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Planning, Wealth Transfer And Environment
(A response to the Green Paper “Planning: Delivering a Fundamental Change”)
For the past four decades at least, the planning system in the UK has been responsible for massive transfers of wealth. This is directly attributable to the manipulation of the market in planning permission. In key areas especially, the value of planning permission has increased enormously so that its value far exceeds the cost of buildings (for which planning permission is required) and the land that they occupy. This affects both commercial and residential development. However, here I concentrate on the domestic market.
Currently, in many places, the market value of a house is several times the cost of new build. I currently live in York. In Barton on Humber, a pleasant place 35 miles from York, a new house costs about £70,000. In York a similar house would be three times more expensive. But the undeveloped value of the land (without planning permission) is little different so two thirds of the value of housing in York now resides in the value of the permission for the house to be there.
This is why land near York without planning permission would be valued at about £10,000 per hectare and the value of the same land with planning permission is £1,000,000 per hectare or one hundred times greater.
I, with my fellow homeowners, am a beneficiary of this system. For the past four or five years the value of my house (or rather the permission I have to maintain a house on the land in my street) has risen by a greater amount than my salary after tax. This has established an enormous future transfer of wealth to me from those that will take over this property when I leave. Much the same story is true for most of the homeowners in the UK.
I additionally have an interest in a house in York that is let. I should benefit from this by increases in the value of the “house with land and planning permission”. It is, of course, the value of the planning permission that is rising. I will benefit from this by increased rent or by selling, at the expense of people in the rented sector.
By and large, these processes represent an enormous transfer of wealth from poor to rich and from young to old.
This state of affairs has come about under a mechanism of planning that was meant to benefit the whole of the community and the most vulnerable in particular. A particular milestone in the planning system was the Town and Country Planning Act of 1948. Contemporary literature clearly shows what dreams for clean and pleasant living the architects and planners of that day had. The restrictions on uncontrolled development were meant to encourage clearly defined urban areas with open green areas surrounding them. The undeveloped “green belts” around towns and cities were to combat the smog and grime of the city.
The reality has turned out differently. Whilst there was significant improvements in air quality after the smoke control acts brought in after the smogs of the 1950s, there has more recently been a serious degradation of the quality of life in urban areas due to increases in traffic mostly caused by the motor car.
The changes that mass motorcar use has caused may be to the advantage of individuals (e.g. Shorter journey times) but are to the detriment of society as a whole (e.g. Pollution, loss of local shops, loss of public transport, loss of the street as a comfortable public space etc.). We now recognise, of course, other disadvantages of mass car transport such as climate change and asthma in children living in urban areas.
But what has this to do with Green Belts policy? Simply that urban areas are being polluted and damaged by mass car use. Green Belt policy, by restricting the growth of urban areas is thought to be containing the problem. I think this doubtful. The point is that it is the affluent who are the greatest polluters and these are just the group that is being handed vast increases in wealth at the expense of the poor who, by and large, pollute less. This is what economists call moral hazard. It is what I would simply call immoral.
I recognise that to tackle this problem head on is politically unrealistic. Those that pollute most are the affluent majority, but they simply will not admit to the scale of the problem. I wish to suggest a policy of creating of areas of low vehicle use, similar to that which I proposed in the York Inner Ring Road Inquiry of 1973. These would be areas that would have tight restrictions on the pollution they could cause (possibly measured in terms of the emerging concept of “green footprint”). This would mean that the use of private cars would be limited. But these would be areas where local shops, public transport and other facilities appropriate to areas of low vehicle use would be viable.
In 1973, I envisaged that these low vehicle use areas would be fashioned from the inner urban areas. I now recognise that this is politically unrealistic. Even at that time it was unrealistic. As Alderman Burke, a very experienced Labour councillor, pointed out, “You can’t tell a man in a terrace house he cannot have a car”. But I fall back on the alternative I presented then “This [designating inner urban low vehicle use areas], however, should not preclude the building of new housing accommodation designed for a low level of car ownership for those who preferred to spend their money on good housing rather than cars.”
This policy could be successful, particularly if the land allocated to “low green footprint” housing were many times the total demand so that the value of the planning permission was kept low. I would make a rule something like this. “If you are intending to build a settlement which has a green footprint which is one third of the national average, you can build almost anywhere you like.”
If this spoils the view of the middle class, home owning, car-driving polluter, I would happily say, “so be it”. But that is not politically realistic. It could be pointed out, however, that a low green footprint settlement has much more chance of being less obtrusive.
This would be somewhat of a departure from our plan-led system. If you can build anywhere, you don’t need a plan. But the plan led system is responsible for much of the inequity in our society. We need to completely rethink it and the way it interacts with our market economy.
The present Green Paper proposals for changing the structure of the planning process can be seen as reducing its democratic content. Frankly, this concerns me little. It is so hard to keep up with the current system. It is complicated and it is increasingly manipulated by officers so that elected officials cannot keep up. Transparency is only available to those with the skills of the private investigator and enough time to crack the case.
What matters more is the results. What we have at the moment is worsening social conditions, an increasing impact on the local and global environment and an enormous transfer of wealth from the have-nots to the haves. By allowing sufficient supply of planning permission for low green footprint developments, we not only create the possibility of market-led, good quality low-cost housing for those who choose to restrict their impact on their surroundings but we also give some mechanism for dampening down the house price scramble in adjacent areas.
Clearly a coordinated approach to public transport is required, particularly when such a policy is applied to our major conurbations. But it is to be remembered that housing and public transport have been seen, in the past, as tandem developments.
From The London Transport Museum we see
www.ltmuseum.co.uk
Uniquely, the Metropolitan Railway set up a subsidiary company, the Metropolitan Railway Country Estates Limited, which was founded in 1919 to buy land and build estates along its line. Thousands of homes were built during the 1920s and 1930s in ‘Metro-Land’, from Baker Street to Neasden, Wembley and Rickmansworth.
Geoff Beacon geoff.beacon@virgin.net
18 March 2002
20aug02a: Geoff Beacon: York NIMBYs steal from the poor and destroy the Planet
If the world were populated by York people we’d need three Earth’s
A recent report compiled by John Barratt of the Stockholm Institute for Planet York says that an average York resident has an individual green footprint of 6.91 hectares. This report gives a “fair earthshare” footprint as 2.1 hectares so if everybody on Earth lived as the residents of York, we would need three planets like Earth.
(An individual’s green footprint is the area of the Earth required to grow food, absorb waste and provide raw materials for consumption. One of the largest elements in the green footprints of the affluent world is the area of land required to absorb greenhouse gasses, particularly Carbon Dioxide from energy generated for heating and cooling buildings, transport and manufacturing products for consumption. See Pippa Langford Introduction to green footprints. (www.townplan.org))
The rich need more – the poor need less
Planet York’s brochure for the launch of this green footprint report shows that some individuals have bigger footprints than others. Some people are the sort that could fit on one planet Earth, others would require five or more planet Earths.
There is, of course, an obvious connection between affluence and consumption so, in general, the rich and affluent are the more polluting.
The Green Belt gives to the affluent and powerful
Property prices are rising in York at over one thousand million pounds a year. This value gives those, who already have their feet on the ladder, an enormous store of wealth, which sooner or later they will spend. Most of this is directly attributable to the manipulation of the market in planning permission by Green Belt policy.
The obvious backers of Green Belt policy are the NIMBYs who gain so much wealth through their houses and some pleasure in driving their cars through the Green Belt. But there are more powerful and well organised interests that benefit from the allocation of planning permission: land owners, property developers and, of course, the University.
Regulating the price. Distributing the spoils
It may not be York Council’s intention, but the slow release of planning permission regulates the price of development land more effectively than OPEC regulates the price of oil. The small amounts released keep the value of the NIMBYs’ assets rising. This strategy also bestows enormous benefits on those organised enough to understand the system or lucky enough to be able to mask commercial development under the guise of education.
Planning and pollution
It is, of course, one of the objectives of our current planning system to regulate development in order to reduce pollution. Indeed, the Green Belt policy itself is thought of as a “green” policy. But it is clear that this is not the case because it gives wealth to people so that they can increase their consumption and so increase their pollution and green footprint.
A recent “Analysis” program on Radio 4, “Home Economics” made part of the link:
Andrew Henley, Professor of economics, Aberystwyth University said
“There is now this phenomenon of housing equity withdrawal that people, … may well be withdrawing equity to spend on other things. That may typically be to buy new consumer durables – carpets, curtains, furniture – for the next house… Some of it goes into overseas holidays and new cars.”
Martin Ellis, Group chief economist, Halifax Building Society said
“People have extracted a record amount from the housing equity and that amount is at 18 billion pounds in the first 3 months of this year. That is the highest amount ever and it’s one of the reasons why consumer spending is so buoyant at the moment.”
If anyone does know of any economist (or anyone) who has done any studies on the demographics of pollution please let us know. But the main point is, of course, obvious: House owners pollute more as their assets inflate. We fly away to our holiday in the sun. We consume more fruit and vegetables flown halfway round the world and we buy bigger cars.
Stealing from the young and the poor.
The rise in house (or planning permission) values has established an enormous transfer of wealth to householders from those that buy their houses in the future.
Additionally, with the increase of “buy to let”, property owners are now benefiting from increases in the value of the “houses with land and planning permission”. It is, of course, the value of the planning permission that is rising. The benefit is in the form of increased rental values, at the expense of people in the rented sector.
The ones that loose out are typically the young and the poor and increasingly the not-so-poor as a recent report by the Joseph Rowntree Foundation has highlighted (“Land for Housing: Current Practice and Future Options”, March 2002, James Barlow).
