Introduction

In this second part of the book we turn to more detailed analysis of the policies that governments have introduced to make the housing system more effective. We start by looking at how the land use planning system has developed and how housing needs are estimated to determine required land supply. This is seen as a core reason why supply is so unresponsive to demand and price in Britain. In Chapter 10, we then move on to look in more detail at the impact of the system on stakeholder behaviour and the impact of particular planning policies on housing delivery.

In this chapter we first clarify how the land use planning system has evolved over the last 75 years, and how it has framed and continues to frame the residential development environment. In particular we examine the emphasis English governments have put on matching new housing supply to household formation – something that we have already argued goes against the economic analysis which implied that household formation is endogenous to the system. Importantly, required supply is almost always based on estimates of housing need, even though the majority of the dwellings will be provided in the market sector.

Most developed countries make some estimate of the numbers of homes that they need to accommodate their populations; some go further and estimate how these numbers will change in the future and what particular needs should be fulfilled. Historically, these estimates have been very simple and entirely based on demographics – maybe just an assumption that requirements will rise in line with population (or adult population) or perhaps building in an assumption about projected household size.

Governments in some developed countries (notably in North Western Europe where housing has tended to be seen as part of the social contract and indeed the welfare state) have become increasingly interested in obtaining a more nuanced picture of future requirements. There are two main reasons: first, in most such countries postwar numerical shortfalls, which were very large indeed, have been eradicated – that is, the number of households has come to exceed the number of dwellings. Future needs have therefore become more directly associated with the projected growth in household numbers together with concerns around minimum standards and the exclusion of certain groups from access to adequate affordable housing.