Building Houses Has Never Been More Attractive

By Morgan Anthony

The government has a new plan for overcoming NIMBY opposition to new housing. By building traditionally designed homes in keeping with older property, ministers hope to drastically increase housebuilding and start solving the housing shortage in the United Kingdom.

If one were to walk along Richmond Avenue, a nondescript residential street just north of King’s Cross Railway Station in London, one would come across an especially small house sandwiched between grander and larger more traditional residences. This house, if you could even call it that at only 150 square feet and with a bed you reach by hurdling above the kitchen counter, sold for £275,000 in 2014. For people up and down the country, including students soon graduating and nervous about reaching for that first step on the housing ladder, small and extraordinarily overpriced properties are one of many poster children a housing crisis which renders social mobility an ever more distant dream.

The United Kingdom currently has a shortage of over one million homes. Despite seeing the highest numbers of new houses being built since 2007 at over 160,000, the numbers pale in comparison to the government’s target of 300,000 new homes constructed every year in order to end the dire housing shortfall. With internal migration and immigration from abroad remaining high, the deficits in housebuilding will continue to place upward pressure on house prices and further burden the increasing number of people trying to buy a home.

There are many causes for the low numbers of houses being built every year and the price of the remaining housing stock. An inefficient and slow planning systema lack of competition in the housebuilding market which lowers supply,restrictions on building due to the green belt and limited transport links to feasible commuter towns are part of a litany of issues which have led to a reduced supply of new houses, higher prices and more geographically concentrated demand.

But for one group of campaigners aiming to help resolve the housing crisis, NIMBYism is the overriding constraint on accelerated housing growth. NIMBYism (or Not in my backyardism) is a characterisation of opposition to further housing development by local residents of an area. By opposing the development of new housing in an area with rising demand for housing and restricting the supply of houses available, house prices rise as sellers can charge more and more for their scarce properties to budding homeowners. This helps raise the total value of homeowners assets (homes represent a key part of the assets which pensioners hold), helps keep access to quasi club goods (goods which people can only access by paying a fee for but then have no limitations on use of the good) such as school catchment areas and parking spaces more exclusive. NIMBY residents use their political clout in residents’ associations and local political parties at council level to stifle new housing projects, reduce land available for new housing construction and increase regulations and planning restrictions on newbuilds by voting for candidates on platforms which aim to limit this. Since older homeowners typically vote in higher proportions and most future homeowners living outside of these areas have no say in these local political decisions which deeply affect their livelihoods, it is often relatively easy to entrench these regulations which keep the supply of homes low and the prices of homes up.

However, the government has another plan for overcoming the NIMBY issue. Rather than view NIMBYism as solely a feature of classic public choice economics, where residents use their vote to stymie housebuilding in order to maintain the value of their assets, the government believes that a key part of why new housing is opposed is its aesthetic appeal, or rather lack thereof to local residents. 

The Building Better, Beautiful Commission partially led by the late philosopher Roger Scruton, which fed into the government’s housing reform paper, put building attractive homes in the traditional style of the area at the top of its priority list. A large proportion of people believe that modern housing isn’t well designed or is even built without any consideration as to how new properties will ‘blend in’ with their immediate surrounding. A disconnect, suggested by research by Mark Halpern, between the aesthetic preferences (of buildings) of architects and other members of the population help explain the low satisfaction with housing projects and some of the resistance to greater housebuilding. Part of the housing reform proposed by the government looks to drastically shift this by introducing greater local consent in the design standards of housing through local design codes set up by local councils with the input of their residents which aim to ‘respect character’ and keep newer builds more aesthetically in line with older properties. By overcoming local inertia and resistance, the government hope councils will be able to hasten the rate at which new homes are built.

Whether the reforms will work is another matter. It is not obvious how central design is to the opposition towards new housing. Even if many people have a distaste for the style of many new buildings, their financial interests in maintaining high house prices may remain paramount. Thus, it could be the case that this change leads to only a minimal rise in houses built. Furthermore, the policy may be vulnerable to regulatory capture and political influence in the setting of the design codes. Either local resident groups with a strong preference for a particular style of property may mobilise in local politics, or housebuilders or architectural firms may lobby for their own preferences in design codes in exchange for a promise of further development. This may lead to limited change to design practices or enforced changes which fail to satisfy a large proportion of local residents and thus fail to gain local consent for accelerated housebuilding.

Despite the limitations of these reforms to planning and housebuilding, the plans to get more houses built in a style in keeping with older properties and with the consent of local residents represents a new type of thinking in regard to helping get more land available for housebuilding. Along with suburban densification and street votes and a litany of others, new ideas will be a necessary constant in the struggle to overcome the housing crisis in the United Kingdom. Perhaps building more beautiful will see us building more.

The views expressed in this article are the author’s own, and may not reflect the opinions of the St Andrews Economist.

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