To create housing for the many not the few, we should reform Britain’s land market

Jeremy Corbyn points at a house. Image: Getty.

Housing policy was centre stage last week when Jeremy Corbyn unveiled the Labour party’s Green Paper on social housing. With commitments to build 100,000 affordable homes a year and introduce a new definition of affordable housing, the party’s plans certainly don’t lack ambition.

These ambitious commitments are long overdue. Housing supply has not met housing need for decades with house price growth far exceeding wage growth for years. There are over a million families on the waiting list for social housing, and rough sleeping has increased by 169 per cent since 2010. The list goes on.

At the heart of the housing crisis is a set of political choices which have rarefied the concept of housing as an asset rather than a place to call home. Central to this process has been the marginalisation of the role of the state in the housing market.

Since the Second World War, we have only ever met housing need with a significant contribution from the public sector. Between 1948 and 1978, local authorities built an average of 90,000 council homes a year, but by the 1990s it was next to nothing. Housing associations have made a growing contribution – but they’ve not been able to fill the gap. Research by IPPR last year showed that 92 per cent of local authorities were failing to build the number of affordable homes their areas needed.

Concerted action is needed, and the role of the state is crucial. It should begin with much greater investment in affordable housing and the freeing of councils to build the homes their communities need. Arbitrary rules introduced by the current government prevent councils from borrowing prudently against future rental streams to build council homes: these should be scrapped as Labour recommended.

The justification for these limits is that it will add to Public Sector Net Debt (PSND) the UK’s measure of government debt. The main international measure of net debt – the General Government Gross Debt (GGGD) – excludes debts of public corporations involved in such activities. We should adopt the international standards, and free ourselves up to allow greater investment in housing – just as our global competitors do.


Investing to build more affordable homes is critical, but ensuring they are affordable in the first place is just as important. That’s why Labour’s proposal to scrap the current definition of affordable housing is vital. Under the current definition, ‘affordability’ is linked to prices, not wages. As a result, research by IPPR has found that a couple with a child on low incomes, one working full-time and the other part-time, would find many ‘affordable’ homes unaffordable. In places like London the problem is even more acute. We must return to an affordable housing measure that is linked to incomes, not market prices.

Perhaps the most crucial, and under reported, aspect of Labour’s plans was a small section on an “English Sovereign Land Trust” which will allow local authorities to buy land at cheaper prices to build affordable homes.

It is here, through intervention in the land market, that the state could have the biggest impact – not to just build more affordable homes, but to make all new homes built more affordable. The price of land has risen exorbitantly over the past few decades, and in high demand areas is the most significant cost of building a home. Yet the increases in the value of the land often has very little to do with the actions of a landowner and everything to do with the awarding of planning permission by a local council on behalf of their local community.

Under our current system we have few mechanisms to capture that value effectively for the community, with the majority of it going to the landowner or developer. Moreover, we rely on private developers and land speculators to bring this land to market, meaning they carry all the risk but also get most of the reward.

It doesn’t have to be like this. In other countries they have far more effective ways of dealing with these issues, either by using more effective property and land taxes which help capture land value increases, or through planning mechanisms which reduce the cost of land for development, or help capture the land value for the community.

Labour’s green paper yesterday was a huge stride forward in setting out substantive proposals to tackle the housing crisis. But on land reform, there is scope to be bolder and go further to ensure that affordable housing really is available ‘for the many’, rather than the preserve of the few.

Luke Murphy is associate director for the environment, housing and infrastructure at the IPPR.

 
 
 
 

It’s time to rethink how the British railway network works

Nothing doing: commuters await a long-delayed train. Image: Getty.

The recent meltdowns on Northern and Thameslink not only left many passengers besides themselves with frustration about not being able to get to work on time, if at all. It also led to a firestorm of criticism and condemnation from politicians and media alike.

With the immediate shock of that first Monday morning of the meltdown passed, there’s a now a bigger debate about whether the way that rail services are provided for cities needs some far reaching reform. But before coming to that, the first thing to say – and as we set out in our Rail Cities UK report, launched today – is that the fundamentals for urban rail remain very strong.

Here’s why. All cities want to become denser, more dynamic places which attract the best people to the growth sectors of the economy (including the ‘flat white economy’ of media, communications and information). In order to achieve this, as well as to improve air quality, cities are also reducing space for motorised traffic in favour of space for people.

It’s very difficult to see how this can be achieved without expanding rail networks and their capacity. What’s more, if housing need is to be met without creating more sprawl and traffic congestion, then again its rail that will be key – because it opens up former rail-connected brownfield industrial sites, it extends commuting range, plus housing can be built above or around new or existing rail stations and interchanges.

In some ways there’s nothing new here. From Metroland to Docklands, successful cities have always grown with their rail networks. And to be fair, there is significant investment going into urban rail at present. Northern will get a lot better (the pacers are doomed) and both Merseyside and Tyne & Wear are getting a whole new fleet of trains for their urban rail networks.

However, much (but not all) of this investment is incremental, or replacing rolling stock on its last legs. It stops short of the wider vision for the rail cities that we need.


What would that look like in practice? There comes a point when the biggest cities need more cross-city routes, because running trains in and out of edge-of-centre termini can’t cope with the numbers. That explains the push for Crossrail 2 in London, but also the need for more cross-city capacity in cities like Birmingham (on the Snow Hill route) as well as in Manchester (on the Oxford Road to Manchester Piccadilly corridor, as well as a potential new underground route).

Tram-train technology can also help – allowing the lucky commuter that benefits to get on board at their local station and get off right outside their city centre office on main street in the city centre, rather than piling out at a Victorian railway terminal on the edge of that city centre.

Tram-trains aren’t the only tech fix available. Battery packs can extend the range of existing electric trains deeper into the “look ma, no wires” hinterlands, as well as allow trams to glide through city centres without the expensive clutter of overhead wires.

More mundane but equally useful work to increase capacity through signalling, station, track and junction work offers the opportunity to move to turn-up-and-go frequency networks with greater capacity and more reliability – networks that start to emulate the best of what comparable German rail cities already enjoy. Interlocking networks of long distance, regional express, regional, S-bahn, U-bahn, trams and buses, all under common ticketing.

But in talking about Germany and common ticketing I am now getting back to where I started around the debate on whether some fundamental change is needed on how urban rail networks are provided. Obviously there is a bigger national discussion going on about whether the current structure is just too layered, with too many costly interfaces and too fractured a chain of command. And in addition another, on whether the railway should be publicly or privately owned and operated.

But it’s been heartening to see the growing recognition that – regardless of how these debates are resolved – more devolution for urban and regional services should be part of any solution. That’s not only because fully devolved services have been out-performing comparators both operationally and in passenger satisfaction; it’s because local control rather than remote control from Whitehall will mean that the dots can be joined between rail and housing, between rail and the wider re-fashioning of city centres, and between rail and local communities (for example through repurposing stations as wider hubs for local community use, enterprises and housing). It will also allow for rail and the rest of local urban public transport networks to be part of one system, rather than be just on nodding terms as is all too often the case at present.

The crisis on Northern and Thameslink has been a miserable experience for rail users, affected cities and the rail industry. If any good has come out of it, it is that it shows how important rail is to cities, and opens up a space for some bigger thinking about what kind of rail cities we will need for the future – and how best we can make that happen.

Jonathan Bray is the Director of the Urban Transport Group which represents the transport authorities for the largest city regions. You can read the group’s full report here.