Beyond the comfort zone

Think tank: Social Market Foundation

Author(s): Gideon Salutin

April 16, 2024

This report from UK think tank the Social Market Foundation looks at how effective planning reform is and how the UK can learn from failures elsewhere.

Planning reform is of growing interest to policymakers across the Anglosphere as a way to increase the rate of housebuilding at minimal cost to the public purse.

This report – the fifth and final instalment of our series on the housing crisis – looks at how effective planning reform is and how the UK can learn from failures elsewhere to ensure it succeeds.

While planning reform is a useful tool and is necessary to increase housing supply, it is not sufficient: it is far from a sure bet. Generally, the impact of planning reform on supply has been limited by its limited scope, and other regulations can continue to hold back developers. Even where supply does increase, there is no guarantee the increase will be large or that the new units will be affordable, as it can result in gentrification. When planning is reformed, policymakers are gambling that the increase in housing supply will outweigh the increase in property values. To win this bet, they need to ensure planning reform increases supply and that the new supply is affordable.

The report therefore recommends that any planning reforms are ambitious enough to greatly increase supply by maximising the land available to housing development and the unit density that can be built. Policymakers should undertake a root-and-branch approach to planning reform by making certain regulations related to planning reform, capacity and affordability mandatory for Local Planning Authorities. They should introduce blanket planning reforms across the UK or devolved nations, rather than a piecemeal approach, and ensure that design codes and targets are introduced at Local Authority level.

Finally, any planning reform must include demand-side affordability requirements based on household income and local wages, to avoid the gentrification that can result from planning reform.