[…] Following Labour’s victory, the share prices of the major housebuilders rose, and the new Chancellor bragged about meetings with asset managers like BlackRock who were just waiting to invest in UK housing.

This enthusiasm from major real estate investors is for Labour’s housing and planning policies. Last week, Bloomberg described Labour’s proposals as a ‘revolution in planning’, while Rachel Reeves called planning ‘the single greatest obstacle to our economic success’. Planning, an area of the state which had received little attention from Labour or the Left, is now the central and defining area for reform in the incoming government’s programme. For Labour, planning reform is the key to unlocking growth, drawing upon a set of supply-side planning and housing policies developed by organisations that now tend to self-refer as part of a ‘YIMBY [Yes In My Backyard] movement’. Unfortunately, their proposals draw more from right-wing think tanks, astroturf campaigns and asset managers than they do the demands of workers, tenants and the labour movement.
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The YIMBY view, which several leading UK politicians apparently endorse, is not simply that more homes need to be built, which is a fairly banal view. The YIMBY position, long held by right-wing think tanks, advocates for liberalising planning regulations to address the (largely imagined) problem of the NIMBY [Not In My Backyard], thereby stimulating mass private sector housebuilding and alleviating the housing crisis by reducing sale and rental prices.

There are three problems with their basic proposition. First, it is by no means clear that even a large-scale private house-building programme, such as building over 300,000 houses a year, would significantly decrease prices. The best that high rates of building could do is help slow the rate of price increases. However, since the early 2000s, the average house price to average income ratio has doubled its historical norm, rising from 4:1 to around 9:1. Based on recent annual average wage growth, it would take around 25 years of zero price growth to return back to something like affordability. Private housebuilding, which with a fair wind usually settles at around 170,000 a year, could easily be bolstered with a social housing programme that would reduce the rents paid by those currently in private rental housing more directly and more swiftly whilst hitting the 300,000 a year target. The impacts would be felt within years, not decades, as well as reducing the substantial housing benefit bill (a staggering £23.4 billion in 2022)

Second, it is also not clear that the various proposals to reform planning, ranging from zoning systems to Labour’s vague promise to ‘bulldoze’ regulations, would even lead to such a housing boom. Private housebuilders build at rates that ensure their profitability — it’s not in their interests to ramp up house-building rates beyond a certain point without some form of state subsidy. While it is true that planning is a source of delay and uncertainty for development, this is because it has been decimated as a public service through austerity and various policy ‘streamlining’ exercises. A strong public planning system linked with an actual industrial strategy can help us find a way through the pressures and trade-offs inherent in land-use decisions rather than creating folk devils out of groups of pensioners with a WordPress site.

Third, the YIMBY proposition is one that elides the problem of what constitutes demand for land and housing. The affordability problem began in the early 2000s, as demand for land and housing in major cities was increasingly driven by those with significantly higher spending power than individual households. Institutional investors, buy-to-let landlords, and a variety of international investors seeking ‘safe havens’ all bought up huge amounts of property in major cities. Added to this, the reduced capacity of local authorities to lead housing development and provide social housing has meant that demand for land is increasingly driven by those who have greater access to credit and can outcompete households, increasing rents and sale prices.
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Rejecting YIMBYism does not mean rejecting housebuilding. What we want to see is houses as homes, not new opportunities for upward wealth redistribution. Indeed, the reason the YIMBY ‘movement’ exists is to divert focus from the real, egalitarian solutions for the housing crisis the Left has put back on the table in recent years, such as rent controls, major social housing programmes, and reversing austerity — solutions which require a shift in power against the rentiers that dominate the UK economy and a government with the courage to take that on.