The urban consolidation end-game

By Leith van Onselen

I have written previously how the UK housing system is arguably the worst in the developed world.

Thanks to the Town and Country Planning Act 1946, the right to develop has been virtually nationalised and the UK is ruled by NIMBYs. All of the major cities and towns in the UK are surrounded by “greenbelts” that are off limits to development. And the centralisation of government finances has also led to a situation whereby local governments receive little benefit from increased population and development, but bear most of the costs, making them anti-development.

The end result is a chronic undersupply of homes, driving-up both prices and rents. And the situation has recently been made worse by the implementation of the government’s “Help-to-Buy” shared equity scheme for first home buyers and the Bank of England’s “Funding-for-Lending” program, which have artificially increased demand and pushed against the constipated supply system to further inflate prices.

If you want to see the ultimate end-game of forced urban consolidation, look no further than the above video, which shows that when you constrain land/housing supply via planning, you end up with deleterious consequences.

Watching the video and reading the associated story is frightening. Essentially, Generation Y (dubbed “Generation Rent”) is being unneccessarily forced to live in expensive, cramped living conditions, renting at exorbitant prices from asset rich Baby Boomers or investors, who are gaming the rigged housing system to their own advantage.

There’s the example of landlords renting out individual rooms for exorbitant profits:

Generation rent is downsizing. And as demand for smaller, cheaper accommodation grows, investors and entrepreneurs are rushing to cash in…

“We basically take a property from a landlord, pay him a long-term guaranteed rent and then sublet it on a room by room basis. That’s how we make our margin,” Kim Stones explains.

Kim’s strategy is to adapt living spaces in order to maximise profits when the property is sublet. He rents three bed properties from landlords and sublets them as five individual rooms by turning sitting rooms and lounges into bedrooms. He is at pains to point out that he follows all relevant regulations.

“We’ve got 23 rent-to-rents,” says Kim. “Our target is a minimum £400 a month profit on any property, and we do have properties that make £1000 net profit a month”

And property developers producing tiny 18 metre square apartments – one-third of the size of a squash court – for “affordable” rentals targetted at Gen Y’s:

A property developer from China is banking on the future of the rental market being tiny. In floor space at least.

He’s hoping to attract priced-out tenants with a new development of micro-apartments. Planning permission has been secured for 160 one bedroom flats starting at just 18 square metres, less than a third the size of a squash court.

Surprisingly, the micro-apartments will be located not in one of the UK’s major cities, but in Oldham.

“Do you really think Oldham’s ready for this kind of living?” I ask Dr Francis Liu, Chief Executive of G-Suite Holdings, the Chinese company behind the project.

“Yes, I come from Hong Kong and I know people are looking for quality buildings with everything in,” he says…

“The trend in New York and San Francisco is for tiny micro-apartments. The idea is coming from those people.”

I put it to Dr Liu that unlike San Francisco and New York, Oldham has plenty of land ripe for development, which could easily house decent-sized homes.

“The key is affordability,” he replies. “You don’t have to be an accountant to work it out. The smaller size will result in lower rental.”

But what does Oldham gain from a development like this?

None of the apartments have been earmarked as affordable housing, and local first time buyers appear not to be the developers’ target market.

Instead, the apartments will be sold to investors in the Far East. They are being promised an 8% return on their investment.

“Micro means small,” says Dr Liu. “Boutique means it has some style. Apartment means self-contained. You can have everything within a tiny space, but without giving up any luxuries.”

Except, of course, the luxury of space.

And many young Britons have all but given up hope of ever owning their own home:

Daniel is 21 years old and works in a warehouse in Doncaster. The sum of his property ambitions are to one day rent a place of his own.

“This room here is my personal space, it’s the only thing I’ve got really,” he says.

Doesn’t he dream of owning a home? The government has, of course, rushed forward its Help to Buy scheme. It is available to anyone with a deposit with a deposit of 5% or less, including first time buyers.

“Nah, not really,” says Daniel. “It just wouldn’t be affordable. I can’t even consider it.”

These are the true costs of 60 years of forced urban consolidation and strict planning. It certainly does make one wonder why Australia – one of the least densely populated countries on earth where land should be cheap and readily available – is following the UK planning model.

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  1. Frightening reading.

    Question – when the issue of Australia being so sparsely populated is mentioned, a lot of people say that liveable land is a lot less than the actual land area due to the desert expanses.

    I noticed that there is a physiological population density measure which again ranks Australia as one of the least densely populated countries per of arable land. However, the sources that I find are either a few years old (i.e. between 1998-2005) or unsubstantiated, eg. Wikipedia. Do you know of any recent peer-reviewed/reliable sources available that show this measure for Australia? The wiki article claimis to reference the 2005 CIA factbook. I had a look at the present version of the factbook but could not find this measure.

    • i) NSW is twice the size of Germany, and the eastern half on NSW is quite fertile.

      Ergo, the eastern half of NSW could replicate something like Germany.

      ii) For residential office workers, desert is not an unlivable place. Even here in perth, residential cosumption is tiny, something like 6% of all Perth metro scheme water.

      The rest goes on intraurban agriculture, and the horrendous practices of the building industry.

      A city in the desrt that is able to be reasonably close to reticulated water, such as west of Lake Ord, Sandifre W.A, or Normanton, is quite a feasible scenario.

    • Google the Lincoln Institute’s “A Planet of Cities: Urban Land Cover Estimates and Projections for All Countries, 2000-2050”

      It is possible to download it without opening an account.

      There are comprehensive charts near the end of it. The body of the analysis is very interesting too.

  2. People I’ve spoken to abroad have a very hard time understanding why Australia has some of the most expensive real estate in the world.

    “You’ve got a big country and a small population”, they say.
    “You should have lots of space for houses!”.

    Indeed we should.

  3. Sadly, there is a lesson to be learnt from the longevity of the situation in the UK.

    If an economy is prepared to choke itself with high land prices it can do so for a long long time if it has the means to do so.

    It just has to be prepared to divert economic resources to keeping the dysfunction going.

    Whether any country can do so indefinitely is debatable as year by year that massive misallocation of resources steadily drains the life blood from an economy.

    Back in the day when the “West was Best” this may have been viable as the west always had stuff to trade.

    Now with most of the world heading well along the development pathway it seems demented to tie large prices for a fundamental economic input around your ankles.

    In the land down under we get away with it for the time being, because we have no qualms about selling off the furniture (companies, land, govt bonds, bank bonds, natural resources) to keep that housing “wealth effect” going.

    John Howard must be very proud of his creation.

    • I wouldn’t say John Howard is entirely to blame. Labor is just as bad. Look at all the policies implemented by Rudd during the GFC to reinflate the bubble, and nothing has changed since. Both sides are equally committed to unaffordable housing, and both sides would probably see the situation in the UK as something we should be aiming towards. There isn’t a viable third party we could have voted for, unfortunately. I know about Stable Population Party but they were never going to be leading the country.

      • “I wouldn’t say John Howard is entirely to blame.”

        Neither would I but Mr Howard has been particularly reluctant to disown his offspring.

        I would put Rudd more into the category of foster parent who found it easier to give in to the squeals and petulance of a brat that had already gone bad.

        Not good and not excusable but not quite the same as the person who raised the baby for 11 years – between 1996 and 2007.

      • Agree with you md. However the difference is that Rudd was trying to keep the economy from supposedly tanking. Howard did it when we were on the up and up.

      • I would say that both parties are indistinguishable in their housing policies. Both are for a big Australia whether they actually say so or not. Both are highly encouraging of foreign investment. Both are loyal to negative gearing. And both parties see nothing wrong, on the contrary, are extremely happy when a housing bubble of the magnitude we are in swallows up everything else in the economy. And both, without a doubt, would do anything to keep it going.

        If only there was a third major party who was against a housing bubble…. but then they probably wouldn’t be voted in anyway.

    • “Sadly, there is a lesson to be learnt from the longevity of the situation in the UK….”

      Absolutely. It is “don’t start”.

      Once 70% of the voters are vested in keeping bubble prices in place, it is pretty much game over.

      The Poms have never ever had good solid common sense discussion of this issue, the media lets them down due to the control that vested interests have. Hysteria about “paving over our green and pleasant land” prevails even from people I would expect better from.

      And the biggie is that the price of land per square foot could crash by so much if proper reform was ever done. Proper reform will generally mean sections of 1/4 acre for under $100,000 equiv. anywhere in the world. The impact of this reform on the status quo varies quite a lot, according to how much downsizing of land consumption has already been done. Seeing 1/20 of an acre is now about $250,000 equiv in most parts of Pommy-land, this is obviously going to be a lot more painful to reform than if you are still getting by with 1/8 of an acre sections at about $250,000.

      It also helps if you already have a lot of 1/4 acre sections in mature suburbs; the Poms have almost none of this to act as a shock absorber in any reform. Portland Oregon has definitely not gone as grossly unaffordable as it could have given its UGB since about 1977, because so much of it was already 1/4 acre + suburbs and its overall density is still low. (It is unnaturally dense in all the new fringe developments – same phenomenon out here).

      • You say 1/20th acre is $250,000, just under £3 million an acre.

        Well in the part of England you affectionately call ‘Pommyland’ that I come from originally (South East 40 mins commute to the city of London) I have found 1.1 acres at £700,000, another 1.1 acre site at £1 million (both with planning permission for housing), and 3.6 acres of commercial land for £500,000.

        So it’s not all as expensive as you portray.

      • I was talking about the price that actual developed sections sell for. Those raw land costs you describe are horrific anyway; farmland almost everywhere in the world is only about $5000 to $30,000 per acre, and developers in affordable US cities do literally pay these prices for land they then build houses on.

        But in the UK they are paying millions of dollars (equivalent) per acre.

        THEN the poor developer has to carry the cost of finance for his land acquisition for around 7 years on average and often over ten years while navigating the layers of permissions for what he is allowed to build and whose palms he has to grease along the way, all adding to the costs before he has even started up the first bulldozer.

        AND the raw land cost per acre includes some proportion of land that will not be included in saleable parcels – a lot of it has to be road space, footpaths, rights of way, public spaces etc. It is quite usual for only 50% of the land to end up actually “sold” as parcels for housing. It does not help when conditions are imposed on the developer, such as incorporating bike paths, preserving a nature reserve, donating land for a school, etc etc etc.

        So it is perfectly possible that even the “less expensive” raw land you refer to, will end up with $250,000 “sections” of 1/20 of an acre on it.

  4. God forbid that there should be any small apartments !!! Let’s put in some regulations to prevent the development of anything but suburban sprawl. After all, since Australia has so much land, the ONLY sensible thing is to develop it (especially when so much money can be made!). We can’t possibly have green belts or recreational land or productive market gardens or farmland or forest. What a waste that would be!!

    Surely the market should be allowed to provide a choice of dwelling forms and sizes, especially if this enables more dwellings to be built in more convenient locations. As MacroBusiness would say, dump the planning regulations that hinder this, allow the market to provide dwelling choices.

    Who is to say that having a real selection of dwellings to choose from is a bad thing? Whose place is it to say that small apartments are a bad thing, or that not everyone wants or needs “the luxury of space”, or that some people might prefer medium density or high rise? Let people decide for themselves.

    Face up to the demographic facts. Mum, dad and the kids form a minority of households, and their proportion is dwindling year by year. Nearly all new households are small households. But perhaps the MacroBusiness team are all in the traditional nuclear family and don’t naturally think of household diversity or the needs and desires of other household types?

    This type of discussion needs a declaration of interests – people who live in a pleasant inner to middle suburb and blog about the need to release more urban fringe land stand to be accused of indulging in dressed-up nimbyism. Me – I’m an inner surburbanite in a small house on a small lot.

    Look at the total dwelling stock. There is no shortage of large houses to accommodate the big households of the past, while there are hardly any small apartments suited to the smaller households of the future. Let’s get wise with our resource allocation – isn’t that what economics is all about?

    On a slight tangent, the rise of group households over the last decade is a reflection that the huge dwellings that Australian cities build every year, often with a bathroom for every bedroom and a number of separate living spaces, are ideal for group or multi-household unit living. Sure affordability is a factor, but it is not the only one – although this is a common argument in MacroBusiness. After all, who could possibly want to live in a group household by choice!! Plenty of people, I would have thought. Why cough up for a house of your own when you can live just as comfortably, but far more cheaply and conveniently, with the parents or with other households?

    • Madafo, there is already a glut of apartments in inner Melbourne, and soon they’re going to build 39,000 more! These apartments are poorly built and tiny, with no room for storage. Many are sold off to Chinese investors just so that they can park their money here, so they just sit empty. And at $450,000 – $500,000 for a dogbox, who would want to live in them for more than a year at most?

      Australia does have plenty of land, but we also are one of the most urbanised countries in the world. The sensible solution would be to grow the regional towns. If the government were to provide incentives, and if there were more job opportunities, it would make sense then for people looking for affordable housing to move to one of these towns. This would relieve the pressure on the cities, but then the government would be obliged to continue their Ponzi scheme by importing yet more people to always ensure a shortage of housing in the cities.

      • “If the government were to provide incentives, and if there were more job opportunities, it would make sense then for people looking for affordable housing to move to one of these towns.”

        If they simply ended the new development shakedown so that the price of land and housing (new and existing) in regional towns was not so expensive, more people and eventually businesses would be inclined to make the move.

        It is surprising just how much old houses in country towns cost – having regard to their age and where they are.

        They should be cheap as chips.

        Good transport and communications links will help as well but the excessive cost of land is a killer of country towns.

        Here is a 3 bedroom brand new town house in Yass – $400K +

        Not exactly a bargain to live a long commute from any major regional centre.

    • Madafo, affordable US cities with unconstrained sprawl HAVE “housing choice”.

      A new fringe McMansion is half the price of Melbourne.

      A 40 year old family home nearer the CBD is a quarter the price of Melbourne.

      A CBD Condo is a fifth the price of Melbourne.

      A dog box apartment in the CBD would be 1/5 the price of Melbourne if they existed, but the affordable cities don’t need them.

      What the planning classes dislike about THIS “choice” – which is REAL choice – is that most people exercise their choices in ways the planning classes disapprove of.

      So forcing up urban land prices to force people to downsize – i.e. remove choices – is the preferred tactic.

      And in Orwellian Newspeak, they always SAY they are “increasing housing choice”!!!!!

      Off with their heads…..!!!

      • The ‘affordable’ cities have potential…
        It is good that they have affordable housing, but they need affordable transport too. A cheaper house is not very useful if it requires you to buy a car for transport. Affordable housing should be augmented by jobs and amenities within walking distance of the home, and convenient public transport to access other parts of the city (otherwise you trap those who can’t drive in their locality). Only then can you say it is ‘affordable’ to live in a certain city.

        Imagine the potential if Manhattan lifted its numerous height and density restrictions, to allow enough development for affordable market housing prices comparable to Houston, but with cheap transport! Building technology, if not already sufficient, will advance to provide tall enough and dense enough buildings to clear the NY property market.

      • It is good that they have affordable housing, but they need affordable transport too. A cheaper house is not very useful if it requires you to buy a car for transport.
        This is a furphy.

        Most people will own a car regardless, because the benefits of doing so are substantial. They may not – probably won’t if they live in the inner suburbs – use it to commute, but they’re still going to own it.

        I know quite a few people who live in Sydney and Brisbane (and London) and commute via public transport every day, who still own a car (and wouldn’t be without it).

        Therefore the additional cost to compare is not the ownership of the vehicle itself, but the cost of a daily commute – basically fuel use and time. A couple of hundred grand saved on housing buys a LOT of commuting and a LOT of leisure quality.

      • @drsmithy
        Sure people might want to buy cars, and let them, but people should have the choice to live without a car.
        Being able to live easily without a car represents a huge saving – helpful for poorer people.
        If people value something other than cars, like, say, holidays, or fine wines, then under a free market economy they should allow to satisfy those wants with the least exertion. There should be no need to waste exertion on buying and maintaining a car if one does not value a car. And it is not up to you to tell people that they want cars.
        You talk about commute time and leisure quality, yet extra time spent commuting is time not spent for leisure. Extra money spent commuting is money not available for leisure spending. People commuting from sprawl sacrifice leisure.
        The cost of a car is $9000 a year. Over 30 years, that is $270 000 – which sounds like the difference between affordable and unaffordable housing. Coupled with cheap transport … well, that’s very cheap commuting and a lot of leisure time and quality, and discretionary spending. Cheap housing and cheap transport supports entrepreneurialism, as well.

      • DrSmithy, excellent comment, mate.

        Frederick, the cost of automobility is $9,000 per year in studies that analyse the average for new cars for the first 4 years of their life. This includes wealthy people’s brand new Rolls Royces, Ferraris and Hummer Limos.

        Most of this cost is “discretionary”. The main cost is depreciation.

        The people who need affordable “choice” of housing and transport, generally buy economical, already-depreciated but still reliable used cars and achieve an annual cost of around $3,000.

        Even at $9,000 per year, that is a similar excessive cost as the inflation in housing costs caused by urban growth containment….! As your own calculation points out. I don’t know how you can justify this. It is completely inconsistent to talk about “affordable housing” and defend growth containment policies that impose cost increases that are as bad as the cost of running expensive cars, in return for NOTHING – straight out wealth transfer to land vendors and the finance sector.

        There is actually massive scope for co-location of housing and job in typical dispersed cities. The affordability of a home nearer to any particular job you might get is always far LESS of a reason that people don’t move closer to their job, in an affordable city compared to an unaffordable one. The “pricing out” effect of inflated urban land prices was noted by Peter Hall et al in the UK way back in 1973 and plenty of other academics have noted the effect since in smart growth cities in the USA as well as in the UK.

        Manhattan is a ridiculous example to offer; it only exists because that is one of half a dozen locations where the global finance sector ended up. Houston has locations with no height restrictions but that does not mean developers take advantage of the fact. The needs of the local economy are most of the time NOT for massively high density CBD’s.

        It is in any case controversial in the urban econ profession, that abolishing height limits would make Manhattan “affordable”; it is just as likely that site owners would make more money. Cheshire and colleagues at the LSE, for example, disagree with Ed Glaeser on this.

      • Sure people might want to buy cars, and let them, but people should have the choice to live without a car.
        No-one is even vaguely suggesting they shouldn’t.

        Being able to live easily without a car represents a huge saving – helpful for poorer people.
        Not as huge as paying 1/2 or 1/4 as much to buy or rent a house.

        If people value something other than cars, like, say, holidays, or fine wines, then under a free market economy they should allow to satisfy those wants with the least exertion. There should be no need to waste exertion on buying and maintaining a car if one does not value a car. And it is not up to you to tell people that they want cars.
        Where do you get this absurd idea anyone thinks they should be telling people to buy a car ?

        You talk about commute time and leisure quality, yet extra time spent commuting is time not spent for leisure. Extra money spent commuting is money not available for leisure spending. People commuting from sprawl sacrifice leisure.
        Firstly, your assumption of extra travel time is bunk. A car commute is rarely longer in time than a public transport commute, and often longer. I’ve lived in five cities over 3 countries, and in most of them driving was quicker than public transport.

        Secondly, if you’re saving thousands, if not tens of thousands a year on shelter, that’s a lot more money you can spend on your leisure time. Even if I have to sacrifice 30 minutes extra a day on travel, if that means I have an extra twenty grand in my pocket each year to spend on a big holiday, I’m ahead as far as I’m concerned.

  5. I might have blinked during this discussion over time…but aren’t green belts supposed to give cities important amenity?

    Maybe obsession with consolidation is related to an equally destructive rush into sprawl, with crap infrastructure, alienation, car dependence, etc.

    The answer can’t simply be ‘more land release’dooming people to live further and further from their jobs and the things they like to do. City design has to come into it…

    • “The answer can’t simply be ‘more land release’dooming people to live further and further from their jobs and the things they like to do.”

      Correct, but until such time as the strong NIMBY resistance is resolved – and that means allowing people to intensify their own property WITHOUT regard to the neighbours – for example granny flats / dividing houses into 2 / building 3 townhouses or terraces on a single block, selling to a unit developer – people should be allowed to build houses on the outskirts.

      You only need to see the successful scare campaign run by the Greens to block the LNP plannning changes in NSW to know that significant intensification is not going to happen and when it does it will be very expensive.

      By all means leave reservations for transport links, parklands and some market gardens and farms but the point is that those are reservations and the rest is free to be developed if the owner wants to and people are interested in buying.

      The thing that anti-sprawl campaigners forget is that there are lots of people who work in the outer urban areas who would be more than happy to buy land from a farmer and build houses out there.

      If you live on the outskirts the distant place that is undesirable to visit is the city centre. Anti-sprawl campaigners tend to assume everyone wants to live where they live.

      All it boils down to is choice.

      If people want to buy a block of land from a farmer and build a house – let them.

    • Green belts and UGB’s force up the price of land inside them.

      “Reserves” on a pattern of even distribution could provide amenity far more evenly shared out between the urban area’s residents, and would not force up the price of land and therefore housing.

      Nor would they have the numerous unintended perverse consequences of green belts and UGB’s for urban efficiency.

      Guess why it is only ever green belts and UGB’s that get considered as a planning policy?

  6. Add this utter asinine state sanctioned stupidity to the mix

    George Osborne, the Chancellor, will unveil details of the £12 billion Help to Buy scheme which the government hopes will give people the “same chance to get on the property ladder as their parents”.
    Royal Bank of Scotland/ Natwest said that from Tuesday it will offer the mortgages to 25,500 home buyers over the next three years, although loans will be more expensive than those already available on the market.
    Halifax will also offer the mortgages from this week, while Virgin Money and Aldermore Bank are expected to join the scheme in the New Year.
    Mr Cameron said: “From today, thousands of people will be able to get a foot on the housing ladder by applying for the new Help to Buy mortgage guarantee. If you’ve got 5 per cent of the funds for a mortgage deposit, we’re providing a guarantee to the banks to help you get the rest.
    “Help to Buy is going to make the dream of home ownership a reality for many who would otherwise have been shut out. This goes right to the heart of my vision for Britain – a country where everyone who works hard can get on in life.”

    • Gunnamatta drew attention a few threads back, to a video.

      From 12 minutes on, it is a “must watch” on the subject of housing and finance and government policy. That discussion between Max Keiser and Michael Hudson is packed with insights, I agree with the whole lot of it.

      Roughly from memory:

      “The UK government is pretending to help the first home buyers, but they are really helping the banks. The banks will get the fatter profits AND the bailouts”

      “This isn’t failed policy, it is a raging success from the point of view of what it was meant to achieve: enrich the banks. The banks run the government”.

      “They talk about Adam Smith and free markets, and mean something completely different. They mean the enrichment of a new rentier class, something that is contrary to all the economic philosophy of the enlightenment era….”

      “It’s goodbye to British manufacturing. No-one can pay the wages that will be necessary to cover the housing costs…”

  7. i feel like thats already happening here.
    my rent has gone up $240 pw over the last 3 years, to just over 600pw (inner syd, 2bdr appt). the only way to avoid that is to move further out …and even thats going up

    looking for a house to buy, im seeing heaps of tiny townhouses, subdivided properties – places getting smaller and smaller trying to pay off developers “improvements”

    this video just goes to show how much further Aus can sustain the property delusion. Just wait till we get “rent-to-rent” schemes. were well on our way !!!

  8. Lol we just had some British neighbours move in next door. They say they love the apartment because “it is so large and roomy”. It’s about half the size of this one which my American wife insists we move out of because “it’s so tiny and cramped”.

    Depends on your perspective I guess – my previous girlfriend was living in a single room (in Ghana) with her mother and two brothers.

  9. Another recent development in Pommy-land is Councils doing aerial infra-red mapping at night and then overlaying it on aerial photos to pick up all the garages and garden sheds being lived in “illegally”.

    Then the inspectors move in and kick people out and fine the “landlord”.

    • Isn’t that in part to catch people who are inhumanely cramming illegal immigrants 20 to a room?

      • You mean they are rounding them up at gunpoint and forcing them into a room?

        I suggest that illegal immigrants voluntarily live at this sort of density if local cost of housing means they have to. You don’t find this sort of crowding in Houston.

      • I suggest that illegal immigrants voluntarily live at this sort of density if local cost of housing means they have to.
        Doesn’t sound very “voluntary” to me.

    • So when the market provides higher-density living outside of the planning system, the extra residents are kicked out. Less about urban consolidation and encouraging density, more about finding a way to put the most pressure on the housing market, if you ask me. The councils’ actions are anti density and increase the demand for sprawl (which, incidentally, is not allowed). Simply allowing and encouraging density might go some way to reducing UK property prices

      • I have yet to see any example in the world where “allowing” higher density building development, resulted in affordability. All that happens everywhere, is that site owners make more money out of it.

        Public control over the property market is necessary if this is to be prevented. Singapore probably gets the closest to “affordable” high density, and if the public anywhere can be democratically convinced that Singapore property rights and planning powers are justified to resolve their own urban crisis, well and good.

        Otherwise it is only ever a highly successful policy to enrich “big property” and “big finance” at everyone else’s expense. Regular bailouts are just the taking of this racket to another level. It is a question how long this can last.

        Incidentally, the people who designed the UK “Town and Country Planning System” in the 1940’s included powers of compulsory acquisition of land in it; this was left out, much to their concern and anger – they actually knew what the results would be.

  10. There is no clear distinction between urban and non-urban uses. It is a continuum of intensity. In light of that, it is difficult to see how a boundary could truly stop sprawl. It can only worsen sprawl, in a sense, by limiting density past the urban growth boundary to something so low that it is not considered urban. Yet, people may still live here, and work in the city, and engage in high levels of car travel and produce high levels of pollution.

    Rather than stopping sprawl through boundaries, but really spreading it out beyond recognition, development should be pulled in. A land value tax ensures that the most valuable land (central land) is fully used first, before development spreads. An LVT is also a good mechanism to build railway lines and concentrate development along them, without pricing out buyers (ensuring enough density is built to clear the market), reducing the sprawl of development.

    • Aha, now we’re talking.

      Have you read:


      The more I have learned, the more convinced I am about the unhealthy influence exerted over policy making by the land and finance rentier class. So many of the best policies are not even considered as options, and the worst policies are enacted in response to crises that are at least partly manufactured.

      “We need to reduce energy consumption”


      “We need to stop urban sprawl” (debatable anyway)

      “Therefore we must enact UGB’s” (the final leap of unreason in a chain of unreason)

      Far too conveniently simple and wrong, to be anything other than a manufactured ploy by the beneficiaries of the “unintended” consequences.

      Useful idiots play a major role, of course – the environmentalists are the “Baptists” to the property and finance “Bootleggers”. I have never yet met or heard of a Greenie who was economically literate at even the most basic level. Greenies who argue that so-and-so is the exception – eg Russel Norman in NZ – actually tend to prove the point.