Friday 24 June 2011

Localism and Housing Supply

I wrote recently about unresolved conflicts in the government's approach to planning, economic growth and the natural environment.

One of those conflicts involved the tradeoff between localism and growth in terms of the supply of housing (to recap: localism may encourage NIMBYs, while incentives to local authorities try to encourage growth). According to the Guardian, research by BNP Paribas suggests that the NIMBYs are winning and that localism may make housing shortages worse. Looking at target figures, the research finds that half of local authorities have announced they are sticking to original targets, 12% cutting and only 2% increasing. The average change is a cut in target of 20.6%.

It is, of course, possible that the authorities that are considering increases will announce later. But if that doesn't happen extrapolating this cut across all LAs means 31,000 fewer homes built next year (leaving total targets around 85,000). This is some way short of the 270,000 houses per year that Steve Nickell suggested were needed in his lecture earlier this week.

It's also possible that these figures may improve once the system beds down and the economy improves. But I wouldn't like to bet on that.