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

THE SOCIAL MARKET FOUNDATION The Foundation’s main activity is to commission and publish original papers by independent academics and other experts on key topics in the economic and social fields, with a view to stimulating public discussion on the performance of markets and the social framework within which they operate. [...] What is zoning? Zoning is practised by most of the Western world to influence local construction and plan local economies, including in Canada, the United States, Australia, and New Zealand, and Ireland.i The system provides semi-automatic permission to develop land so long as these developments meet all the stipulations demanded by the local government for the given area. [...] The authors of the briefing warn that to reach the relative supply of Austria and Finland, where housing is more affordable, an increase between 25% and 30% would be needed.5 But any major increase to the UK’s housing stock is complicated by the country’s discretionary planning system which allows local councils and national park authorities to act as Local Planning Authorities (LPAs) which appoin. [...] According to Cameron Murray and Tim Helm, by assuming the trend is linear rather than a curve, and by underestimating the rate of housebuilding prior to the AUP, the authors overestimate the effects of the AUP on supply growth.25 Figure 4 shows that, when measured across the city, planning reform did not lead to an increase in housing permits. [...] The smaller the land units for which planning is reformed, the greater the risks that supply increases will not be large enough to offset the increase in prices.