Response to nef’s “One million homes” paper

Ordinarily a report that claimed to be able to create 1 million affordable homes (http://www.neweconomics.org/press-releases/housing-how-to-build-1m-new-homes-in-5-years-and-cut-government-spending), would get my approval.

I have always been and will remain a strong believer that it is in societies best interests to ensure that everybody has the right to adequate housing. David Orr, the Chief Executive of the National Housing Federation has spoken of “the huge human, social and economic cost of failing to invest in affordable housing”, so surely a report that lays out a path to creating an additional 1 million affordable homes should be good news?

Certainly, from the point of view of geotechnical, environmental and structural engineering consultancies, as well as drillers and other organisations involved in home building, there should be a lot to be pleased about here, or is there?

The sting in the tail of the nef proposal is that in order to reduce the price of land, they would create a regime where “the bulk of the land in the privately owned “land banks” – would suddenly only be of value to social landlords”, this would mean that housing developers stand to make substantial losses.

This should be of concern to all organisations that work in housing development, many of them small to medium enterprises, as these costs will be passed on by developers as they look to protect their margins.

For many of the companies that managed to ride out the recession, this is the last thing that they need and many would not survive a squeeze in their own profit margins, resulting in a large number of small local firms going under.

So would opposing this be an “I’m all for change as long as it doesn’t affect me” attitude? Not really. In order for regions to prosper you need local firms who can employ local people. These firms have been hard hit by the recession and in areas without any big businesses, these are the only companies that provide diversity of work.

Any further erosion of local businesses will have economic and social consequences, so this proposal, rather than improving quality of life for all, could lead to a greater inequality between regions in the UK. It could also be bad for big business too, as competition will be much reduced. So whilst I applaud any efforts to build new affordable homes, any efforts to do this needs to be balanced against its effects on the communities that it is proposing to help.