Anthony Breach: Why planning reform is essential to improving public transport use

4 Apr

Anthony Breach is a Senior Analyst at Centre for Cities, where he leads on housing and planning.

Better public transport would be a wonderful thing. National and local government, as well as the metro mayors, all agree, and even the Prime Minister considers transport as “one of the supreme leveller-uppers”.

But where there is much less agreement is on exactly how to boost public transport in cities and towns across the North and Midlands of England.

Let’s forget about the environmental and social arguments for public transport for a moment, and instead just focus on the economics. Achieving value for money in urban transport requires not just running faster trains or building trams for the sake of it, but on maximising usage while ensuring commuters can still make free choices.

Unfortunately, in British cities outside London, public transport usage seems to be low because their residents lack choice. Centre for Cities has produced research showing that public transport accessibility is worse in large British cities than in similar Western European cities.

While 66 per cent of residents in European large urban areas can reach their own city centre by public transport in half an hour, only 40 per cent can in Britain. And in some cities the situation is even worse.

Take Manchester for example. Manchester has roughly two and a half million people, compared to just under two million in Hamburg. But our new Centre for Cities tool shows that in Hamburg, 800,000 residents, 44 per cent of the population, can reach the city centre in 30 minutes by public transport, while only 500,000 in Manchester can, just 20 per cent of the city’s population.

Part of this is that British cities do face a supply-side problem. Manchester’s public transport network covers a smaller area in 30 minutes than Hamburg’s. Some other large cities, such as Sheffield and Liverpool, also have smaller networks than peer European cities.

But crucially, all the large cities in England face demand-side problems too. There are fewer people available to ride public transport in every part of their 30-minute areas – 5,270 people per hectare in Manchester compared to 6,500 per hectare in Hamburg for example.

This pattern, common to big British cities, decreases demand for their public transport networks as there are fewer customers available for every mile of route or rail laid.

Why is the potential demand for public transport so much lower in British cities? The reason is their urban form. While in Hamburg and other Western European cities a ‘mid-rise’ urban form of four-to-six storeys is common across areas accessible to public transport, as Create Streets regularly point out, British cities are typified by a uniform, low-rise terraced and semi-detached built environment, even in neighbourhoods just outside the city centre.

In effect, the shape of residential areas in British cities forces people to live out of reach of public transport. That might not at first seem like a big problem. After all, 70 per cent of Manchester’s population can reach the city centre in 30 minutes by car, as 72 per cent can in Hamburg, and a majority of all of Manchester’s commuting is by car too.

But the problem isn’t just current commuting capacity, but future capacity. For Manchester’s city centre to continue to grow and provide more highly-paid, highly-skilled jobs for people who live in the rest of Manchester and in the towns outside it, it needs to be physically accessible with quick and convenient commutes, even if working from home remains a significant trend.

As motorists face terrible congestion in Manchester and other large cities due to their sheer size, their city centres need better public transport accessibility – and therefore, a more mid-rise urban form – for their local economies to keep growing.

A shift away from a low-rise built environment within the urban core of big cities and near stations is compatible with protecting the suburbs and the countryside in places out of reach of public transport – Hamburg and other large European cities enjoy English-style suburbs on their outskirts too.

But, if national and local government are to achieve value for money for the taxpayer from investment in extra public transport, there must be efforts to boost demand in neighbourhoods closer to city centres. Just laying more track without constructing more mid-rise buildings in cities will be hugely expensive and for minimal gain.

For national and local government, this means several things.

First, improvements to public transport must come with changes to the built environment – both around new and existing public transport. Too often, we have wasted money by building expensive new infrastructure while hardly adding any new buildings for residents and businesses to actually use.

Second, achieving this depends on ensuring planning better connects new homes to new infrastructure. Our current planning system does not make it at all easy to build new homes in the first place, let alone on small bespoke sites within urban areas. Local Development Orders (LDOs) are a handy planning tool that local authorities can use to make this easier, but at present they rarely use this power.

National government should continue to make the system more predictable through planning reform, and require councils to apply LDOs around stations if they want public transport investment.

And third, local authorities should release parts of the green belt next to stations for ‘button development’. Large sections of England’s railways provide services to small settlements that cannot grow because of the green belt.

If this land was allocated for new suburban development, Centre for Cities has calculated that between 1,700,000 and 2,100,000 suburban homes could be built in walkable ‘buttons’ around stations, on lines leading into the centres of England’s five largest cities, on less than two per cent of the green belt.

Public investment in urban transport needs to provide economic benefits not just for its customers, but also the wider public. More track in Britain’s cities needs to be paired with more, and slightly bigger, buildings. If city centre journeys remain stuck in a bottleneck, then not just local, but national economic growth will suffer.

Ryan Bourne: Housing. Gove is poised to dump radical supply side reform. And subsidise younger peoples’ mortgages instead.

22 Sep

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

Michael Gove’s appointment to what was the Housing, Communities and Local Government Department last week received an uncertain reaction among Wesminster’s free-marketeers. The optimistic case is that the former Education Secretary’s record of ministerial effectiveness, if channelled into the much-needed cause of land-use planning reform, could snatch victory from the jaws of defeat. Sadly, I find the pessimistic case more convincing: that his appointment further reflects the Government’s backtracking on the issue.

Renaming the Ministry the “Department for Levelling Up, Housing and Communities” already seems to reveal a shift in emphasis away from housebuilding. Gove has reportedly gone out of his way to play down the role of a constrained housing supply in driving recent house price inflation. It has been claimed that he will abandon the government’s “do or die” approach to watered-down planning reforms too – instead meeting backbenchers concerned about “over-development.”

Westminster’s mood changed with the Chesham & Amersham by-election, which crystallised the political risks of a planning reform overhaul. In the wake of that shock, spooked Conservatives began scrambling for fashionable theories to explain away the economic dysfunction caused by our archaic planning laws and so the need for reform. Now even Gove, it seems, echoes the talking points of the Tony Blair Institute’s Ian Mulheirn. The prospects for meaningful liberalisation are increasingly grim.

We all know the anti-planning reform lines by now: that the housing supply has kept pace with household growth since the 1990s, implying a housebuilding drive today would produce socially wasteful “surplus” stock; that planning can’t be the problem because permissions granted regularly exceed net additions to the housing stock; that new supply would take time to dent prices significantly, so wouldn’t do much for home ownership in the near-term.

These are alluring for Conservatives worried about the politics of land use liberalisation, because the conclusion is that mortgage affordability, not planning reform, is key for the Tory goal of a nation of homeowners. If planning genuinely doesn’t constrain how much and where housing occurs, then it’s difficult to see what anyone really fears by liberalisation.

But when has consistency mattered in politics? The convenient conclusion instead is that planning reform can be shelved, replaced with the tried-and-tested method of demand-side subsidies to first-time buyers from the Treasury. What could go wrong?

These planning-sceptic arguments are mostly non-sequiturs, of course. A functioning market doesn’t allocate by “need,” but by matching what people want and are willing to pay for with what suppliers are able and willing to provide. In that sense, the number of households is not synonymous with demand. As Paul Cheshire, a housing expert, has explained, as we get richer we tend to want more housing and more living space, often including gardens. A planning system using household numbers as a determinant of how much land to allocate for housing therefore systematically supplies too little and in the wrong places.

A well-functioning market, in fact, would see supply responsive to demand, not just in terms of the number of dwellings, but their type and location too. If half-a-million people really want to live in apartments in a commuter-friendly South Eastern town, then it would be densified, just as Kensington and Knightsbridge reached six or eight storeys in the Victorian era. That there’s new bungalows in Carlisle is hardly relevant.

Indeed, one would hope “market friendly” Conservatives would understand price signals. Today they scream that people want more land for residential use in London, the South East, Cambridge, and Oxford. Yet our planning system is tone deaf. Not only does it generally restrict land availability or prevent potential densification, but it does so more stringently where people actually want to live. Cheshire, again, has shown house completions have been much lower in Oxford and Cambridge over the last 40 years than in Barnsley and Doncaster, despite much larger population growth in the richer university towns.

The landbanking bemoaned by many is a consequence of the uncertainty of our very discretionary regime. As Ant Breach of the Centre for Cities told me, developers are plagued with the risks associated with not knowing whether developments will actually be approved given the blocking potential at local level. With the supply of land slow and unreliable, it makes sense for them to keep a buffer – a point made way back in 1988 in the IEA’s No Room.

The date of that publication indicates that Britain’s land use and planning policies have had badly damaging consequences for decades, leading to structurally high rents and house prices, irrespective of what drives more recent trends. So yes, house prices are now highly responsive to falls in interest rates, with housing demanded as an asset in itself.

But history shows if interest rates fall and the housing supply is elastic, we get a building boom, like in the 1930s with ‘cheap money.’  If housing supply is restrictive, we get the price boom. We today reap what our planning system sows.

The case for fundamental reform of land use and planning in a liberalising direction therefore remains overwhelming. Peer-reviewed academic literature has repeatedly confirmed that tight supply restrictions on housing reduce affordability, constrain the growth of productive regions, create macroeconomic instability, and a host of other economic problems.

It’s not as if the Government’s controversial reforms took aim at all of this, either. They were mainly about replacing the discretionary approach with a more explicit rules-based system to remove uncertainty, with developments automatically green-lighted if they met locally-determined, democratically approved requirements under the designation of the land (a form of zoning).

Were those proposals perfect? Of course not. Plenty of U.S. cities have zoning, but still suffer from a horribly inadequate supply of housing, as the rules are too restrictive. This meant whether the reforms produced new housing in reality was largely dependent on the “market socialism” of affordability signals creating centrally-determined housing targets in the style of the old Yugoslovia. This algorithm driven-process naturally raised question marks over how the very real bargaining needed about the impacts of development on local communities would occur.

What we are hearing today though are not critiques of the mechanisms that might produce more housing, but outright denials that the planning system is even a bottleneck to it. Faced with political resistance, the Conservative party seems to be abandoning not just the policy but its understanding of the problem.

And this backsliding has a self-reinforcing dynamic. The more that reform gets watered down, Breach tells me, the more even reforming Conservatives will regard the lesser economic reward of what’s left to defend as unworthy of the inevitable political grief. And so the Government will reach for the comfort blanket, once again, of fiddling with mortgages.