Wednesday 17 August 2011

Location matters: putting people first in planning

Posted by Tim Leunig, SERC, LSE and CentreForum

I recently visited Bordon, a small town in North East Hampshire. It was one of Labour’s proposed eco-towns. The Conservatives opposed this in opposition, but are now keen. The proposed 5500 houses would double the town’s size.

I talked to a leading light of Bordon Area Action Group. He was a NIMBY, opposing all new housing. He favoured sending immigrants home (adding that this was not BAAG policy). He had many objections to housing – including that more people walking on local countryside footpaths would damage invertebrates’ habitats.

I am not mocking him. He was knowledgeable, and his views were heartfelt. He is correct on many things. He feels that the Tories nationally lied, and that the council – which covers a big area – have slanted consultations to get the answers they want. He likes his town the way it is.

I think we need much more housing in the South East. But not in Bordon. This has nothing to do with lizards, and everything to do with people. Put simply, people don’t want to live in Bordon if they can live elsewhere nearby.

We can see this in local house prices. The cheapest 3 bedroom house in Bordon is £140,000. The equivalent in the neighbouring towns of Alton, Liss, Liphook and Farnham are £188,000, £195,000, £215,000 and £224,000 respectively. People generally prefer to live in other towns in the area.

The other towns also have railway stations, and are on dual carriageway roads. They are better connected, and better placed to prosper in the future. It makes sense to build there, rather than in Bordon.

Both the previous and current government chose Bordon because the army is moving out, releasing brownfield land that can be redeveloped. Everyone says that building on brownfield land is a “Good Thing”.

This is not true unless the brownfield land is where people want to live. We should also consider land restoration, and building elsewhere.

I found that a house costs £80,000 more in Farnham than in Bordon. If we can restore the Borden army site for less than £80,000 per house space, we should do that, and build in Farnham.

Davis Langton [pdf] suggest that restoration costs about £1.75m per hectare, or around £60,000 per house space. These costs are very site specific. They assume, for example, 1.9 tonnes of waste per square metre of the site. This colossal figure is for dense inner city sites: the figure for a former army camp such as Bordon will be far lower.

Many of the costs have to be paid anyway, whether the land is used for housing, or returned to green space. If that is so, we might as well build the houses where people want to live.

Whether Bordon is the right place for development requires accurate, site specific estimates of the cost of remediating the land, for both development and greenfield uses. But the figures here make it overwhelmingly likely that cost-benefit analysis would not support redeveloping the Bordon army site for housing. Land auctions, an idea I've developed here would offer a sensible way through the decision-making process.

On thing is for sure, developing the Bordon army base for housing simply because the War Department decided it was a good place for army training in 1863 is not good spatial economics or good planning.

* Tim Leunig is a SERC Affiliate. He is a Reader in Economic History at LSE, and Chief Economist at CentreForum think thank.