Michael Gove, the Conservative MP and Secretary of State for Levelling up, Housing and Communities tasked, has recently delivered a speech on how such a goal can be achieved. The focus was housing policy, and the solution intriguingly labelled the ‘Medici Model’. This approach concentrates housebuilding in city centres rather than in the suburbs, thus utilising land that has already been developed on instead of digging up ‘virgin land’. However, the response to the speech was far from positive, with Gove receiving ardent criticism even from members of his own party.

Cities or Suburbs

In Gove’s defence, the Medici Model has many merits. From an environmental perspective, building in the suburbs involves concreting over green land, meaning that we irretrievably lose large green areas that form part of the natural landscape. Moreover, building houses outside of the city forces people to rely on polluting forms of transport to access the city centre.

Second, there is a much greater quality of life to be had in compact cities; everything is more easily accessible, people can walk and cycle everywhere which brings many health benefits, there are more job opportunities, and there is less social segregation. Gove cites ‘the heart of Gaudi’s Barcelona’ and ‘the Haussmann-designed centre of Paris’ as examples of the Medici Model in action, claiming the density of these cities to be a key factor in their creativity, productivity and attractiveness.

On the other side of the political divide, the Labour Party are proposing more development on green land. They argue that the UK’s Green Belt – green land which cannot be built on except under ‘very special circumstances’ – is holding the country back from achieving its housing targets.

The ‘cities or suburbs’ debate always arises in political discourse when it comes to housing. It is clear that there is a housing crisis; millions cannot afford to own their own home or to rent, leading to homelessness and living in temporary accommodation. And building more houses has come to be the accepted solution to this crisis – the only debate to be had is where to build them. However, is it possible that the entire discussion on housebuilding is misguided?

Is there a Housing Shortage?

As highlighted by Ian Mulheirn of LSE, since 1996 English housing stock has grown by an average of 168,000 units per year, whilst the growth in the number of households to fill these units has averaged 147,000 per year. Consequently, by 2018 we reached a housing surplus of over 1.1 million homes. Yet the government continue to persist with their housebuilding target of 300,000 homes a year. This suggests that current housing policy, and the debate on housing more generally, greatly misses the mark, thus raising some pertinent questions.

The first question is – why do the government set such high housebuilding targets if the need for new houses is overstated? The reason is that these targets are based on outdated forecasts. Population growth in the UK has consistently, for decades, been lower than expected. In 2016, the Office for National Statistics projected the UK population to be 0.5 million more than it turned out to be, and this was repeated in 2021, with an overestimate of 0.3 million. This is reflected in housing targets, meaning that we typically build more houses than needed.

The second question – if there are enough houses, why aren’t they being filled? A major factor is the lack of social housing. Since Margaret Thatcher introduced the ‘Right to Buy’ policy in 1980, allowing people to purchase council houses, there has been a massive fall in social housing stock as it was transferred from the public to the private sector. As a result, there are 1.4 million fewer households in social housing than in 1980. The number of people on the waiting list for social housing is also huge, with at least 30,000 people having waited for a decade or more to get a home.

On top of this is the issue of people hoarding property for their own purposes, examples of which can be seen all over the country. Almost 1 in 3 homes in the City of London are empty as investors wait for house prices to rise. 10,000 homes are registered as Airbnb’s in Cornwall alone, and many buy second homes there, leaving over 18,000 homes empty in the county. Perhaps we should be addressing these issues before we start renovating disused buildings or digging up fields to make way for new houses.

Accepted Wisdom

Ultimately, the fact that we aren’t addressing these issues is a damning indictment of the neoliberal consensus that prevails in most Western democracies. In recent decades, most mainstream political parties have come to accept the core tenets of neoliberalism, including the free-market logics that determine the allocation of resources such as housing. This is certainly the case in the UK, where the left-wing Labour party are currently launching a charm offensive on big business ahead of the next election to assure the richest and most powerful in society that they will not pose a threat to the status quo if elected.

As a result of this ideological convergence between the major political parties, any solution to the housing crisis is heavily conditioned by the accepted wisdom of neoliberalism. At present, this involves a leading role for the private sector in which development companies are given the green light for housebuilding schemes which are of no help to those struggling to get on the housing ladder. Major developments are required to provide at least 10% affordable housing, and councils can set this higher if they wish. However, requirements rarely exceed 40%, and the definition of affordable is dictated by extortionate market rates. Therefore, affordable housing is, more often than not, unaffordable for the many.

At its core, the problem with neoliberalism is that it commodifies things that should be treated as a basic right. The housing crisis illuminates this, and any measures to tackle it must focus on wrestling control of the housing sector away from the private hands responsible for this commodification. A start would be to redefine ‘affordable’ in accordance with local average incomes, so ‘affordable housing’ would be genuinely affordable, rather than merely profitable for developers.

Additionally, local authorities should have the power to take control of properties that have been empty for over 6 months. Such a power was granted to councils in the 2004 Housing Act, but has been continually weakened and is very rarely exercised. Yet local authorities require this power to prevent speculative investors buying up houses and leaving them vacant whilst others struggle to afford a home of their own.

The housing crisis is just one of many crises that have emerged or worsened under neoliberalism. As inequality widens, global warming worsens and more people find themselves on the streets or unable to secure a permanent home, it is time to acknowledge that these crises are symptoms of neoliberalism, and the solutions lie elsewhere.