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Abundance of land, shortage of housing

By Tom Papworth
April 16th, 2012 at 12:19 pm | Comments Off on Abundance of land, shortage of housing | Posted in Uncategorized

Hot on the heels of my paper on Planning in a Free Society, the IEA has published a paper by my colleague, Kristian Niemietz, entitled Abundance of land, shortage of housing.

No prizes for guessing what Kristian’s conclusions are.

I strongly recommend reading the report, but if  you are in a hurry, here is the summary from the IEA website:

Not enough is being done to reduce the extraordinarily high cost of housing in Britain. This is the finding of a new report released today by the Institute of Economic Affairs Abundance of land, shortage of housing.

In the research Kristian Niemietz looks at how housing costs in the UK have exploded in recent decades. Real-terms house prices in 2011 were more than two-and-a-half-times higher than in 1975, with rent levels following suit. Nothing about this was inevitable. Many other countries have experienced rising housing costs as well, but in most other cases, the increase has been much lower and/or largely transitory. In the USA, Germany and Switzerland, real-terms house prices are still close to their 1975 levels.

Other main findings include:

·         Housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.

·         There is still plenty of room for development in the UK:

·       Only 1/10th of England’s surface land is developed and even in developed areas, the single biggest item is gardens.

·        Literally ‘concreted-over’ land makes up only 1/20th of England’s surface area.

·         Housing benefit is a flawed approach to dealing with the problem of low-cost housing – it favours those living in expensive areas rather than those on low incomes.

·         The main difference between the UK and its north-western European neighbours is not in demographics, but in completion rates of new dwellings.

·         Empirical evidence from around the world shows that planning restrictions are the key determinant of housing costs.

Recommendations

·         Only a thorough liberalisation of the planning system can address the affordability crisis.

·         The government must resist vested interests lobbying against planning reform to help those struggling to afford to buy a home.

·         The government’s National Planning Policy Framework does not address the fundamental flaw in the current planning framework – that the current incentives encourage NIMBYism.

·         The combination of a restrictive planning system and an over-centralised tax system should be addressed so that local residents obtain the advantages of development.

·         It must enable rational trade-offs between preserving valuable pieces of countryside and other considerations:

·      One way to achieve this is to extend the coalition’s ‘localism’ agenda to local finances and planning. If local authorities had to cover most of their expenditure through local taxes, they would have an interest in enlarging their tax base, and granting planning permission would be one way of doing so. People would be free to vote for NIMBY policies, but they would be aware of the cost. Blocking development would mean foregoing tax cuts or better local public services.

All very sensible. All very sound.

Comments on the IEA website, please.

Modern Architecture

Modern Architecture

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The role of prices in education

By Tom Papworth
April 2nd, 2012 at 11:40 am | 3 Comments | Posted in education

The government’s Free Schools policy is widely regarded as a significant innovation; a radical shake-up of state education. The next logical step – permitting for-profit providers to deliver state-funded education – is still hotly contested and is unlikely to emerge in this parliament.

Yet even if profit-making providers were able to deliver state-funded schooling, this would hardly represent a free market in education. For one thing, almost all discussion of voucher schemes and for-profit provision assumes that prices will be capped.

This misses one of the most crucial benefits of allowing markets to operate.

Read the rest of the article, and leave any comments, at the IEA blog.

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Give me your entrepreneurial masses, yearning to work hard

By Tom Papworth
March 28th, 2012 at 9:54 am | 3 Comments | Posted in Uncategorized

Graeme Cowie has launched an e-petition on Direct Gov calling on the coalition to Abandon the Government’s Arbitrary Non-EU Immigration Cap.

The wording of the petition is as follows:

We the undersigned believe that the attempts by the Coalition government to restrict non-EU immigration by way of a cap has no evidential basis and that it should be removed. Contrary to the aims of its advocates, the cap harms the UK economy and with it the job prospects of UK citizens by discouraging enterprise and foreign investment.

Given that the Coalition government recognises in its agreement that immigration has “enriched our culture and strengthened our economy” it should not pander to populist and protectionist measures which allow our labour market to stagnate and our skills-base to insulate itself from modernisation.

We consider that the existing points system does not benefit from an arbitrary cap on non-EU immigration. Removing the cap will send out two important messages. Firstly it will show that Britain is open for business. Secondly it will make us a more tolerant and culturally enriched society.

It is certainly true that combining a points-based system with an arbitrary cap is less belt-and-braces and more flogging a dead horse. In fact, the points-based system is itself deeply flawed, ignoring as it does the huge demand for unskilled labour in this country which – under our current welfare system – is not being met by the domestic “reserve army of labour”.

Personally I hate the expression “Britain is open for business”, but I’ll forgive Graeme that small slip because it’s otherwise a great petition.

I urge all Liberal Vision readers to sign the petition.

Lazy, immigrants, freeloading off the state.

Planning in a Free Society

By Tom Papworth
March 16th, 2012 at 12:00 pm | Comments Off on Planning in a Free Society | Posted in Uncategorized

Last week the Adam Smith Institute published my policy paper on reforming the UK’s sclerotic and highly damaging planning system.

The land-use planning system in the UK has created a housing crisis, stifled our economy and had a negative effect on our environment.

You can download the full report from the Adam Smith Institute.

If you want to engage in the lively debate, you can do so at Lib Dem Voice, here and here.

 

Glum councillors

By Tom Papworth
March 8th, 2012 at 3:08 pm | Comments Off on Glum councillors | Posted in Uncategorized

Hat-tip to Glum Councillors, a website that seeks to collate photographs of elected representatives looking serious and saddened by the state of the roads, litter and all the other stuff we have to deal with.

This photo won't look so good when reduced to a 2 inch square and run through the black-and-white Riso at the shed at the end of one of these guys gardens.