Mill Hill East Transport (before the bean counters cut it all)


Tuesday, 10 April 2012

IEA: "Only liberalisation of land use planning system can address affordability crisis"

Link to IEA web site

"... In summary, there is overwhelming empirical evidence that planning restrictions have a substantial impact on housing costs. It is also fully plausible, albeit not (yet) definitely confirmed, that planning restrictions play a much more important role than scarcity of developable land, be it due to topographic obstacles or past development.

Even in very densely populated and built-up places, regulatory restrictions have been found to be important determinants of housing costs. If such evidence can be found for Manhattan and Hong Kong, then there is hardly any place in Britain where housing shortages could be blamed on scarcity of space. High housing costs are a self-inflicted problem.

"...  Opinion surveys show strong resistance to development, which allows the anti-development lobby to present their views as fully in accordance with the public mood. But this is not the least surprising given that these surveys bear no resemblance to real-world decision-making processes, which involve opportunity costs and trade-offs. They are no more meaningful than asking ‘would you prefer to get up two hours later in the morning’ or ‘would you prefer to work closer to home’: other things equal, how could the answer be in the negative? 

What matters is the choice people make when faced with real-world opportunities, facing the benefit and (opportunity) cost of each, and making trade-offs. Unless the planning system moves a lot closer to a decision-making process of this type, there will be no lasting solution to the housing affordability crisis."

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