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18 JUL 2019

Delivering affordable housing: a wicked problem

Tony Mulhall RICS

Tony Mulhall MRICS

Associate Director Land Professional Group

London, UK

RICS

It is commonplace to berate the planning system for constraining land delivery and housing supply. There is also a growing view that all value in land and property emanates from the planning system.

It is arguable that by the time the planning system comes into play a great deal of the structuring in the political economy has already predetermined the outcomes. The Global Financial Crisis (GFC) and its aftermath demonstrated clearly that property and land values are also the result of policies taken about mortgage debt and finance together with the effects of government economic stimuli in different sectors of the economy.

A new book by Nick Gallent, 'Whose housing crisis? Assets and Homes in a Changing Economy' provides a provocative perspective on where he considers affordable housing fits into the wider political economic priorities. In summary he seems to be saying that after governments have tended to the needs of the mortgage finance system by keeping the capital markets active and the banks alive; and cultivates the development sector by maintaining dividends flowing; delivering housing to those in need might be seem like a distant by-product of these other two main aims.

Housing is valued for its role as an asset upon which debt may be secured rather than for its functional purpose of providing shelter. Politically this is quite surprising, since there surely must be more individual votes to be obtained from the large number of people whose housing needs are not being met.

Wicked problem

The term 'wicked problem' is not a casual throw away term. It comes with a well-defined framework for problem solving. It draws attention to a level of complexity that makes the problem not merely difficult to decode; there usually are no solutions in the sense of definitive objective answers. Outcomes are contradictory. Good outcomes may be a mirror of bad outcomes.

RICS through its housing market survey engages this on a monthly basis with any expectations of low growth in house values being characterised in the media as negative. Yet how do homes become more affordable to those on static incomes if values keep rising? Moreover, the first-time buyer who has just managed to scrape together a deposit, and qualified for the maximum mortgage will probably feel cheated, if just then, house values flat-line or even begin to decline.

Following discussion about the choices between incremental and radical change several short- and long-term approaches are proposed by the author.

It is worth noting that at the recent RICS Planning & Development Conference 2019 the majority view now seemed to favour more radical approaches rather than the perpetuation of incremental change delivering at glacial pace.

This book is an important contribution to the debate on housing delivery for lots of reasons. It is written by the head of the Bartlett School of Planning, UCL, one of the largest planning schools in the world. So, inculcating an understanding of where planning fits into the wider political economy in the next generation of planners should be a good outcome.

The author is also a chartered surveyor with responsibility for many RICS accredited programmes at UCL and so understands that particular perspective.

There is a considerable literature developed on value extraction as opposed to value creation. This book contributes to understanding the distinction and particularly where land and property fit into a sometimes heated discussion.

It is impressive though, that in such a rigorously researched book the author has found little or nothing published by RICS which might help to illuminate some of the central issues raised here.

Delivering affordable housing...

Tony Mulhall RICS

Tony Mulhall MRICS

Associate Director Land Professional Group

London, UK

RICS

Tony Mulhall is responsibile for the Planning and Development Professional Group, which has 22,000 members worldwide. As a chartered surveyor and town planner he worked across planning and property disciplines in both the public and private sectors. He graduated in Surveying and Planning in Dublin and also holds Masters degrees from the University of York and from Cass Business School, City University, London.

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