Brooklyn Re-development Deathmatch August 19, 2006
Posted by Brickonomist in America, Design, Planning, Regeneration.add a comment
Over at Environmental and Urban Economics, Matthew E. Kahn links to a New York magazine article describing the controversy over the proposed ‘Atlantic Yards‘ development in Brooklyn. While the scale of the proposed development is vast, the politics are not so dissimilar to arguments over countless much smaller schemes. For example, the article author Chris Smith notes how the development’s promoter “manages to use the phrase “affordable housing” five times in two minutes. Not once does he mention the 4,610 market-rate (unaffordable?) apartments and condos to be built”. And the concerns are about massing, blocked views, “intersections choked with traffic [and] More kids than the local schools can possibly handle”.
Matthew seems a little sceptical about the concerns being expressed:
This looks like a classic case of public choice and heterogeneity. People will disagree over whether this project is good or bad. Mancur Olson would say that a small cohesive pressure group that loses the most from doing the project (i.e white upper middle class hipsters who already live in the community) have the greatest incentive to lobby against it. It will be interesting if the “silent majority” can launch a counter-attack. This Ratner looks quite well politically connected .
The last point is important, because a small cohesive group that has the most to win from doing the project can be very persuasive too while being no more representative of the greater good. In my view, there will always be enormous disagreements over a development like this, because once it’s built there will be no going back for decades at least, and if it goes wrong it could spoil a huge swathe of Brooklyn. The temptation is always to avoid the risk by saying no, but done well a large-scale redevelopment of this kind can transform a whole city for the better. All of which is a long-winded way of saying that it comes down to whether the details are right. And from first glance I’m not sure they are: why must the proposed buildings be so massively out of scale with their surroundings? Why does a development involving several thousand luxury flats and vast office space require over a billion dollars in public subsidy? And what makes the Ratner proposal better than this one? Both may have their qualities, but only one (if that) will be built.
Signs of the home-owner’s apocalypse, number 17: Planning Delivery Grant August 10, 2006
Posted by Brickonomist in Media, NIMBYs, Planning.add a comment
Here’s a wonderfully hysterical story from Monday’s Telegraph about how
The Government intends to reward councils with cash if they give planning permission for hundreds of thousands of new homes to be built in attractive parts of England where property prices are high.
(Funny how the Telegraph only cares about areas with high house prices, isn’t it?)
Let’s see how many things they managed to mislead their readers about in a single story, shall we?
No environmental conditions are placed on the scheme
There doesn’t need to be. The housing targets are set as a result of a regional planning process which takes great account of environmental impacts.
There is no apparent ceiling on the money that councils could make if they exceed the targets for new homes set by Ruth Kelly, the Communities and Local Government Secretary.
Well, the total pot of money available for the Planning Delivery Grant in 2007/08 will be only £120m, equivalent to a whopping 0.6% of the total Council Tax take. Currently ‘Housing Delivery Grant’ accounts for only 20% of that (see page 4 here), with the remainder rewarding perceived good performance in adminstering planning decisions and policy-making. In a separate consultation paper, the government seems keen to tilt the balance more in favour of incentivising housing delivery, but there is no indication that the total pot available is going to increase.
Councils not reaching a threshold would be starved of cash.
If you call not receiving a very small bonus on top of a huge income from council tax, business rates, etc being ’starved’, yes. If not, then that’s just nonsense.
Government figures show that five million new homes are needed in England over 20 years, 1.5 million of them because of record levels of immigration.
Now, as it happens, I think the proposed Housing and Planning Delivery Grant is a pretty crude and bureacratic way to incentivise housing supply at the local level. But I also think it’s too insignificant to make much of a difference. Of course it was not in the interests of Charles Clover or the Telegraph’s editors to inform their readers of the amount of money involved, since that would have got in the way of their primary objective of stirring up paranoid visions of class warfare.
Definitively dense August 6, 2006
Posted by Brickonomist in Overcrowding, Planning.add a comment
The problem with handing down national planning policy is that fortunes can turn on the smallest difference in phrasing. Example: when the government says it wants to see higher housing densities, it defines ‘density’ in terms of dwellings per hectare (see its draft policy statement, PPS3). Reasonable enough, you might say, but the chronic lack of family-sized housing in higher density areas is forcing a rethink in some quarters, as described in this article reprinted from the RIBA Journal:
The definition of density and how it is measured is important, because interpretations can lead to wildly varying design approaches. The government’s preferred method of calculating density is dwellings per hectare, which works fine when considering uniform house types, but not if you are trying to encourage a variety of unit sizes. The latter produces a far lower average density than a mass of one-bedroom apartments. Alternative methods of calculation are beds per hectare, or habitable rooms per hectare.
Link-dump: energy efficiency, regeneration, densities, buy-to-let and more August 1, 2006
Posted by Brickonomist in Housebuilding, Housing economics, Housing investment, Housing markets, Housing need, Linkage, London, Planning, Regeneration.add a comment
Apologies for the light posting of late, which was due to more work demands and some very pleasant weekends away. There’s a lot to catch up on so here’s a quick link-dump – I’ll try to come back to one or two of these items in more detail later.
- The Sustainable Development Commission has published ‘Stock take: delivering improvements in existing housing‘, which details “the technical options available for minimising the energy and water consumed and waste produced by residents of the existing housing stock”. The big question for me is what can be done to improve the efficiency of privately owned homes, with a particular question mark over privately rented housing, which the report rightly identifies as suffering from a ’split incentive’ problem – the tenant doesn’t have the incentive to invest in upgrading the home when she’s not going to be living there long, and the landlord doesn’t have the incentive to do so because she doesn’t pay the bills. Personally I think the landlord should pay some of the bill, but then I would say that because I’m a tenant. See also “Reducing the Carbon Impact of Private Rented Housing“
- England’s Housing Timebomb, from the National Housing Federation, features a prediction from Oxford Economic Forecasting that “the average house price in England will increase by around 50% by 2011, from just under GBP195,000 at the beginning of 2006 to GBP286,000, equivalent to 9.2 times the projected average salary for 2011″. The study concludes that housing associations should therefore be building or refurbishing 80,000 affordable homes each year instead of the current 40,000, which would obviously require much more funding from the state. They might well be right, but this one might get filed under “They would say that, wouldn’t they?”.
- The Town and Country Planning Association has published a commentary by Julie Cowans with the ungainly title of “Cities and regions of sustainable communities – New strategies”, but the potentially radical message that traditional approaches to addressing poverty (focusing on the “worst” estates first) should be abandoned in favour of proactive policies aimed at creating mixed income communities, i.e. enticing middle-income households into poor areas and trying to capture the resulting increases in land or property values. This has already excited some comment in the housing blogosphere (such as it is): Hannah is sceptical, Kevin pretty enthusiastic. I think Cowans may be drawing on the findings of this work, which I’ve started reading but have yet to finish. Anyway, hope to say more on this in due course.
- According to CB Richard Ellis, there has been an extraordinary increase in the density of new residential developments in London, no less than a quadrupling (in terms of habitable rooms per hectare) in just four years. They seem to mostly put this down to policy changes, but surely the huge rise in land costs (which obviously isn’t entirely unrelated to policy) is the main driver? Interesting quote: “We found schemes within regeneration and other special policy areas are frequently gaining planning permission for greater density than is recommended in the London Plan”.
- Labour-run London boroughs are building a lot more affordable housing than their Conservative counterparts, according to Inside Housing: “The 11 Tory authorities in power before the election were due to deliver just 18 per cent of grant funded homes in the capital.” Word on the grapevine is that some incoming Tory administrations have effectively vetoed large numbers of affordable housing developments that were going through the planning stage. Certainly, I don’t expect Hammersmith & Fulham council will be delivering 65% affordable housing in the next few years, as it has in the past.
- And finally, the Financial Times celebrates ten years of buy-to-let in the UK
Superstar hamlets? July 19, 2006
Posted by Brickonomist in Design, Environment, Housebuilding, Housing inequality, Housing markets, NIMBYs, Planning, Rural housing.add a comment
In an earlier post, I wondered whether London might one day turn into the kind of ‘Superstar City’ researchers have identified in the US. But according to today’s Guardian, it looks more like the Superstar syndrome (high income households taking over areas that are unique, desirable and feature little or no new construction) is happening in many parts of the English countryside:
It may be an over-simplification to argue that a form of social apartheid grips rural England, with traditional country dwellers confined either to the remaining council houses or the tied cottages of the big estates, rarely in contact with their neighbours – the superannuated, and rich. But the divisions are apparent.
A good place to start is the roof of England. Drive on the country’s highest road, where the lush North Pennines briefly meets a more barren landscape, and the pressures and conflicts of the countryside are soon evident. Down the winding Hartside pass, old farmhouses and buildings – which once supported hundreds of agricultural workers – have become the preserve of a new rural elite. At the bottom of the pass, and over the Eden valley on the edge of the Lake District, Kit Scott-Harden, aged 59, has farmed 300 acres on a tenancy most of his working life. With his income around £45,000 annually – 60% met by subsidy from the EU’s common agricultural policy – he’ll be lucky to break even this year.
Most farmers are now in their mid to late 60s. The industry is rapidly contracting. Farmers’ sons often leave the land. The result: empty properties. As upland farmers, and the few remaining agricultural workers struggle to make ends meet, wealthy incomers splash out hundreds of thousands for small cottages – and, sometimes, close to £1m for larger properties. Over two years ago a two-bed cottage in the hamlet next to the Scott-Harden farm went for £280,000 to an investor. “Terrifying price,” he says. “And it would be worth much more now.”
There’s usually plenty of space to build in these areas – the main obstacles are NIMBY attitudes, an over-protective planning system and inadequate funding for new social housing in rural districts.
Lord [Ewen] Cameron, a cross-bencher in the Lords and former chairman of the government’s Countryside Agency, can see what is happening from his farm in south Somerset. He is alarmed by the rigidity of a planning system blocking affordable housing initiatives. This has led to “serious demographic mismatch in the countryside”. Why, he wonders, do the authorities approve plans to convert buildings into holiday cottages, yet refuse plans for low-cost homes? He would like to see redundant farm buildings re-classified as “brownfield land” so that they can benefit from urban-style grants and incentives. “Why can’t we build, say, 50% for straight purchase and the rest for renting? That would benefit people all round.”
But, as things stand, Mark Shucksmith, a professor at Newcastle upon Tyne University, a government adviser and expert on rural housing and planning, says the countryside is becoming too skewed in favour of one class. “While people have a clear aspiration to live in the countryside, it is becoming much more exclusive,” he laments. “You have to ask that if only people with higher incomes can afford the move, how this chimes with the [government's] agenda of choice that is rooted in the context of social justice.”
As I said, NIMBYism is a big reason for resistance to new housing developments in rural areas, but it’s hard to disentangle pure selfishness from the quite justified perception of much new housing supply as ugly, sprawling and car-centric. This takes us back to the vexed questions of design quality and planning and funding new public transport, which I hope to look at in more detail in the near future.
Superstar cities July 19, 2006
Posted by Brickonomist in America, Housing economics, Housing inequality, Housing markets, NIMBYs, Planning.add a comment
According to Joseph Gyourko, Christopher Mayer and Todd Sinai, ‘Superstar Cities’ arise when high income households are sorted (or sort themselves) into areas that are (a) desirable, (b) unique and (c) feature low rates of housing construction. Their very restrictiveness makes them desirable, and perhaps their desirability makes them more restrictive. A similar dynamic certainly appears to be happening in some parts of the UK, but will it ever go so far as to make London, for example, the exclusive domain of the rich?
Here’s the abstract from NBER (the full paper is here):
Differences in house price and income growth rates between 1950 and 2000 across metropolitan areas have led to an ever-widening gap in housing values and incomes between the typical and highest-priced locations. We show that the growing spatial skewness in house prices and incomes are related and can be explained, at least in part, by inelastic supply of land in some attractive locations combined with an increasing number of high-income households nationally. Scarce land leads to a bidding-up of land prices and a sorting of high-income families relatively more into those desirable, unique, low housing construction markets, which we label “superstar cities.” Continued growth in the number of high-income families in the U.S. provides support for ever-larger differences in house prices across inelastically supplied locations and income-based spatial sorting. Our empirical work confirms a number of equilibrium relationships implied by the superstar cities framework and shows that it occurs both at the metropolitan area level and at the sub-MSA level, controlling for MSA characteristics.
Public attitudes to housing development July 13, 2006
Posted by Brickonomist in Housebuilding, NIMBYs, Planning.add a comment
In her interim report into the planning system, published last week, Kate Barker included the following table.
It’s interesting data, but importantly it’s also a bit incomplete. The figures here give the impression that people are much more opposed to social rented than to private housing (net support of -10 versus +28), but if you go to the original data (Q15 here) you can see that it is really flats that people are opposed to, with private flats getting the same net opposition as social rented ones. It’s not immediately obvious why this should be, but there are plausible possibilities – is it because flats tend to be more high-density, or because they’re often poorly designed in this country, or because they’re associated with unsociable or anti-social inhabitents, or because they mean more households per hectare and therefore more perceived strain on local services and amenities?
There are a few other interesting findings from that survey (called the ‘Saint Index’), such as high public support for getting more money or in-kind benefits out of developers through planning obligations and very strong support for case-by-case assessment of those obligations instead of using the fixed tariff approach apparently favoured by the government.
Housing and hatred in Barking and Dagenham July 8, 2006
Posted by Brickonomist in Housing need, Local government, London, Planning.add a comment
Here’s another article focusing on the housing crisis as a key factor behind the recent electoral success of the racist British National Party in Barking and Dagenham. It suggests that the ease with which the BNP whipped up resentment over asylum seekers and other ‘outsiders’ apparently jumping the queue (sometimes, it was claimed, with the help of cash grants from neighbouring boroughs) for social housing is a bit of a puzzle, as there are only a handful of asylum seekers accommodated in the council’s housing stock. Charles Fairbrass, Labour leader of the council, suggests people are attributing shifts in the housing market to council policy:
There is a growing black middle class in London and many of them want to get on the property ladder. Because we have some of the cheapest housing in London, they choose to buy here. And when they buy ex-local authority property, people often assume that those properties are still local authority and they’ve been allowed to jump the queue.
I wonder if the movement of homeless households around London has something to do with it too. After all, according to the numbers in Figure 3.6 here, fully one third of the ‘privately rented’ housing in Barking and Dagenham is actually inhabited by homeless households who are being put up in rented accommodation while they wait (often years) for a permanent home. Many if not most of these households will be non-white, and many have probably been placed in Barking & Dagenham by other councils. This could well be perceived by locals as an influx of ethnic minorities into the borough’s social housing stock.
All this benefits nobody except the BNP and the (blameless) private landlords who get to collect extra-high rents (mostly funded through Housing Benefit) from their homeless tenants. The main solution has to be to increase the supply of permanent social housing to provide a decent permanent home to all those who need it.
Valley of the one-bed flats Part 2 July 7, 2006
Posted by Brickonomist in Design, Housebuilding, Housing need, London, Planning.add a comment
I posted a while ago in disappointment at the lack of family housing being planned for the Lower Lea Valley. Now it looks like the same applies to the wider Thames Gateway. That’s according to someone who should know – Eric Sorenson, chief exec of the Thames Gateway Partnership, writing in Building magazine:
What is striking in large parts of London Thames Gateway is the predominance in development of one and two-bed flats. It is as if there has been a significant over-reaction to the increasing number of smaller households …
We know from experience in Europe that higher-density flats can and do work for families. But they have to be reasonably sized, designed to be spacious and flexible, have good sized balconies, require good performance from local management and a well maintained public realm.
What we get too often here are small flats with insufficient commitment to address families’ requirements. Local authorities are becoming increasingly firm about family housing provision in their planning policies but, if there is unbalanced emphasis on housing numbers rather than the nature of the output, we simply won’t create sustainable communities in the Gateway.
I think the same goes for London as a whole, and probably the wider South East. It’s notable that in the proposed update to his London Plan, Ken Livingstone is gung-ho about a big increase in housing numbers and densities, but pretty much devoid of any effective policy to ensure those numbers consist of the family housing London needs, according to his own Housing Requirements Study.
PGS gains more enemies June 26, 2006
Posted by Brickonomist in Housing markets, Planning.add a comment
The current government here in the UK wants to introduce a major reform to the planning system: a ‘Planning Gain Supplement‘ in the form of a (mostly) fixed-rate tax on a development’s ‘planning gain’, i.e. the increased value thought to accrue to a development at the moment it is granted planning permission.
There has been and will be much debate on whether this is a good idea or not (see here for a previous post on the subject, or here for a load of submissions to a parliamentary inquiry on the subject). But I was particularly interested to read in Planning magazine (not available online AFAIK) some comment on the current system of negotiated ‘Section 106′ agreements by Tony Crook and Steven Rowley, authors of research the government portrayed as supporting the case for PGS. They point out that since even the government envisages S106 negotiations being retained for some purposes, such as securing affordable housing on private developments, the question of what rate to set the PGS at becomes critical:
Should the PGS tax rate be less than the effective tax rate on S106 contribution, developers will have an incentive to minimise section 106 contributions to benefit from the lower PGS rate. But if the PGS rate is set higher than the effective section 106 rate, developers may be encouraged to contribute more affordable homes than at present.
They conclude:
Our provisional view is that the risks of introducing an optional charge [another mooted alternative to section 106] and a PGS are high and that current section 106 policy can be made to work better.
It’s actually quite hard to find anyone outside of the government itself who thinks that PGS would be a really good idea. Any time previous Labour governments have tried to do something similar, it has been swiftly abolished by the next Conservative regime. Maybe this time around they could save us all the bother by just not trying it in the first place?
