Devolving to build
Researcher
The Government are on course to miss their 1.5 million housing target. Ministers have been criticised for moving slowly and watering down the flagship Planning and Infrastructure Bill.
One bright spot has been Homes England, which enabled ~37,000 new homes last year. Its Arm’s Length Body (ALB) status and development powers insulate it from the direct firing line of NIMBY opposition.
In this context, our recent proposal to abolish Homes England and devolve most of its powers and functions to Mayoral Strategic Authorities (MSAs) could appear counter-intuitive. What would stop a mayor, empowered with strategy-setting, funding-allocation and decision-making power, from enacting NIMBYism at scale?
Voters
The politics of housebuilding is shifting. Recent polling suggests the public are more pro-housing than the typical caricature implies. Therefore, mayors would have the incentive and political cover to drive housebuilding.
Of course, pockets of anti-housing sentiments remain. But mayors, given their large and diverse electorates, have the ‘breathing room’ and legitimacy to take strategic decisions in the face of localised opposition.
Furthermore, vesting MSAs and mayors with Homes England’s powers would establish strong localised lines of accountability. The electorate and scrutiny bodies could judge in plain sight how successful a mayor has been at deploying the additional funding and power. A NIMBY-inclined mayor may decide they would rather be re-elected than indulge the whims of a minority of their voting base.
Central government
Still, despite voter incentives and clear accountability lines, a mayor may still decide it is in their interests to pursue a NIMBY agenda. What then?
Even in a devolved system, central government would still have significant ‘bite’. The Secretary of State for Housing, Communities and Local Government could use their call-in powers to override planning rejections. And the Housing Delivery Test imposes harsh consequences if housing delivery falls below 75 per cent of a local authority’s assessed housing requirement. These powerful levers help to ensure that mayors cannot underperform in housing delivery below a certain acceptable standard.
Investors
And finally, mayors must also answer to investors and the market. As we argue in the paper, locating funding and decision-making power within MSAs would simplify the funding landscape and provide greater certainty. This could plausibly allow MSAs to attract higher levels of investment than Homes England’s current ratio of £9 of private sector investment for every £1 of public money invested in equity deals. A NIMBY mayor inclined to reject decisions would inject uncertainty into this system, reducing investment and leaving their area poorer.
Taken together, these preexisting safeguards reduce the risk of ‘NIMBY capture’. The three key stakeholders – voters, central government and investors – are all incentivised to see greater housebuilding and have punishments available if mayors fail to deliver this. Voters can remove mayors from office, central government can override decisions or implement a presumption in favour of sustainable development, and investors can reduce funding.
Viewed this way, abolishing Homes England and devolving its powers and functions is a necessary, not antithetical, step if 1.5 million homes are to be built.