Solving the housing crisis (without building new houses).

Net Zero is lowering emissions - and living standards.

Last week, the LSE published a post on their blog on the housing crisis that was roundly mocked. The title is enough to explain why; it was called ‘Solving the housing crisis without building new houses.’

As I can barely understand this line of argument, much less put it into my own words, I’ll let the authors explain;

A long-established governmental focus on quantity of housing (as opposed to quality or tenure), epitomised in the current cross-party consensus that seeks to build 300,000 new homes a year, has done little to alleviate the market-generated burdens of disadvantaged and low-income families…. To tackle urgent, inter-connected social and environmental crises, we must shift our focus to the existing housing stock, and pursue innovative policies of re-distribution and re-utilisation, alongside efficiency-enhancing measures.

What do these innovative policies look like? The authors call for a suite of solutions that aren’t building enough housing to match demand, including, more progressive property or land taxes, the regulation of second homes and excess housing, local interventions to better match housing stock to households and improving the feasibility of and access to co-living arrangements.

Yuan Yi Zhu summed up the multitube of mockery simply, and ably; ‘This is not a serious proposal.’ But, rarely for an UnHerd contributor, he is wrong. This is a very serious policy proposal indeed; just not one to solve the housing crisis.

This blog is based on the CASE Paper ‘Fair decarbonising of housing in the UK: A sufficiency approach’. In order to meet tough Net Zero targets, the authors of the paper tell us, they adopt a sufficiency approach, ‘based on determining both a housing floor – a decent minimum standard for all – and a housing ceiling - above which lies unsustainable excess.’

You simply have to follow the carbon; the built environment is responsible for over 40% of annual global Co2 emissions, with 70% from building operations and 30% from construction. British homes are the worst insulated in Europe and according to the National Housing Federation this, combined with high levels of gas central heating, means ‘the average family or household in England is currently producing more CO2 every year just by living in their home than they are by driving.’

If your goal is to create a housing policy that aims to meet Net Zero targets then it makes sense to ‘reutilise and redistribute our existing housing stock’ first and disincentivise further construction. But this, as housing policy, runs into a major blocker; living standards.

Britain is already one of the most densely populated nations in Western Europe, has the highest rate of inadequate housing in Europe, the lowest number of houses available and the oldest housing stock in the developed world. The average new home size in Britain is smaller than in Japan, a nation famed for cramped living conditions; last year, the number of those new homes was the lowest on record. Britain is already missing over four million homes; added demand from immigration means government targets are around 70% short.

In fact, this mirrors the wider trend of how Net Zero is pursued; with a focus solely on emission reduction, rather than how to meet those goals without declining living standards.

Energy is the prime example; whilst the phasing out of coal has been a huge success in terms of reducing emissions, the energy lost through the closure of Britain’s coal fired power stations hasn’t been replaced. This mean Britain became more reliant on imported energy and, when Russia invaded Ukraine, was overexposed, with energy price hike a primary driver of high inflation.

Following the green agenda has complex trade-offs. But as long as it is followed with disregard for living standards, the possibility of populist dissent will remain ever before our eyes – and so it should. Climate change has the potential to be the biggest change to our civilizational infrastructure since the Industrial Revolution; it cannot be for the worse.