Lifting the council borrowing cap won’t address the biggest housing issue cities face. It’s time for land reform

Mmmm green belt. Image: Getty.

Prime Minister Theresa May danced her way onto stage to the disco sounds of ABBA last month – but the real mood music of Conservative Party Conference was house. Ending the housing shortage is a huge domestic priority for the government, and one of the things May, Boris Johnson and Jacob Rees-Mogg all agree on is that we need to build more homes.

The key policy the Prime Minister announced during her conference speech is that the government would relax restrictions on local government borrowing to build new council homes. However, while this might increase the rate of building and especially benefit those on low incomes, it doesn’t solve the key problem in our most high-demand cities – a shortage of land in the planning system that can be developed.

Getting councils building housing for rent is sometimes considered the silver bullet that will end the housing shortage. The Local Government Association itself makes the case that “the last time this country built homes at the scale that we need now was in the 1970s when councils built more than 40 per cent of them”. The Labour Party also pledged to abolish the same restrictions back in April as part of a plan to build 1m new council houses at social rents.

And, broadly, we should expect the removal of the borrowing cap to increase the amount of building by councils. There’s a key role for the public sector to play in providing good quality rented housing for those on low incomes, which would complement the recent private sector boom for those on medium-high incomes through Build to Rent housing.

But there is no guarantee that councils will use the new freedoms to build more homes.

The new policy assumes that all councils want to build more homes. And while a few councils in cities are keen on the idea of playing a much larger role in supplying homes, many others in and around high-demand cities are not. Different places have distinct politics and views, and simply giving local government the freedom to build more houses is no guarantee they actually will. The current existence and structure of Right to Buy also discourages councils from building – yet so far it remains untouched.

Moreover, it remains unclear how much freedom councils will have to borrow under the new proposals. The government expects councils will borrow up to £1bn a year and they will have to comply with the prudential code, but beyond that details are scarce. If councils borrow a lot more or less than expected, this will jumble up the sums that underpin the policy and force a rethink.


In particular, the abolition of the borrowing cap for housing comes at a point when concern is growing in Whitehall that councils are borrowing too much to invest in commercial property to create new revenue streams rather than foucsing on land assembly. One possible result of the new policy might therefore be a tightening of restrictions around borrowing for commercial purposes, in return for greater freedom for borrowing in residential property.

Nor will the new proposals address the fact that the UK’s central housing problem is a shortage of land for development in particular cities. In fact, they may actually push up land prices across cities.

If councils take on a much larger role in housing construction and also release much more land for development, then the additional building will dampen housing costs and make their cities more affordable to their residents. But if, hypothetically, no more land was released and the shortage of land continued as before, then adding councils as another developer will only push up prices for land as a whole.

Lower housing costs for families on low incomes – coupled with no change in the amount of land released for housing – would come at the cost of increasing housing costs for the rest of the city. This might be preferable to doing nothing, but it’s just not necessary, as we could make housing in high demand cities cheaper for everyone if enough land was released for development and used efficiently.

There are a number of technical changes that could make this happen, but for the keynote at Conservative conference the announcement has to be big enough to grab headlines, while also acknowledging it will take time for any reforms to filter through to the actual market.

A missed opportunity for green belt reform

Instead, what the Prime Minister should have done and do is announce a radical overhaul of the green belt. Grading green belt land by quality would protect the best countryside, while releasing ordinary scrubland and brownfield land for “button development” of dense housing around train stations would tackle a key cause of the housing shortage.

Doing it at one fell swoop would minimise political risk in a Conservative Party which is united on the need to build more homes, compared to the ongoing nibbling at the green belt which agitates local residents and councillors.

The government needs a radical domestic agenda to win the next general election – which could be four years or four months away, given the volatile nature of British politics. Housing will inevitably one of the key debates ahead of that election – the government needs to be bold in making essential reforms if it is to seize the initiative on this issue.

Anthony Breach is an economic analyst at the Centre for Cities, on whose blog this post first appeared.

 
 
 
 

“Every twitch, breath or thought necessitates a contactless tap”: on the rise of the chain conffeeshop as public space

Mmmm caffeine. Image: Getty.

If you visit Granary Square in Kings Cross or the more recent neighbouring development, Coal Drops Yard, you will find all the makings of a public space: office-workers munching on their lunch-break sandwiches, exuberant toddlers dancing in fountains and the expected spread of tourists.

But the reality is positively Truman Show-esque. These are just a couple examples of privately owned public spaces, or “POPS”,  which – in spite of their deceptively endearing name – are insidiously changing our city’s landscape right beneath us.

The fear is that it is often difficult to know when you are in one, and what that means for your rights. But as well as those places the private sector pretends to be public space, the inverse is equally common, and somewhat less discussed. Often citizens, use clearly private amenities like they are public. And this is never more prevalent than in the case of big-chain coffeeshops.

It goes without saying that London is expensive: often it feels like every twitch, breath or thought necessitates a contactless tap. This is where Starbucks, Pret and Costa come in. Many of us find an alternative in freeloading off their services: a place to sit, free wifi when your data is low, or an easily accessible toilet when you are about in the city. It feels like a passive-aggressive middle-finger to the hole in my pocket, only made possible by the sheer size of these companies, which allows us to go about unnoticed. Like a feature on a trail map, it’s not just that they function as public spaces, but are almost universally recognised as such, peppering our cityscapes like churches or parks.

Shouldn’t these services really be provided by the council, you may cry? Well ideally, yes – but also no, as they are not under legal obligation to do so and in an era of austerity politics, what do you really expect? UK-wide, there has been a 13 per cent drop in the number of public toilets between 2010 and 2018; the London boroughs of Wandsworth and Bromley no longer offer any public conveniences.  


For the vast majority of us, though, this will be at most a nuisance, as it is not so much a matter of if but rather when we will have access to the amenities we need. Architectural historian Ian Borden has made the point that we are free citizens in so far as we shop or work. Call it urban hell or retail heaven, but the fact is that most of us do regularly both of these things, and will cope without public spaces on a day to day. But what about those people who don’t?

It is worth asking exactly what public spaces are meant to be. Supposedly they are inclusive areas that are free and accessible to all. They should be a place you want to be, when you have nowhere else to be. A space for relaxation, to build a community or even to be alone.

So, there's an issue: it's that big-chain cafes rarely meet this criterion. Their recent implementation of codes on bathroom doors is a gentle reminder that not all are welcome, only those that can pay or at least, look as if they could. Employees are then given the power to decide who can freeload and who to turn away. 

This is all too familiar, akin to the hostile architecture implemented in many of our London boroughs. From armrests on benches to spikes on windowsills, a message is sent that you are welcome, just so long as you don’t need to be there. This amounts to nothing less than social exclusion and segregation, and it is homeless people that end up caught in this crossfire.

Between the ‘POPS’ and the coffee shops, we are squeezed further by an ever-growing private sector and a public sector in decline. Gentrification is not just about flat-whites, elaborate facial hair and fixed-gear bikes: it’s also about privatisation and monopolies. Just because something swims like a duck and quacks like a duck that doesn’t mean it is a duck. The same can be said of our public spaces.