Building more big homes won’t help people get onto the housing ladder in Wales

Leanne Wood AM, Plaid Cymru shadow minister for housing

It has become something of a cliché to summarise the wide and complex range of issues facing the housing sector as ‘we need more houses’. That mantra has been echoed by a wide range of people, and although not completely inaccurate, is something of a simplistic approach to the issue.

Furthermore, it’s simplicity disguises the available solutions to us, and blinds us to where our efforts might best be served.

The mantra comes from seeing things through a non-devolved lens. In many parts of England, the housing market has seen prices rise to such an extent that many young people will never have realistic aspirations of owning their own homes regardless of their career choice.

On the other hand, the UK government faces the dilemma that the policies needed to bring prices down to a reasonable level in those areas would risk creating millions of households trapped in negative equity and could possibly fuel a second financial crisis.

The status quo for the English housing market is thus dysfunctional but a problem unlikely to be resolved soon.

So instead of being a call to action, in Wales ‘we need more housing’ has simply empowered developers to lobby for watering down planning restrictions, to lighten building regulations, and to get away with the cutback on obligations in section 106 agreements.

It enables developers to portray local communities objecting to specific plans as ‘nimbys’ regardless of the content of their objections, and has meant unpopular local development plans railroaded through against the wishes of many communities.

Furthermore, on those occasions when protests about plans for large scale housing unsupported by public services have won concessions from local authorities, we have then seen those protests and concessions cited as examples of bureaucracy and expense for developers that prevents more housing being delivered.

But the belief that more supply solves the problems people in Wales face in having a decent and affordable home is an example of ‘trickle down’ thinking: it argues that if enough new 3 or 4 bedroom housing developments are built on greenfield sites, with a small or negligible percentages of social/affordable housing negotiated with developers by local authorities as part of this, then prices will come crashing down and create a chain of events that will solve the housing supply crisis.

We argue that this won’t meet the needs of Wales and it risks leaving our communities with many long term problems.

We thus need to be clear on what exactly the housing supply crisis actually is if we are to solve it.

Affordable

So, to be clear on the true nature of the problem, let’s take one projection of future housing demand to illustrate the point that we want to make. The Public Policy Institute report on the future need and demand for housing estimates that between 2011 and 2031 an additional 8,700 housing units are needed each year.

Of these, 63 percent would be in the market sector—that’s 5,500 a year—and 37 per cent in the social sector—that’s 3,300 a year. But if population growth is higher, then the report estimates that we need 12,000 units a year, of which 35 per cent would need to be in the social housing sector—that’s 4,200 per year.

Now, let’s take a look at house building over the last 20 years and how it relates to the figures that the PPIW estimates are needed.

Let’s start with the ‘market sector’. Between 1997 and 2007, there were an average of 7,591 units completed in the market sector each year. Between 2007 and 2017, that figure dropped to an average of 5,573 units each year following the housing crash.

Yet, in both decades, that level of performance will be enough to meet the PPIW’s main predictions of need. It only becomes problematic at the higher levels of housing growth.

But if we look at the performance in social housing, a very different picture emerges indeed.

Between 1997 and 2007, just an average of 825 new units of social housing were built each year, and that average only increases to 850 each year in the last 10 years. But the PPIW estimates that we need between 3,300 and 4,200 additional units of social housing every year, yet just 850 homes when we need over 4,000. That gap is absolutely staggering.

So, we must be clear that it’s social housing where the greatest supply shortage is.

The question is whether the neo-liberal approach that large developers sometimes argue for – that or watering down planning laws and building regulations, and for railroading local development plans against local opposition – will be enough to meet that gap.

Clearly, anyone with any experience of the planning process knows that won’t be the case. Even in the existing system, it is often the case that after planning permission gets granted, requirements for ‘affordable’ housing (not the same as social housing) and Section 106 agreements can often be watered down as developers argue they make projects ‘unviable’.

Furthermore, none of this approach considers at all how to create sustainable communities. Surely if we’ve learned anything over the past few decades, it is that housing estates in poor locations without public services to support them are a recipe for disaster.

Even more so when we separate communities into estates of social housing, and estates of private housing.

We also have to recognise that the overwhelming barrier to home ownership is low wages, insecure employment and high rents that prohibit many young people from saving for a deposit. More six-bedroomed homes in the suburbs will do nothing to help those people get onto the housing ladder.

So Plaid Cymru has a different approach. One that not only aims to substantially increase the amount of Social Housing constructed in Wales each year, but one that proposes to bring communities, housing associations, local authorities and developers together to consider how we create sustainable communities supported by public services.

Our consultation paper on housing supply has now been published, and outlines many of these proposals in more detail.

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