No Room! No Room!

Scrap Planning Restrictions to Fix Housing Crisis - 1988 IEA Publication still applies today

by Alan Evans

• Britain's housing market is broken, with housing affordability in London so poor that median house prices are nearly 12 times the median annual income.

• Rent consumes over a third of gross income for private renters in London, and 29% in the West Midlands, the South West, and the South East, leaving little for savings or other essentials.

• Britain lags dramatically behind its European counterparts in housing supply, with a shortfall of millions of homes.

• The Institute of Economic Affairs has been writing about the housing crisis and the chronic supply shortage since the 1980s, and the same arguments in “No Room! No Room!” apply today.

The Institute of Economic Affairs is proud to announce the republication of the seminal “No Room! No Room! The Costs of the British Town and Country Planning System”, by the late Professor Alan Evans. Originally published in 1988, this hard-hitting analysis of the planning system can be considered the original manifesto of “YIMBYism”.

This edition features a new foreword by Dr Kristian Niemietz, Editorial Director at the Institute of Economic Affairs, emphasising this critique of the system that continues to stifle Britain’s housing market and economic growth.

Niemietz describes stumbling upon the publication in the IEA archives, remarking that “despite the old-fashioned typesetting... it felt as if it had been published last week”, and that “the problems Professor Evans originally identified in 1988 are all immeasurably worse today”.

The only positive note is that the problem is now widely recognised, and there is now considerable support for policies which seek to liberate Britain’s restrictive planning system.

“No Room! No Room!” laid bare the extent of Britain’s housing crisis before the full effects of the crisis was felt. The housing affordability ratio has climbed to over 8 nationwide and nearly 12 in London, meaning that homeownership is simply unachievable for many.

Britain’s housing stock falls short by millions compared to its European peers, with an urgent need for at least 3.4 million new units.

Contrary to popular belief, the UK has one of the lowest housing vacancy rates in the OECD, with less than 1% of housing stock unoccupied in the long-term.

Housing land prices in the Southeast are over 200 times higher than agricultural land, driven up by restrictive planning policies that have created artificial scarcity.

“No Room! No Room!” makes various recommendations to create a more flexible and economically rational approach to housing, including:

• Compensate affected residents: Offer direct financial compensation to residents impacted by nearby developments to reduce local opposition.

• Reduce rent-seeking: reduce discretionary elements in the planning system, which incentivise lobbying and other non-productive uses of resources.

• Targeted building on the green belt: Develop parts of the green belt with minimal environmental impact to alleviate urban overcrowding and increase housing supply.

• Decentralisation to change incentives: Shift tax incentives to local authorities, allowing them to benefit financially from granting planning permissions, thus aligning their interests with increasing housing supply.

• Streamline planning system: Simplify and accelerate the planning system to reduce delays and lower costs, benefiting developers and communities alike. Create a default stance in favour of development, while ensuring economic costs and benefits are accounted for in planning decisions.

There is an urgent need for fundamental reform to the planning system to solve Britain's housing crisis.

Dr Kristian Niemietz, IEA Editorial Director and Head of Political Economy, said:

"What is so amazing about this book is that, even though it is nearly 37 years old, it still reads as if it had only been written last week. If you are looking for an introduction to the causes of Britain's housing crisis, the book still does that job remarkably well, after all these years - better, in fact, than a lot of what is being published today. It is precisely the fact that this book is, by definition, free from any hindsight bias which makes the argument all the more powerful."

Lord Richard Best, Independent Crossbencher and former Chair of the Affordable Housing Commission, said:

"I recall the original report by Professor Evans and it was certainly ahead of its time! Much of it is now broadly accepted by most housing experts - and indeed by the current government."

Sam Bowman, Editor of Works in Progress, said:

"No Room! No Room! is enormously valuable for two reasons. One, it is a clear and insightful diagnosis of why Britain's housing shortage matters and where it comes from. But two, just as importantly, it proves that many explanations for the housing shortage that are popular today are wrong: we cannot blame high house prices on 'financialisation' or immigration if the problem was already deeply embedded by the 1980s. No Room! No Room! shows that our problems date back to the postwar governments that curbed supply and nationalised the land-use planning market, and that only undoing these mistakes will restore Britain's housing market to normality and Britain's economy to prosperity."