Tim Leunig

Yesterday in my piece about the Policy Exchange think tank's suggestion that Oxford and Cambridge ought to be allowed to expand to as many as a million homes I mentioned the work "Car Free Cities" by J H Crawford which I came across a decade ago when looking into Oxford's last Local Plan. In it he postulates a city of a million people with a topology and transport system that means that any two addresses anywhere in the city would be no more than 35 minutes apart by foot and rapid transit system.

The city is made up of many districts of about 12,000 population like strings of beads along one of three overlapping rapid transport loops. Every home is less than five minutes walk from open countryside. And whilst the densities within the districts are amongst the highest on earth (similar to Seoul, for example, although nothing is more than three stories in the reference designs) only 20% of the total 100 sq mile (10 by 10) area is developed at all, leaving all the areas between the beads and strings as open countryside or managed parkland or whatever. Overall then the density is not a lot greater than Oxford's current density and less than the average of Greater London as a whole.

So, for a bit of fun, I superimposed Crawford's one million population city topology onto the ten by ten mile square centered on the current centre of Oxford. Now sure, a million population is only probably about a third of the million households the Policy Exchange report was ultimately suggesting, but if anyone says to you that it would simply be impossible to imagine a million people in the area between Wheatley and Eynsham, Littlemore and Kidlington, you can say you have seen how, and with no traffic and only 20% of the land developed to boot! It would currently take me over an hour to get from the end of one of these loops to about a third of the way out the adjacent one, incidentally.

Now nobody is suggesting that we do this, least of all me. I'm just demonstrating that it would be possible, indeed whilst making more of the green belt actually because all the space would be accessible in minutes rather than in half an hour in the car, it would reach right into everyone's neighbourhood - with open country no more than 400m from every front door. Fitting such principles into existing cities is of course much more difficult than an academic sitting at a drawing board with a blank sheet of paper. They need not be loops for example but twelve strings with termini at the end of each. It would increase average journey times but not the overall maximum of 35 minutes door to door and could be fitted in along existing radial roads as a series of villages.

Incidentally, the picture on the right here shows some of the housing in the ward with the highest density in England, at least that I can find - a "middle level super output area" either side of the Cromwell Rd in Kensington & Chelsea.  I notice from Net House Prices that there have been 267 £1m plus residential property transactions in the last eight years in this post code area.  This is getting pretty close to the densities that would be required in a city such as that in Crawford's book.  It's hardly slum clearance stuff is it!

When I saw the first press mention of the "Cities Unlimited: making urban regeneration work" report from the Policy Exchange think tank in the Oxford Mail yesterday screaming that "Oxford should get a million new homes" and I noticed prominent Lib Dem economics boffin Tim Leunig was involved I'm afraid I at first reacted with my heart, yelling "Not In My Back Yard, you heartless economist you" before engaging my head.

You see, all too often Tim has come out with some great ideas that have been instantly presented as the works of the devil himself. There were "community land auctions" which, for those who didn't think about it too much, was presented as the state confiscating land from private owners at a fraction of its value. Then more recently his idea for allowing people to sell the social housing home they rent in order to buy another one of their choice elsewhere which would in turn become a social housing home. Even I had to think about that one for a while before I thought it was anything other than a great council house give-away scam. Such is the fate, almost inevitably I suspect, of people who write about "agglomeration economics" and "gross value added" measures of local economic activity.

And so it is also with this report. It is, despite the economic jargon at times, quite an easy read, with what I find to be compelling arguments. It is counter-intuitive for sure, for anyone who has worried about what to do about the "North South divide" and traditional regional policy which has been focussed on using regeneration money to try and repopulate declining towns, to keep people where they are and bring the economic prosperity to them. It has enough controversial suggestions for any mischievous media outlet or politician in denial to pick out the one that seems to say most about their area and have a go at it.

And boy, have they had a field day with it. If you're vaguely northern, or Welsh, you are to be outraged that the report says regeneration has failed, and not only failed but unlikely ever to recover your town's fortunes. If you're in Oxford or Cambridge you've got a million new homes to get outraged about. If you're anti-Tory you will like the portrayals of it as demanding no more money should go to Labour heartlands in the north. It is, in some senses, a perfect storm - there's something for absolutely everyone to criticize about it. But I would suggest they read it first as it is apparent that many who have commented on it, from John Prescott down, have not.

Yes, it does say that the regeneration money lavished on declining cities and towns (and over the past four decades not just Labour's tenure) has been wasted. Of course, the Labour ministers and MPs who championed this money more recently going into their heartlands are outraged. But the report, or rather its predecessor data collection exercise, "Cities Limited", shows pretty conclusively that this failure is real - that, whilst they may be declining slightly less slowly in comparison with more prosperous areas than before the money was spent, they are certainly not catching up, or keeping up. But it does not, as Adam Bienkov writes at Liberal Conspiracy, call for that money to end, for the rest of the country to just "fuck off".

Actually quite the opposite. Anticipating an incoming Tory government will naturally be likely to have fewer "champions" of these northern former industrial towns, it suggests instead of these grand technocratically led regeneration projects controlled from the [London] centre, government should give pretty well the same total amount of money to the local authorities based on need but for them to spend on what they see fit for improving the quality of life in their own towns and cities. This, it says (or rather another predecessor report called "Cities for Success" said) will lead to stronger, better scrutinized and more responsive local government producing "quality of life" projects that people actually want, rather than what some central planner looking at house prices from Whitehall thinks is good for them.

So it's a document about devolution and decentralization of regeneration. About freeing those local authorities in declining areas to choose how they respond to that depopulation rather than how the centre says they should. It is not that spending money on a place always fails, it is that the over-riding concern of regeneration money and regional policy to date has been that these places need to be repopulated by that money, people actively encouraged not to up sticks and leave, despite the obvious fact that they stand to have greater opportunity and more possibilities for increasing their wealth by moving, when in fact the money might be best spent making the quality of life for those who remain far higher.

In fact, it says that this current regeneration policy has even worse effects. Because regeneration areas are still, despite the billions, growing at a slower rate than the successful areas, in insisting that they should be repopulated come what may, regeneration policy is "condemning" the people it persuades to remain or return there to a slow lane of growth. And that because the exodus is led by the more mobile, enterprising, adventurous and usually better skilled parts of the population, it means that what is being left behind is denuded of its greatest assets - the skilled people that might make it attractive for new businesses to set up there.

And of course, the other main controversy is about what those skilled people wanting to better themselves should do. Clearly, London is a huge draw - I always think if it personally as a black hole with government and the City at the singularity and threatening to swallow anything that falls into its event horizon which has been expanding for centuries. Others of course say they like London. So why would they want to prevent others having the same standard of living and opportunities as they do.

Adding an extra million homes around London, says the report, would be the equivalent of adding an extra two miles to the outskirts. Traveling along the M40 at Hillingdon at 70mph for example this, he says, would mean that it would take someone an extra two minutes to reach the countryside. Are we [in London that is] so selfish that we would deny that opportunity to others from "up north" for the sake of it taking an extra two minutes to get to open countryside? Conveniently, the response from the Lib Dem PPC for Hastings yesterday, reveals the answer:

Nick Perry, Lib Dem parliamentary campaigner for Hastings & Rye said, “I am a Northern lad hailing from St Helens, and our move to Hastings last year was a dream come true, however the calls from this Tory think tank are nothing short of bizarre."

So that's it is it. What's good for Nick Perry, indeed a "dream come true", is too bizarre to contemplate for everyone else who may want to better themselves. Ironically, had the Hastings Lib Dems read the report first they'd notice that Hastings is actually one of the exceptions in the South East. That it suffers by being connected only to the periphery of London's orbit and so would not be an ideal place for adding lots of people unless there was significant increased connectivity.

So, perhaps I can get more worked up about the section that talks about a million homes for Oxford and Cambridge, if I can't get excited about the thought of London expanding by two miles in each direction. Well actually, whilst personally I am in Oxford precisely because it is small, and probably would be one of those who would leave if it became terribly much bigger, that's because I can. My IT skills can be put to use anywhere. I could move to Liverpool and get similar pay in a similar academic institution to what I'm in here. But for others it's harder. Oxford and Cambridge, outside of London, are the only two UK academic institutions that get more in research money than they do for teaching students. On the global scale they are our only two really big knowledge generators. Leunig's position seems to be that if they are to remain it that position globally, and they'd damned well better as there is precious little else our economy will thrive on if not knowledge generation in the new global village, they too have got to capitalise on "agglomeration economics", to attract a real thriving community from around the world and the UK that services the expansion of the best brains in Britain in their subjects.

Of course here in Oxford, we can't even agree on whether it is right to have four thousand extra new homes, let alone a million. Our heads are simply not in the right place to hear the logic of what Leunig is telling us. But even if it does become someone's policy, should we be so scared of it? On the one hand, yes, clearly haphazard development of a million homes in a rural county is not on. But if we're looking at a new world order, with population migrations the like of which Britain has not seen since the Industrial Revolution urbanized Britain's population and gave rise largely to those northern towns, then we ought to be looking at new urban forms as well.

Here's a model from a book called "Car Free Cities" by a chap called J H Crawford I came across a decade or so ago in my reading up for the last Oxford Local Plan, that shows how a city of a million population can be fitted into a ten by ten mile area with development on only 20% of the square, where, thanks to rapid transit systems every home is no more than thirty five minutes traveling distance from any other location in the city, every home is less than five minutes walk from open countryside and which could be developed in phases linked into or threading between existing communities.

So, the worst I can say about the report is that "the truth hurts". The truth is that current regeneration projects have and continue to fail to bring less well off former industrial areas up to the standard and the ability to match in future seen in the more prosperous south east. It is cruel and heartless in the light of this to prevent people migrating from those areas to where their skills will be better rewarded and it would be but a small imposition on London in particular to host another million or so homes. We risk our place in the global future if we fail to recognise this reality and grasp the opportunities it presents to make more people better off than regeneration ever can. At the same time we need to make local authorities and local people in declining areas responsible for their own projects to make their quality of life better, whether in decline or otherwise. We need to empower them and finance them, and watch them compete with each other for the best ideas.

At the same time we need to free up from planning constraints land in the south east to accommodate inward migrants. We need to ensure also in the process that space is made for semi-skilled and unskilled also to come from those declining areas so that the balance of people moving out of them is not skewed too heavily towards the skilled sectors.

And all the signals that make this apparent are related to land value. That London is not yet at its optimal size is proven by the fact that people still pay more for their home than the capital cost of the home - ie that land still has some residual value that people are prepared to take a gamble on rewarding them by more than it has cost them to move. That some of the "Pathfinder" areas should not have housing replaced is indicated by the fact that housing costs less than it costs to build. We'd be better buying spare houses and allowing families in the neighbouring houses to expand into hem than knocking them down and replacing them, hoping against hope that they will fill up with bright young things who do not want to join the London black hole.

But there must be something I would criticize the report for, surely, and yes, there is indeed. Tim is always saying that his ideas are a new way of thinking about land, superior to and more suitable for the modern world than that other suggested reform a hundred years ago, Land Value Tax. But the report opens with a complaint that despite trying everything regeneration has failed. Well we haven't tried everything - we haven't tried land value tax. And if any of this report is to be taken on board and implemented we need LVT first. To ensure the timely release of non-housing land for housing, to ensure that Oxford is developed to its current optimum level before adding more, and so on. If Burnley has, as the report suggests, a negative residual land value, then people settling there under my suggested system of land tax and citizens' income , are going to actually be paid for living there. Any firm setting up there will face no taxes, either on its workers, profit or its location; it's going to be around 30% better off just for that and may indeed help attract skilled work back into tax free areas.

The report praises the London Docklands development. Docklands was primarily initially successful (key to regeneration is getting a critical mass of occupiers into a newly regenerated area quickly so it can start to form a community) because the LDDC declared a rates holiday for a decade. Rebasing our tax system to land values rather than incomes or productivity would help focus sustainable communities and give massive incentives, natural incentives, for communities to attract new settlers, especially in jobs that are not necessarily competing on a global scale. With that caveat, that full scale LVT should predate any of the changes suggested in this report, I think I support virtually everything else in it.

It's not comfortable reading necessarily, but I've long held that the rise of global communications and the internet is an epochal change the likes of the printing press or the steam engine. When the steam engine came along it reshaped Britain. Why should we expect, Cnut-like, to stand in the way of the next epochal technology changing the way we live on these islands?

One thing I would say though, Tim, if you read this - I reckon calling your own report "barmy" probably makes for worse press!