The Economist: Economic Impact of Housing Policies

[CaptainYooh]

Interesting articles in the January 2014 issue of The Economist magazine. They analyze the unintended impact of planning policies implemented and intended to control urban sprawl in England. Calgary planners and politicians better take notes until it's too late.

The first article "An Englishman's Home" deals with the overall housing crisis and economic drag it creates.

...The lack of housing is an economic drag. About three-quarters of English job growth last year was in London and its hinterlands, but high prices make it hard for people to move there from less favoured spots. It also damages lives. New British homes are smaller than those anywhere else in Europe, household size is rising in London and slums are spreading as immigrants squash into shared houses (and, sometimes, garden sheds). Inequality is growing, because the higher property prices are, the greater the advantage that accrues to those whose parents own their homes.


This is all the result of deliberate policymaking. Since the 1940s house-building in Britain has been regulated by a system designed to prevent urban sprawl, something it has achieved spectacularly well. It is almost impossible to construct any new building anywhere without permission from the local council. In the places where people most want to live—suburbs at the edge of big cities—councils tend not to give it...

http://www.economist.com/news/leader...glishmans-home

The second article "Breaking the Stranglehold" analyzes the consequences of NIMBYism and tight political control of land supplies:

...in such a tight market, deep-pocketed builders prevail. Since 2008 the number of small house builders—those that put up between 10 and 30 units per year—has fallen by 50%. The number of big builders has increased slightly. Weak competition means that builders have little incentive to invest in design, which may explain why new homes are often unlovely. And since these firms often operate as little local monopolies, they rarely cut prices: if prices are not suitably high, they tend to undershoot even the low targets set by councils...

http://www.economist.com/news/britai...g-laws-enacted

[Bill Bumface]

What is Calgary currently doing to limit sprawl?

I'd say probably nothing.

Calgary is trying to have those buying in greenfield developments pay the true cost of their purchase.

Nothing wrong with that, and it won't discourage growth or homebuilding.

Calgary also has swaths of land close to it's core that can undergo massive densification.

I don't think we're even close to a parrallel of London.

The construction industry has to catch up to housing demand, but I'd say the permitting process is the biggest obstacle to that short term problem. Residential developments are flying up all over, there are many places to live here.

[Bunk]

I think this probably belongs on the urban planning thread, no? It's just going to be yet another latte-sipper, yop gobbling rehash.

[CaptainYooh]

I doubt it. Favelas don't pay any taxes and they steal all of their utilities from the municipalities. When I was in Rio talking to a local engineer, he said that some of the radical proposals are to grant them all unilateral ownership and titles to their homes; thus, making them "official" and tax-paying. Didn't work so far.

[kevman]

Inequality is growing, because the higher property prices are, the greater the advantage that accrues to those whose parents own their homes.

I thought this was interesting. Not that Calgary is anywhere near London when it comes to home prices but as cities grow the land is historically priced out of reach from most citizens that don't already live there. "Old Money" forms as family's sit on their land over many generations.

As an inner city resident on a fairly "big" chunk of land the idea of banning all greenfield development could do wonders for my net worth!

[CaptainYooh]

Originally Posted by kevman

...
As an inner city resident on a fairly "big" chunk of land the idea of banning all greenfield development could do wonders for my net worth!

Don't discount this thought as a joke. This is one of the most important hidden reasons behind NYMBYism and restrictive development policies.

[jofillips]

great articles - the economist can always be relied upon for quality...
Reading this may help explain why i see Calgarys Cancer-like suburban sprawl so shocking!

[CaptainYooh]

Originally Posted by jofillips

great articles - the economist can always be relied upon for quality...
Reading this may help explain why i see Calgarys Cancer-like suburban sprawl so shocking!

If this is your conclusion, then you have probably grossly misunderstood the points made in those articles.

[SebC]

Originally Posted by CaptainYooh

If this is your conclusion, then you have probably grossly misunderstood the points made in those articles.

And if you think the articles justify developer subsidies, then so have you.

[ranchlandsselling]

Originally Posted by SebC

And if you think the articles justify developer subsidies, then so have you.

I haven't seen anyone in this thread mention developer subsidies?

[CaptainYooh]

Originally Posted by SebC

And if you think the articles justify developer subsidies, then so have you.

"So, when did you stop beating your wife?" (c) Nenshi

[GGG]

Originally Posted by CaptainYooh

"So, when did you stop beating your wife?" (c) Nenshi

Your post around the article is the beating your wife question. You are posting an article that is not at all relavent to Calgary and then warnin calgary not to follow a similar path which calgary is not considering taking.

How much undeveloped serviced land is ready to go. Lots. Who is stopping suburban sprawl? No one.

[SebC]

Originally Posted by ranchlandsselling

I haven't seen anyone in this thread mention developer subsidies?

I'm guessing at CaptainYooh's motive based on previous pattern of posting.

[ranchlandsselling]

Originally Posted by SebC

I'm guessing at CaptainYooh's motive based on previous pattern of posting.

I know, but figured he deserved the benefit of doubt,..... until the beating of wife comment. Now I'm confused and leaving the thread

[CaptainYooh]

Originally Posted by GGG

Your post around the article is the beating your wife question. You are posting an article that is not at all relavent to Calgary and then warnin calgary not to follow a similar path which calgary is not considering taking...

I posted two articles from the magazine that is not a tabloid but a generally respected publication on economics. Both describe the impact of restrictive policy planning something that the City of Calgary is notorious for. So, yes, I think it is relevant to Calgary and it is a fair warning.

Originally Posted by GGG

...How much undeveloped serviced land is ready to go. Lots. Who is stopping suburban sprawl? No one.

You and some others think we have a sprawl in Calgary, I and some others don't. This disagreement is debated extensively in Bunk's thread, in latte sippers thread and some others. Why rehash it here and dismiss the topic of articles?

[MarchHare]

Originally Posted by CaptainYooh

You and some others think we have a sprawl in Calgary, I and some others don't.

Reasonable people can have a reasonable disagreement about whether suburban sprawl is a net positive or negative for our city. That's an interesting discussion and one absolutely worth having as we debate the best way for Calgary to grow.

What is not reasonable is to state that we do not have sprawl in Calgary. You have no credibility whatsoever if you're denying that sprawl exists.

[GGG]

Originally Posted by CaptainYooh

I posted two articles from the magazine that is not a tabloid but a generally respected publication on economics. Both describe the impact of restrictive policy planning something that the City of Calgary is notorious for. So, yes, I think it is relevant to Calgary and it is a fair warning.


You and some others think we have a sprawl in Calgary, I and some others don't. This disagreement is debated extensively in Bunk's thread, in latte sippers thread and some others. Why rehash it here and dismiss the topic of articles?

Actually I don't think we have a sprawl problem in Calgary. Your original statement that Calgary planners better take note is a loaded statement. Then you call out others for responding to the loaded statement.

The fact remains this article has little to do with anything that Calgary will face in the next 20-50 years.

[CaptainYooh]

Originally Posted by MarchHare

...You have no credibility whatsoever if you're denying that sprawl exists.

Why do you want to make it personal? Does it make you feel better? I don't need to have credibility with you and you are nothing to me but an avatar. Please don't make it personal, it's pointless in a forum off-topic chat setting.

What do you know about sprawl that makes you so confident? Can you credibly define sprawl in terms that are universally accepted by the academia? Just repeating that we have sprawl and rejecting any opposing arguments makes you no better than little red book waving angry mob in China.

What we DO have in Calgary is some really unattractive suburban developments, that have been allowed to proceed and that are, btw, fully compliant with the anti-sprawl policies. The market found the way to build them cheaper at the expense of looks, walkability, product mixes etc. This was the point in the article. The market will always find the way to work around restrictive policies in a negative fashion.

[jammies]

Alberta is 660 000 square kilometres in size, England is 130 000 square kilometres in size. Calgary is around 760 square kilometres, Greater London 1583 square kilometres.

England has a population around 53 million. Alberta has a population around 3.5 million. Greater London has 8.2 million people; Calgary, 1.2 million.

The relevance of English urban planning to our situation, in light of these facts, is somewhat unclear to me. They have many many many more people in a far smaller area. Further, their cities were never "planned" until recently, and have to cope with legacy infrastructure and road networks dating back to medieval times.

[Addick]

Originally Posted by CaptainYooh

If this is your conclusion, then you have probably grossly misunderstood the points made in those articles.

It's hard to take the first article seriously when it's reaction to an extreme solution is to go to the extreme on the other side of the scale. While the Green Belt policy and NIMBYism have been massive contributors to the alarming housing shortage in England, getting rid of the Green Belt is not a panacea and most likely would not even help provide the type of housing desperately required in England. The National Planning Policy Framework isn't about allowing homes to be built where they are needed but rather anywhere where land speculators can turn a fortune.

When I read the article last weekend I was questioning if the author even had any experience with the British planning system. It read like an uninformed North American take on a unique English problem.