Where should we build?

Councils own all sorts of unexpected things. Pubs, hotels, farms, airports, golf courses, shopping centres. They also own lots of car parks. Such is the reach of many municipal empires. Not all are managed directly. Some were bought as commercial investments — reckoned to give a good return in this era of low interest rates. Invariably a scroll down the asset registers show that those council leaders that complain the loudest about austerity are from the local authorities that have the longest and most eclectic property portfolios.

It is true though that councils relying on revenue from these assets have taken a financial hit during the coronavirus crisis. Car parks will be an important example. Five years ago I did some research for the Taxpayers Alliance using Freedom of Information requests. That identified 11,517 council-owned car parks. I suspect the true figure is even higher.

There have been predictions that even after the pandemic has ended fewer of us will be using cars. More will work from home. Using the internet to order groceries, rather than driving to a supermarket for a weekly shop, will be an enduring habit for a greater number of us.

Yet rather than moaning this offers a wonderfully lucrative opportunity. Ian McGuinness, the head of geospatial research at Knight Frank, has glad tidings. He reports on detailed mapping of all surface car parks in England for a study commissioned for the Ministry of Housing, Communities and Local Government. If all the public-sector car parks were sold, 2.1 million homes could be built on the land — seven years’ supply of housing at the government’s stated target of 300,000 new homes a year.

McGuinness said: “Some councils had the equivalent of half the land they owned covered in car parks. In another case there was the equivalent of 200 football pitches. In many cases these lie empty. Some 70 per cent of sites we identified as suitable for development are in the south, in areas where housing is deemed unaffordable for many.”

Of course, the point will be made that some state car parking spaces must be retained. What about those who live on council estates, for instance? But here getting stuck into the details shows considerable potential. Birmingham City Council tells me that it owns 7,656 garages of which 4,149 are empty. That is not an exceptional ratio. So often they could be replaced with homes.

Often when garages are let, they are done so at commercial rates to residents not living on the estate. Sheffield City Council, for instance, has 1,532 empty garages. It has a further 1,073 garages let to non estate residents. Probably most of these are used for storage. Why is Sheffield City Council competing in the storage business when it could be easing the housing shortage?

It’s not just garages. Camden has 2,191 void council estate parking spaces out of 5,096. At least they keep track. Most councils don’t have a clue. (They also own 901 empty garages, since you ask.) The average house price in Camden is £1.8 million. That’s before we get started on boarded up “tenants halls”, surplus “pram sheds”, closed off ball courts, boiler rooms that have served their purpose or scraps of neglected waste land. All these are familiar aspects of municipal mismanagement in council housing departments across the land, urban and rural, Labour and Conservative.

Even with an easing of planning bureaucracy, it will not always be possible to replace a row of empty garages with a row of new cottages. Sometimes where it could be done they would have to be bungalows, but elsewhere they could be taller. Existing residents would be likely to welcome them. Provided the design was traditional and attractive that would surely be seen as an advance on ugly empty garages, often vandalised or sprayed with graffiti.

Remember we are only considering car parks. We haven’t got on to all the farms and all the unused council land. Council finances could be assisted in two ways by releasing land for development. Firstly, by allowing billions — indeed tens of billions — of pounds to flow into the coffers from land sales.

Secondly, the negotiations that followed would generally result in some of the new homes being designated as “affordable”. That would mean that many in expensive (and usually unpleasant) temporary accommodation including in hostels and hotels could be given proper homes.

But to move beyond bureaucratic definitions true “affordable housing” can be delivered by the market if the supply is increased. By no means are local authorities the only ones blocking this opportunity by hoarding land. The Ministry of Defence owns 600,000 acres (equivalent to the size of Surrey.) Is it really all needed for national security? Seems dubious.

Property developers have been accused in recent years of “land banking”. The suggestion is that there is a profit motive in delaying development. Less attention has been given to state land banking where the difficulty has been a lack of financial rigour.

“I am not worried about the deficit. It is big enough to take care of itself,” Ronald Reagan memorably remarked. But the Office for Budget Responsibility estimates it will be £322 billion for the UK this year. As hopes of a “V shaped” recovery fade, it seems unlikely that it will “look after itself.” So grappling with the public finances is not a challenge that can be put off for long. Solving the housing shortage is another national imperative as a generation experiences the exasperation of being shut out from home ownership.

Happily, both these challenges can be met if surplus state land is released for development on a sufficiently ambitious scale. The Prime Minister wants to “build, build, build.” For that to happen the Government must “sell, sell, sell.”