Abstract
This chapter turns to an issue that remains at the forefront of policy today—housing supply—but set in a long-run framework. Public sector involvement in the provision of housing expanded after the Great War, but the proportion of GDP devoted to housing has exhibited little evidence of an upward trend since then. High levels of building have rarely consistently taken place, except following times of national emergency or when the wider economy was in recession. Controversially, this raises the question of whether the building industry would respond fully to the commonly-acknowledged current major housing shortages, even if planning controls were to be relaxed. This national level analysis is complemented by local London analysis and considers the relationship between building and rail and underground developments in the nineteenth and early twentieth centuries. Rail construction had a major impact on population outflows from cities towards the suburbs.
The First World War rather than the Second marked a watershed in housing policy in terms of the increase in the resources going into housing, in public expenditure, and in progress in improving housing conditions. The low level of house building in the years before 1914 at a time when large numbers of households did not have a separate dwelling is strong evidence that a combination of socially determined minimum standards and a near exclusive reliance on private enterprise, unaided by subsidy, was unworkable with the level and distribution of incomes at that time, and the housing standards that were set.
Department of the Environment (1977, p. 45)
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Notes
- 1.
The Department of the Environment’s 1977 Housing Policy Review provides valuable information on the development of housing policy up to the date of its publication and is particularly used in Sects. 7.2 and 7.3.
- 2.
The figure is for England and Wales. See Holmans (2005), Table B.6.
- 3.
Building subsidies for private construction were not made available after the Second World War.
- 4.
The Acts granted the companies compulsory powers to purchase land for railway construction, although any surplus land could not be used for associated property developments.
- 5.
Haywood (1997) provides an excellent overview of the relationship between housing, transport and planning.
- 6.
Sir John Betjeman wrote and narrated a BBC documentary on Metroland in 1973.
- 7.
Milton Keynes, Peterborough, Northampton, Warrington, Telford, Central Lancashire.
- 8.
The table uses the relevant local authority district for each New Town.
- 9.
In the US, the NBER Macro History data base shows that the level of housing starts was much lower between 1900 and 1940 than in the post-war period, although, there was little trend pre-war. However, starts were heavily hit by the Great Depression when single-family starts fell from 436,000 in 1928 before the collapse to 76,000 in 1933 at the bottom of the slump. From Fig. 7.1, Britain did not experience a construction slump in the Great Depression.
- 10.
From 1921–2013 (allowing for the Second World War), an Augmented Dickey Fuller test yields a value of −5.4 (the 5 % critical value is −2.9), but the test suggests non-stationarity before the First World War.
- 11.
Formally, the growth in prices is a stationary process, formed from differencing the non-stationary price level. Since construction is also a stationary process, the properties of the two time series are consistent.
- 12.
Even larger values were found for nineteenth century Glasgow in Chap. 6.
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Meen, G., Gibb, K., Leishman, C., Nygaard, C. (2016). Building Our Way Out of Trouble. In: Housing Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-47271-7_7
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