David Rudlin of URBED winning The Wolfson prize has shifted discussion of the housing crisis away from simple expansion - but will it provide the impetus needed to make its alternative a liveable reality?
The Garden City is arguably the singularly most influential town planning idea in the world. As David Rudlin and his team take the £250,000 2014 Wolfson Economics Prize with their proposal for ‘Uxcester’, what lessons does it, and the wider Garden City concept, offer for planning the cities of tomorrow and solving the deepening housing crisis?
Working with Nicholas Falk (also URBED) and input from Jon Rowland (John Rowland Urban Design), Joe Ravetz (Manchester University) and Peter Redman (Managing Director, Policy and Research at TradeRisks Ltd), David Rudlin lists the great estates of London as inspiration in their usage of land value ‘whereby the estate retained the freehold of the land, could develop it incrementally and benefit from the increase in value over time.’ They describe a Garden City Land Company to fulfil this function.
‘Today ‘Garden City’ has become a mere byword for a reasonably popular, leafy, unobtrusive new development – which greatly distracts from the real issue at hand.’
First proposed by Ebenezer Howard in To-morrow: A Peaceful Path to Real Reform in 1898, the garden city was envisaged as a hybrid – a happy medium between the benefits of urban and rural life. However, what truly distinguished the idea of the Garden City from other forms of planning were the radical economic principles that underpinned it, using the rising land values that urbanisation creates for the benefit of its inhabitants. Howard proposed purchasing land far enough away from a large city in order for it to be available at cheap agricultural prices, and then vesting that land in a trust. The increasing value of the trust’s land can then be reinvested in the city as illustrated in Howard’s diagram showing ‘The Vanishing Point of Landlord’s Rent’. The shrinking red circle represents the initial borrowings used to build the Garden City gradually being repaid, until all that’s left is a big kitty for social purposes, like pensions. Howard emphatically states that ‘It is this arrangement which will be seen to give Garden City much of its magnetic power’.
The idea caught on, and we have a real example at Letchworth. The physical form of Letchworth Garden City, designed in an arts and crafts style to embody the principles of ‘town-country’, is pleasant, but is not the key issue. The important principles are embodied by the Letchworth Garden City Foundation, which has evolved from the original trust. Letchworth does not fully fulfil the vision of Howard in an unadulterated form, but the foundation still ‘returns to the community a share of the proceeds from its holdings that far exceed what any local authority for a town of this size would normally be able to afford.’
However, today ‘Garden City’ has become a mere byword for a reasonably popular, leafy, unobtrusive new development – which greatly distracts from the real issue at hand. As the UK government pushes forward with its plans for a series of new towns badged as Garden Cities, the sophisticated economic model upon which the garden city model relies risks being lost within watered-down and politicised proposals that will do little, if anything, to alleviate a growing housing crisis. For this reason there are many Garden Cities and Garden Suburbs, including those proposed by the government in Ebbsfleet, which are not worthy of the title. They are examples of vacuous developments seeking to exploit the good connotations of the name while ditching the essential element of land value-capture for the benefit of the community who will live there long-term.
Meanwhile you can scarcely open the paper without finding a statistic reporting dizzying new heights of unaffordability. Michael Howie, writing in the London Evening Standard, revealed the average price paid for a house in London is now £457,072, up almost 20% from a year ago. The situation in the South-East follows with an average price of £234,939, up 10.2% year on year. A large tranche of society and the media are engaged in fanning these flames by applying neo-liberal ideology to housing: tellingly, Howie did not refer to the South-East as the country’s most expensive area; it was referred to as the ‘best performing’ area.
‘The excluded underclass of perpetual renters, and the homeowner with their incapacitating mortgage are two sides of the same coin.’
The critical issue any neo-Garden City must address is land ownership. This is not to pit renters against property owners; in the British market, many aspiring homeowners work exceptionally hard, burdening themselves with huge amounts of debt in order to get on the ‘housing ladder’. The excluded underclass of perpetual renters, and the homeowner with their incapacitating mortgage are two sides of the same coin. Homelessness charity Shelter, the runner up, reports that the average home now costs ten times the average salary. A solution would be to the benefit of all.
The value of land in a given location is determined by a mix of factors including proximity to natural and human resources, but when prices rises, nothing has necessarily been improved as a result. In fact the opposite is true. Improvements are made by the work and tax revenue of everyone, and this is then reflected in the increased values of the affected locations. Economists refer to this rise as the ‘unearned increment’ as it is created by the private sector (we all do jobs, provide services, are potential customers etc.) and the public sector (schools, hospitals, roads, the police etc.) rather than anything extra provided by the land itself. Houses within the catchment area of a good state school, or near a good rail service show a higher increment than those in worse locations. This is tacitly acknowledged with the saying ‘location location location’. That makes sense to us all. What doesn’t make sense is who benefits. Fred Harrison, the economist credited with predicting the sub-prime mortgage crisis over a decade in advance argues that the nature of this unearned increment in land value means that ‘we socialise our privately earned incomes (wages and salaries), while our social income (from land) is privatised.’ For his part, Howard was incensed by the way the ‘unearned increment’ is siphoned off by land monopolists, arguing that it should instead be ‘collectively earned increment’, as it derives from the community.
David Rudlin and his team winning the Wolfson Prize can help us to finally shift the discourse on the housing crisis away from solutions based on just building more, or helping a few more people onto the ladder, to a systemic understanding of the way in which land distributes wealth. Without fail, the fives finalists for the competition have described a variety of community land trusts and stewardship arrangements as part of their proposals. Until some of these solutions are brought to fruition, until we disenthrall ourselves with the ladder system, we will be in a state of perpetual housing crisis, and perpetual cycles of boom and bust, no matter how many more houses we build.
The Runner up: Shelter
Shelter, the leading housing and homelessness charity (in collaboration with architects PRP, with advice from KPMG LLP, Laing O’Rourke plc and Legal & General), led by their Head of Policy Toby Lloyd argued for a community trust which owns a portfolio of valuable assets for the benefit of the residents. They project that ‘The Community Trust’s anticipated annual budget rises from £700k in the first year of operation to over £30m after 75 years.’
Led by James Gross, Barton Willmore’s proposal set out the possibility of buying shares in the city. They advocate ‘The use of incentives (bonds or shares) to aid the development of Garden Cities and provide a sense of ownership for all those involved/affected (not compensation).
Chris Blundell FRICS FCIH, Director of Development & Regeneration at Golding Homes, suggested establishing a Garden City Community Council saying ‘Letchworth Garden City Foundation provides a perfect example of the way this could develop.’ He also examined the possibility of bonds being made available to residents and landowners to widen the spectrum of stakeholders in the success of the Garden City.
Wei Yang & Partners and Peter Freeman
Wei Yang & Partners and Peter Freeman in collaboration with Buro Happold Consulting Engineers, Shared Intelligence and Gardiner & Theobald, led by Pat Willoughby, described a Garden City Community Land Trust responsible for the long term stewardship of the community’s assets. They state ‘The trust will be endowed with ownership of key retail premises on the High Street and in the Neighbourhood Centres.’
The Wolfson Economics Prize 2014
All of the entrant’s initial and final submissions can be viewed online for free here