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After recently walking the 78-mile Capital Ring in London, I became terribly bored.
The route connects parks, open spaces, rivers and even a beaver reserve in a loop through central London. The scenery is beautiful, but I couldn’t resist putting on the mantle of an amateur urban planner on every vacant lot or substandard warehouse space, outdated retail stores, and along low-density streets. “Hundreds of houses could be built here,” I kept telling my wife. “Thousands.”
The route is evidence that it would clearly be possible to create more housing without compromising London’s historic beauty or its green spaces.
London is a great city with efficient public transport and lots of open space. But it fails. The problems are economic and not due to the Ulez vehicle charge, knife crime or a popular mayor.
Since the global financial crisis of 2008-2009, productivity growth in the capital has been lower than the rest of the UK. With stagnating wages comes crippling housing costs. The property price to income ratio has weakened from other regions since 2007, rents are also high, rising quickly and you don’t get much for your money.
Unless you have lived in the capital for a long time, have rich parents, inherited or have a very high income, the standard of living is low after housing costs. You have the choice between a poor standard of living here, where there are good jobs, or moving away, where career prospects are often poorer – a terrible decision.
The most meaningful statistic for the future is the rapidly falling number of students in the capital’s primary schools. The declines are significantly faster than elsewhere in the UK, showing, among other things, that families are increasingly unable to afford to raise children in London.
There are two possible solutions. One of them was recently formulated by the Center for Analysis of Social Exclusion at the London School of Economics. In “solving the housing crisis without building new houses,” the authors point out that a third of households have two or more bedrooms above the national space standard. They propose a sufficiency approach that levies surcharges on “surplus living space,” forces single people to share a home, and bans second homes.
Excess housing is defined by the national standard, which essentially states that couples should share a bedroom, as should young children and teenagers of the same gender. Guest rooms, dens, home offices, and most children who have their own bedrooms are obviously in violation.
If a government were to set taxes high enough, people would certainly become quiet. High rents already have this effect in a market system. I’m equally sure the voters wouldn’t thank you for that. The idea that housing is akin to smoking and requires special sin taxes violates economic principles (it is not a sin) and the natural aspirations of people.
It advocates a minimum threshold, sensibly developed by the Thatcher government, to define overcrowding as a target.
The alternative I prefer is mass construction, knowing full well that this is a long-term project as the influx of new houses will always be small in relation to the existing ones. That means radically simplifying and relaxing planning rules for all locations, allowing homeowners to densify their streets with few restrictions, and accepting that strange results can happen.
This is a fundamentally ambitious approach that is intended to enable people to afford more housing as their wealth increases. Currently, demand so exceeds supply that housing costs all too often rise and eat up additional income. That’s what makes people unhappy. And I challenge anyone to walk across the Capital Ring and tell me there is not enough space to build in London.