, as those with parents living in the North East such as my own.

Land use regulation is linked to house price increases, restricts the movement of labour, and is a causal factor of rising wealth inequality

It goes without saying policies that successfully redistribute these inheritances would have large effects on inequality and social mobility for later-born generations. The OECD recognises that land use determines health, environmental, social and economic outcomes. Arguing that rising inequality in recent decades is explained by “rising land and property prices”.

Even small changes in valuations of land and property can have major consequences on the distribution of wealth.  Meanwhile we know increases in land and property prices tend to benefit older and wealthier households. This often comes at the expense of younger and poorer households.

For most of the 20th century workers moved to areas where new industry and opportunities were emerging, with farmers and the like moving from rural settings to cities. In the Great Migration of the United States some six million African-American workers left the South for factory jobs in cities like Chicago.

Yet when housing supply is highly restrictively regulated in certain areas, house prices are higher and population growth is smaller relative to the level of demand. Professor Edward Glaeser of Harvard University and Professor Joseph Gyourko of Wharton Business school make this argument. It is this tight regulation of land markets, often in a country’s most productive places, that leads labour to locate in places where wages and prices are lower.

NIMBYism and stringent restrictions on building new housing holds back the economy, harms workers, and hampers social mobility

In turn reducing a country’s overall economic output in the process. In arguably the single most influential article ever published on housing regulation, Chang-Tai Hsieh and Enrico Moretti’s “Housing Constraints and Spatial Misallocation”  determines such these restrictions that have held by the US economy by over 36% of Gross Domestic Product between 1964 and 2009.

The rise of the property-rights revolution that is “Not In My Back Yard” has reduced the construction of new homes tremendously. In particular where the economy has been strongest and most productive. This is not just an American phenomenon. In England we know the impact of supply constraints have a substantive impact on house prices. A fact we cannot choose to ignore.

The Social Mobility Commission released it’s “State of the nation 2021: Social mobility and the pandemic report” earlier this year in July 2021. It acknowledges that recent trends have shown wealthier families increasing levels of second home ownership and an apparent increase in intergenerational wealth transmission.

Its own findings highlight “as inheritance of these houses comes into play, we will see stark rises in inequalities”. The increasing sizes of inheritances received by those from wealthier backgrounds sets to limit the prospects of upward mobility for those from poorer backgrounds.

Labour needs to ask itself: does it care more about the preservation of housing wealth or the affordability of housing

As Michael Gove starts his new role as the Secretary of State for Levelling Up, Housing and Communities we must look back to his views on the matter. For example, he acknowledges in his 2013 Keith Joseph Memorial Lecture that “access to home ownership has become the preserve of those with family wealth”.  In England, with reference to superstar cities like London, we know that two-thirds of house price versus rent increases between 1997 and 2018 can be explained by labour demand shocks and supply constraints.

A strong labour market is one a full employment and where employers must compete for workers. This makes an area more desirable to potential migrants and increases one’s willingness to pay for housing in an area. If the Labour Party is to be the party for labour, it must understand its role alongside supply constraints.

This means finding ways to allow labour to go to move to where the jobs are. We currently limit the number of workers who have access to such high productivity. But this is why we must build houses there to allow more workers to create wealth of their own.

Labour voters should care more about housing affordability than protecting housing wealth

Interestingly, Labour Party voters feature as an instrument in research methods to identify planning restrictiveness. On average, voters of the Labour Party have below-average incomes and housing wealth. Thus, it is expected that we should care less about the protection of housing wealth. Instead more about the affordability of housing.

Campaigners are fighting for planning reform to make housing more affordable

Sadly, in England we have seen the housing wealth preservers successfully lobby Government into submission. This has come much to the horror of campaigners for affordable house prices. Director of Priced Out, Anya Martin, said:

“We are horrified that Government is u-turning on planning reforms.”

“Renters have faced decades of rising costs because of our failure to build enough homes, and our planning system is at the heart of this failure.”

Priced Out finds itself alongside the National Federation of Builders. Who also have cried out they won’t forgive Conservative backbenchers for derailing the planning proposals. To note, smaller builders used to deliver 40% of homes during the 1980s, but now that figure is just 12%. This is in large part blamed on the current systems barriers to entry.

While some on the left deem the reforms a “ferocious attack on democracy”, they find themselves standing shoulder to shoulder with the wealth preservation lobby of some of the most affluent areas of the country.

Maidenhead, where the house price to earnings ratio is 12.7x, see its MP Theresa May having led the Tory revolt against planning reforms. Theresa Villiers MP for Chipping Barnet, where the household income needed to buy is £140,000, railed against the alleged reduction of democratic involvement in the planning system.

Both of whom see the ability to veto new homes in their local areas as the holy grail. Sadly, ignoring the fact local plans are politically led community consulted processes in themselves.

Labour needs to think about how they can win Tory safe seats like the Isle of Wight

Other Tory backbench MPs, such as Isle of Wight’s Bob Seely, have vociferously made the case against the “planning revolutionaries”. He represents an area with one of the worst levels of child poverty in the South East. Boasting below average incomes and weak productivity.

Average disposable household income on the Isle of Wight languishes below the UK average at £18,366 (-13% lower). The constituency has 2,149 households on its social housing waiting list. You would think with such demographics it would present itself as a target Labour seat for Keir Starmer.

Yet the Isle of Wight boasts a Tory majority of over 21,000 votes. Labour, being the party of tackling wealth inequality, needs to think about how people like Bob are effectively challenged. Last time Labour ever came close to winning Bob’s seat was in 1945. The year the Attlee government put housebuilding at the heart of its agenda.

These questions come at a time where Labour recognises the need to win Tory voters. Director of Progressive Britain, Nathan Yeowell, says “Labour must be ruthless in going after soft Tory voters if it wants a swift return to national government”. Perhaps revised planning reform is Labour’s chance to show just how ruthless it can be. After all the Tories lost their majority of the council in the Isle of Wight in May this year.

Backbench Tory MPs block homes to preserve wealth off the backs of working people

The case of Bob Seely epitomizes how wealth preservers hamper housebuilding and damage equality of opportunity for his constituents. The wealth preservation lobby on the Isle of Wight are challenging the housing targets set for it by Government, with Bob Seely at the helm.

There are concerns about how the island will handle the additional 400 new homes per year. Most of which arising from the latest housing need calculation. This comes on top of the 640 calculated using the meagre standard method. Shockingly, the Isle of Wight has a price-to-earnings ratio of over 8x the average income. But this bears no relevance to the Tory preservation lobby, no doubt as they directly benefit.

Construction provides jobs, wages, and keeps income in the community. It improves the local economy as workers employed on each project have wages to pass onto other local businesses. The Isle of Wight is crying out for such opportunities. But those hell bent on preserving wealth continue to deny them the opportunity.

But the issue goes much further than the island itself. For example, the ONS states that those living in neighbouring Central Hampshire have an average annual disposal income of  £26,302 (+24.6% higher than the UK average).

For those looking across the water for opportunities from the Isle of Wight the outlook is bleak. New Forest District Council, next to the Isle of Wight, is only delivering half as many homes as it needs. In effect pricing out poor islanders who may wish to move to this more productive part of the country.

Backing meaningful planning reform means creating more opportunities for workers. Only then will wealth become redistributed more evenly.

Changes to land use regulations can form part of the biggest redistribution of wealth under a Labour government

Historically, local economic booms matched with local building booms. Prior to 1946 building was lightly regulated and housing was allowed to be built in areas of high demand. For example, there were 80,000 new build homes created in London in a single year of 1930 alone. Over 2.5x the net number of new homes delivered in 2017/18. A year that marked a decade long high, mostly by the private sector subsidised by government.

Source: https://www.london.gov.uk/sites/default/files/housing_in_london_2019.pdf

We know extensive restrictions on land use and building leads to higher house prices, rather than more homes and workers. If Labour is to be once again the party of the worker, it must deliver more homes. People used to move from poor places to richer places. However, due to restrictive land use regulations this pattern is on the decline.

We must allow the population to seek work in wealthier places. These are places where demand is strong and productivity is high. In doing so we will avoid unequal mobility and poverty traps created by a lack of new housing.

We must counter the NIMBY property-rights revolution to improve prosperity for all – and say ‘Yes In My Back Yard’

For constituencies like Bob’s to prosper, we must tackle the misallocation of labour. This means allowing workers to cross the Solent to the New Forest West and building more homes. While wealth inequality starts at home, it ends with allowing others to access creating that wealth of their own.

Thus, Labour needs to present the country with a vision for prosperity. It must do this by challenging the NIMBY property-rights revolution. One steeped in a world of draconian regulation, high prices, and ever more entrenching wealth inequality. In allowing more families to build wealth through the property owning democracy, it can create one that will become less unequal.

Labour must focus on improving opportunities for the workforce through land regulation. By redistributing wealth more fairly through building more homes in high demand areas it can achieve this. After all we know that data on wages shows big cities do bring prosperity to their wider areas.

The problem is they just aren’t generating enough of it.

By moving to “Yes In My Back Yard” (YIMBY) Labour can tackle wealth inequality and become once again the party of aspiration. Equipped with this vision it will can attract soft Tory voters, while at the same time putting labour back at the core of its policy-making.

<strong><span class="has-inline-color has-accent-color">Christopher Worrall</span></strong>
Christopher Worrall

Chris is the Editor of Red Brick blog and sits on the Labour Housing Group Executive Committee.

He currently is Chair of Poplar and Limehouse CLP, co-hosts the Priced Out podcast and is the Local Government and Housing Member Policy group lead for the Fabian Society.

He writes in a personal capacity.

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Building a Coalition for Building Homes

In a way, it was almost inevitable that I would develop an interest in gentrification and housing. After all, I am a millennial and I grew up in Zone 2/3 of Inner London. I didn’t just watch my neighbourhood change as I grew up, I watched the door to a future my parents’ generation took for granted close before my eyes. 

My parents moved to Forest Hill, South East London in the mid-80s. Even back then my parents couldn’t afford to live in Hackney or Tooting (my mum had been a big Citizen Smith fan). Growing up, South London was the butt of jokes – most of which revolved around it being poorly connected, scary or dull. But by the noughties, my area would start appearing in the aspirational columns about London’s new exciting suburbs. Housing prices rose sharply and continuously. The global housing market crash in 2008 couldn’t stop this runaway train and the last decade has seen my neighbourhood transform. 

I noticed the most rapid changes taking place after 2011, when the London Overground was delivered to the area. I was away at university over this period and as I returned each summer, there were new cafes, estate agents and pizza places to replace the launderettes, sandwich shops and second-hand electronic stores. I remember chatting to the owner of Cafe No 41 on Brockley Rise around this period. He had owned Bertie Rooster’s Fried Chicken on the same site and he said he’d noticed the area changing, so he thought he’d better change too. Smart move. 

Local NIMBYs, true to form, opposed the transformative rail connections. I remember my dad, who worked in transport, railing against the local opposition to it. He had been arguing for greater capacity for the Overground, for longer trains, and an additional station between Surrey Quays and Queen’s Road Peckham. As the Overground now sits at bursting point — a victim of its own success — he should’ve been listened to. Ironically, the Overgound has been a huge boon to their property-owning NIMBYs that opposed it.

But while I infamously remain sniffy towards NIMBYism, I do understand it. A rapidly changing neighbourhood can be discombobulating and disconcerting. As a strange teenager, I remember pleading with my friends to go to the array of cornershops in Honor Oak instead of the new Sainsbury’s Local if they were buying drinks and snacks before we had a kickabout in the park. Instinctively, I didn’t like what I saw as the homogenisation of my local mini-high street and I knew that Sainsbury’s would destroy some of those independent shops (it did) that I felt I had a relationship with. My instincts were to, in a way, keep my neighbourhood ‘static’. 

I’ve been on a journey to try and understand the phenomenon that shaped my home town when growing up and understand my own feelings around it. While at university, I wrote my dissertation on the changing Toxteth and Canning areas of Liverpool. I had grand ambitions to start a university society that would work with the local community to improve ‘Town & Gown’ relationships in the nearby area. Like most of my plans, they crumbled due to a bad attitude and lack of endeavour. The dream ended with me getting into a fight at a Residents’ Association’s ‘cheese & wine’ night and quite literally being thrown out. 

However, looking back on the experience, it gave me a good understanding of how gentrification works and was a valuable insight into a world I would later inhabit. Gentrification is an organic process and one seen in major cities around the capitalist world. The cliched but illustrative example is as follows – artists move into an area due to cheap rents and large spaces. They create an artistic community and the area becomes ‘cool’. With it being cool, it then becomes desirable. The greater appetite for the housing then pushes up rents and prices and gradually the area’s demographics shift. 

It was once thought that cities would act like a pebble falling into a pond, rippling outwards and decaying inside. Yet from the 1970s onwards the shift has been back into the centre. Some hippies and squatters now own multimillion pound property in areas of our West End. Savvy boomers profited. 

The process of gentrification can be sped by developers who see the opportunities offered by a rent-gap to maximise profits. In this, developers are simply capitalising on a saturated housing market and building where demand is. Likewise, ‘gentrifying’ businesses are responding to their new clientele not moulding customers from thin-air and wishes. Cereal cafes and posh chicken shops are a symptom of gentrification, not a cause. Today, many of the anti-gentrification activists I come across are ‘first wave’ gentrifiers themselves, similar if not a bit older than my parents.

While it is an organic process, gentrification does cause profound issues. Sharp rises in the cost-of-living create havoc for low-income families and at its starkest, drives them from their neighbourhood. As I mentioned in my last blog, social homes with secure and affordable rent is a fire-wall against gentrification. But London is increasingly being hollowed out, swathes of North & West London in zone 1 & 2 have become binary and soulless places – the very well-heeled live alongside enclaves of council homes occupying parallel lives. I worry that the evaporation of London’s Little Italy, will eventually happen to our Little Bengal and our Little Portugal.

***

My blood still curdles at a previous generation of local politicians who seemed to actively encourage the gentrification of their neighbourhoods, as a means of improving their patch. Gentrification doesn’t solve poverty, it just kicks it down the road. But for some local politicians, that once seemed enough. Angered by what I saw, I vowed to campaign against it. It signalled my first forays into local politics. 

In my last blog, I wrote about Lewisham’s Residents Charter and how we’ve come along way from this era. Like our predecessors, we know that mixed communities are positive for social cohesion and shared uplift. Likewise, we also know that many of our large post-war estates are in need of urgent renewal. However, as an administration led by a new wave of politicians, we’re committed to ensuring that any regeneration produces a net gain in social homes, expanding our gentrification fire-wall in the borough. 

Yet I do not remain hopeful for the future. Writing this, I am struck by just how long I was part of the problem and what that says for the future. I was driven into local politics by the anger that while my neighbourhood was being torn up and built back up, none of these homes were for me.

Developers, greedily lining their own pockets, were building ‘luxury flats’. Councils were failing to stand up to them and accepting schemes with pitiful amounts of affordable housing. 

It’s been through sitting planning committee as a councillor that I learnt that most of these flats weren’t ‘luxury’. The only thing luxury about them was the unaffordable price. The housing crisis has simply become so insane in London that any market-value home is deemed luxury and therefore out of reach of someone like me — a young person without assets, earning the average London wage. 

This situation has bred a culture of cynicism among an entire generation. As we discuss rents at house parties and scoff in frustration at the mere idea of saving for a deposit, we’ve grown suspicious of new housing and growth. Moreover, the council-led schemes of the past have led to a sour taste in people’s mouths. While these schemes, directly reducing social housing, could be an example of top-down gentrification — it would be wrong to view gentrification as a whole, as planted from top-down from developers.

If writing to note to my younger self, I’d be rather pithy. ‘Dear Leo, sick of chain stores and the champagne et fromages under those new flats? Let many, many, more flats just like that be built, so rents and prices round here come down and the demographics that fed those independent shops and the sandwich shop you loved so much, can remain.’ As this article highlights, the forces that drive gentrification ‘do not come from the construction of specific apartment buildings or retail complexes, no matter how many granite countertops or artisanal coffee shops they might contain.’ Increasing supply will lower prices.

***

It is only now that I see how damaging the framing of gentrification as a top-down process, thrusted-upon benign communities by developers, has been. 

As a councillor, I have been shocked by the glacial and bureaucratic process of approving new homes in the borough. Not only that, I’ve seen how small interest groups have leant on councillors to reject new homes on spurious grounds. 

But this is only the tip of the iceberg. As this Centre for Cities report highlights, our planning system operates like the old Eastern Bloc, rationing supply through a permit system. ‘In both the former Eastern Bloc and the English housebuilding market, firms must apply to planners for a permit, or a planning permission, to get the inputs they need to do business.’

We currently have a system that cannot respond to demand. Developers need to go through the process of receiving planning permission which is slow, often costly and fundamentally uncertain (planners can downsize or councillors can strike down an application, years into the process). This means ‘the amount of land that they can develop tomorrow is fundamentally unknown.’

It is this risk, inherent in our system, that means developers hoard land that has planning permission (or is likely to receive planning permission). As Centre for Cities notes, ‘this ‘hamster-like’ behaviour is rational as it means they will always have land on which those assets can be operating, even if planning permissions temporarily dry up.’ The report also notes:

‘A site that has planning permission or is suspected to have a high chance of receiving planning permission can greatly increase this price, especially near cities and large towns with successful economies and expensive housing’. To illustrative this point, in 2010, agricultural land without planning permission around Cambridge was worth roughly £18,500 per hectare. Once it received planning permission for housing, the value per hectare increased to £2.9m.

Developers must cover these high land costs, and they cannot escape them by increasing production or efficiency as the planning system rations the supply of land they require. They therefore need to pass their land costs onto consumers and sell new houses at high prices.

Developers experience a disadvantage trying to acquire land which can be lawfully developed, they enjoy the advantage of a sellers’ market when selling new properties to consumers due to slow buildout rates. This means that predominantly only big powerful developers can get hold of land which will get large-scale planning permission, and once they have hold it, they can build a slow ‘absorption rate’ keeping house prices high due.

If developers could instead just buy land and develop it without applying for a planning permission, then “planning gain” and thereby the absorption rate would both disappear. The price of land would reflect local demand and, as firms would and could only buy what they immediately needed, they would be forced to build new housing as quickly as possible to outcompete rival firms that could now do the same.

It is our system which creates the circumstances for large developers to be able to buy the rationed land for development and build slowly as they face little competition. 

But this isn’t a cry to rip-up the rule book. Local planning frameworks should remain in place and offer clear rules of what can be built and where. However, areas zoned for development should be greatly expanded. As the campaign group Priced Out argues: 

‘For the areas that are zoned for development, there should be transparent rules about what cannot be built there — which could include what the developments are used for, and rules on look and feel — with everything that does not contravene these rules allowed. Alongside this we already have extensive national building regulations, rules on the sustainability of developments, and various other regulation which is already in place.’

Priced Out Manifesto | Rules-Based Planning

However, when reaching out to colleagues to express these views and concerns, I receive immediate and blanket push-back. Those I speak to see the bureaucracy of our planning system as a bulwark against lowering standards. They instinctively reject ideas about cutting red tape and increasing competition to raise standards. Developers are the bad guys that need to reined in by councillors, rather than firms rationally gaming a broken system that we uphold. 

It has become fashionable across the political spectrum to deny that our housing crisis is linked to a lack of supply. Campaigners against new market-sale homes often point to the fact that the UK has 216,000 long-term vacant homes, which could occupy a sizeable chunk of our 280,000 homeless people, if only they were happy to be bussed to Cornwall or Cleethorpes.

However, rather than suggesting that we do not need to increase supply, our empty homes highlight our nation’s stark housing shortage. In the UK, only 0.9% of homes are long term vacant. In a healthy market, surpluses provide ‘a strategic reserve which they can use to respond to sudden changes in consumer demand.’

Compare our situation to Japan, a nation with an affordable housing market. In Japan, less than 5% of homes are socially rented (here it is around 17%). Across Japan, 5.6% of homes are long-term vacant, while Tokyo the figure is 2.5% – which is a higher share of empty home than in Burnley – other most affordable city in England and the one with the most vacant housing. Suppressing vacancy rates in the UK will only make the situation worse. Instead, we need to build enough to homes to create a healthy surplus.

As I have written previously, the housing crisis cannot be tackled by local authorities building themselves. This blog succinctly nails the issue: The UK’s housing affordability crisis is too little supply, which cannot respond to prices. However, getting Labour Party colleagues and angry young millennials alike to accept that we need developments of market-rate properties on a huge scale in areas of the country where our housing shortage is most acute — will be an uphill battle. 

Steam-rolling through reforms won’t work. Instead, we need to start that process of chipping away – gradually building a coalition in support for house building. And maybe one day we can get more people to say yes-in-their-backyard to luxury flats.

<strong><span class="has-inline-color has-accent-color">Leo Gibbons-Plowright </span></strong>
Leo Gibbons-Plowright

Leo is a Labour and Co-Op Party Councillor for Forest Hill in Lewisham.

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Calling all Labour Conference-goers – support LHG contemporary resolution!

Information for all Constituency Labour Parties and delegates attending LP Conference this weekend.
The Conference Arrangements Committee met earlier today to consider the contemporary resolutions submitted by CLPs and affiliates. The CAC decided that the resolution submitted by Labour Housing Group counts as contemporary and will go forward to the Priorities Ballot on Sunday 25 September.
The Labour Housing Group is asking CLPs and their delegates to Party Conference to vote in favour of having Housing as one of the Contemporary Resolutions to be debated.  The Resolution submitted by LHG is below.  The Resolution is ‘contemporary’ because the Government’s relevant figures on the increase in levels of homelessness and unemployment and the dramatic fall in home building were not published until either August or start of September, making the issues ‘contemporary’ according to Party Conference rules.
Tackling the Housing Crisis
We note with alarm the recent sharp jump in unemployment by 80,000 to two and a half million people, the sharp fall in house building to just 23,400 homes last quarter – the 18% jump in homelessness over 12 months and the £1.3 billion pa rise in Housing Benefit payments.
Together, these figures are an indictment of a Government which is ideologically obsessed with cutting investment but is blind to its inevitable consequences –  increased homelessness and  joblessness, rising market rents, and the inability of young and middle aged households the opportunity to either buy or rent a decent home.
We ask Conference to call for an emergency programme of investment in quality new homes, which will provide employment, generate tax income, reduce homelessness and the cost of emergency accommodation, and reduce expenditure on unemployment and housing benefits.
A tax of £1bn a year from Bankers bonuses would cause little hardship to the recipients, and yet could fund around 50,000 extra new homes every year which could be available at well below market rent levels.
Given the huge increase in housing benefit going to fund private landlords, we also call for regulatory change to shift the financing of private sector landlord investment away from purchasing existing second hand homes (in competition with first time buyers), and towards investment in New Properties. This will result in an increase in quality supply, and better opportunities for younger and middle aged families to purchase a home.

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Labour's housing policy review – your chance to contribute

The recently launched Labour Party review of housing policy is issuing a ‘call for evidence’ from organisations and individuals with an interest in housing policy.
Earlier this year Labour Leader Ed Miliband MP established several Policy Reviews, including one led by Shadow Communities Secretary Caroline Flint MP which will focus on the key question: How do we meet families’ aspirations for good housing and a good home?
Written evidence is invited by Monday 27 June covering any or all of the above and any other relevant issues.  A website is being launched and submissions will need to be in a specified format and may be published: we will publish details here when they are available, and the document will also be available on the LHG website at www.labourhousing.co.uk .  This will be an important exercise and Red Brick encourages readers to consider the questions and make submissions.  We would also be pleased to receive any comments for publication on this site.
The call for evidence starts by recognising that Britain’s housing system is failing and that there is a genuine housing crisis, the effects of which go well beyond the needs of those on housing waiting lists: “Our commitment is to a decent home for all at a price within their means, supporting successful, safe and sustainable communities where people are able to lead happy, healthy lives and contribute to their local community, and ensuring that the next generation of families has access to the sort of home that best suits their needs and meets their aspirations.”
The Housing Policy Review will consider:
1 – The Changing Landscape:

  • What effect will significant demographic trends have on household formation and household type in the future?
  • What will the impact of Government’s policies on housing be and how will it vary around the country?
  • What will the housing market look like in 2015, and how significant will regional variations be?
  • How are changes in the housing market affecting people’s expectations and aspirations for housing and decisions about their lives?

2 – Places where people want to live:

  • Where do people want to live and what do people want from a home and from the community they live in? Does everyone want the same?
  • How do we create and finance the infrastructure and amenities that communities need to thrive?
  • How can housing support safe, healthy communities where people are able to work and their children can get a good education?

 3 – Housing finance:

  • How do we encourage more private and institutional investment in housing?
  • Where should public expenditure on housing be spent?
  • How do we create a housing market that contributes to economic stability and
  • How do we balance a prudent approach to mortgage lending with a mortgage market that enables people to buy their own home?

 4 – Housing supply: 

  • What are the causes of undersupply in the housing market and why have levels of house-building fallen to such low levels?
  • What lessons can we learn from our approach in government and from what worked in the past or overseas?
  • How do we support the construction industry to build more homes? And in an environmentally sustainable way?
  • What role can converting empty residential or commercial units play in creating more homes and how can we increase supply amongst existing housing stock?

 5 – Home ownership:

  • Why do people want to own their own home?
  • Are there aspects of home ownership that could be replicated in other types of tenure?
  • What is preventing people from buying their own home?
  • How do we make home ownership more affordable and accessible for first-time buyers?

 6 – Social Housing:

  • What is the role of social housing providers? Who should live in social housing and how should it be allocated?
  • Why do people want to live in social housing and are there aspects of social housing that could be replicated in other types of tenure?
  • What should the relationship be between social housing and the private rented sector and home ownership?
  • How do we ensure that all social homes are decent?

 7 – Private rented sector:

  • Why do people live in the private rented sector?
  • What do people want from a home in the private rented sector?
  • How do we tackle bad landlords? Does the private rented sector need better regulation?

 8 – Planning:

  • How do we increase land supply for housing?
  • How do we make better use of previously developed land and vacant dwellings?
  • How do we overcome local opposition to proposed developments and get communities to champion new homes?
  • How do we ensure that those outside the housing market aren’t excluded from decisions about development?

 9 – Housing design and quality:

  • How do we encourage the best design in new builds?
  • Are homes in Britain fit for purpose and how do we improve the quality of housing?
  • How do we set the standard for energy efficiency in new builds and improve energy efficiency in existing stock, especially private stock?
  • What would a ‘green homes standard’ look like?