28 Oct 2007

What the hell is the NHPAU?

§ The National Housing and Planning Advice Unit

• The what? I have never heard of it.

§ It’s a new quango. It’s not an independent body, it’s set up with government money, and it seems to be embedded within the Department of Communities and Local Government (DCLG).

• I do know what the DCLG is, just about. It’s the government department that deals with planning and housing. In fact, it replaced John Prescott’s ODPM (Office of the Deputy Prime Minister). What is it with New Labour and four letter acronyms?

§ NHPAU is five.

• So it is. Maybe I am due a visit from the numeracy squad.

§ Funny you should say that but that is pretty much what the NHPAU does?

• What? Teach hoodies how to add up?

§ Not quite. But it’s there to thwack NIMBIES over the head with a load of statistics and figures, setting out to prove that there is a near-insatiable demand for new housing which can only be met with very large numbers.

• Let me guess. 240,000 new homes a year?

§ Very good. 8 out of 10. In fact the NHPAU is calling for 270,000 new homes a year up to 2016.

• Where have they done this?

§ They’ve come up with a response to the Government’s Green Paper Homes for the Future: More Affordable, More Sustainable and it’s generated a bit of press coverage last week.

• But hang on, I thought you said that they were part of the government?

§ Well not exactly part of the government. Just a review body that consists of members appointed by the government.

• So not exactly likely to contain many critics of government policy?

§ Precisely.

• So who runs the NHPAU?

§ Head honcho is Stephen Nickell, an economist who has sat on the Bank of England Monetary Policy Committee.

• Which if I remember correctly is also an independent body where membership is decided by the government. A bit of a pattern emerging here, don’t you think? And wasn’t that Kate Barker also a member of the MPC?

§ She still is. And you’ve put your finger on an important connection. The NHPAU’s job is to further the new housebuilding agenda set out in the Barker reports.

• Hang on a minute. Who commissioned the Barker report? Gordon Brown, wasn’t it?

§ Correct.

• And did he get the answer he wanted from it?

§ Yes, undoubtedly.

• But, to date, it’s all come to nothing. The amount of new housing in the UK actually went down last year. It stubbornly refuses to lift off above the 180,000 a year range, doesn’t it?

§ That’s why we need the NHPAU.

• What, due to the absence of any effective independent lobbying groups calling for more housing, the government does its own?

§ I wouldn’t be so cynical myself.

• So what’s in this report they have just put out? Can you summarise it for me with a few choice phrases?

§ It’s more of the same. An awful lot about affordability, almost nothing about sustainability. They are trying to guess what level of new housing is required in order to maintain affordability at current levels.

• You mean current unaffordable levels.

§ Quite.

• These are a bunch of economists, right?

§ Right.

• So they like to look at things in terms of supply and demand.

§ I’d go further. They are unable to look at things in any other way.

• My guess is that they spend a long time dwelling on the hardships caused by not having enough housing to meet everyone’s aspirations, but almost no time at all looking at the problems caused by trying to meet those aspirations.

§ Your point?

• My point being that it’s a big and complex problem and they have their telescopes focussed on just one relatively small area.

§ Well, what other areas do you think they should be looking at?

• The Irish question, for a start. I bet Ireland doesn’t even rate a mention in the report?

§ That’s correct. No mention of what happens anywhere else in the world, as far as I can see. That does seem rather blinkered, doesn’t it?

• You bet. Do you know what has happened in Ireland in the past 15 years?

§ Tell me.

• They built new homes like nowhere else has ever seen before. Each year they would build more than the year before. By 2006, it had got to 90,000 new homes a year. If that was the UK, the equivalent level would be over a million, not the paltry 270,000 a year that the NHPAU is calling for.

§ I had no idea. I guess it must have made houses in Ireland incredibly cheap, what with there being this huge over supply.

• You are joking. House prices in Ireland have risen even faster than they have in the UK. Since 1997, they have trebled.

§ But according to the economic theories being put forward by the likes of Kate Barker and the NHPAU, that should not be possible. What happened?

• It appears to be that the more homes they built, the more people moved to Ireland to fill them up. First the Irish diaspora started to return from overseas. Then the East Europeans who had come over to build the new houses stayed on in them. They just filled up. As fast as they could build them, the population grew to fill them. This kept the prices high. The demand for new homes was elastic.

§ But I don’t think the analysis the NHPAU has undertaken looks at this issue at all.

• Another question for you. How often do they look at the relationship between rates of new housebuilding and rates of immigration?

§ Well they do analyse migration. They use the term exogenous a lot.

• Exogenous? What does it mean?

§ As far as I understand, it refers to external causes. That is ones beyond the brief of the economists. They suggest that inter regional migration is affected by the housing market, but international migration is exogenous. I guess that means it’s beyond their control.

• Does that make sense to you? Why should migration patterns within a country be fundamentally different to those between nations?

§ I don’t know. Especially as the bulk of international migration now occurs within the EU. It acts like one big country in that respect.

• The point I am trying to make is that none of these economic models of how the housing market works take on board the fact that the demand for housing is always going to outstrip the supply, almost by definition, and that rates of migration, both internal and international, are hugely effected by the supply of housing. In fact, strange as it may seem, but the housing market is just about the only tool a government actually has at its disposal to control the flow of migrants.

§ Are you suggesting that we stop building new homes altogether in order to stop immigration?

• Not really. It’s more that I would like the politicians to acknowledge the fact that immigration rates and new housebuilding are intrinsically linked. If you increase the rate of housebuilding, you will simply increase the rate of immigration. That’s fine, if you want it to happen and you acknowledge explicitly that this is the goal of your policy. But it’s not being acknowledged. In fact, I don’t think anyone in Whitehall has even made the connection yet.

§ So do you think there is a hidden agenda here? Why does this government and Brown in particular want to expand the rate of housebuilding?

• Well, on the surface, it seems that they have been taken in by the affordability argument. That they genuinely think that building more homes will make them cheaper. It would if the size of the overall population was static, but of course it’s not. The population will just expand to fill the new homes, so it becomes a pointless exercise. Unless of course they want the population to grow. It’s hard to say.

§ Is there anything else that’s troubling you.

• Of course there is. There always is. It’s this ever present tension between development and sustainability. However green these new homes are made, they are still going to put stress on the environment. More traffic on the roads, more people in the streets, the schools, the hospitals, more holidays, that sort of thing. Somewhere in the back of my mind, I am thinking that we already have 22 million houses in this country. Isn’t that enough? Do we really need 25 million? What will we gain by having 3 million more? Shouldn’t we be thinking of improving the ones we have got rather than building loads more? But it’s this sort of analysis which is completely lacking from the likes of the NHPAU. They just look at the whole thing in terms of numbers. Where they see demand, they think it must be met with increased supply. It’s all so mechanistic.

§ Aren’t you being a NIMBY?

• Yes, I think you are right. Maybe I am getting older, but I am beginning to question the logic behind endless growth. The usual arguments for housing growth are that without it, our children and grandchildren will never have homes. But this isn’t strictly speaking true, is it? If the population stays more or less the same, which it does without the inward flow of migrants, then we have the same amount of housing available for the next generation as there is for this. People might want more: they might want second homes, or investment flats or smaller units to cope with divorced families, but there comes a point when you have to say: “Enough. Let’s learn to live with what we have rather than keep on expanding the amount of housing.”

It doesn’t follow that this means an end to growth per se. We could extend and improve the houses we have, we could knock down old houses and replace them with state of the art new homes, and we could spend money improving the environment in which we live. But at some point we have to say: “We are now closed for new housebuilding.” The question is at what point does this happen. At 25 million homes? At 30 million? Or at 40 million? When will Britain be full?

Now that’s a very big question, but I think it’s time it moved onto the political agenda. We’ve more or less accepted it with roads now — there are lots of road improvements planned but just about no new motorways. We may be on the point of accepting it with runways and airports — not there yet, but the end is arguably in site. But no one has begun to ask the same questions about our housebuilding programme. Here, it’s still onwards and upwards, to infinity and beyond.

§ I think it’s time for your medicine.

• Have I started dribbling again? Have my dentures become detached?

§ No, nothing like that. It’s just that you are sounding off again. It’s that vision thing, I find it rather disturbing.

• Look, I am sorry, do forgive me. Must make a mental note not to get carried away with the sound of my own voice. Anything on the telly?

§ That’s more like it. I expect there’ll be a repeat of Dad’s Army, just the ticket really.

• Sounds wonderful. Pass the Hobnobs.

1 comment:

  1. It is all enormously confusing. There is a lot of talk about affordable housing but it isn't well defined. Affordable in a fiscal sense, affordable in a sustainable sense. it doesn't make any sense.... I've even tried asking various building firms for their understading of the term affordable housing and they all have differing answers...