Here's how Britain's government can fulfill its promise build 1m homes by 2020

Yay! Houses! Image: Getty.

 Come May 2020 what will Theresa May’s government look back on with pride, and what will it look back on with regret?  Depending on the choices made at this early stage, housing has the potential to fall squarely into either column. At Shelter, in our 50th year, we want housing to become a source of pride for our country, not a chronic weakness.

This week, we published a new paper looking at how the government can meet its welcome commitment to build one million homes this Parliament. It will be hard, but it’s not impossible. More than anything else, it requires taking on the broken, overly-concentrated house-building market which we’ve accepted for too long without real reform, especially since the 2008 recession.

If we’re going to build one million homes this Parliament, then many of those will need to be built outside of the business model of the major developers. This should be led by new small firms, Build to Rent companies, housing associations, self-builders, public bodies and new public-private organisations such as development corporations and local housing companies.

The need for a new approach is underlined by new projections we publish today from Capital Economics. These suggest that house building will slump by 8 per cent this year, in the wake of economic uncertainty following the EU vote. This is not because Capital Economics expect the economic fallout to be terrible – they don’t. It’s because the major house-builders have a model which is vulnerable to slight changes in buyer sentiment – one which works overtime to protect their profits rather than work in the national interest. They will slow their production if prices don’t match what they expected when they bought their sites.

The big developers compete to buy land. Whichever firm offers the worst deal for consumers – in terms of the size, quality and affordability of homes – is the one able to pay the most for a site. That model is unlike almost any other consumer market, where firms compete to drive up quality and drive down prices for buyers. New homes just get smaller and more expensive.

The major developers are in no rush to expand their building levels above their historic level of around 150,000 homes per year: “over-building” could risk their margins. Currently, there’s no-one ready to fill the gap to get us to the 1m homes target.

Historic data and Capital Economics’ forecasts. Image: Shelter.

The blame doesn’t just lie with a broken building model, though. Policymakers have failed to respond to market cycles for too long as well.

Our paper sets out in detail how two successive governments failed to take advantage of the slump in land values after 2008. This fall in values could have been used to break up the big house-builder monopolies within the land market, and bring in new players. Instead, huge fiscal support was provided to the major developers – we estimate £32bn in the 2010-15 Parliament alone – propping them up and further concentrating the market into a few hands.

Government policy should focus on getting land, finance and planning certainty to new alternative homebuilders – rather than launching ever more subsidies at the big developers, propping up a broken system.

In particular we recommend:

  • A Help to Build package for small and medium sized developers focused on access to development finance and public land;
  • The government directly commissioning housebuilding by SME firms, both for sale onto housing associations but also for direct sale into the market;
  • Promoting land market transparency, to make it easier for smaller house-building firms to find and access suitable plots;
  • Giving local communities the powers to force land-owners to use their sites for new homes where there is an identified local need, and to drive down the land price to allow better quality, more affordable homes.

Along with these market reforms must come sustained investment in affordable homes and infrastructure. We therefore agree with Stephen Crabb and Sajid Javid that a “Growing Britain Fund” should be created to use the government’s historically low borrowing costs to invest in homes and infrastructure.

For some short-term government debt, yields have even been negative: the market is willing to pay the government to hold its money. Imagine if a bank offered to pay a business to invest in improved machinery that it needs – it wouldn’t hesitate. Neither should the government at this time.

With the right package of policies, it will absolutely be possible to build one million new homes this Parliament and make a sizeable dent in our housing shortage. If the government manages it, then we’ll join them in 2020 in being proud of that vital part of their record.

Pete Jefferys is a policy advisor at Shelter. This post was first published on charity’s blog. 

Want more of this stuff? Follow CityMetric on Twitter or Facebook


America's cities can't police their way out of this crisis

Police deployed tear gas during anti-racism demonstrations in Los Angeles over the weekend. (Mario Tama/Getty Images)

As protesters took to the streets across the United States over the weekend to express their anger at police killings of unarmed black Americans, it was hard to miss the hypocrisy coming from local authorities – including the otherwise progressive, left-leaning officials who are in power in most major American cities. 

Many US mayors and their police chiefs had issued public statements over the past week that seemed – only briefly, as it turned out – to signal a meaningful shift in the extent to which the Black Lives Matters movement is being taken seriously by those who are in a position to enact reforms. 

The sheer depravity of the most recent high-profile killing had left little room for equivocation. George Floyd, 46, died last Monday under the knee of white Minneapolis police officer Derek Chauvin, while three additional officers helped to hold Floyd down, doing nothing to aid him as he begged for them to stop and eventually lost consciousness. The officers had been attempting to arrest Floyd on suspicion of having used a counterfeit $20 bill at a deli. All four have since been fired, and Chauvin was arrested Friday on charges of third-degree murder and second-degree manslaughter. 

“The lack of compassion, use of excessive force, or going beyond the scope of the law, doesn’t just tarnish our badge—it tears at the very fabric of race relations in this country,” Los Angeles Police Chief Michel Moore told the Washington Post in response to the Floyd case. Meanwhile Moore’s boss, Los Angeles Mayor Eric Garcetti, on Friday claimed that he understood why his city, which is no stranger to police brutality, was protesting. “We absolutely need as a nation, certainly as a city, to voice our outrage, it’s our patriotic duty to not only stand up for George Floyd but for everybody who has been killed unnecessarily, who’s been murdered for the structural racism that we have in our country,” Garcetti said. 

Normally, US police chiefs and mayors tend to ask citizens to withhold judgment on these types of cases until full investigations can be completed. But a 10-minute video recording of Floyd’s killing had made what happened plain. Police chiefs across the country – and even the nation’s largest police union, which is notorious for defending officer abuses – similarly condemned the actions of the Minneapolis officers, in a rare show of moral clarity that, combined with the arrest of Chauvin, offered at least a glimmer of hope that this time things might be different. 

As the events of the weekend have since shown, that glimmer was all too fleeting. 

In city after city over the past three days, US mayors and their police chiefs made a series of the same decisions – starting with the deployment of large, heavily armed riot units – that ultimately escalated violent confrontations between officers and protesters. Images widely shared on social media Saturday and Sunday nights made it clear that members of law enforcement were often initiating the worst of the violence, and appeared to treat protesters as enemy combatants, rather than citizens they were sworn to protect. 

In New York City, two police SUVs were seen plowing into a crowd of protesters, while elsewhere an officer was recorded pulling down a young protester’s coronavirus mask in order to pepper spray his face

In Louisville, the city where Breonna Taylor, a 26-year-old black woman was fatally shot by police on 13 March, state police in riot gear were captured confiscating and destroying protesters’ supplies

In Minneapolis, forces opened fire with nonlethal rounds on residential streets, much to the shock of homeowners standing on their own front porches. 

Images of police pushing or shoving peaceful protesters were almost too numerous to count, including, in Salt Lake City, an elderly man with a cane

In many places, police also targeted journalists who were covering the protests, firing at clearly identifiable media crews with rubber bullets, injuring and even arresting reporters

Some protesters did commit acts of vandalism and looting, and the leaders of cities where that happened generally responded in the same ways. 

First, they blamed “outside agitators” for the worst protester behaviour, a claim that harkens all the way back to the civil rights era and for which the evidence is murky at best

Next, they enacted sudden curfews with little to no warning, which gave law enforcement an excuse to make mass arrests, in some cases violently. 

In a pair of widely criticized moves, Garcetti of Los Angeles closed the city’s Covid-19 testing centers and suspended the entire mass transit system Saturday evening, stranding essential workers on their way home from daytime shifts. Late Sunday night in Chicago, the city’s public school system halted its free meal distribution service for low-income children, citing “the evolving nature of activity across the city”.  

Governors in at least 12 US states, in coordination with city leaders, have since called in National Guard troops to “help”. 

At this point it’s clear that the leaders of America’s cities are in desperate need of a radically different playbook to respond to these protests. A heavily armed, militarised response to long-simmering anger toward the heavily armed, militarised approach to American policing is more than ironic – it’s ineffective. Granting police officers wider latitude to make arrests via curfews also seems destined to increase the chances of precisely the tragic, racially biased outcomes to which the protesters are reacting. 

There are other options. In places such as Flint, Michigan, and Camden, New Jersey – both poor cities home to large black populations – local law enforcement officials chose to put down their weapons and march alongside protesters, rather than face off against them. In the case of Camden, that the city was able to avoid violent clashes is in no small part related to the fact that it took the drastic step of disbanding its former police department altogether several years ago, replacing it with an entirely new structure. 

America’s cities are in crisis, in more ways than one. It’s not a coincidence that the country has tipped into chaos following months of emotionally draining stay-at-home orders and job losses that now top 40 million. Low-income Americans of colour have borne a disproportionate share of the pandemic’s ravages, and public health officials are already worried about the potential for protests to become Covid-19 super-spreading events.

All of this has of course been spurred on by the US president, who in addition to calling Sunday for mayors and governors to “get tough” on protesters, has made emboldening white nationalists his signature. Notably, Trump didn’t call on officials to get tough on the heavily armed white protesters who stormed the Michigan Capitol building over coronavirus stay-at-home orders just a few weeks ago. 

US mayors and their police chiefs have publicly claimed that they do understand – agree with, even – the anger currently spilling out onto their streets. But as long as they continue to respond to that anger by deploying large numbers of armed and armored law enforcement personnel who do not actually live in the cities they serve, who appear to be more outraged by property damage and verbal insults than by the killings of black Americans at the hands of their peers, and who are enmeshed in a dangerously violent and racist policing culture that perceives itself to be the real victim, it is hard to see how this crisis will improve anytime soon. 

Sommer Mathis is the editor of CityMetric.