The Bonfire of Structures
Labour's plans to deregulate planning processes will further open up Britain to the property developers who have already caused so much damage to the country — and do little to help those at the sharp end of the housing crisis.
Labour has embraced the YIMBY approach to the housing crisis, deregulating planning to unleash the private sector. (Photo by Darren Staples/Getty Images)
Prior to the election, British billionaire John Caudwell revealed why he would be supporting Keir Starmer’s Labour Party in the upcoming general election: ‘What Keir has done… is taken all the Left out of the Labour Party, and he’s come out with a set of values and principles in complete alignment with my views as a commercial capitalist.’ Cauldwell made his fortune selling mobile phones, but like most capitalists in Britain, he now makes his money from assets as a developer of luxury townhouses. Following Labour’s victory, the share prices of the major housebuilders rose, and the new Chancellor bragged about meetings with asset managers like BlackRock who were just waiting to invest in UK housing.
This enthusiasm from major real estate investors is for Labour’s housing and planning policies. Last week, Bloomberg described Labour’s proposals as a ‘revolution in planning’, while Rachel Reeves called planning ‘the single greatest obstacle to our economic success’. Planning, an area of the state which had received little attention from Labour or the Left, is now the central and defining area for reform in the incoming government’s programme. For Labour, planning reform is the key to unlocking growth, drawing upon a set of supply-side planning and housing policies developed by organisations that now tend to self-refer as part of a ‘YIMBY [Yes In My Backyard] movement’. Unfortunately, their proposals draw more from right-wing think tanks, astroturf campaigns and asset managers than they do the demands of workers, tenants and the labour movement.
Over the last decade, public opinion on core questions concerning the housing crisis has shifted. There is now a broad acceptance that the right to buy needs to end, that the failure to build public housing is at the heart of the housing crisis and, even more universally, that section 21 ‘no fault’ evictions should be abolished. In Scotland, rent controls were given a limited roll-out, and Labour mayors such as Sadiq Khan and Andy Burnham have called for similar powers. Taken together, this policy platform would amount to overturning key elements of the reforms pushed through in the 1980s by the Thatcher government and go a long way towards a solution to the crisis.
And yet, aside from Labour’s promise to outlaw ‘no fault’ evictions, which has featured in all party manifestos since 2017 (including the most recent Conservative manifesto, despite the failure of the Renters Reform Bill), none of these positions can be found in Labour’s manifesto. All of them have been watered down or explicitly ruled out at some point in the last four years. Instead, think tanks like the Centre for Cities, who have churned out policy papers calling for planning reform; astroturf organisations like ‘Priced Out’, who have had influence over the public debate; and key fora within the Labour Party itself, such as the Labour Housing Group and the Fabian Local Government and Housing group, have all shaped a simplistic, pro-developer supply-side agenda.
Property Developer Activism
The ‘YIMBY movement’ emerged in the US in response to the growing strength of a revived tenant’s movement. Its emphasis on the simple economics of supply and demand, as well as its tendency to flatten all who oppose real estate projects — no matter if they are homeowners opposing a council estate or inner-city tenants opposing a luxury housing development — into the derogatory concept of the ‘NIMBY’ has been a great boon for those who want to pretend that developers and landlords have the public interest at heart. Tracy Rosenthal of the LA Tenants Union has written that ‘YIMBYs are not housing activists, but real-estate-development activists’.
The YIMBY view, which several leading UK politicians apparently endorse, is not simply that more homes need to be built, which is a fairly banal view. The YIMBY position, long held by right-wing think tanks, advocates for liberalising planning regulations to address the (largely imagined) problem of the NIMBY [Not In My Backyard], thereby stimulating mass private sector housebuilding and alleviating the housing crisis by reducing sale and rental prices.
There are three problems with their basic proposition. First, it is by no means clear that even a large-scale private house-building programme, such as building over 300,000 houses a year, would significantly decrease prices. The best that high rates of building could do is help slow the rate of price increases. However, since the early 2000s, the average house price to average income ratio has doubled its historical norm, rising from 4:1 to around 9:1. Based on recent annual average wage growth, it would take around 25 years of zero price growth to return back to something like affordability. Private housebuilding, which with a fair wind usually settles at around 170,000 a year, could easily be bolstered with a social housing programme that would reduce the rents paid by those currently in private rental housing more directly and more swiftly whilst hitting the 300,000 a year target. The impacts would be felt within years, not decades, as well as reducing the substantial housing benefit bill (a staggering £23.4 billion in 2022)
Second, it is also not clear that the various proposals to reform planning, ranging from zoning systems to Labour’s vague promise to ‘bulldoze’ regulations, would even lead to such a housing boom. Private housebuilders build at rates that ensure their profitability — it’s not in their interests to ramp up house-building rates beyond a certain point without some form of state subsidy. While it is true that planning is a source of delay and uncertainty for development, this is because it has been decimated as a public service through austerity and various policy ‘streamlining’ exercises. A strong public planning system linked with an actual industrial strategy can help us find a way through the pressures and trade-offs inherent in land-use decisions rather than creating folk devils out of groups of pensioners with a WordPress site.
Third, the YIMBY proposition is one that elides the problem of what constitutes demand for land and housing. The affordability problem began in the early 2000s, as demand for land and housing in major cities was increasingly driven by those with significantly higher spending power than individual households. Institutional investors, buy-to-let landlords, and a variety of international investors seeking ‘safe havens’ all bought up huge amounts of property in major cities. Added to this, the reduced capacity of local authorities to lead housing development and provide social housing has meant that demand for land is increasingly driven by those who have greater access to credit and can outcompete households, increasing rents and sale prices.
Solving the Housing Crisis
The explanation that constraints on property developers have caused the housing crisis and that it can be solved by deregulating planning a convenient one for those in power. It portrays the neoliberal market forces responsible for creating the crisis in the first place as the heroes without ever acknowledging their role as the villains. Meanwhile, politicians can be seen to be acting without needing to challenge the status quo, taking on the NIMBYs rather than the entrenched power of the private sector. For defenders of austerity, the bonus is that all this can be done without increasing investment or day-to-day spending.
Sadly, we do not see this having a happy ending for workers and tenants, as wonderful as it may be for the shareholders of major housebuilders. The ‘Build, Build, Build’ approach is essentially a smokescreen for extracting rent while shifting the housing debate away from important issues. This strategy focuses on arbitrary targets and NIMBYs while overlooking crucial questions about housing, such as who is profiting from building houses, the type of houses being constructed, and where they will be built. It would be naïve for progressives to believe that those advocating for mass private housebuilding are doing it as an act of social good, especially when their demands so neatly align with the interests of the development and construction industries.
Rejecting YIMBYism does not mean rejecting housebuilding. What we want to see is houses as homes, not new opportunities for upward wealth redistribution. Indeed, the reason the YIMBY ‘movement’ exists is to divert focus from the real, egalitarian solutions for the housing crisis the Left has put back on the table in recent years, such as rent controls, major social housing programmes, and reversing austerity — solutions which require a shift in power against the rentiers that dominate the UK economy and a government with the courage to take that on.
Labour must recognise that it needs to do more than simply build more housing. However, its aversion to housing policies such as social housing and rent controls could easily lead to a situation where it builds more without addressing the underlying housing crisis. This would mean five years in which the profits of Cauldwell and BlackRock go up and the costs of housing remain unmoved. The fight for progressive alternatives will only become more important if so.