Supply and demand: how can local government respond to the housing crisis?
From Future of Local Services to the Public
Contents |
Summary
The government says we need £3 million additional homes by 2021 to meet the demand for new housing. Affordability of housing and housing growth problems are at record levels – the average first time buyer couple will have to save 104% of their annual salary to meet the costs of buying a typical home.
The financial crisis is having an impact on the housing market - house prices fell over the last year (2007/08) and look set to fall further. By 2016, all new homes will have to be carbon neutral, though the biggest source of carbon emissions from housing is from existing stock. Providing insulation in all existing homes would do more to cut carbon emissions than building zero carbon homes. The Government has announced plans for 10 – 15 Eco-towns, but it is not clear how the infrastructure required to support them will be funded. Government threatens to by-pass the local planning system to get eco-towns through if necessary.
Increasing recognition that housing and planning are central to “place-making” and to achieving other local priorities and objectives – economic development and regeneration, tackling climate change, health and well-being, social cohesion, educational attainment, crime. Leadership and capacity in the housing sector is mixed and expectations and pressures on councils is increasing.
Housing is a hugely more salient issue since Gordon Brown took over as Prime Minister in June, 2007. There is major central government activity around the housing agenda, and the LGA’s profile in the national policy community is increasing, building strong relationships with key national players and the developer sector.
Impacts
- Unstable financial market could have implications for the numbers of people on housing waiting lists, for people planning to use equity in their houses to provide for care in old age.
- Financial crisis could also impact on the number of houses being built in the short term, causing councils to miss their targets on housing delivery.
- The changed economic environment could also result in opportunities e.g. easing of capacity constraints in the construction sector, more affordable land.
- The building of new homes can have a severe impact on the physical environment. Increasing demand for housing and raises the profile of sustainability issues - there will be increasing pressure on government to build eco-homes and towns and to provide insulation to the existing stock of housing
Relevance
There are important links between housing and other key issues for local government, notably economic development and the sub-national review, local democracy and climate change.
Councils are the only bodies that can provide leadership and bring forward the housing we need in places where people want to live, but they need to get better at doing it, have more tools for the job and they need to build public support. Councils must improve leadership and capacity, develop and promote new models of council-led housing companies to increase investment in homes and communities.
Local councils must ensure that homes are built which are in adequate supply to meet local needs, affordable, well designed and of high quality; and which enhance the environment and the neighbourhood, support economic development; and are in communities where people want to live and can thrive. They must actively work to increase the supply of new housing to meet local need, improve the standard of all housing in their area and enhance the quality of their neighbourhoods and communities. They should also ensure that vulnerable people and those in housing need have access to the houses they need.
They should also secure commitment from national political parties to:
- not usurp or supersede council’s planning powers
- give councils additional investment and freedoms for councils to deliver affordable homes
- allow councils to plan and deliver infrastructure according to local priorities
- provide asingle regulation system that places the same responsibilities and scrutiny on councils and housing associations in providing housing for all social tenants
- have greater control over the money raised through utility bills to meet the carbon emissions reduction target by 2010
- make decisions on eco-towns through the local planning system.
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