Dialogue on Housing Priorities: A National Perspective

Since 2010, local authorities have faced financial and moral challenges. Rebuilding the structure that empowered local communities in the 1840s is vital. Historical context shows local governments' significant role in housing, such as the Ministry of Health in the 1930s and the London County Council Architect’s Department in the 1950s. The shift away from local government to a market-led sector has stalled housing supply recovery.

Public health’s shift back to local authorities in 2012 highlights the link between housing and health. Rapid urbanization has led to higher densities, limited greenspace, and car-centric planning, reducing opportunities for healthy lifestyles. Addressing the commodification of housing as a human right can reverse fortunes for local authorities and the communities they serve.

Inefficient Use of Space:

• Empty blocks and homes, excessive space for vehicles, and under-occupied homes.

• Homelessness, unaffordability, and poor-quality housing.

• Bankrupt local authorities despite declining market demand.

• Homes not equipped for net zero or health protection.

• Noncommunicable diseases surpassing infectious diseases.

Local authorities can unify powers, assets, and data to implement radical changes, leveraging legal authority to buy back housing and regenerate public land. Coordinating planning, housing, and public health departments can streamline processes and use underused properties for those in need. Health Impact Assessments for planning applications ensure developments meet health and emission reduction goals.

Local authorities possess resources to redesign traffic and road use, enhancing air quality and encouraging active lifestyles. ESG (Environmental, Social, and Governance) factors, which have been around for two decades, offer a framework for improving housing provision. Transparency in ESG metrics can reshape market perceptions and drive investment in sustainable housing.

One of the significant challenges is the lack of access to comprehensive data and corporate disclosure. As the UK tackles a decade-long decline in productivity, accelerated by the COVID-19 pandemic, the relationship between GDP and ESG (Environmental, Social, and Governance) metrics presents a crucial opportunity.

Local authorities have the potential to play a more prominent role in housing delivery, potentially outperforming the current market. This potential is rooted in their existing model, which utilises locally updated data, audit trails, and publicly scrutinised regulations. Many local authorities are currently developing decentralised energy strategies and exploring renewable energy sources. This focus is necessary, as increased productivity requires more energy use, creating a risk-free source for growing public investment confidence and acting as a catalyst for GDP growth. 

Banking institutions and corporate investment trusts are increasingly requesting reporting standards from real estate developers concerning emissions and climate risk. ESG metrics are becoming universal measures for screening investments. Leading global rating systems like WELL, LEED, and Fitwel have been adapted to evaluate developments based on health impacts, using scorecards from site reviews or self-evaluation processes.

Comparing local authority domains and responsibilities against these rating system categories (Figure 1) reveals the significant value of local authorities in their communities. They constantly utilise high-quality data to make informed decisions. Evaluating this data for reliability, transparency, and quality shows that local authorities could play a significant role in the housing market if they were more active as housing providers.

The use of Health Impact Assessments could be a formula for corporate investment funds to upgrade reliance on scorecards into transparent, publicly managed data on local health contexts. This approach would deliver what is needed for whom it is needed over time, in a site-specific way, generating much-needed funding streams for local authorities to continue improving local services.

Since the publication of The Entrepreneurial State in 2013, Mariana Mazzucato has provided clarity on recalibrating wealth generation for the public good. Her work offers practical tools for empowering government to benefit from innovation and research, generating income cycles. Mazzucato argues that government tools have historically supported and driven outcomes, and “the capitalist market is always subordinate to the state. Policymakers must efficiently use tools to shape and create markets, making things happen that otherwise would not.”

The traditional method of housing delivery has led to societal inequality and financial strain on local authorities managing the public health crisis created by market dynamics. Governments worldwide have tolerated this as housing-led markets were the norm until now. The growing importance of ESG, favouring healthier and cleaner supply chains and governance, presents an opportunity for local authorities. Utilising a Health Impact Assessment to contextualise risk-free secure returns for shareholders can produce cycles of impact investment for local benefit. This approach allows local authorities to confidently deliver housing and act as beacons for ESG.

Conclusion: Keir Starmer's 2020 Labour leadership pledge to keep public services in public hands resonates with housing. Local authorities can leverage their existing data and resources to lead in innovative housing provision, capitalizing on common good and becoming market leaders.

Housing Opportunities Areas:

• Ban on Short-Term Rentals: Barcelona’s 2028 ban on short-term rentals to tourists can free up 10,000 flats for long-term rent, addressing soaring rents and house prices.

• Property Tax Reforms: Shifting to annual land value taxes can enhance labour mobility, reduce regional inequality, and promote productive investments.

• NHS Housing Strategy: Using NHS sites to house its workforce locally can support better retention.

• Unlicensed rental properties: Toronto’s unlicensed rental properties must obtain a licence number before advertising. Local authorities can repurchase unlicensed properties to expand social housing. This approach aligns with the Greater London Authority's Council Homes Acquisition Programme (CHAP).

• Resource Sharing and Financing Models: Engaging with private and third-sector organisations for joint ventures and innovative financing.

• Reverse Housing Benefit Subsidy Cap: Reversing the 2011 cap can alleviate financial strains on local authorities.

Dialogue on Housing Priorities

By Annalise V. Johns

Summer 2024

References:

1. New Statesman - Council Bankruptcy Tracker

2. Mazzucato, M. (2015). The Entrepreneurial State: Debunking Public vs. Private Sector Myths. Public Affairs.

3. Centre for London - Licence to Let

4. LocalGov - The Temporary Housing Dilemma

5. Centre for London - Recommendations

6. SSIR - Real Estate Development and Urban Health

7. Leogrande, A., & Costantiello, A. (2023). The Role of GDP Growth in the ESG Approach at World Level. HAL Archive.