How can compact cities keep house prices under control?

Southwark (left): surprisingly un-dense. Image: Getty.

Islington is the most densely populated are in the United Kingdom – yet wandering around the quiet streets of the north London borough, it is difficult to appreciate just how many people live there. Handsome terraces, elegant squares and a plethora of parks disguise the fact that there are nearly 14,000 people per km2.

By comparison, anyone passing through Southwark, on the other side of the Thames, is immediately aware of the crowds of people who live and work in the area. New glass towers loom over the major roads, while older council housing squat heavily on the back streets. Cars crawl through the famously congested roundabout and the air is heavy with pollution.

Yet Southwark has fewer than 10,000 residents per km2. This means it is significantly less dense than many of its more desirable northern neighbours: Kensington and Chelsea, Hackney, Camden, Tower Hamlets and, of course, Islington.

Measuring the benefits of urban density

Increasing the number of people living and working in an area can generate huge benefits for a city. Productivity rises as people spend less time and money travelling, and can share knowledge and ideas more freely. Businesses can reduce their production costs when they have access to a greater choice of specialised suppliers and workers. And it’s cheaper to provide services such as health care, waste collection and buses when more people can use them.

For the first time, researchers have estimated the monetary value of these benefits to urban residents. Their findings have just been published in the first working paper from the Coalition for Urban Transitions, a network of over twenty organisations committed to enhancing the economic, social and environmental performance of cities.

Drawing on more than 300 academic papers, Demystifying Compact Urban Growth: Evidence from 300 Studies Across the World demonstrates that increasing population density generates significant economic returns. The authors find that a 10 per cent increase in the number of people living and working in an area enhances productivity by approximately £54 per person per year. Better access to jobs is worth another £48, while improved access to services and amenities is valued at £38. Increased population density is also associated with better environmental outcomes, including preservation of green space and greater energy efficiency.

All other things being equal, this suggests that compact cities like Hong Kong, New York and Paris are likely to be richer and more sustainable than sprawling cities such as Houston or Melbourne.

Managing the risks of urban density

A more compact city is not a silver bullet: there are also risks associated with increasing population density. Careful urban planning is required to mitigate these risks, and deliver the potential economic and environmental benefits.

First, a 10 per cent increase in the number of people living and working in an area can lead to more congestion, with an estimated cost of £27 per person a year. Significant investment in public transport, cycling lanes and pedestrian walkways is essential to ensure that people can move around the city without cars.

Second, this increase in density increases housing costs by £186 per person per year. Such growth in house prices might benefit people who own their own homes or rent out property – but it will be a challenge for renters. As low-income households are more likely to rent, there is a risk that compact city policies will exacerbate inequality within cities.

Governments can avoid an increase in housing costs through policies to increase housing supply. A steady flow of new homes coming on to the market can have a downward effect on housing prices, which may outweigh the upward effect caused by increasing population density.


Lessons from London

In the 19th century, the city of London undertook a series of extraordinarily ambitious urban infrastructure projects that continue to shape the city. The world’s first underground railway was opened in 1863; today, the London Underground carries an average five million passengers per day.

In the 1860s, a vast network of sewers and drains were constructed to serve the three million people living in London. These pipes ended the waves of dysentery, typhoid and cholera that devastated the city, and continue to be used by over 8m Londoners. These far-sighted investments enabled people to live and work in close proximity to each other, helping to sustain London’s population and economic growth for over a century.

A walk through London today suggests that the city is now struggling to manage population density. Despite Crossrail, the proliferation of cycling lanes and iconic red buses on every street, many people continue to depend on cars. As a result, London has the worst air pollution in Western Europe. A normal day’s exposure is equivalent to smoking 15 cigarettes.

The problems extend from transport to housing. House prices in Islington have doubled in the last decade, a period when real wages have stagnated. The soaring property prices are the favourite topic of struggling renters or prospective buyers. The city needs to build over 50,000 homes a year to keep up with population growth, while redressing decades of neglect in the existing housing stock.  The failures of London’s housing policy were made all too clear with shocking fire that devastated Grenfell Tower and the lives of its residents.

Thousands of people move to London every year for the economic and social opportunities associated with this extraordinary city. Its dynamism is due in no small part to its high population density. However, the city’s strained transport system and spiralling house prices underscore the importance of strategic government intervention to manage the risks of crowding so many people into such a small area. Large-scale investment in public transport and housing are essential to ensure that compact cities are also liveable and affordable.

Sarah Colenbrander is a researcher with the International Institute for Environment and Development (IIED) and senior economist with the Coalition for Urban Transitions. The working paper, Demystifying Compact Urban Growth: Evidence from 300 Studies Across the World, was prepared for the Coalition for Urban Transitions by the Organisation for Economic Cooperation and Development (OECD).

 
 
 
 

Was the decline in Liverpool’s historic population really that unusual?

A view of Liverpool from Birkenhead. Image: Getty.

It is often reported that Liverpool’s population halved after the 1930s. But is this true? Or is it a myth?

Often, it’s simply assumed that it’s true. The end. Indeed, proud Londoner Lord Adonis – a leading proponent of the Liverpool-bypassing High Speed 2 railway, current chair of the National Infrastructure Commission, and generally a very influential person – stood on the stairs in Liverpool Town Hall in 2011 and said:

“The population of Liverpool has nearly halved in the last 50 years.”

This raises two questions. Firstly, did the population of the City of Liverpool really nearly halve in the 50 year period to 2011? That’s easy to check using this University of Portsmouth website – so I did just that (even though I knew he was wrong anyway). In 2011, the population of the City of Liverpool was 466,415. Fifty years earlier, in 1961, it was 737,637, which equates to a 37 per cent drop. Oops!

In fact, the City of Liverpool’s peak population was recorded in the 1931 Census as 846,302. Its lowest subsequent figure was recorded in the 2001 Census as 439,428 – which represents a 48 per cent decline from the peak population, over a 70 year period.

Compare this to the population figures for the similarly sized City of Manchester. Its peak population also recorded in the 1931 Census as 748,729, and its lowest subsequent figure was also recorded in the 2001 Census, as 392,830. This also represents a 48 per cent decline from the peak population, over the same 70 year period.

So, as can be seen here, Liverpool is not a special case at all. Which makes me wonder why it is often singled out or portrayed as exceptional in this regard, in the media and, indeed, by some badly briefed politicians. Even London has a similar story to tell, and it is told rather well in this recent article by a Londoner, for the Museum of London. (Editor’s note: It’s one of mine.)

This leads me onto the second question: where have all those people gone: London? The Moon? Mars?

Well, it turns out that the answer is bit boring and obvious actually: after World War 2, lots of people moved to the suburbs. You know: cars, commuter trains, slum clearance, the Blitz, all that stuff. In other words, Liverpool is just like many other places: after the war, this country experienced a depopulation bonanza.


So what form did this movement to the suburbs take, as far as Liverpool was concerned? Well, people moved and were moved to the suburbs of Greater Liverpool, in what are now the outer boroughs of the city region: Halton, Knowsley, St Helens, Sefton, Wirral. Others moved further, to Cheshire West & Chester, West Lancashire, Warrington, even nearby North Wales, as previously discussed here.

In common with many cities, indeed, Liverpool City Council actually built and owned large several ‘New Town’ council estates, to which they moved tens of thousands of people to from Liverpool’s inner districts: Winsford in Cheshire West (where comedian John Bishop grew up), Runcorn in Halton (where comedian John Bishop also grew up), Skelmersdale in West Lancashire, Kirkby in Knowsley. There is nothing unique or sinister here about Liverpool (apart from comedian John Bishop). This was common practice across the country – Indeed, it was central government policy – and resulted in about 160,000 people being ‘removed’ from the Liverpool local authority area.

Many other people also moved to the nearby suburbs of Greater Liverpool to private housing – another trend reflected across the country. It’s worth acknowledging, however, that cities across the world are subject to a level of ‘churn’ in population, whereby many people move out and many people move in, over time, too.

So how did those prominent images of derelict streets in the inner-city part of the City of Liverpool local authority area come about? For that, you have to blame the last Labour government’s over-zealous ‘Housing Market Renewal Initiative’ (HMRI) disaster – and the over enthusiastic participation of the then-Lib Dem controlled city council. On the promise of ‘free’ money from central government, the latter removed hundreds of people from their homes with a view to demolishing the Victorian terraces, and building new replacements. Many of these houses, in truth, were already fully modernised, owner-occupied houses within viable and longstanding communities, as can be seen here in Voelas Street, one of the famous Welsh Streets of Liverpool:

Voelas Street before HMRI implementation. Image: WelshStreets.co.uk.

The same picture after HMRI implementation Image: WelshStreets.co.uk. 

Nonetheless: the council bought the houses and ‘tinned them up’ ready for demolition. Then the coalition Conservative/Lib Dem government, elected in 2010, pulled the plug on the scheme. 

Fast forward to 2017 and many of the condemned houses have been renovated, in a process which is still ongoing. These are over-subscribed when they come to market, suggesting that the idea was never appropriate for Liverpool on that scale. 

At any rate, it turns out that the Liverpool metropolitan population is pretty much the same as it was at its peak in 1931 (depending where the local borough boundaries are arbitrarily drawn). It just begs the question: why are well educated and supposedly clever people misrepresenting the Liverpool metropolis, in particular, in this way so often? Surely they aren’t stupid are they?


And why are some people so determined to always isolate the City of Liverpool from its hinterland, while London is always described in terms of its whole urban area? It just confuses and undermines what would otherwise often be worthwhile comparisons and discussions. Or, to put it another way: “never, ever, compare apples with larger urban zones”.

In a recent Channel 4 documentary, for example, the well-known and respected journalist Michael Burke directly compared the forecast population growths, by 2039, of the City of Liverpool single local authority area against that of the combined 33 local authority areas of Greater London: 42,722 versus 2.187,708. I mean, what bizarre point is such an inappropriate comparison even trying to make? It is like comparing the projected growth of a normal sized-person’s head with the projected growth of the whole of an obese person, over a protracted period.

Having said all that, there is an important sensible conversation to be had as to why the populations of the Greater Liverpool metropolis and others haven’t grown as fast as maybe should have been the case, whilst, in recent times, the Greater London population has been burgeoning. But constantly pitching it as some sort of rare local apocalypse helps no one.

Dave Mail has declared himself CityMetric’s Liverpool City Region correspondent. He will be updating us on the brave new world of Liverpool City Region, mostly monthly, in ‘E-mail from Liverpool City Region’ and he is on twitter @davemail2017.