How to fix the housing crisis: Take land seriously

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The government’s Housing White Paper is set to join the decades of policy interventions that have failed to fix the housing crisis because they do not seek to address the broken land market and its role in an increasingly unequal economy. The government’s ambitions to reduce the dominance of speculative development of new homes and strengthen the role of planning are welcome. But counterveiling policies to hand over ownership of public land to private developers and continue to prop up house prices with subsidised mortgages means these ambitions are unlikely to be fufilled.

Targets for building new homes will not be met if we continue to cede control over how land is used. Our research shows that the government’s insistence on selling off public land is fuelling the affordability crisis:

• Only one in five of the new homes forecast to be built on public land and sold off are likely to be classified as ​‘affordable.’
• As little as 6% of new homes are likely to be social housing, and in some cases developments comprise solely of luxury properties.
• New homes on formerly public land are dramatically behind schedule. At the current rate, the government’s target of building 160,000 homes by selling off public land will take until 2032 to achieve, 12 years later than promised.

In this briefing we highlight the role of land in the economy and its impact on the housing crisis. We provide a series of recommendations designed to put land to better public use and to start to break the housing market’s dominance over our economy. These include:

1. Halting the public land sale and retaining land for public or community ownership and the development of homes suitable to community needs
2. Genuinely strengthening compulsory purchase powers to help retain land value rises for public benefit
3. Establishing a national land bank responsible for purchasing, developing and selling land for residential and commercial use

The arguments and recommendations are explored in more depth in our book Rethinking the Economics of Land and Housing