Introduction
In recent years, housing has risen up the political agenda, and rightly so. A national conversation about the role of housing in building a good society and a strong economy is not only a moral imperative, but a political necessity for any government genuinely committed to tackling inequalities and improving prospects.
Recent political commitments to funding for affordable and social rented housing and to the reform of private renting – notwithstanding recent bumps in the road – represent a generational opportunity to do something different.
The debate in practice has so far been dominated by the ambitious housing delivery targets that the government has set. But a national conversation about housing cannot be dominated by a simplistic and one-dimensional focus on the housing crisis as experienced in the hottest parts of the housing market. There is an ongoing need to ensure that policies and interventions are sufficiently ‘place-aware’ to recognise the nature of the challenge in different parts of the country and the potential for growth everywhere. That is not to underplay the severity of affordability issues and the need for new-build housing – there is for good reason, a consensus around the need for new supply – but new housing alone will not address the housing challenge.
The housing ‘polycrisis’
There is no one single housing crisis. Some refer to the phrase ‘polycrisis’ to denote not only how it differs fundamentally in different types of local housing market but also to stress its close connections with other forms of crisis. The housing challenge alone encompasses unaffordability, poor stock conditions, poor energy efficiency and high heating bills, and the degradation of the built environment. Britain has among the oldest residential housing stock in the developed world. Dickensian conditions in parts of the private rented sector are underreported and underregulated at best, and invisible at worst. In turn, these housing challenges have broader impacts: poor health, poor educational outcomes, a high social care burden, high levels of domestic greenhouse gas emissions, and increasing levels of socioeconomic polarisation within housing markets and between neighbourhoods.
Good housing – like the high street – is a barometer of the health of places. Housing matters enormously for social progress. If the prospect of access to decent, affordable and safe housing is increasingly beyond the means of ordinary households then that indicates a dangerous breach of the social contract by which governments govern. It is in this context that increased dissatisfaction with governments and the rise of populism in many countries can be observed. The challenge of regenerating neighbourhoods and improving obsolete and unsafe housing should be a priority for all actors with an interest in doing the best for people and places throughout the country. Committing to a substantial new build programme is important but will be, by itself, insufficient.
Building new housing is important but is only half of the challenge
For generations now, housing has been seen as both a consumption and an investment for good – providing not just shelter but a source of capital which can be drawn on in later life. House prices respond in complex ways to market signals, with seasonality and long-term economic cycles overlain with local market segments (student housing and housing for older people being just two examples). Geographic housing market areas are multi-layered and overlapping, constrained by labour markets and transport infrastructure.
On top of this, just less than a fifth of England’s housing stock is social housing, rationed not by price but by varying measures of need. Such needs are usually inherently local and cannot be passported around the country to be met elsewhere.
Despite the requirement for new housing, demand is met overwhelmingly by the relet and resale of existing dwellings. Tempting as it may be to look for silver bullets, building 300,000 units a year – even if that were possible – won’t necessarily solve the underlying problem. It takes a very long memory to recall a government that has not tried to reform the planning system – it is an easy poster child for regulatory dysfunction and a tempting scapegoat for any government seeking to demonstrate pro-business credentials. But history is not kind on it as a route to boosting housebuilding and many now accept that the only credible way of boosting housing numbers is through direct bricks and mortar subsidies of social rented housing.
Making the economic and fiscal case for regeneration
In times of extreme fiscal constraint, demonstrating value to the public purse is paramount. Unlike the well-developed machinery of economic appraisal within transport and health appraisal, the theoretical and practical tools for understanding the value of regeneration are less well developed.
A host of factors such as brownfield viability concerns, a complex tax position for regeneration, and a reliance on past household growth projections as a guide to future demand, mean developing green field sites for new housing has become seen to be the easier option, even in places where this may undermine other parts of the market. Although recent research for Homes England recognises the need to better account for a wider set of economic impacts, the primary measures of success remain house prices and land values. Prices may be a good guide to assessing the amount of public subsidy that a housing scheme should have, but they are a much less satisfactory measure of wider societal benefit. Thankfully, there is now a solid evidence base on the value of good housing and its monetary benefits. Regenerating housing can induce savings to the NHS, education, transport and other budgets. An important task for Renew will be clearly articulating the wider economic and societal benefits of housing regeneration.
Winning the political argument
Decent, affordable housing is the foundation of a good life. Irrespective of the economic doctrines they favour, governments of all stripes recognise the risks of not providing hope to a jaded electorate. As an investment that delivers tangible local benefits, regenerating houses and neighbourhood makes good political sense.
Life for today’s young people is impacted significantly by the cost of living. Many will already be resigned to enjoying less than their parents did. The most recent Index of Deprivation underlines how entrenched place-based deprivation is. Over four-fifths of neighbourhoods that are in the most deprived decile in England were also in the most deprived decile in 2019. Even where economic opportunity is thin on the ground, people have local roots and pride.
The current government understands that pride in place is critical and is putting more investment into hyperlocal support. Whilst welcome, the prospect that this will ‘shift the dial’ needs to be understood in the context of past regeneration programmes. The last serious attempts at place-based regeneration policy – New Deal for Communities, Housing Market Renewal, Neighbourhood Renewal – were nearly a quarter of a century ago — and even then, had mixed results. What must we do differently? More pertinently, will surgical interventions in hyperlocal neighbourhoods be big enough and sufficiently joined-up to make a meaningful difference? Regeneration needs to be bold, vision-led, and not just paper over the cracks. Focusing on the fundamentals of a good life – the foundations of which are in decent housing – is likely a better strategy in the long term.
Infrastructure investment and housing strategy have responded principally to affordability and ‘overheated’ markets such as London and the South East, which is where most public policy attention has been channelled. By contrast, housing conditions and the built environment in the North have been for too long neglected by both the market and by public policy. This has acted as a significant brake on the country’s productivity and has prolonged regional inequalities, in contrast to other OECD countries.
The challenge for Renew
These are not abstract challenges but they are complex. Making the case for housing regeneration means nothing less that portraying a vision of hope for the future of the country and what it means to live a decent life in its ordinary villages, towns and cities.
But whilst there may be agreement on the moral imperative and the will for action, there remain important technical questions and lines of enquiry which need clear, crisp answers. Governing is both an art and science. Much of the evidence is out there, including in the wisdom of practitioners and communities on the ground. The challenge is to bring it to bear on the overarching aim of this inquiry which is to make sure no one and nowhere is left behind.
This inquiry will need to address four key concepts simultaneously.
First, the economic question. This is not only about the technical rules for economic appraisal (such as the Treasury’s Green Book, recent revisions to which are a step in the right direction), but having a clear vision-led approach which breaks out of the mould of piling investment into areas of existing strength and hoping for trickle-down benefits. Housing should be seen as critical economic infrastructure, and a key tool at the disposal of devolved Mayoralties in developing holistic place-based strategies for economic, social and environmental progress.
Second, the pride in place argument. Housing is at the heart of place and neighbourhood. Whatever the causes may be, poor quality housing along with decaying high streets are visceral reminders of the failures of successive governments to make good on the social contract with their citizens. Pushing social welfare into an underregulated private rented sector at huge costs to the benefits bill has wreaked havoc on some neighbourhoods. Communities are not impressed by whataboutery, and any failure to invest in places throughout the country will arguably lead to more pain at the ballot box.
Third, a learning and listening mindset. Past regeneration programmes have not always paid sufficient attention to community engagement. Regeneration needs to be done in a way that works with the imagination and consent of communities. Top-down approaches will not work, but equally all communities should be able to expect good underlying services and infrastructure. There is a large UK and international evidence base on lessons learned from regeneration which can be interpreted against what we know now.
Finally, Renew is an inquiry about the North. It must recognise the specific challenges and opportunities of the North in a way that exemplifies how regeneration needs to be done differently. But it must avoid claiming Northern exceptionalism or indeed treating the North in homogenous terms. Housing markets and housing systems are geographically very complex and the question of the link between housing regeneration and economic growth demands a geographically nuanced approach which is built from a strong understanding of local and regional conditions – not just the experiences of overheated markets. Getting this right will develop a strong template that can be applied throughout the rest of the country.
If Renew can address these themes and questions, then it will truly advance understanding of the prospects and value for a strategic and sustained commitment to housing led regeneration in all parts of the UK, not just the North of England.
The perspectives collection showcases a range of opinions about regeneration. The views expressed in the articles are the author’s and do not necessarily reflect the position of the NHC or the Renew inquiry.