Beyond the comfort zone: How can planning reform boost housing supply and affordability?

KEY POINTS

• While planning reform is a useful tool and is necessary to increase housing supply, it is not sufficient: it is far from a sure bet.
• Generally, the size of the impact of planning reform on supply has been limited by its constrained scope and modest ambition, and other regulations such as limits to building size can continue to hold back developers.
• Even where supply does increase, there is no guarantee the increase will be large or that the new units will be affordable – planning reform has in some cases been blamed for worsening the affordability crisis through gentrification.
• When planning is reformed, policymakers are gambling that the resultant increase in housing supply will outweigh the resultant increase in property values. To win this bet, they need to intervene to ensure planning reform increases supply and that the new supply is affordable.

RECOMMENDATIONS

• Ensure any planning reforms are ambitious enough to greatly increase supply at the scale required by maximising the land available to housing development and maximising the unit density which can be built on this land.
• Undertake a root-and-branch approach to planning reform in the National Planning Policy Framework and local plans by making certain regulations related to planning reform, capacity and affordability mandatory for Local Planning Authorities.
• Introduce blanket planning reforms rather than a piecemeal approach by applying reforms made to the National Planning Policy Framework across the UK or devolved nations and ensuring design codes and targets are introduced at Local Authority level.
• Include demand-side interventions which mandate affordability to avoid the gentrification that can result from planning reform by establishing a definition of affordable housing based on household income and median local wages.