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Welcome to www.greeningthegreenbelt.org, started 01 feb 2003. This is a protest against the unfairness and environmental damage caused by green belt policy.
Green belts are mechanisms for restricting the supply of planning permission. Green belt policy is usually regarded as the one strong weapon planners have against developers who would destroy our environment; our environment which is free for us all, rich and poor, to enjoy. But, in reality, it
Open up the greenbelt to settlements that will
Briefly, if you commit to a lifstyle that is much less polluting than average, you can have exceptional planning permission.
And brownfield sites?
Scroll down or click on a red link to go directly to an article.
A recent letter in the Independent from Cllr Andrew Duffield argued for a national land value tax and described the unearned windfalls of land speculators as a cash cow that the government could perpetually milk. (“Brown’s massive gift to land speculators”, 14th July 2004).
The background to this proposal is the rise in the value of property that has equalled 40% of GDP in some recent years. Changes in tax and benefits since 1997 may have made the poorest families better off by more than £30 per week but over the same period the affluent have seen their property assets increase by hundreds of pounds per week. Wealth distribution has been from the poor to the rich and from the young to the old.
Increases in property values have for many years been driven by a shortage of development land. But, for most of the country, it is not land per se that is in short supply but the right to use land for building. We have a shortage not of land but of planning permission. It is not an increase in the value of the bricks and mortar that has made property more valuable: It is the increase in the value of the rights, which planning permission grants to allow property to occupy land.
Planning permission often increases the value of land a thousand fold. For example, a hectare of agricultural land near York is worth about £5,000. With planning permission for residential development this can rise to over £5 million. Planning permission increases the value of a plot for a single house from £100 to £100,000. Planning authorities dispense huge amounts of wealth. The immediate windfalls go to the landowners. But we should remember that these planning processes control the housing market, which is he cause of the enormous increases in the value our house. In the long run rises in house prices get spent whether it be by equity withdrawal, inheritance or downsizing. This is an enormous tax-free bonanza – to the lucky.
Traditionally Green Belts were to stop urban sprawl and were billed as the "green lungs" of the city. Now the policy is seen as the major instrument for protecting the environment against environmental damage due to overdevelopment. They are believed to "protect the countryside". But we might remember here that only about 10% of England and Wales is urbanised
The shortage of planning permission caused by green belt policy also redistributes wealth from young to old wealth as well as from poor to rich: older people eventually sell their houses to younger people. Higher housing costs are a burden on the young and the poor.
Another problem is that the policy encourages building replacement, rather than new build. Replacing existing buildings with denser development is seen as an environmental benefit because higher density is thought to mean shorter travelling distances thus saving the environmental impact of car travel. But what is rarely calculated is the global environmental impact of new building - building a new house generates about 70 tonnes of CO2. Demolishing ten dwellings to build twenty creates 700 unnecessary tonnes of CO2.
Green belts are often "green deserts" as modern agriculture is high in chemical and other inputs. At British Association last year Dr Keith Porter of English Nature said low-density developments with gardens and public open spaces would provide more favorable habitats for species than the giant pesticide-treated cereal fields that dominate much of the countryside now.
"By placing housing in these areas with innovative designs you can build in the corridors and the linkage the wildlife need to come back in," he said. "You would be certain to increase biodiversity."
Indeed, a square kilometer of central London has significantly more bird species than a square kilometer of farmed land in Surrey. And, of course, many brownfield sites have significant amounts of wildlife.
There are social objectives that are delivered by the planning system. For example, planning permission may come with a requirement to provide social housing or a university may be given planning permission with the implicit recognition that it is performing a wider public service.
But from a political standpoint it is impossible to directly reversing the property-driven redistribution of wealth by taxation. Property owners are the most important group of voters. So a head-on assault on green belt policy would also be difficult. They may contribute less to the environment than is conventionally believed but they have a very strong place in the public mind.
A land development tax might capture some of the increased value for the public purse but this runs the risk of bringing development to a stop while landowners (or option holders) wait for a friendlier regime. Also compulsory purchase is usually slow and bureaucratic and may be open to legal challenges.
Recently there has been renewed interest in the Development Corporations. But not in a way that challenges current green belt policy. Hansard’s report on the Draft Thurrock Development Corporation (Area and Constitution) Order 2003 says:
"According to the proposal, housing, commercial and industrial growth would be focused predominantly, but not exclusively, on brownfield land south of the A13. The UDC would operate in line with the development principles established in Thurrock council's local plan—and first deposit unitary development plan—as that relates to the protection of the green belt."
Another characteristic of development corporations is that they are allocated for a specific site and must deal with existing interests. I wish to propose that the development corporation legislation be used in a new way:
A fund is established to buy options on greenfield land throughout the UK at or just above agricultural prices. When options have been purchased for a suitable area then a development corporation is established. The key point here is that no specific schemes should be planned until after the land has been purchased. Any specific landowner can refuse and if they refuse their land will not be developed so its value will remain as undeveloped land.
Objectives of these new development corporations could vary. They might have the purpose of raising money for the Exchequer - planning permission raises the value of one square kilometer of well placed agricultural land by several hundred million pounds. Well-placed development corporations could raise many billions.
They might provide social housing and possibly alternative forms of settlement (e.g. neighborhoods with reduced environmental impact or with objectives in line with the Government’s Sustainable Communities initiative.) Here we should remember that the affluent property owning class are those that have the biggest impact on the environment and it is not hard to see that increased house prices lead to increased consumption and less sustainability.
For some other purpose such as funding health or education. The current proposals in York for the University Campus Two represent a few hundred million pounds worth of planning permission. It is clear that some of this is a business park, where the planning permission is particularly valuable and not particularly closely related to University activity.
In the Long View article, in the Financial Times (Jul 19/20, 2003) John Plender says
"The Fed's strategy has been to offset the impact of a falling stock market on people's wealth by boosting the housing market to encourage consumer spending. This was intended to keep the show on the road until increased government spending and renewed corporate investment allowed imbalances to be addressed without throttling the economy."
Of course, it is holders of houshold real estate that benefit by the Fed boosting the housing market. Clearly a large bonus for the already affluent.
The CIA World Factbook 2002 puts US GDP at $10,082 bn so US stocks have been falling at a rate equal to 12% of GDP. At the same time household real estate has risen at a rate equal to 9% of GDP. During the same period UK house price rises have been increasing at yearly rates of up to 40%. So in the UK, the affluent have benefited even more than their counterparts in the US.
But is help on the way? The FT had a piece the previous day "Economist to count cost of nimbyism" by Nicholas Timmins and Roger Blitz> It starts
The economist assigned by Gordon Brown to draw up measures to boost housing supply is to examine the economic impact of nimbyism. Kate Barker has been so taken aback by public resistance to new housing that she wants to stir up debate on the pros and cons of the instinct for preserving the status quo of communities.
And also says
Ms Barker said: "An important part of that analysis will be what happens if we do not build these extra homes and what will be the consequent impact on economic growth."
Pity a growth orientated economist has been chosen to look into this question. Will she have read "The Loss of Happiness in Market Democracies" by Robert E. Lane (Yale University Press. See here)? But it is a good start for her to recognise that planners are following nimbyish policies (and worse). Perhaps she will have time to look up www.yorkexilesthe poor.org.uk
The Chancellor gives ...
We have some interesting statistics derived from the Treasury's Inter Governmental Tax and Benefit Model. They show working age household gains over the past few years that are due to the Chancellor's tax changes, such as the working family's tax credit. The bottom 30% of households are about £30 per week better off and the top ten percent are £12 per week worse off and someone on £1000+ per week is hardly likely to notice the price of five pints of London beer.
... ODPM takes.
But against these modest gains for the poor we have the consequences ODPM's planning system. House prices in 2002 increased at rate roughly equal to 40% of GDP or about £500 per household per week. For the wealthy that can be thousands of pounds per week. For the young and poor it is usually nothing.
As seen below, the winners are finding ways of spending it while the young and the poor stump up extra housing costs through higher rents or the extra cost of trying to grasp that last rung of the housing ladder. See this in "UK housing surge boosts rental market" in today's FT
It is, of course, possible there will be bit of a slump in housing market. Some householders may even end in negative equity. But it is unlikely do more than slightly reverse the enormous transfers of wealth that have landed riches in the laps of the rich over they past few years.
Staff from faxfn struck up a conversation with a PC who told us the following.
I have recently moved back to York and cannot afford to buy a suitable house. My maximum mortgage would be about £100,000. If I could manage a £20,000 deposit I could buy a house for #120,000. I have children so we would need a 3 bedroomed house. Police officers have to be careful where they live - they can't live on any estate - so I am thinking of moving to Humberside and commuting. On my shift there are officers who commute 30, 50 and 70 miles daily.
A bonus for some older officers, who own houses in York is that they can move out to surrounding areas as they near retirement. One older officer has recently sold his house in York to move to a small town near York.
Of course, new recruits are on lower salaries than me so they will be able to afford almost nothing in York.
The Daily Mail has two stories today
The Good News - for most readers of the Daily Mail
The Good News refers to a recent report by the Centre for Economic and Business Research, reported on the BBC as House prices 'set to double'. The Mail reports CEBR as saying that millions of home owners could earn a 'second income' from remortgaging their property. The Mail also reports that "analysts" already estimate that £15 out of every £100 spent now comes from equity withdrawal. (This is not surprising considering that, during 2002, the national total of house price rises was equal to roughly 40% of GDP.)
Of course, the Good News is good news for most readers of the Daily Mail, who already own their own houses. They report CEBR's Mark Pagnall as saying.
"Because we fail to build houses fast enough to meet rising demand we can expect a return to relatively-high rates of house price inflation when consumers' confidence and the economy picks up.
... and for most readers of the Guardian
Our readers may like to look at these faxfn review websites:
These are concerned with the unfairness in the planning system which rewards the older, home-owning middle classes with these vast amounts of wealth at the expense of the poor and the young.
The Bad News - for us all
The Bad News refers to a forthcoming book by the Astronomer Royal, Professor Sir Michael Rees, "Our Final Century" in which he gives mankind only a 50-50 chance of surviving this century.
His list of worries include:
Our readers may like to look at these other faxfn review websites:
These are concerned with the lack of thought on issues such as these by those that have responsibility for planning our towns and cities.
Data for this graph comes from the Carbon Dioxide Information Analysis Center cdiac.esd.ornl.gov.
CO2 concentration and temperature
To see the correlation between CO2 concentration and average surface temperature at Vostok over the past 450,000 years see
Challenges of a Changing Earth Conference
A response to the Green Paper "Planning: Delivering a Fundamental Change"
(The planning system has been responsible for massive transfers of wealth)
For the past four decades at least, the planning system in the UK has been responsible for massive transfers of wealth. This is directly attributable to the manipulation of the market in planning permission. In key areas especially, the value of planning permission has increased enormously so that its value far exceeds the cost of buildings (for which planning permission is required) and the land that they occupy. This affects both commercial and residential development. However, here I concentrate on the domestic market.
Currently, in many places, the market value of a house is several times the cost of new build. I currently live in York. In Barton on Humber, a pleasant place 35 miles from York, a new house costs about £70,000. In York a similar house would be three times more expensive. But the undeveloped value of the land (without planning permission) is little different so two thirds of the value of housing in York now resides in the value of the permission for the house to be there.
This is why land near York without planning permission would be valued at about £10,000 per hectare and the value of the same land with planning permission is £1,000,000 per hectare or one hundred times greater.
I, with my fellow homeowners, am a beneficiary of this system. For the past four or five years the value of my house (or rather the permission I have to maintain a house on the land in my street) has risen by a greater amount than my salary after tax. This has established an enormous future transfer of wealth to me from those that will take over this property when I leave. Much the same story is true for most of the homeowners in the UK.
I additionally have an interest in a house in York that is let. I should benefit from this by increases in the value of the "house with land and planning permission". It is, of course, the value of the planning permission that is rising. I will benefit from this by increased rent or by selling, at the expense of people in the rented sector.
(A transfer of wealth from poor to rich and from young to old ...