The Sudden Rediscovery of Housing Supply as a Key Policy Challenge

Abstract

Housing supply was suddenly rediscovered as a major challenge for English housing policy in the early 2000s, after nearly three decades of neglect. There does appear to be a problem of inadequate and unresponsive housing supply in England, by international or historical standards. Although shortcomings of the house building industry and limited public investment play a part, the most important factor explaining England's housing supply problem is the operation of the land-use planning system. Policies, procedures and incentives are all implicated. The most important impact is a long-term real rise in the price of housing, differentiated by region, which is damaging both economically and socially, although there are some compensating benefits in terms of the environment. The Barker Inquiry has proposed a radical supply agenda, which has been substantially accepted by the present government. This proposes that planning targets should be geared to affordability, with more land released and market-contingent mechanisms, more social housing and supporting infrastructure investment. There is room for debate about the magnitudes involved, the role for more proactive approaches to development and the best fiscal mechanisms and incentives. However, given the fraught political economy of housing and planning in the pressured regions, there is considerable doubt as to whether these measures will be implemented on the requisite scale.

Keywords:

• Housing supply
• land-use planning
• affordability