You cannot regulate empty houses away

Posted by Christian Hilber (SERC & LSE), Paul Cheshire (SERC & LSE) and Hans Koster (VU Amsterdam) 

“Almost 57,000 homes in London stand empty…” writes David Smith in the Guardian on May 4th. This he claims is a significant cause of London’s housing problem and the “Key to this is tackling buy-to-leave investing.” The answer to this ‘problem’ is for the mayor to refuse planning permission and for Boroughs ”…to introduce planning restrictions …to prohibit the deliberate practice of letting properties lie empty.“ This is not a view unique to David Smith. For example, the well-known architect Lord Rogers in arguing against the desirability of permitting offices to be converted to housing to help with London’s housing shortage noted: “Why should we rush to convert office blocks when we already have three-quarters of a million homes in England lying empty.”

Leaving aside the fact that any housing market always needs empty houses if it is to run smoothly – people move house, they die or they need major building works – is this the solution, even if it is a problem? Is making planning permission more difficult to get or imposing additional conditions a feasible way of reducing the proportion of empty homes?

The trouble with interventions in the housing market is that however well-intentioned, they generate all sorts of unintended consequences. And sometimes achieve exactly the opposite of what was intended. The uncomfortable truth is that we need to understand how things actually work: not pass laws or regulate hoping to make them work the way we would like them to. One of our most recent research findings is that more restrictive local planning actually increases the proportion of vacant homes.

Of course by making housing even scarcer (which more restrictive planning achieves) it makes it more expensive. This generates an incentive to occupy it, so reduces vacancies. Unfortunately more restrictive planning also makes it more difficult to adapt homes to the constantly changing patterns of demand. Jobs grow in a locality, so demand for houses there increases; the local school gets better so the demand for family sized homes increases; people buy a car so want parking; they have fewer children or separate so they want smaller homes – the list is potentially endless. The result of this is that in more restrictive locations people wanting a home find it more difficult to match their preferences to what is available. So they have to search longer or further afield. The result of that is there are more empty houses.

These two effects work at the same time and in the opposite direction, of course. Which dominates and so whether more restrictive policies increase or reduce the proportion of homes that are empty net, is a purely empirical question. Our results for England, using data from 1981 and being careful to offset for reverse causation and other econometric problems, show that the net effect of more local restrictiveness is not just to increase the proportion of empty homes but to increase it substantially. A one standard deviation increase in local restrictiveness causes the local vacancy rate to increase by nearly a quarter. That is not all. Because it makes finding a suitable house locally more difficult it also increases the average distance people have to travel to work. The same increase in local restrictiveness causes an 8.5 percent rise in commuting distances.

So the Islington policy quoted approvingly by David Smith will in fact be likely to increase the proportion of empty homes in the Borough – not reduce it – and at the same time mean that people who work in Islington will end up commuting further. Roll it out over London as a whole and we would expect the same outcome. The absolute opposite of what the advocates of the policy wanted to achieve.

NHS walk-in centres are popular, but divert few patients from A&Es

Posted by Ted Pinchbeck, SERC 

Originally posted on the LSE Business Review, here.

In 2010 NHS Walk-in Centres were a valued feature of around 200 communities in England, but many of these facilities have since closed or are facing closure. My research may go some way to explaining why: less than a fifth of patients attending a centre would otherwise have attended an A&E, meaning the centres do little to relieve pressure at busy casualty departments.

The rise and fall of the NHS walk-in centre 

Walk in health services of one form or another feature in many healthcare systems, including Canada and the United States. In England, the first NHS walk-in centre opened in the late 1990s but only became prominent in the late 2000’s following a policy initiative that led to the opening of around 150 new facilities.

Offering extended hours and with no requirement for patients to pre-book or register, many new centres had proved highly popular with local residents with minor illnesses and injuries such as colds, eye infections, sprains and cuts. But despite this popularity, during the last parliament around a fifth of the facilities shut their doors, with a number of others, for example in Redruth, Hereford, and on Teeside, also currently at risk.

Taking sides 

Why the services should have closed in such numbers is not immediately clear: the scale of local opposition to some closures – for example in Jarrow, Worcester and Southampton – was intense. Their supporters argue they reach new groups of patients, provide easy and convenient access to care, and take pressure off other stretched NHS services.

At the same time, commissioners closing centres argue they represent a poor use of funds as many attendees have minor conditions that have little need for medical attention, and those that do could readily be treated elsewhere. Some have cited the need to fund seven-day-a-week access to GP services as a more pressing priority.

While not the whole story, one important question in these debates is whether walk-in centres divert patients from attending busy hospital A&E departments. This may be desirable since crowding at A&E is associated with high mortality and can have knock-on effects by reducing the capacity for hospitals to carry out planned medical treatments. In addition, many attendees at A&E have low severity needs which could be safely treated outside a hospital setting. Treating these patients as emergency cases in hospitals is considerably more expensive than treating them in walk-in clinics.

Building the evidence: do walk-in centres divert patients from A&E? 

Until recently there was no conclusive hard evidence – from either side of the Atlantic – either way. When surveyed, around a quarter of patients attending walk-in centres say they would otherwise have attended a hospital A&E. However, academic research using statistical methods has been unable to detect any such effect.

My research provides new evidence that goes some way to filling this gap. Combining detailed information contained in hospital records with difference-in-difference statistical techniques, I provide credible estimates of how patients’ use of A&E departments changes in response to the opening or closure of a new walk-in centre close-by.

Two main findings emerge. The first is that walk-in centres do significantly divert patients away from attending A&E. The second, however, is that relative to the number of patients attending walk in clinics the effect is small, with calculations suggesting only around five to 20 per cent of patients attending a walk-in clinic would otherwise have gone to casualty. The implication is that they only make a small dent on the overall A&E figures.

Conclusions 

The research points to something of a dilemma for decision-makers. Easy access services such as Walk-in Centres are popular, which suggests they are valued by patients. The evidence suggests they do make a small contribution to relieving pressure at over-stretched emergency services, but with low diversion rates from A&E they may be an expensive way to do so. The cold reality of a chilly funding climate points to hard choices in allocating scarce NHS resources to best meet local demand. With this in mind, fights over the remaining centres look set to continue.

Next London Mayor should work with Wider South East to rethink the green belt

Posted by Ian Gordon, SERC and LSE Department of Geography & Environment 

This article was originally published in the Centre for Cities’ Mayoral Elections 2016 blog series, in which experts from the worlds of business, housing, local government and academia discuss the big issues ahead of the elections on 5 May. 

Whoever becomes the next mayor must recognise the need to work with London’s neighbours to tackle the region’s housing shortages. 

Ahead of today's election, the various London mayoral candidates have been keen to emphasise their commitment to protecting the welfare of Londoners, present and future. However, one major issue missing from the mayoral debates so far is a recognition that this cannot be achieved by treating London as an island within the M25 – as both Ken Livingstone and Boris Johnson have done in their time in office. This isolationism is no longer sustainable given the threat posed by chronic housing shortages, as well as the size of the opportunities that an integrated regional approach to public investment would offer to both Londoners and their neighbours.

The incoming Mayor, taking over a strongly established GLA, has the chance to make their mark by recognising the crucial linkages between their turf and the Wider South East. Practically, this means taking serious account of how ‘cross-border’ economic, housing and labour market links will affect policy decisions. But it also means working more actively with representatives from the wider region to resolve shared problems and make the best of the joint potential of this southern heartland.

These themes emerge strongly in the final set of reports from the current Mayor’s Outer London Commission (OLC), but they have barely figured in the electoral manifestos of the leading mayoral candidates. Caroline Pidgeon has promised a specific dialogue with the rest of the South East about accommodating London’s household growth when brownfield sites in London ran out. But neither Zac Goldsmith nor Sadiq Khan have shown any more inclination than their predecessors to look beyond the borders of their electorate. In part, this is because these are not electorally appealing issues, especially given the sensitivities around the green belt. But with the housing crisis set to dominate the political agenda in the capital for years to come, the question of how London engages with its neighbours has become important to address.

This will not succeed if the Mayor is simply perceived as asking neighbouring regions to house those who they’ve failed to accommodate within the capital. Leaders from across the wider South East, who’ve held two preliminary summits with the current Mayor, are expecting London to do its bit in releasing extra land for development, but they have a wider agenda and are responding to the fact that the housing crisis is region-wide. Its common cause is the overall tightness of land supply across the South East, exacerbated by greenfield development quotas which have bitten most directly outside London.

The issue is shared because neither mayors nor planners elsewhere can ‘control their domestic borders’. Housing completions need to double to meet the estimates of housing need, but despite all the efforts currently proposed by the OLC and others, this is still unlikely. In that case, some of London’s projected population growth will simply get diverted into neighbouring sub-regions. But since capacity there is also limited, the likely knock-on effect will be for more local residents to look further afield for affordable housing – spreading London’s housing footprint even deeper into semi-rural East Anglia, Wales and the South West (if not to cities further north).

This would be a perverse and environmentally unsustainable outcome of ‘compact city’ planning policies. Instead, a much better idea would be to take a city-region approach – channelling growth into well-connected strategic locations closer to London, which would enhance both economic and environmental sustainability.

The OLC reports offer a series of recommendations for how the new Mayor can boost housing output from brownfield sites within London. However, this alone won’t close the supply gap, requiring new initiatives to bring other land into residential development. To address this in a sustainable way, the OLC recommends that the new Mayor should take a lead in ensuring strategic reviews of green belt are undertaken on a co-ordinated basis, both inside London and beyond. Another more specific proposal recommends a focus on the development of five Growth Corridors along major transport axes in and out of London, with an integrated combination of housing, employment and enhanced transport links.

As the Centre for London’s recent Manifesto for London also recognises, opening-up more land for development must be pursued in a controlled fashion that can command broad support. This may be best achieved through identifying specific well-bounded areas, with potential for dense development, to be excluded from the green belt – removing the fear of continual incursion into other areas. This should also be buttressed by ‘deals’ to enhance environmental quality across other nearby green belt areas, and to upgrade communications links.

Of course, these ideas are speculative – the point is that willing partners and public confidence will be required in order to find solutions to the housing crisis across the South East. As the most powerful political actor in the extended region, the Mayor of London could play a crucial leadership role in this process, by helping to negotiate deals with the government and to build habits of co-operation among regional partners.

But most importantly, the new Mayor must recognise that London simply isn’t a free-standing city-state, and that it can’t ‘consume its own smoke’ in accommodating its projected population growth. Securing a decent quality of life, both for Londoners and their South East neighbours, will require region-wide efforts to re-model a much-valued – but outdated – green belt for the 21st century.