Voices
An incredibly frustrating thing about the housing crisis is that the solution is obvious – and yet, it’s beyond our reach.
The obvious solution is to let buyers and sellers come together. There is one group of people who want to buy houses, and another group of people who’d happily sell some land to build it on if the price was right. But the deals don’t get done, because planning laws make it hard to sell land and build houses.
Building houses isn’t like building furniture. Planning laws exist because building a home impacts more than just the buyer and the seller. It impacts the neighbours too. They have to deal with noise during construction, look at the home when it’s built, and share local infrastructure with more people.
From the neighbours’ perspective, the optimal amount of new development near their homes is zero. For them, new development is all downside and no upside.
This is why the neighbours get strict planning laws enacted, and why they use the planning system to slow down new development: all downside, no upside. It’s why Ireland’s strategic housing developments keep getting shot down in the courts. And why, five years later, construction still hasn’t started on 657 apartments in an empty field beside St Anne’s Park.
The net result is that in cities with growing populations, it’s very difficult to build new homes. The shortage of supply pushes housing costs upwards. It’s particularly bad within areas that are already built up. It’s true in Galway, Dublin, and in cities all over the world.
Conceptually it’s clear what needs to be done to lower housing costs: build more homes. But getting more homes built isn’t as simple as changing the planning rules. Planning rules are written by politicians whose job it is to represent their constituents — the very constituents who don’t want development in their areas. Any attempt to liberalise planning laws is swimming against this tide.
For Ben Southwood and Dr Samuel Hughes, authors of a new report called Strong Suburbs, local consent is the key bottleneck for housing affordability. If new homes are to be built, the neighbours must consent. That’s the starting point.
Choosing to change planning rules unlocks that giant sum of money, from which there’s plenty to buy everyone off.
Southwood and Hughes’ big idea is to give neighbours a taste of the upside of new housing developments. In this way, the benefits of new development would not be captured solely by buyers and sellers. And the neighbours would be compensated for the drawbacks of increased development near their home.
Here’s how the idea could work in practice: someone who lives on a low-density suburban street could come up with a proposal to permit building at higher density on the street. The higher density might take the form of terraced housing up to a limit of, say, four stories. The proposal would also say roughly how new building would look in terms of materials, and wall to window ratio. If the proposal were passed by a super-majority of residents on the street, development would be permitted along the lines agreed in the proposal.
Why would anyone vote in favour of more development on their street? Because they’d be voting to give themselves the option to develop their own property at higher density. This would instantly make their property more valuable. They could choose to develop the property themselves, adding another home or two to their plot. Or they could choose not to develop it, and benefit from higher property value when they sell their home on or pass it to their heirs.
What about pressure on local infrastructure? Southwood and Hughes’ suggest that a chunky subvention to the local authority as part of any new development, to fund local services.
On some streets, given the option, the residents would stick with the status quo. They’d choose space and privacy over money. But on many streets, residents would likely take the deal. Particularly if they thought new development might make the street more rather than less beautiful.
Beauty is an important part of this. A big reason people object to new development is that new development is usually ugly. This doesn’t have to be the case. It’s not beyond us to build nice new terraces — like the old ones people pay a premium to live in. Street-level planning rules could make that happen.
Voting to allow more development on your street is unfamiliar and weird. So things might move slowly, at first. But if handsome new streets started to appear, enriching locals in the process, the idea might not be long catching on.
How could all this be possible — a property-price uplift for residents, money to fund local services, nicer places, lower housing costs for everyone?
It’s possible because our current system leaves so much money on the table. A lot of well-paid people in Ireland would like to buy a home, but can’t. A lot of land isn’t being put to its best use. Choosing to change planning rules unlocks that giant sum of money, from which there’s plenty to buy everyone off.
Southwood and Hughes’ idea is tailored for the UK, and, to be sure, the UK isn’t Ireland. Planning rules are tighter over there. And construction costs aren’t as high. But there’s no doubt that Dublin in particular could do with getting denser within the M50. Suburban Dublin is far less dense than property prices indicate it should be. Ben Southwood said: “If you take a London or Dublin suburb — these are the two best places for this idea in Europe.”
Homes on half acre sites aren’t uncommon inside the M50 in Dublin. These homes were built when land was cheap. But that would never happen today. To give you a sense of the potential upside from this type of development, on a half acre site on the Howth Road there’s a new scheme called Copeland Place. It’s a scheme of terraced houses on a half-acre plot. Onto that half acre, there are now nine houses with a total of 28 bedrooms. These homes, when completed, will have sold for a total of six to seven million euro.
Now, think of all the other half acre plots within the M50. Infilling these spaces is an opportunity to lower housing costs, reduce commuting times, make some homeowners richer, and make new developments more beautiful. And it doesn’t cost the state a penny.
