Reasons to be Impossible

The Telegraph can take the moral high ground against you

However, figures from the building industry suggest that developers are holding large numbers of plots where they have been granted planning permission but have not started construction.

The National Trust estimates the total land bank with planning permission to be around 330,000 plots.

Of course, this is an effect of the Telegraph representing the landowners keen to keep the value of their land by preventing development spoiling their views or undermining the value of greenfields. Private eye has made much the same point this week.

The real villain, of course, is the property market. Landowners have an asset in land-with-permission irrespective of if they build on it: and, of course, if they do build, they fix its value; whereas if they leave it fallow it rises continually with rising land prices. Land itself grows in value - roughly - in line with economic growth (modified by precise pressures on farming, industry and housing need in specific locales).

In short, the incentive is not to meet housing need, but to hold onto large chunks of land. Now, this could be easily remedied - a tax on land-with-permission would stop them getting permission, but could be an incentive to move where permission exists. A land value tax would hit everyone with land, especially the greenfield nimbys. It could, though, be done within capitalism.

The problem is the politics. Generations of politicians have committed us to private home ownership, which people treat as an investment. So long as house prices continue to rise faster than inflation+interest, that's a goer. It does, though, commit politicians to ensuring house prices rise, which means supply must always fall behind demand, else it wrecks everyone's asset value.

So, a large company/housing co-op that relied on rental income for its profits could probably see everyone adequately housed, but only if the interest of land owners were adequately eliminated; but that would be almost impossible to do since it would have to hold land as well. To work, we'd all have to end up renting, and at the mercy of market rental rates.

Labels: 332.6, Housing, Land value, Property, Real estate