Wednesday, 11 May 2011

Abandoned Streets

Housing Minister Grant Shapps has announced a £30 million "lifeline to families trapped in abandoned streets due to stalled large scale housing demolition schemes."

In his recent book Ed Glaeser argues: "Investing in buildings instead of people in places where prices were already low may have been the biggest mistake in urban policy over the last 60 years".

If large scale demolitions have such high social costs and dubious economic rationale, it's important to ask whether they make for good policy? The answer will surely depend on context but I think that the way in which the question is framed is crucial for making better decisions. Too often, policy makers ask "what can we do to improve the housing stock in this area?" when what they care about is "how can we improve the housing conditions of people who currently live in this area?" The answer to the two questions will not always be the same which is why economists emphasise the importance of focusing on people not place when thinking about the objectives of policy.

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