‘The Death and Life of Great American Cities’, the classic 1961 book by Jane Jacobs, is probably even more relevant today — the mark of a great book. She emphasises that visual order is very different from functional order, a lesson which our planners and politicans have not heeded:
Too many people for the number of dwellings, especially in areas where people can find work: neither Conservative nor Labour nor Coalition governments have come close to solving the problem, which worsens year on year. The UK’s population is rising faster than the number of dwellings, as the chart below shows.
Only 281,030 new homes were completed in the two years 2011-12 and 2012-13. Meanwhile, the population rose by 1.678 million, from 2010’s 62.027 million to 63.705 million in 2012. The predominance of small households, one or two people, means that population increase of this order requires over 940,000 new dwellings.*
The shortfall is massive, yet construction firms have land banks lying fallow. Four volume builders — Barratt, Bovis, Crest Nicholson and Berkeley — had a total of 114,419 plots in their land banks, according to the Financial Times in September.** They are releasing about one-sixth of this total annually: not enough to fix the housing shortage, but then why would they do that? They want to keep property prices up, and in any case the number of potential first-time-buyer households is restricted by low incomes, as new data in Family Spending 2013*** makes plain. The chart below shows that outgoings exceed income for about half the UK’s households. The outgoings count only the net rents paid by households, after receipt of housing benefit and other subsidies. About 35% of households rent their home, up from just over 30% in 2001. The change reflects the declining affordability of home purchase.
Mortgage rates which are kept low by the quantitative easing programme — the creation by the Bank of England of additional, artificial digital money — and rents subsidised by housing benefit have both been critical in keeping roofs over the heads of the hard-pressed population.
Without housing benefit, typical rents would be unaffordable for households with incomes in the lowest 40%, less than £17,784 a year in 2012. Rents in London are so high as to be unaffordable for over three-quarters of households.
In the E1 postcode, immediately east of the City and including Whitechapel and Bethnal Green, until recently regarded as a cheap area, typical rents for two-bedroom flats are between £336 and £450 a week, at the lower end more than the average gross weekly income of 30% of households and at the upper end more than the gross income of 40% of all UK households. Smart postcodes in central and west London are beyond the financial reach of almost all British households.
Our next chart plots gross rents against household incomes in 2012. In the first decile, incomes are below £170 a week, and in the tenth decile, over £1397 a week. Households in the first decile were asked to pay rents of £122.50 a week on average, from incomes under £170. In the second decile, gross rents averaged £118.60 a week, and incomes ranged between £170 and £256. For decile no.3, rents of £124.70 a week would have to come from incomes in the range £256 to £342, were it not for the housing benefit subsidy.
Static wages and soaring rents have turned housing benefit, a means-tested welfare payment, into a colossus of the social security system, costing just on £24 billion in 2013-14, 14.7% of the total £163.593 billion for all welfare expenditure. By 2018-19 the government itself predicts that housing benefit expenditure will be £28.406 billion, 15.3% of all welfare spending. The only category of welfare costing more is the state pension, £82.997 billion in 2013-14 and £100.731 billion in 2018-19.
Rent subsidies are paid to households right across the income spectrum. Subsidies typically exceed 50% of rental cost for renting households in in the bottom third of the income distribution, and are above 25% for about half of all renting households. The next chart shows the high dependency on housing benefit, over £88 a week in the bottom income decile and more than £47 a week as far up as the fourth decile, for households between the ranks 31% and 40%.
While the word ‘sustainable’ is over-used, it’s reasonable to say that, in this era of welfare cuts, the gap between rents and incomes is unsustainable and becomes more so every year that the gap widens between numbers of dwellings and of households.
Given the colossal chasm between supply of and demand for housing, it is no surprise that rents and property prices are so high – especially in areas where jobs are easy to find.
In the towns and villages in the remoter rural areas, like here in northern Carmarthenshire, there are plenty of unoccupied homes, but scarcely any well-paid (or even paid) work. Surely part of any solution to the startling housing crisis should be to help local businesses (a) start up and (b) expand, in a process of rural re-population. That process could not be more expensive than £24 billion a year spent on housing benefit. One problem is the attitude of ‘not-in-my-backyard’ that is common among affluent country-dwellers, another is the rigid planning system which zones land uses and prefers big and corporate to small and individual.
In big towns and cities, have we reached the point at which novel approaches to home provision need to be taken? Municipal conversion of defunct shops, offices and public buildings such as redundant schools into homes at regulated rents, accompanied by a significant dispersion of jobs? Greater use of mobile homes, as in the years after the Second World War?
£24 billion paid in housing benefit is an annual cost of more than £900 for every household in the United Kingdom. The policy is not working. House-builders see no profit in building for people who in reality cannot afford to be housed in a cool, wet country where building regulations are stringent and land costs are exorbitant.
Looking forward, there seems little relief from a critical underlying problem: the downwards pressure on wages resulting from the globalisation of economic activity, juxtaposed with the upwards pressures on living costs caused by more and more people competing for resources on a finite planet.
Even after counting housing benefit and other welfare payments, about half of the UK’s households spent more than their income in 2012, financing the excess by taking money out of savings and/or borrowing – from family, friends, banks, building societies, payday loan companies, and even loan sharks.
This is no basis for an economic ‘recovery’ but a downward slide towards penury, in a land with too few homes for its people, and too little money to continue with multi-billion £ annual subsidies.
by Pat Dodd Racher
* Table 5, households by size, in ‘Families and Households 2013’ from the Office for National Statistics, October 31st 2013.
** ‘Housebuilders buy up plots at pace last seen in 2006’ by Gill Plimmer, September 25th 2013.
*** Family Spending 2013 was released by the Office for National Statistics on December 11th 2013.
When a local authority decides to close the only secondary school for miles because of falling rolls, and then makes an unrelated decision to allocate land for 148 family homes in the newly created educational desert, one wonders ‘Why’? Departments not sharing information? Not speaking to each other? What about the councillors? Are they far too over-reliant on the opinions of individual council officers, to the point of just rubber-stamping them?
Here is a case in point:
The town, Llandovery in Carmarthenshire, is ancient and architecturally pleasing, but is in serious decline, the repercussions affecting some 400 square miles of surrounding countryside in Central Wales.
Pat Dodd Racher
What is it about employers and their demands for a flexible workforce? By ‘flexible’ they appear to mean sackable at will. This view of people as no more than units of production inspired Karl Marx and Friedrich Engels in the 19th century, and subsequent philosophies of communism. For a time, especially in Western Europe and North America post-1945, communism retreated into the archive of failed doctrines. Economic growth made workers into desirable assets, and their incomes rose. The capitalist system seemed to be delivering prosperity for all.
As we look back, we can link our exploitation of fossil energy, especially oil, with economic expansion, but like those supermarket bargains of the day, once it’s gone, it’s gone, and the outcome is economic contraction. Competition is fiercer, employers depersonalise their staff and treat them like widgets. It is a step back towards serfdom.
‘Renting to be ‘way of life’ for young UK families’, read a headline in The Observer on June 10th 2012, above a story by Toby Helm and Tegan Rogers. “Millions of young families are entering an era of insecurity in which renting becomes the nom, according to a report that warns of steep increases in the number of parents unable to buy their own homes”, they said, quoting a Cambridge University study. Over the previous five years, the number of families with children having to rent private accommodation soared 86%, they said. Generally, they are renting because they cannot afford to buy. Many families “are paying half or more of their income in rent and, as a result, have little or nothing left at the end of the month to save for a deposit.”
The Cambridge University report would probably have been even gloomier if it had considered looming issues of resource scarcities, which intensify competition and push costs up and wages down and so are serious albeit underplayed policy priorities.
If your employer makes you redundant, and you cannot get another permanent full-time job, you are not likely to get a mortgage either. Work insecurity also means housing insecurity.
A good 40% of households in the UK do not have the resources to repay a mortgage, and for another 20% it is a dubious proposition. Home buyers are concentrated in the upper third of the income distribution. At the top of the scale, households are doing very nicely, better than at the start of the millennium, but their advance is at the expense of everyone else.
In 2010 the incomes of UK households looked like this:
The hardest-up 10% of households had average incomes under £8,320 in 2010, and average spending of £9,651 – quite a gap! Spending ran ahead of incomes in the four lowest income deciles, and was barely lagging income in the fifth decile. The most affluent 10% of households, in the top decile, were very comfortable in comparison. However, the picture is complicated by several categories of ‘spending’ that are excluded from the figures: life assurance, pension contributions, net income tax, national insurance, mortgages and outright purchase or alteration of dwellings, repayment of debt consolidation loans, savings and investments –categories of expenditure that are either compulsory, as with income tax and national insurance, or are voluntary payments made with the intention of making households more financially secure, and less dependent on the state, in future. Only the highest-income 30% of households seem to be in a relatively strong position to improve their financial resilience.
For more than two-thirds of households, pressures from their paymasters — whether government welfare, public-sector employers or employers in the private sector — to do more for less will further damage their ability to provide for their own futures. We don’t seem to be following a very secure path.
Shouldn’t we stop holding mammoth employers in awe, and deferring to them as our economic saviours? Their interest in us is purely financial. Instead, shouldn’t we put a lot more effort into not-for-profit and co-operative enterprises, in which worker members have a genuine stake? The futures of work, and of payment for work, are issues that government tries to treat as non-issues, as solely the responsibility of individuals, who can get good jobs if they try hard enough. If only that were true, but it’s not. Nowhere close.
 ‘Housing in Transition: understanding the dynamics of tenure change. A report for the Resolution Foundation and Shelter by Christine Whitehead, Peter Williams, Connie Tang and Chihiro Udagawa, Cambridge Centre for Housing and Planning Research, 2012
The opposite of joined-up thinking is…. what?
Two sets of mandated policies which are mutually exclusive, maybe. We are talking about Low Impact Development and Building Regulations as applied in the UK and specifically at the Lammas project in Pembrokeshire, Wales.
Wales has a One Planet Development policy to encourage sustainability. Pembrokeshire has its own Low Impact Planning policy with the same objectives, but there is an elephant rampaging all over the policy woodpile – an implacable elephant called Building Regulation.
Simon Dale and Jasmine Saville are smallholders living in an experimental eco-village in Pembrokeshire. They wrote that they were “delighted when Pembrokeshire introduced its Low Impact Development planning policy. As well as bringing Low Impact Development out of the shadows, it offered us an opportunity to use our recent but modest inheritance to get a piece of land and home of our own with the security of planning permission “.
Needless to say, and despite its own Low Impact policy, Pembrokeshire County Council refused permission. That was in September 2008. The planners decided that the Lammas project’s proposal for nine smallholdings and a community centre near Glandwr in the north of the county could not generate enough income to be financially sustainable over the long term. Of course, the planners were assessing the business plans against traditional agricultural benchmarks and not against low-impact benchmarks because there are none. This low impact proposal was not about financial profit and loss but about resource protection, year after year, a perspective that conventional business plans ignore.
There was another application, another refusal, an appeal and, in August 2009, the planning inspector at the appeal overturned the county council’s refusal. The eco-smallholders, including Simon and Jasmine, were given five years to meet the productivity targets which they were obliged to set out in their plans for the new village, named Tir-y-Gafael.
The tortuous process since then is documented in Simon’s and Jasmine’s paper, ‘The Compatibility of Building Regulations with Projects under new Low Impact Development and One Planet Development Planning Policies: Critical and Urgent Problems and the Need for a Workable Solution’, published in November 2011. The clashes between building regulations and low impact development policies were so serious that Pembrokeshire County Council opted for a criminal prosecution against Simon and Jasmine because their home at the eco village does not meet building regulations.
Building regulations are a sort of consumer guarantee that a home purchased from a developer is constructed to specified standards. Simon and Jasmine point out that “if all projects under new Low Impact Development/ One Planet Development policies are expected to include buildings reaching full buildings regulations compliance in the same way as we have been asked [to do], the vast majority of established approaches to low impact development will be prohibited”. This would include carrying water to one’s home in containers and heating it on a woodstove; using an outdoor composting toilet; or not connecting to a mains electricity supply”. One of the barriers they crashed into was the requirement for a smoke alarm connected to mains electricity – because they did not have mains electricity. Another was the absence of electrically powered ventilation, again because they were not connected to the mains.
An additional hurdle relates to applications for relaxations of specific building regulation diktats. These applications have to be backed with evidence from acknowledged experts, or by the applicants’ own research completed to professional standards. This pushes the costs beyond the pockets of many smallholders, and is rather like being involved in lengthy legal proceedings – the total expense cannot be predicted at the outset. Simon and Jasmine obtained some quotations from professionals, and realised that fees would be twice as much as the £3,000 their home cost to build, or even more.
Planning permissions under Low Impact Development policies usually come with what Simon and Jasmine call “ambitious targets” for the output from smallholding land, which would be hard to reach in the best possible circumstances, let alone when having to cope with the pressures and conflicts imposed by clashing planning and regulatory requirements.
In January 2012, almost two and a half years after the grant of planning permission, and a couple of months after Simon and Jasmine published their excellent paper, Pembrokeshire’s building control department, responsible for compliance with Building Regulations, accepted in Haverfordwest Magistrates Court that the regulations could not be applied strictly to innovative structures that are designed to minimise environmental impact and carbon emissions, in pioneering new ways.
A candle in the sustainability gloom, lit only after years of effort, disappointment and refusal to give in.
The saga makes me wonder whether planning authorities adopt Low Impact Development policies to make them look ‘green’ but, at the same time, rely on Building Regulations to ensure that nothing really changes. Simon’s and Jasmine’s experiences are like those of Merav and Janta Wheelhouse at their Karuna permaculture project near Picklescott in Shropshire. The Wheelhouses battled for seven years for the right to live on their 18 acres in a sustainable way, their home and farm emitting not much more than one-seventh of the carbon emanating from nearby homes.
Next door to Pembrokeshire, in Carmarthenshire in 1974, the first of a changing population of tent-dwellers moved onto remote land at Llanfynydd, in the hills east of Carmarthen. The settlement became known as Tepee Valley, and the local council tried for years to evict the people living there. In 2006 the Welsh Assembly granted, retrospectively, a Lawful Use Certificate, but only for three tents and one caravan, and not for any experimental Low Impact dwellings. The authorities continue to see Tepee Valley as some sort of threat to established order, not as an opportunity to experiment with low-carbon, self-sufficient living.
The struggles faced by would-be smallholders who want to work their land contrast with deference that so many planning authorities show to Big Business applicants, like Tesco, Sainsbury’s, and wind farm operators. It comes down to power differentials in the end. Big Business has the money and clout to persuade planning authorities that if permission is withheld, there will be appeal after appeal until it is granted. Meanwhile, young families who want to live the sustainability agenda have to fight every step of the way.
 ‘Council obstructs family’s ethical land project’ by Paul Evans, The Guardian, November 19th 2008.
Houses without jobs — planning for yesterday, not tomorrow:
Construction jobs are a short-term fix not a long-term basis for a sound economy. Ask Spain.
Planning policies lag behind economic realities.
Matt and Lily Gibson couldn’t afford to live in a rented house any more so they moved into a tent. I read it in The Guardian on Saturday. The rent had been £625 a month, apparently. The tent cost £370. They needed somewhere to pitch it, and the farmer friend of a friend obliged by offering a corner of a field.
Living simply requires time to be substituted for money. Matt and Lily keep themselves and their baby daughter warm with a wood-burning stove, on which they cook. The stove requires feeding every two hours around the clock in cold weather, and that’s a lot of wood to chop up. Time taken to survive off-grid, without utilities, means less time for paid work. The couple want to save up to buy a plot of land on which to build an eco-home. Saving up enough money may be just as hard as paying to live in a rented house.
Matt and Lily “believe more working families will be forced to live like they do, as rents and bills rise and first-time buyers are permanently priced out of the housing market”, wrote article author Patrick Barkham. Cuts in welfare payments like Housing Benefit are sure to result in more families sinking under the breadline. Yes, there may be downward pressure on rents, but landlords with mortgages to service do not have huge room for manoeuvre, and the shortage of homes means that they can, for the moment, usually find another tenant.
The planning laws in England and Wales are not keeping pace with the social and economic changes that are swirling around us like a cyclone. Nice little suburban estates, out-of-town superstores with vast car parks, no development in the countryside (unless you have the money to build a house deemed to be of architectural merit). Suburban estates require occupants with jobs somewhere else, access to a car, and sufficient income to pay a seemingly endless series of bills – mortgage or rent, council tax, water charges, electricity, gas, telephone, and so on.
Planning policies have still to recognise that the past is not a predictor of the future. Motorised transport made the suburbs possible, made retail parks possible, made long supply chains for food and all other products possible. Motorised transport is going to become so expensive that people will need to live close to work, and the items they consume will have to be made closer to where they live. Until planning policies come to terms with this shift, people like Matt and Lily are likely to bang their heads against a wall of planning negativity.
They haven’t been in the tent long, although if they can survive January, June will be a breeze. In the UK we may think their downshifting rather extreme, but the newly homeless in Greece would recognise the shattering of past habits when incomes are no longer sufficient to meet the costs of urban living.
See ‘We couldn’t afford to live properly’, by Patrick Barkham, The Guardian February 11th 2012, Family Section pp4-5.