Friday 26 April 2013

How to Kill Nightingales and not Build Houses: Insist on building on Brownfields

Posted by Paul Cheshire, SERC and LSE

The planning system is supposed to safeguard amenity, our wild places and the environment. I have already exposed how it signally failed to protect the shifting sands of Menie from the Trump golf development. I also argued here that refusing to allow any development on Greenbelt land inevitably led to ever higher house prices, a more volatile housing market and to the loss of environmentally valuable or amenity-rich places such as ex-MoD land, grounds of former hospitals or recreation grounds (owned by government or the planning authorities themselves, who in cash-strapped times face a a grave temptation to develop).

These problems are nicely illustrated by recent worries about the future of the nightingale. Suddenly conservation groups have woken up to the imminent loss of the the most important breeding site for nightingales in England. Simon Jenkins (who is also President of the National Trust) rightly and powerfully lamented the coming loss - blaming it on "planners’ inability to tell a woodpigeon from a nightingale". The bitter irony is that he is tragically and dangerously wrong in his diagnosis. 

One might argue that among the culprits, the conservation groups themselves have inadvertently played a leading role in getting us in to this mess. We desperately need land for housing. Thanks in large part to the misguided campaigns of conservation groups our planning system has been systematically not providing such land for two generations, pushing house prices and rents beyond the reach of young people.

Why does this mean that conservation groups share in the blame? Because not only have they been the most vocal and influential lobbyists against relaxing the planning restrictions on land release by one iota, but they have enthusiastically supported ‘building on brownfields’. Apart from being no solution to the housing land crisis, brownfield land is very frequently amenity-rich. The tragic irony is that the nightingales chose to breed on ex-MoD land (the Lodge Hill site on Medway’s HooPeninsula). So it is exactly the type of land the National Trusts and the Royal Society for the Protection of Birds (RSPB) favour for development.
When the debate and lobbying against the draft National Planning Policy Framework was in full swing about back in 2011, the CPRE, RSPB and National Trust joined forces to campaign against any relaxation of planning restrictions. No building on the Greenbelt! Build only on Brownfield sites! were their cries. The case of the nightingale provides just one example of the unintended consequences.

Worse, perhaps, is that the true enemy of our threatened wildlife like the nightingale is not housing but agricultural intensification, boosted by rising agricultural land prices. Back in 1969 (in an article with John Bowers) I argued that as farmland becomes more expensive, so every scrap is used more and more intensively and the wild things are forced out. But the reason farmland prices have been rising so extravagantly (11,000 percent in the past 60 years, according to the Telegraph) is no longer mainly agricultural subsidies (as it was in 1969), it is the handy 100 percent tax avoidance value of farmland that the very rich use to pass on their money to their heirs. There is now more bio-diversity in back gardens than on English farms.

There is no need for affordable housing and nightingales to be in conflict. They are brought into conflict by two terrible policies: tax loopholes for farmland and not enough land available for housing because of urban containment policies and building on brownfield obsessions. We can and should have both wildlife habitats and houses. The problem is the blanket preservation from development of land whose value is mostly for avoiding taxes: intensively farmed agricultural land surrounding our big cities. 

To solve our crisis in the supply of housing land we need release just a tiny proportion of our greenbelts of the very lowest environmental quality. To put all of this in context, greenbelts cover an area nearly half as big again as all our developed land put together and we certainly would not need to build on ‘all of it’ – or anything remotely like - to make a big difference to housing affordability.

In fact, this can even be win-win. Providing houses where people want to live with the gardens people seek would improve the existing environment and increase bio-diversity! Intensively farmed land has a negligible - even negative - environmental value and is almost sterile from the point of view of wild life; take a look at the 2011 National Ecosystem Assessment. That is the sort of land we should be allowing houses to be built on. The vehement opposition to building on any intensively farmed greenbelt land fails to recognise it for what it is – almost worthless from a social, environmental or amenity perspective. 

Just a tiny fraction would solve our housing problems and take all the pressure off rare habitats like the Hoo Peninsula and other ex-MoD land. That may be legally ‘brownfield’ but is mostly a wonderland of semi-natural habitat. If you want to hear another iconic songbird – the skylark – visit a tank range. The public needs ex-MoD land to be preserved in its semi-natural state and as much access secured as is possible. We need this almost as much as we need more houses near jobs.

Tuesday 9 April 2013

Diversity, cities and business performance: some new evidence from the UK

Posted by Dr Max Nathan, SERC, LSE and NIESR

Like many Western countries, the UK has become substantially more ethnically and culturally diverse. The 2011 Census makes this crystal clear. Since 2001, the foreign-born population in England and Wales has jumped from 4.6 to 7.5m. At the same time, the ‘white British’ ethnic group shrank from 87.5-80% of the population.

What are the economic impacts of these deep demographic shifts, and what do they mean for cities? Certainly, population change has been most striking in urban areas: notably, London is now a ‘majority minority’ city for the first time in its history.

Urban factors may also affect how ‘diversity effects’ play out at firm level. Although the public debate is still focused on migrants, jobs and public services, a number of academic researchers are turning their attention to the wider impacts of immigration, minority communities and population diversity. Globally, there are now studies exploring effects on firms’ productivity, innovation, entrepreneurship, or trade patterns; and channels that may influence house prices, or the mix of local goods and services.

There’s been little parallel UK research to date – but in a new SERC Discussion Paper (supported by LLAKES) I explore the links between the composition of 6,000 English firms’ ‘top teams’ and company performance. Unusually, my data allows me to look at both ethnicity and gender mix.

What might we expect to see? Owners, partners and directors set firms strategic direction. So the make-up of a ‘top team’ might generate production externalities through diversity (a wider range of ideas/ experiences, helping problem solving) and/or ‘sameness’ (via specialist knowledge or better access to international markets). These channels may be balanced by internal downsides  (lower trust) and external barriers (discrimination), so that overall effects on business performance are unclear.

Big cities might then amplify or dampen these channels. Agglomeration economies might help productivity, and firms may benefit from large, cosmopolitan customer markets. Alternatively, firms in cities might face more competition, or minority-headed businesses might face discrimination.

My results suggest a non-linear link between top team diversity and business performance, which is net positive for process innovation and net negative for turnover. Further tests on diverse and minority/female-headed firms find positive links for diverse top teams, negative for minority and female-only top teams.

Looking at the influence of urban areas, I find some evidence of complex amplifying and dampening effects. In London, for example, diverse firms are less likely to engage in process innovation; but overall, firms in bigger cities are more likely to.

My data make it hard to identify causal effects, so I interpret these results as pure correlations. The implication is that while diversity has internal and external benefits, penalties from being ‘too diverse’ probably result from external constraints. In turn, that suggests policymakers need to encourage corporate diversity, while taking discrimination more seriously.

In a companion paper on London firms, Neil Lee and I found strong links between firm-level diversity and innovation. This paper suggests diversity-innovation links for firms outside the capital too. Core city leaders should pay attention.

This post was originally published on the Squareglasses blog