Cities, houses and greenbelt-related problems

What is the relationship between housing and cities? Ahead of the General Election, Andrew Carter, chief executive of Centre for Cities, explores the policies and problems

The two main candidates vying to be the next Prime Minister have set out ambitious plans to solve the housing crisis in their election manifestos. Boris Johnson’s Conservatives have pledged to build a million homes in the next five years, while Jeremy Corbyn’s Labour Party promises 100,000 new council homes a year by 2024.

The scale of their ambition should be applauded; the shortage of homes is the biggest domestic challenge this country faces. It is damaging the economy by denying businesses access to workers and workers access to jobs, and it denies millions of people a secure and affordable home.

But despite the ambition, the commitment from both parties to largely preserving the existing greenbelt that constrains many of the UK’s cities will make it almost impossible to deliver the homes we need where we need them most.

The reality is that, despite its name, much of the greenbelt is not actually green. Acres of it are given over to wasteland, disused industrial buildings and unsightly patches of land. Parts that are green are also not necessarily well utilised – for example some golf courses sit within the greenbelt. So, in order to have a proper debate about the greenbelt we must distinguish it from valuable, but separate Areas of Outstanding Natural Beauty and National Parks.

Greenbelts also often don’t just surround and constrain cities, they can also extend deep into them – as Greater Manchester’s does – preventing development on land between already urbanised parts of the city-region. This further limits the options available to build more housing in parts of Greater Manchester close to the city centre and transport hubs.

Greenbelt-related problems are a very large elephant in the room for politicians and policy makers hoping to solve the housing crisis. The next government, whatever form it takes, needs to be braver in dealing with it.

Developing new homes
Centre for Cities has been working with the LSE’s Paul Cheshire and UCL’s Bonnie Buyuklieva on a solution that takes a measured approach to opening up greenbelt land surrounding five major cities – London, Manchester, Birmingham, Bristol and Newcastle – and catalogues exactly how much of this land could be given over to developing new homes close to the cities where they are needed.

We omitted any Outstanding Areas of Natural Beauty and National Parks and we only focused on land immediately surrounding existing train stations offering quick links into the five cities – thus maximising the existing public transport network and reducing the need for private cars. This approach has the added benefits of shrinking the carbon footprint if any new housing and improving air quality – two pressing issues given that last year the World Health Organisation found that 40 towns and cities in the UK were at or had exceeded air pollution limits.

The result of our approach is this: a catalogue of 47,000 hectares of unproductive and unremarkable green belt and farm land less than ten-minute walk away from 1,035 train stations which are within 45 minutes of the five major urban centres. Our estimates suggest that this land could deliver up to 2.1 million new homes.

More than one million of these would be in London – where the housing crisis is at its most acute. But the plans could also deliver 494,000 homes around Manchester, 260,340 around Birmingham, 171,250 around Newcastle, and 68,950 around Bristol.

The centrality of the rail network to these plans would give the industry a large role in the development of the new homes. Our report proposes giving new commercial development companies established by network operators such as National Rail, Transport for London and Transport for Greater Manchester, the exclusive right to buy and develop the land.

Making them the only organisations able to buy the land would enable them to strike a lower price for the land with the landowners. The cheaper land price could then be passed on to the public in the form of cheaper housing. This approach would be a significant improvement to the current complicated, costly and ineffective system of Section 106 agreements.  

Under our approach, both Section 106 agreements and the Community Infrastructure Levy would be abolished and replaced with a new simpler and transparent Land Development Charge. If the charge were set at 20 per cent of the new homes as they were sold, it would raise around £100 billion. This is significantly more than the £2.89 billion budgeted by local authorities to spend on housing, planning and development. The extra funding could be spent on new infrastructure to support added capacity and social housing for low-income households.

I appreciate the concerns that many have about encroaching upon the countryside, but our plans would affect just 1.8 per cent of greenbelt land and we have been rigorous in exempting National Parks and Areas of Outstanding Natural Beauty. But inaction is not without cost.

We already know that a lack of affordable housing in cities is having a damaging effect on younger generations, reshaping political allegiances, and fuelling wealth inequalities. Our restrictive planning system, including the greenbelt, constrains the supply of housing in high demand cities and is denying businesses access to labour – as people are being priced out of economically successful cities.

The shortage created also drives up housing wealth for existing homeowners in economically successful cities. Take London as an example – where our plans could build over a million new homes – housing equity here has increased by an average of £122,000 for every home-owner since 2013. Meanwhile in Sunderland it has increased by £3,000. The failure to reform our planning system and have a sensible conversation about the greenbelt is making our country more and more unequal.

For too long politicians have allowed the housing crisis to be framed by the tenure of new homes, with the Conservatives championing homeownership and Labour pledging to kickstart mass council house building. This may be good politics but it distracts from the main problem: the fundamental failure to build enough homes in the places where they are needed the most .

We have set out a practical blueprint for how this can be done, now it is up to the next government to act.

Andrew Carter is chief executive of Centre for Cities. You can read their full report Homes on the Right Tracks here.