On Wednesday morning, the finalists for the Wolfson Economics Prize will be announced. This year’s Prize asked people to design a new garden city that is attractive, funded and locally popular.
It is well recognised that we are not building enough homes. Indeed we have not been building enough homes for at least a generation. We built just over 110,000 homes in the latest year (completions) and yet around 300,000 homes a year, or 1.5 million by 2020, are needed. In a Populus poll published today, 72 per cent of people agreed there was a serious shortage of good housing.
Much of the blame for our housing shortage lies squarely with the planning system, often entwined with endemic local opposition to sequential development, or NIMBYism. Unfortunately such NIMBYism is often well-founded, given the often poor quality of architectural design of new homes and a lack of new infrastructure for them, which places ever more pressure on existing local roads and schools. Many homeowners also object to new development on their doorstep because it can reduce the value of their home, particularly if built on greenfield land and their view is affected. They will (rightly) object as a result. All of these things are examples of what economists call negative externalities. Garden cities move us fundamentally away from the externality problem. That is why they are game-changing. That is why we shouldn’t be surprised that people not only back new garden cities, but that existing homeowners back them even more.
Of course it is important that new garden cities are visionary, popular and economically viable. Good architectural design, green spaces including for gardens (78 per cent of people in the polling thought private gardens for new homes are important), and careful attention to the sense of community and place are essential ingredients. We know that garden cities are popular with the people living in them, just take Welwyn and Letchworth as examples. If new garden cities are built on agricultural land, instead of the optioned land that often surrounds our urban areas, the land value uplift can massive. In high demand areas a hectare of land with permission for housing will be worth 200 times more than the same hectare used as farmland. Such uplift is more than sufficient to pay for the upfront infrastructure requirements of a new city and to handsomely compensate existing landowners so that everybody gains. It is worth remembering too that Letchworth did not receive a penny of public money when it was built.
No one is saying that new garden cities are the whole answer to getting us to 300,000 homes a year. But as well as making a significant contribution to our overall housing supply numbers, they will to help to change the way we think about and deliver new housing in our country; moving us away from fearing the next new mock-Tudor housing estate or sequential development near to where we live, to being inspired by well-designed and visionary garden cities that we can point to and be proud of.
Chris Walker is Head of Housing, Planning and Urban Policy at Policy Exchange