Could zoning help the UK build its way out of a housing crisis?

More of this please. Image: Christopher Furlong/Getty Images

Since 1979, some British governments have favoured more intervention in the economy, some less – but all of them have broadly supported both free markets and mass home ownership. The latest report from the Centre for Cities, then, makes a claim that might come as a surprise. It asserts that the British housing market, in its arbitrary approach to building permits and in the way it guarantees shortages, bears resemblance to the Soviet economies of the Eastern Bloc. 

The report, by analyst Anthony Breach, argues that Britain’s inability to build enough homes to meet demand results not from bad decisions by developers or councils, but from the entire institutional structure of the planning system. It calls for fundamental reform – turning away from the current discretionary approach, and instead embracing a form of zoning that's less restrictive than common models seen in the US. It also suggests reconsidering the green belt with a system that brings land into development based on population growth; and swapping the current system of developer contributions with a flat levy of 20% on all developments.

Breach’s paper draws on the work of Hungarian economist János Kornai, whose 1980 article "Economics of Shortage" argued that shortages in Eastern Europe under Soviet rule resulted not from human error but from systemic flaws. It notes two parallels between these economies and the UK housing market. One is the discretionary rationing of inputs. In both cases, you need to apply for a permit just to get started; in both cases, this can be arbitrarily refused. This introduces an element of uncertainty you can’t simply buy your way out of.

The second parallel is, Breach argues, the direct result of this: systemic and long-term shortages. Normal supply issues in market economies, like the undersupply of toilet paper that, upsettingly, hit British supermarkets in early 2020, are short term and quickly corrected (prices rise and supply increases). That isn't what's happening in the UK housing market.

Other oddities of the UK housing market – land-banking, slow construction rates, the poor quality and location of new homes – “all emerge from the planning system’s unpredictable rationing of new development”, Breach argues. “These institutional constraints force developers to undersupply new homes at high prices.”

The report proposes a number of ideas to address this, and remove uncertainty and rationing from the system. One is to end the green belt, which prevents development of land around many cities no matter how high demand gets, and instead bring land into development based on actual population growth.

Another is to scrap Section 106 agreements, under which developers contribute affordable housing or community facilities as part of their planning agreement. Such agreements were intended as a way for councils to recoup increases in land values (so-called planning gain) and pour it back into things that’ll benefit communities. But developers spend time and money on gaming the system and arguing their contributions down, which in turn creates uncertainty. The Centre for Cities’s report calls for this to end, in favour of a flat 20% levy on development value. 

The big one, though, is making it much clearer how to get planning permission. At present, every proposal has to pass council planning officers and committees of councillors, giving the public the opportunity to object to each development. One in ten permissions is refused, the report notes; “there is also an unknown number of applications which are never made, as firms suspect they will not succeed”.

To replace that, the report calls for the whole edifice to be knocked down and replaced with a simplified system of zoning. National governments would produce a “new flexible zoning code”, which councils would use when drawing up their local plans. The public would be consulted on those plans, but not on every individual development. Proposals which met the specifications laid out in the plans would then be granted permission automatically. Suddenly the system has more certainty.

Would this work? One quarrel, raised by several people in a Twitter thread in which Breach answered questions about his ideas, is that building our way out of housing crisis is a very long term solution. Maybe it’d help, eventually. But it does nothing to tackle homelessness or reduce the urgent need for subsidised housing in expensive cities – at least, not any time soon.

A second issue is that many of the most expensive cities in the world, like New York and San Francisco, already rely on zoning. Surely the Boston housing market doesn’t also look like the Eastern Bloc? Breach’s report acknowledges this (“their zoning codes are often highly restrictive, with each zone corresponding to a single possible use, or imposing tight limits on density”) and argues the new zones must be kept simple if they’re to work. Nonetheless, this does suggest that zoning is not a magic bullet.

But the biggest issue, as ever, remains politics: The planning system looks like it does in part because many people want it to. For all the social and economic damage it’s done, support for restrictions on development remains very high – NIMBYism among politicians reflects NIMBYism among the voters. What’s more, even if we could produce enough homes tomorrow, the British economy has been dependent on rising house prices for so long that it’s not clear what the effects of unwinding it would be.  

To some, communism sounded nice in theory, but turned out to be horrible in reality. The same may be true of planning reform.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.


Coming soon: CityMetric will relaunch as City Monitor, a new publication dedicated to the future of cities

Coming soon!

Later this month, CityMetric will be relaunching with an entirely new look and identity, as well as an expanded editorial mission. We’ll become City Monitor, a name that reflects both a ramping up of our ambitions as well as our membership in a network of like-minded publications coming soon from New Statesman Media Group. We can’t wait to share the new website with you, but in the meantime, here’s what CityMetric readers should know about what to expect from this exciting transition.  

Regular CityMetric readers may have already noticed a few changes around here since the spring. CityMetric’s beloved founding editor, Jonn Elledge, has moved on to some new adventures, and a new team has formed to take the site into the future. It’s led by yours truly – I’m Sommer Mathis, the editor-in-chief of City Monitor. Hello!

My background includes having served as the founding editor of CityLab, editor-in-chief of Atlas Obscura, and editor-in-chief of DCist, a local news publication in the District of Columbia. I’ve been reporting on and writing about cities in one way or another for the past 15 years. To me, there is no more important story in the world right now than how cities are changing and adapting to an increasingly challenging global landscape. The majority of the world’s population lives in cities, and if we’re ever going to be able to tackle the most pressing issues currently facing our planet – the climate emergency, rising inequality, the Covid-19 pandemic ­­­– cities are going to have to lead the way.

That’s why City Monitor is going to be a global publication dedicated to the future of cities everywhere – not just in the UK (nor for that matter just in the US, where I live). Our mission will be to help our readers, many of whom are in leadership positions around the globe, navigate how cities are changing and discover what’s next in the world of urban policy. We’ll do that through original reporting, expert opinion and most crucially, a data-driven approach that emphasises evidence and rigorous analysis. We want to arm local decision-makers and those they work in concert with – whether that’s elected officials, bureaucratic leaders, policy advocates, neighbourhood activists, academics and researchers, entrepreneurs, or plain-old engaged citizens – with real insights and potential answers to tough problems. Subjects we’ll cover include transportation, infrastructure, housing, urban design, public safety, the environment, the economy, and much more.

The City Monitor team is made up of some of the most experienced urban policy journalists in the world. Our managing editor is Adam Sneed, also a CityLab alum where he served as a senior associate editor. Before that he was a technology reporter at Politico. Allison Arieff is City Monitor’s senior editor. She was previously editorial director of the urban planning and policy think tank SPUR, as well as a contributing columnist for The New York Times. Staff writer Jake Blumgart most recently covered development, housing, and politics for WHYY, the local public radio station in Philadelphia. And our data reporter is Alexandra Kanik, whose previous roles include data reporting for Louisville Public Media in Kentucky and PublicSource in Pittsburgh, Pennsylvania.

Our team will continue to grow in the coming weeks, and we’ll also be collaborating closely with our editorial colleagues across New Statesman Media Group. In fact, we’re launching a whole network of new publications this fall, covering topics such as the clean energy transition, foreign direct investment, technology, banks and more. Many of these sectors will frequently overlap with our cities coverage, and a key part of our plan is make the most of the expertise that all of these newsrooms combined will bring to bear on our journalism.

City Monitor will go live later this month. In the meantime, please visit to sign up for our forthcoming email newsletter.

As for CityMetric, some of its archives have already been moved over to the new website, and the rest will follow not long after. If you’re looking for a favourite piece from CityMetric’s past, for a time you’ll still be able to find it here, but before long the whole archive will move over to City Monitor.

On behalf of the City Monitor team, I’m thrilled to invite you to come along for the ride at our forthcoming digs. You can already follow City Monitor on LinkedIn, and on Twitter, sign up or keep following our existing account, which will switch over to our new name shortly. If you’re interested in learning more about the potential for a commercial partnership with City Monitor, please get in touch with our director of partnerships, Joe Maughan.

I want to thank and congratulate Jonn Elledge on a brilliant run. Everything we do from here on out will be building on the legacy of his work, and the community that he built here at CityMetric. Cheers, Jonn!

In the meantime, stay tuned, and thank you from all of us for being a loyal CityMetric reader. We couldn’t have done any of this without you.

Sommer Mathis is editor-in-chief of City Monitor.