Time to take a long-term view

Let me ask an obvious question – why, when we have all this choice in consumer products we can’t get the housing that we want and need for our families and our peace of mind? Housing to love, with space to cherish?

The impact of an overheated housing market

We have just witnessed a house price explosion – the bubble effect has been part of a chain of events that has led us to the great crash of 2008. A recent survey by the Economist has shown that between 1997 and 2008 the increase in house prices was 150 per cent including the recent fall.

I believe this house price escalation has had a distorting effect on achieving design quality in new housing. It has had a corrosive effect. While the price was inflating by 20 per cent a year, the speculative appetite for housing was clearly enormous. This demand, with the easy money that the banking sector was offering, added fuel to the already raging fire. This pressurised land supply made planning and regulation more defensive and political, seeking to repress the market forces for development everywhere, and pushed up the price of land. Regulation and taxation eroded resources away from investment in the design and build of the home itself. Some housebuilders in an overheated market place were able to get away with product that wouldn’t have been accepted at other times.

The global recession and the resulting limitation on mortgages have had the immediate effect of stopping production of new homes. 2007 produced 200,000 new homes. 2008, 100,000 and 2009 maybe more like 50,000. The government target of three million needs 240,000 to be completed each year. Luckily, I am not a politician – but would suggest that this confirms a crisis of supply.

An alternative approach

CABE has issued a series of design guidance documents - including the 20-point Building for Life guide to raise the standard of new housing, Delivering great places to live. I feel that we need to start to look at alternative models of delivery and development. The arrival of the Homes and Communities Agency provides the possibility of wider public ownership of land and innovative partnering arrangements that can change the development economics and permit a longer term view. It’s worth looking at some fundamentals to see where we might arrive.

Land is clearly critical – the recent past encouraged land speculation which in turn generated profits for the housebuilders but did little to promote quality development.

In my opinion it undermined design quality, as it diverted funding away from investment in the home product towards ever climbing land acquisition costs.
If the activity of land assembly could become the role for the public authority it would serve to separate the housing supply into two distinct parts. This first predominantly under the public authority would be the assembly, allocation and the planning of development. The second under private and not for profit organisations would be the design and development of the homes for occupiers. This separation would allow the developers to gain more public trust as they would change their role from land speculators to product manufacturers and brand holders.

Creating long-term value

I suggest that if land assembly for housing became a primary function of local authorities with the involvement of community, not just for consultation, but as genuine stakeholders it could become established as a non confrontational process. In this newly engaged role, the community could begin to understand and place trust in the process of development. This would be better than the status quo at present where consultation results in objection to all development - good or bad – as a matter of principle.

This approach would also begin to justify longer-term thinking. It would help position the local authority or neighbourhood as permanent owners of land whose interests align with successful development that enhances value over time.

In this approach they would be more akin to the 18th and 19th Century urban land owners who created the townscape across the centres of our cities of which we are justly proud and which we are looking to emulate in the 21st Century.
I am not suggesting that the local authorities should be solely responsible for the development of homes on the land that they assemble. This could be a disaster - it could take us back to the days of large single tenure public housing projects that have been found to deteriorate into social ghettos.

More consumer choice, less speculation

I am thinking of a new relationship between the independent development of housing by providers whose skill and whose status is judged by the quality and attractiveness of the house product they develop. This becomes their primary role, rather than land assembly and speculation. I suggest that this separation of functions in the delivery chain will free choice and drive quality of product. It will permit both elements to do what each does best to the wider benefit to the community as a whole.

I find myself drawn to the food analogy here – we need developers who are chefs, we need them to start inventing dishes that spark the imagination and begin to penetrate through to the taste buds of the nation. The recipe book – the 20-point format of Building for Life should be thought of as the ingredients of the dish. The invention and the skill of the creative developer in a new role as chef is to take those ingredients and to invent the new dishes - homes of an architectural quality that will provide value for the future.

Value retention is a fundamental requirement for investment in buildings. It is directly related to design and its suitability as a backdrop for the social life of the families who live there. This objective becomes the key financial criteria once the rampant inflationary spiral of house price is removed. Conditions in the marketplace have given us this opportunity to wrestle the home away from speculation put it firmly back in the consumer's realm of influence.
Moving towards better homes and neighbourhoods

To my mind we need to look long and hard at the housing supply in the UK and separate land and infrastructure from the delivery and quality of the artefact of the home itself.

Life changes when creative minds invent new paradigms that shift our way of thinking and provide us with the unexpected we find we suddenly cannot do without. For example, we can look back at organic food or ethical cosmetics and see these as movements that changed long term fixed views to widen what is now commonplace in the market.

Housing to love, space to enjoy, homes to cherish are just as important. They too are movements where that same shift is required. Let’s now be prepared to permit individual chefs to invent and experiment with our homes to provide our society with shelter as flexible and as differentiated which leads the movement for change and ensures that our homes gain as much importance as our cosmetics and our food.

Roger Zogolovitch is chairman of Solidspace, an architect and developer of new 'fit for purpose' housing for 21st Century lifestyles