Postcard from Uxcester Garden City: doubling our housing output

7 June 2014

HOW OUR GARDEN CITIES COULD YIELD SMARTER GROWTH

by Nicholas Falk

The announcement of the shortlist for the 2014 Wolfson Economics Prize will once more throw the spotlight on garden cities as a way of meeting housing needs. It also raises the issue of why the UK has found it so hard to build good places in recent decades. Why have we found it so difficult to avoid house price inflation as they have done in Germany, expand our housing stock to the extent achieved in the Netherlands, or cut energy consumption like the Scandinavians? Over recent years I have been leading study tours to successful cities in North West Europe, and the common theme is that local authorities play a more proactive role in development. They are able to raise finance from state investment banks to assemble land and provide sustainable infrastructure. This enables a multitude of builders to provide much greater choice, and sites are developed five faster once investment plans are aligned.

So what stops us applying the lessons here? In my Smith Institute pamphlet Funding Housing and Local Growth: how a British investment bank can help I propose local authorities and government combine to set up a Municipal Investment Corporation. This would be modeled on the Dutch BNG, which along with the German KfW is rated as one of the two soundest banks in Europe. Local infrastructure bonds could be used to channel private wealth into building more homes, not just buying existing ones. It would fit in with the Labour Party’s commitment to setting up a British Investment Bank and local government interest in forming a Municipal Bonds Agency. In our shortlisted entry for the Wolfson Economic prize (which I wrote with my colleague David Rudlin) we show how this idea might be applied to the expansion of a historic university town – we call it Uxcester. Garden city principles could be used to double the size of the town while protecting the quality of rural villages.

Our calculations show that by building sustainable urban extensions in cities such as Bristol, Gloucester, Oxford or York – places with strong local housing markets -we can not only build more and better homes but help strengthen local transport and energy infrastructure. This ‘three in one’ approach crosses boundaries, and would overcome resistance to developments that ‘cost the earth’ or spoil treasured views. By planning for posterity, not austerity, we can start to match the standards found in cities like Freiburg or Utrecht, whose new suburbs are much more sustainable and attractive than our detached housing estates, and which offer inspiration for the UK. By freezing land values, and pooling land we can plough back what Ebenezer Howard called the ‘unearned increment’ in better places for all.

Having explored exemplary places, and analysed the stories behind the transformation of some twenty European cities, in Good Cities, Better Lives Professor Sir Peter Hall and I came to the simple conclusion that the main messages were to free the cities and strengthen local leadership. New financial mechanisms were also needed to support investment in urban infrastructure and quality in what I call ‘smarter growth’. The housing and infrastructure crises, and the opportunities for building to garden city standards provide the chance to cut through the knots that hold the UK back. A municipal investment corporation would mobilize private funds into building new homes, not just buying existing ones, and could be used to devolve real power back to localities that work together for the common and longer-term good.