In the context of big cities, an individual home here or flat there doesn’t amount to much. Collectively, however, residential is the most valuable real estate in the country. More importantly, it touches every one of us in some way.
Housing matters. In the living organisms that are our towns and cities, transport routes are arteries, employment centres are hearts. Utilities are the spines off which all activities hang. But the flesh, made up of individual cells, is housing.
That may sound a bit too abstract, but stay with me, I have a point.
Quite simply, none of these elements exist independently, and all are self-reinforcing. Delivering more housing is not about a few more schemes, or even about the 250,000 homes pa the country needs. We are not thinking correctly about the way that delivery is meeting the future needs of our cities. Pushing the narrow path towards more and more housing is liable to make our cities fatter, not fitter.
The race to ratchet up construction rates is right, but how much of this housing is considered in the context of the future health of the city? More specifically, are we delivering housing that addresses not just population growth, but the needs of its users?
Good housing delivery is actually about jobs as much as it is about homes. Take the current government drive for home ownership. Yes, most people aspire to own their home and it is an easy political argument to create policies that support this desire. Help to Buy, Right to Buy and starter homes are all vote-winners, but they are not the best solutions for the health of our towns and cities.
Balanced and mixed communities are an embedded ambition of planning policy. Why? Because having a range of occupiers makes our settlements interesting and, in economic terms, provides the necessary resilience that ensures employment across the full range of services and manufacturing are covered. Rented tenures also create flexibility in the system, allowing for a more flexible labour market.
In short, protecting affordable and flexible housing types protects employment; all elements work together and are reinforcing. Moreover, this is also a better reflection of reality, with 52% of London households in some form of rented accommodation.
In this context it seems a little odd, to say the least, that Build to Rent and its “wall of new capital” do not receive more overt policy support. Big demand, with big value to city economies, at little or no cost to the state; what’s not to like?
Permitted development rights is another area that needs attention. Much like Help to Buy, PDR was helpful in pulling housing delivery out of the doldrums, notably on smaller sites where most of the 60,000 potential current PDR-derived housing units will be delivered.
However, its potential overuse in some areas could severely restrict the availability of secondary and tertiary office space. By removing most of the oversight provision from local planning authorities, we are allowing uses to cede in the short-term to the highest bidder, with long-term impacts on the urban fabric. A change of use to residential is a semi-permanent decision.
Residential is infrastructure. It underpins and reinforces the viability of commercial uses, which in turn provides reciprocal value to residential.
However, in policy terms, it is not simply that “more is better”, particularly when “more” is cannibalising the value we should be placing on uses being complementary. Our towns and cities are more than just the sum of their parts.
In London, the voices concerned about growing business costs are getting louder. In the global race, this is not about potential displacement to the UK’s regions, it could be about displacement of employment elsewhere altogether.
Getting this right requires policies that look to the horizon and beyond. Real estate needs stability from government and a recognition that decisions taken based on today’s fashion will have a legacy that reaches many decades into the future.
It is helpful that property receives a disproportionate share of political attention, but not where the resulting decision-making focuses more on the political, rather than the property, cycle.
The health of our towns and cities requires a lot more of the latter.
Adam Challis is head of residential research at JLL
