- Hi, welcome to the Works in Progress podcast.
I'm Sam, I'm here with Ben Southwood and Samuel Hughes.
Samuel, what was the Great Downzoning?
- So historically cities grow in two ways.
Like putting it simply, they grow
outwards or they grow upwards.
Today, most cities around the world still grow outwards.
In fact, there's like massive outward expansion
of cities in most countries,
but in suburban areas, which is most of the surface area
of cities, they don't really, really go upwards anymore.
They tend to be regulatory constraints
that say once you built a suburb at a low density, it has
to stay like that forever.
So it's completely novel.
Historically, it's all changed since the late 19th
century and the present day.
So I call this process the Great Downzoning process whereby
zoning restrictions have gradually introduced
and lowered such that neighbourhoods
were frozen in place forever.
- And basically this happened what,
around the second World War or before the Second World War?
- It's a bit more complex.
So it's starts in actually the German Empire
and Austria-Hungary in the late 19th century.
It spreads in the interwar period to the United States,
Canada, then to Australia.
And then it comes in in Britain
and France, really in the postwar period, quite a kind
of a strange way we can discuss later.
But it's proceeded by a kind
of private sector downzoning, which happens much earlier.
That goes back into the 19th and even the 18th centuries.
So the long story begins in the sixteen, seventeen hundreds
with the first development
of like not really low density suburbia,
but at least like medium density elite residential
suburbs in Britain.
And those have private
zoning rules pretty much from the start names
that then gradually expands
around the world in the 19th century.
So Germany, France, United States, Canada,
they all develop low density suburbs
and they've all got, like, again,
pretty much from the start,
they're getting more sophisticated
and more detailed over time.
They've got private zoning rules, covenants
that are restricting density. Public zoning -
so the state restricting density
that comes in in the late 1800s in central Europe in
Germany and Austria, spreads
to North America British Empire in mainly
the interwar period.
And then finally comes in in kind of Britain
and France, mainly in I think probably the forties,
fifties in the postwar period.
So it's the overall process
is pretty long.
But the short version is like whenever low density
suburbia develops in a country elite low density suburbia
develops in a country,
private zoning follows pretty quickly after that.
And then public zoning, like after the modern state emerges
and norms start shifting about what kind
of state intervention is appropriate, it tends
to come fairly quickly when private zoning mechanisms start
to fail or when low density elite suburbia comes under
serious intensification pressure.
So the the key thing I've learned like studying,
so the first thing to say about the Great Downzoning,
like an amazingly under-discussed underappreciated subject,
Americans write a bit about the introduction
of zoning in the United States
and there's a bit of a kind of classic literature on
how it arrived, but Europeans don't really write
about it at all.
So most British
and French people, even if they work on housing policy,
even if they work on suburban densification
as a policy area, don't know where's like rules against
densification when they started,
why they started, how they started.
So I've like kind
of gone from scratch when I've been reading about this.
The first place where public zoning,
like the state putting in zoning policy started
was probably, I can't quite work out the first one.
The standard people often say it's Frankfurt,
but there seem to be some earlier ones like Dresden
and Budapest seem to maybe have been earlier in the
1870s and 1880s.
And it's very much like German speaking places that do it.
First they have maybe a more interventionist tradition
of state government may, maybe it goes back
to like the Prussian state in the 18th century,
more authoritarian approach
to government in the 19th century.
The big thing I hadn't appreciated at all is
that in pretty much every country, downzoning
by the government is proceeded by downzoning
by the private sector.
So what I mean by this is in the middle ages,
cities do have suburbs,
but the suburbs are like poverty stricken, mixed use.
Like basically they're where like
noxious industrial functions are placed
and where people who can't pay
to get into the city itself have to have to live.
- They're actually outside the walls
in mediaeval times, right?
- Often it's like - Shanty towns against the wall.
- It's the dangerous place which will get burnt
by the authorities if the city's besieged
to avoid giving cover to the attackers.
So you live under constant threats
that the authorities might burn your home down if the town
becomes is a town is in danger,
maybe you don't have like full protection
of law in these places, like bad places.
You don't want to be there if you can possibly avoid it.
Then in the like basically England,
you start getting something like modern suburbs
and the west end of London is maybe the first
- The west end starts as a suburb.
- Well kind of, it's an elite residential area built at
much lower densities.
It's exclusively, exclusively for wealthy people
and exclusively for housing
and some kind of retail functions.
So it's like the key tests, it passes
and it starts as early as the 17th century,
but really gets underway in the 18th century
and that right from the beginning.
So that's where like one big landowner says,
I'm gonna make this whole neighbourhood into a
a sanctuary from the things we don't like about urban life
and also maybe a sanctuary from like the things
that we don't like about mediaeval suburban life.
So we're not gonna have any slaughter houses or brick kilns.
We are not gonna have any like through, well little, as little
through traffic as possible
and the more morally dubious side of it.
Basically we've gotta try to avoid having
poor people living in this area
and they've got this challenge like
how do you preserve once I've sold homes here,
sold plots here, like I can sell them for house building
or I can build houses, but
how do I keep them in that use forever?
And in order to attract really like wealthy buyers
to spend a lot of money on this neighbourhood,
they're gonna want to guarantee
that the neighborhood's going to remain
as an elite residential suburb into the medium term.
So what they do is they impose covenants which are like kind
of like a contract where not only the first buyer,
but all future buyers have to agree
to keep the house in basically like in elite residential use
and in single ownership, right?
In single ownership often.
So as a slightly technical detail,
but often the original landowner doesn't even build the
house, they sell it to a house, a developer
to build the individual house.
So they often put in some restrictions on what kind
of house can be built, what it can be used for,
often a minimum price.
Sometimes they put in detailed architectural restrictions,
sometimes they put in really like minute stuff restrictions
on what pets you can have
or restrictions on where you can hang the laundry
or any of the kind of things that they think is going
to help preserve the tone of the neighbourhood.
- One impression I got from reading the novel, The Quincunx,
which I gather is by based on very careful historical
research of the period, is that everyone at this time
who was middle class was terrified
of their neighbourhood falling into penry
and becoming like a very dangerous, unpleasant place
with 20 people cram to a room
and they gave the example of the Devil's Acre in Westminster
where all the streets are lined
with these crumbling grand mansions,
which are now split into 20 people crammed into every room
and all kind of criminality is being carried out around.
- So it's extremely common for neighbourhoods to go
through social decline in pre-modern times, partly
because of course they didn't have like Europeans now think
an older house is like prima fai better than a new house
and it's like a heritage, heritage property commands a
premium, but Europeans in the past didn't think
that they thought them like, like
cars or computers or something.
Like you've got like a shoddy old house which is gonna have
loads of defects and at some point gonna require
loads of expensive work.
So you had the properties themselves constantly degrading,
just physically fashion, you know, it was capricious then
as now, and then the tendency just if we they're building
new suburbs, the new suburbs will be built to
be maximally attractive and try to draw people out.
So you have a constant tendency for neighbourhoods
to fall into decline.
People are always afraid of this neighbourhoods
that aren't covenanted, certainly in London,
but I generally around Europe there's like
people often pretty comp... like it's going to happen.
- Mm. - You've got a time limit on
how long you can live here at the,
with the same like expectations for the character
of the neighbourhood as when you bought it
and quite a short time limit,
maybe like a 15 year time limit or something.
Neighbourhoods that were covenanted could sometimes survive
indefinitely, although even they would decline sometimes
and eventually sometimes the
like people would stop bothering to enforce the covenants
because they think oh it's, it's hopeless at this
point.
And is and is this happening because
so many people are moving into cities?
Why is it that presumably if you have a lot
of people considered
to be undesirable moving into a particular area,
they're moving from somewhere else,
are they like moving within the city
and does that mean that there are other areas
that are becoming kind of less dangerous let's say?
Or are they moving into the city from rural areas?
- I think it, my sense is it usually
accompanies urban growth.
I see. So it's normally,
there aren't usually urban neighbourhoods
becoming more genial.
There are normally,
the default is all in urban neighbourhoods are in decline
except maybe the business centre
of which might retain like an elite character.
All in urban neighbourhoods are in decline
and the middle classes are slowly moving
further and further outwards.
That's the pattern in London. It's a bit more
complex in other parts of Europe.
- And this is what year, what kind
of year period are we talking about? Again?
- I mean it, this starts in a big way in the 18th century
and runs all the way into the 20th century.
Okay. This process and it's, yeah,
but Covenanting was successful in preserving some areas
of London from this process
and Britain, I mean London had the particularly interesting
process, the freehold system whereby the original landowner
would retain a kind of ownership.
Yeah, partial ownership in the properties
and the, these so-called great estates.
And these landowners were often really vigorous about
enforcing the covenants
because they wanted to avoid the neighbourhood declining
because they had a long-term financial interest in it.
- In a hundred years they would
regain ownership and resell the leases. That's what happened.
Yeah, they'd sell the leases for about
80 or a hundred years.
And so they, and because they were extreme like church
bodies or charities or aristocratic families,
they were extremely long termist
and actually cared about what happened
in 80 or a hundred years.
So they were thinking if this neighborhood's become a slum
in 80 years, my grandchildren
will inherit a worthless asset.
Whereas if I retain it as a summit of fashion,
then they'll retain,
they'll get to inherit this amazingly prestigious
and and lucrative asset.
So I'm gonna fight really hard to retain its character.
And like Bloombury was a key like neighbourhood on the,
on those like edge of genteel London owned
by the Bedford family.
And they were famously like one of the most conscientious
of the great states in enforcing covenants
and even supplying public services
and this kind of thing because they were really, really keen
to keep its character and they didn't completely succeed.
It gradually decayed
and became a kind of bedsit territory
by the early 20th century,
but it didn't completely fall through.
And that sheltered the neighbourhoods to the west of there.
And the mechanism here is basically
units becoming subdivided.
Like it's, it's like you start with a kind of ...
I guess a nice apartment.
Is it apartments or is it houses?
And then the mechanism is, it's kind
of always more economical to just cram more
and more people into these units than to maintain them
as being nice for a single family or whatever.
- Yeah. So London,
in the classic greater states period, that's, that's all correct.
It started as houses and the main form of densification,
it's like population densification rather than mainly floor
space densification.
So it's mostly just the same buildings being subdivided.
That's not quite true because they did fit in the back
garden sometimes, but they weren't at this point mainly
talking about knocking them down and building flats.
That becomes an issue in the 20th century
or late 19th, 20th century when flats become in
Anglo-American settings, they become a
start becoming more common, get lift shafts
and steel frames, which enables you
to build really tall blocks of flats.
And then you start getting the block
of flats appearing in a green
and leafy suburban neighbourhood.
And that becomes another huge issue
and a huge like key battleground
around the, around densification.
- Where are we then when the kind of dense city
that you're talking about begins to change, like
how do we get from what you're talking about this sort
of 18th century, 19th century, the, the emergence
of the suburb, how do we then get to the kind of dense,
I guess upzoned but
but seemingly kind of desirable place to live?
That that, you know, we like the, the kind of
the Georgian apartments, things like that
or you know, in Spain, the kind of nice bits of Madrid
or the, the, the or Barcelona, things like that.
Like how do we get from the emergence of suburbs
to this sort of beautiful, gentle, dense city that
- Oh, they started as beautiful gentle density.
- Okay, - So that's one of the, if
for like us reading about this now, that's one
of the elements which is a bit like surprising or confusing
or confounds our expectations a bit
because we have this like papier mache villain
of low density suburbia where it's like car dependent,
extremely low densities, totally single use
and you know, it's a, an easy thing for us to be against.
Whereas your early suburbs in the 18th
and 19th century were very beautiful, gentle density,
like far above the densities
that you'd build a suburb out nowadays, normally,
and they're all, I mean certainly ones from the 18th
century, will all be under heavy
heritage protection now.
So when we look at these neighbourhoods,
virtually everyone feels positive affect towards them
and they really don't feel like, oh, this is a villain
of the urbanism story.
This is a real hero of the, of the urbanism story.
But it's generally, I mean on the whole, the very fact
that the private sector brings in these covenant
restrictions explodes some
of the standard narratives about density restrictions was it
shows when these restrictions were introduced,
they were actually value maximising for the neighbourhood.
It's kind of seems like a paradox that by
losing rights over your property,
you actually gained property value overall
because even though those rights were valuable to you,
it was even more valuable to you
that your neighbour had lost the rights
to do things that might compromise your property value.
- Yeah, I mean it's not, not
that it's not that crazy, right?
Like I'm very happy
that my neighbour doesn't really have the right to play music
after midnight and you know,
maybe once in a few years I'd like to play music
after midnight, but it's definitely worth it to me.
Yeah, that's right. That we both have that, we both have
our, our hands constrained on that.
- Yeah, it's not crazy at all.
And that's another thing, like researching the history
of this has made me a bit more,
I mean I come from a background of working on housing reform
and specifically on like pro densification reform,
but looking at the history has made me
have a somewhat more nuanced view about it
because you can see like a lot of this stuff was kind
of solving a collective action problem.
And these were like, in a way this is,
these are societies without a housing shortage.
I mean they had housing shortages in the sense
that they were extremely poor and often very overcrowded
and so on, but they were without a housing shortage in the
sense that floor space values were equal to build cost.
- What do you mean by that? Just explain,
explain why that's significant.
- So if you've got restrictions on house building imposed
by the state and they're quite tight restrictions,
then gradually floor space
that starts being the state starts stopping you from
creating floor space - building stuff.
Even when the floor space that you created would be
sufficiently valuable, that it would cover the cost
of building it and more and the type those restrictions get
and the more people who want to build
and can't build, the higher prices will creep
and you end up with a big difference between sales prices
and, and build costs.
And that the huge differences all across western capitals
today, often like buildings will sell for three
or four times more than it costs to build them,
sometimes even bigger differences than that.
That's all the artefact of, of regulation.
But that wasn't there at the time.
At the time they were building at like whatever density was
value maximising sales prices were approximately the same
as build cost or just enough above build cost
to incentivize people to build.
And as soon as sales prices were drifted
above build cost at all, you get some more building
and they'd push the sales prices down.
So there was a market that was basically ine equilibrium
and at that point in improving the immunity
of these neighbourhoods by putting in covenants was
in the eyes of an economist was kind of a good thing.
Now it gets more complex than that, partly
because like morally we might have quite mixed feelings
about lots of the preferences that they were,
that the market was satisfying here.
So like in the United States, a big part
of Covenanting was racial exclusion.
It was white people didn't want to live near
to African Americans, Asian Americans, Jewish Americans,
or occasionally Catholic Americans.
And so they put covenants in
to exclude those people from neighbourhoods in Europe.
That doesn't seem to have, I can't find evidence of
that having happened in Europe,
but obviously social class exclusion was a huge part of it.
Like people want to bask in the reflected glow
of living next to high status people.
And that was like, of course the 19th century people are
much more open about this.
It wasn't regarded as a particularly disruptable motive.
So, so like the landowners will be totally clear,
like we are going to make here a neighbourhood
for the best sort of people.
Nobody else will be allowed in
except as servants or whatever.
So it's morally quite chequered.
It's a, the preference is that the market is solving here,
you know, the market is the,
the reason why your prices go up when you have covenants is
partly because people are being protected from noise
and traffic and disease
and overcrowding and tall buildings cutting out their light
and all the trees being cut down
and stuff that's like morally neutral.
But it is also partly like various kinds of social exclusion
and both of those are part of the story we can't like ...
- So I wanna go back to the start of the story here.
So we, it sounds like we're starting off with the first,
the first bits being in lots of different places,
the first bits of downzoning being in many different
countries, but the UK included private downzoning
and I'm gonna speak for you
and say your, when you said the great estates you're
thinking of like Belgravia and, and places like that.
What I'm interested in is you then said the state starts
doing it in certain places
and I think you said Frankfurt was the, was the first place.
What, like what do they downzone it to?
So I can see in my mind Belgravia, we've got like four
to six story townhouses basically.
And instead they have gardens
and they're not maximally full up of people
and in the city they're presumably filling in like
every bit of space.
What's happening in Frankfurt, what are they,
what are they downzoning it to?
- So there's a tendency in all countries for the densities
to fall over time.
And that's basically
because like the densities of suburbs are falling over time.
I think probably the main driver of
that is railways developing,
which mean like opens up large expanses of spaces for
low density housing
and you can have your,
in Germany they'd call them villa colonies.
So they're like a colony
of large detached houses in the middle of the countryside
built around a railway station.
And then you take your train, you can get into the city
centre for work every day those, so
by the late 19th century at the top
of the market you are usually looking at big detached
stories with like big detached houses with two stories
or maybe two stories plus a basement
or a roof story or something like that.
And that's true probably all around the
Britain, France, Germany, British Empire, United States,
that's like the elite housing type that they like, so
by the end of the 19th century we are talking about
densities that aren't so far off what you'd get in a
a rich suburb today.
But covenants also operate lower points in the market.
So middle class suburbs will also generally be covenanted
and those will still be at somewhat high densities.
Those are still like two story
terraced houses at that point.
So what happens next?
So the problem
with covenants is they don't, I mean people really want
what they purport to offer restrictions on density,
restrictions on use, but covenants are not
very good at providing it.
So they've got a bunch of weaknesses.
For one thing, they're really expensive, you have to,
I mean they're not expensive, they cost nothing
to put in place, but to enforce them you have
to have a lawsuit.
I asked some lawyers about this
and they said in Britain today you'd have a starting price
of 25,000 pounds to bring a lawsuit to enforce a covenant
and it could go way higher than that.
That's to anticipate what we'll talk about later.
That's much more money than it cost to local government
to enforce zoning restriction - like maybe 10
times more money than it cost to.
They are, they're not, courts don't always enforce them.
They're kind of taught, law courts don't always
accept that they're reasonable.
They also have a very serious collective action problem.
So most of them are in London
as we discuss the Great Estates sometimes enforce them,
but in most countries you are reliant on neighbours
to enforce them against each other, the system
of reciprocal enforcement.
So for any given neighbour you think, well I don't want
to be the one who pays 25,000 pounds
to enforce against this guy
for like building an extension in its vanguard.
Couldn't someone else in the neighbourhood
take the, take the hit on this.
And even if it's doing more than 25,000 pounds
of aggregate damage to the neighbourhood,
it's probably not doing 25,000 pounds of damage
to any given person in the neighbourhood.
So there's a serious free rider problem
and that means you tend to get very little enforcement.
The other key weakness
that covenants have is they can't be imposed retroactively on
neighbourhoods that didn't have them at first.
And you also can't fix loopholes with covenants.
So if there's something imperfect in the drafting,
which there frequently was,
or if there were kinds of densification
that they hadn't anticipated, which frequently happened,
there's nothing you can do about it.
This became a huge problem in the first world war
because the, in the 19th century, most European countries,
so the one of the totally standard, the most common kinds
of zoning, zoning rule, covenant rule was
a minimum price threshold.
Really simple and would just exclude all the people you
don't want and exclude flats being built
and exclude holes from being built
The price thresholds were always fixed in nominal terms,
which worked fine in the 19th century
because there was no inflation.
1914 inflation takes off
and pretty quickly all these price thresholds become
trivially easy to reach to, to meet.
So this whole part
of the covenanting system just collapses straight away
and there's nothing they can do about it
because they can't go back
and impose a contract on people
that they haven't signed up to.
So it's like theoretically the system,
the covenanting thing is fascinating for what it shows about
how much people wanted some kind of zoning
and it was sometimes effective in some places,
but basically it was like a rickety weak system which
often collapsed under pressure.
And we had some great cases of neighbourhoods
where once pressures
for densification grew really strong,
the covenants just collapsed
and were unable to stop them from
stopping densification from happening.
Friedenau in Berlin is a classic example
of this laid out beautiful street network with lots
of villas then like the main body
of basic electric trams arrive
and the main body of Berlin sweeps
outwards, reaches freedom now.
And the covenants basically do nothing.
The whole neighbourhood is turned into blocks
of dense flats pretty quickly
and there's only today you can just find like,
I dunno maybe like 10 villas left in Friedenau
that didn't get demolished by the time and
survived long enough for listing protection to
come in.
So basically it's a system that doesn't work very well
then you get what, so the key thing
that happens next is the state starts to provide the kind
of protections that the private sector is trying to provide
but is not very good at providing.
And the country that starts in, as I said earlier, Germany
and Austria-Hungary, we don't really have a very good theory
for why it's in those countries.
They're not the countries where suburbia is oldest
but probably, the standard theory that planners have,
the planning historians have is these are countries
with the sort of relatively authoritarian tradition
of government and so they're more happy
to have zoning controls than other places are, so
that first gets introduced 1880s, 1890s spreads across
the rest of German speaking Europe over the next two decades
and then spreads across other countries in the,
in the decades after that.
And it's not at the time very controversial.
There's like, people tend to regard the introduction
of zoning in existing urban areas as like kind
of a straightforwardly a good thing to exist,
The local people like it,
but there's no no sense this is going
to cause a housing crisis in the long run
or going to like seriously constrained
housing supply in the long run.
So there's no sort
of big pressure in the other direction from economists or,
or people worried about housing need.
The, the main determinant of which countries it spreads
to tends to be like
how much densification is going on in those countries,
how threatened people feel by densification
and how much pressure they put on the
government to do something about it.
So there are some places where it takes ages to arrive,
but that tends not to be because there are like
principled opponents.
It tends just to be because densification wasn't a thing
and so the state doesn't, get round to doing this.
So where are those places where it comes in late?
So you've got countries like Ireland, New Zealand
and so on where it doesn't,
they didn't even have planning systems really
until like the 1960s.
The other really interesting case is,
well the weird case is Britain
and France, which do have,
I mean France always builds pretty densely.
Britain has some densification going on in the Victorian
period, the Edwardian period
and the first World War they introduced rent controls which,
and the private, so the market
for flat building is completely dependent upon build-to-let.
Basically they, in France they don't,
I don't think there's even a way in which a building can be
owned by multiple owners at the same time.
They do have one now copropriété,
which is like condominium ownership,
but it doesn't, literally, there is nothing in 1914.
So it becomes, once rent controls kick in,
it becomes financially kind of impossible
to build anything except for single family housing
to be sold into owner occupation.
Britain does have the leasehold system,
but it's unpopular for flats.
So basically flat building is killed off
in the first world war.
It comes back only very fitfully when bits
of the market are decontrolled in the interwar period
and the postwar period.
And it's not until like quite late in the 20th century that
the market,
the rental market is de-controlled in both countries
and flat building becomes a big deal again.
- Is it, is there a reason that building flats
to sell wasn't happening at this point?
- So France, it's just
because they lack a system for people
to own flats in a building
that's also owned by someone else.
- So for example, in the,
in the US when they invent condominiums,
they get a massive explosion in building flats to sell them.
But they don't have them, they don't, no one does it
before then because there's no legal, it's amazing
how individual legal tools can,
- How did the con how did the condominium get invented?
- So they just realised that wait,
we've invented homeowner associations
and you could actually just apply them
to individual buildings as well.
So let's do it.
I could be wrong on the exact details of that.
Yes, but it's essentially the same legal title as home ...
- It was a slightly sort of trial
and error process as well, right?
They started building cooperatives was an as an early,
which is a different legal structure which still exists in
like properties from the 1890s.
- Yeah. But they barely, they barely ever took off.
Cooperatives basically only exist with subsidy
and they, what's the difference between a cooperative
and a, so I I can't give you,
I can't give you a proper answer roughly.
My papier mache understanding
I mean I'm not a American
and I don't really, I'm not really across the detail,
but my, my understanding is condominium is
where the underlying fabric of the building is owned
by everyone and then each flat is owned
by the people who live in that flat.
Whereas cooperative is where like the whole thing is owned
by everyone and then in a complicated way you are given use
rights to different parts of the building.
- I see. - So you get a result which is pretty similar
but through a legal structure,
which is in some ways quite different.
And that is sort of, they're kind
of mythic the cooperatives, right? The kind of, they
- Still exists in New York in certain
places and in other countries as well.
But my understanding is there has never been a mass
cooperative build out except for in periods where - that's
how they did social housing -
So in various periods the main way they've subsidised social
housing is through co-ops and then you've seen
co-op buildings sprout up.
But other than that you just don't
see them get built.
But the amazing thing is that, like Samuel was saying, the
unless you have condominium title,
no one builds flats for sale.
And in the UK we did see some built
through the leasehold system like that.
But my impression is that from the 1890s
freeholders basically believe
that one day they were gonna beated from their leaseholds,
which eventually happened within
enfranchisement in the 1960s.
Yeah, that's right. And so they were right about that.
And so they were were reluctant to build leaseholds
because they knew they were gonna be taken off them at some
point in the next like five decades.
- They were actually amazingly prescient.
They, they standard lease sold leaseholds on an 80 year time
span and in about the 1880s they started thinking, yeah,
I reckon that the state is going
to somehow steal the freehold from me at some point.
And it sure enough it was exactly 80 years later.
Can you just briefly explain the difference between a freehold and a leasehold?
- So freehold is normal ownership
that everyone's very familiar with.
In some countries, like primarily the UK we've retained a
kind of feudal type of sub ownership
and it could go infinite number of times downwards as well.
So in the Victorian area you'd often have one guy own
something and then he rents out the right to
or sells off the right to own it
for a given number of years.
That's the leasehold to someone else.
And then that guy sells the right the sublet
to to another person.
And it can go very, very far through.
And this has been retained in its full form in places like
Hong Kong and Singapore
where they took the British legal leasehold system
and they've retained the fact that after 99 years
or 999 years, you will in fact be kicked out
and they can demolish the building and redevelop it
or do whatever they like with it, sell it to someone else.
In the UK in the 1960s with enfranchisement,
you got the right to stay in your leasehold building
after a certain period of time.
And then if franchisement was,
was strengthened various times, including in the 1990s.
And so now if you're a free holder, you don't,
you're not really a free holder in the sense we would
usually have understood it before 1960s
because you can't kick a lease holder out even when the
lease comes due and they have the right to
extend it at a rate set by a tribunal rather than
you accepting it as a a bid.
But before that point you could have done leasehold.
I reckon that in the 1930s, one if the,
the reason why the flats didn't go that big is
because of leaseholders, so free holders didn't expect
that they'd be able to resell
leaseholds going into the future.
- Yeah, people also, like flats were seen
as a very transient people.
Even today people often prefer
to rent flats rather than buy them
because they don't expect to stay in flats for that long.
- I guess there's also, I mean the thing
that always puts me off buying a flat is the risk
and yeah, exactly the fact, fact that you're much more
exposed to risk if you've got a bad neighbour as in a flat
and owning that is obviously much, much,
much riskier than renting it for however many years.
So maybe that, maybe that kind of thing is a factor.
- So the English and the Americans have these,
the English have this weird feudal leasehold model
and they can kind of start carrying
that over gradually to flats.
But the market's quite reluctant.
The Americans have cooperative model which they've developed
in for homeowner associations.
They can sort of start carrying that over
to flats in France.
They've got like nothing.
They really, the only way you've ever done flats is
through renting and there's just no legal way
to divide a building between a bunch of people.
So they, when French introduced rent controls, there are,
I mean these quite amazing to go out to the, these
communion, the Paris region
and you can see blocks of flats that were finished in 1914
and then just like little houses built next door
because it became impossible to build flats as soon
as the war had had broken out.
And the market just like was completely
vaporised for decades.
And France, I mean the main effect was a massive dead weight
loss because the French housing market wasn't really ready
for loads of single family houses,
but they did also build quite a lot of single family houses.
And the French started to fall in love
with suburbia in a way that they,
like unbeknownst we never talk about French suburbia,
it's kind of unbeknownst to English and American people,
but like it is actually a huge thing.
And it did all start through this weird story
of rent controls in the, in the first world war.
- So the sequence is you have what you are calling kind
of early suburbia, which is much, much, much denser than
what we would imagine today.
That then begins to become even denser
as apartments become possible.
People begin to be, to get quite upset about that.
Then the second, sorry, the first World war hits,
and rent controls hits,
and then that sort of freezes everything.
And then while the,
world is frozen via rent controls
or at least Britain and France are frozen by rent controls,
this state downzoning also kicks in and means that even
after the rent controls are removed, you are stuck or,
basically you can never go back to the, to the sort
of apartments that you had before.
- Yeah, that's right. So what happened in Britain
and France, the state downzoning,
public downzoning comes in very slowly.
They don't really bother with it in the interwar period
because there's no pressure for it.
But it kind of comes in almost maybe
by accident in the post-war period
where local officials say like,
oh we're putting a local plan in place,
I guess we'll ban putting, you know, turning these,
these terraced houses into flats
and like it's not gonna happen anyway.
But we might as well ban it 'cause it's clearly
an anti-social thing to do.
That's, there's no controversy at the time.
Nothing's ever written about it,
but we notice it when the restrictions,
the rent controls are finally removed
because in 1980 In the eighties, yeah, eighties in Britain
and in France a bit more gradually.
- Oh, so the so sorry. So the rent,
the rent controls are present
for most of the 20th century, right?
- Oh yeah. In Britain, right?
There are rent controls from the what, 1914?
I think so sometime in the first World War, right up
until the Thatcher government decon controls it in
the 1980s.
And it totally destroys the rental market.
Like it falls from being a large majority to or minority
of the British stock in France,
extremely tight rent controls coming in the first world war
and then in the, from the late 1940s,
the markets very gradually decontrolled.
They you like, I think maybe you are allowed
existing stock stays under rent control,
but if you heavily refurbish the property,
you can get it out from the rent control
and there's various sort of get out clauses
and slowly they start to take stock out
and there's still some of it's still controlled today,
like 2% of the French housing stock is still rent controlled
and has been since the first world war.
- So what's the situation in places
that don't bring in rent controls?
- Basically there's much more pressure for densification
and government acts fast to block it using public zoning.
That's the state in United States, Canada,
Australia, and then even
before the first World War, that's
what happens in Germany and Austria-Hungary.
- Okay, so I predict
that almost everybody listening is screaming the word car
and you haven't mentioned cars at any point yet so far.
And the traditional story that I hear that I, that I kind of
take, I think is widely taken to be the,
the real story is you get cars are invented,
people suddenly can extend themselves out to much,
much further a field
and they suddenly can afford to live somewhere
that they can have a house and a garden
and the kind of low density suburbia that is maybe nicer,
maybe safer than cities,
but they can still have a job in the city.
And so the car kind of opens up all of all of this land to,
to low density building and those people simultaneously
don't want those places to be exposed to the sort
of inner city building that they've just left.
Is that true? Is that part of the story?
What's, why are you giving the car such a,
a small role in your story? So
- I started out thinking
that something like that would be true.
I now think it's mainly not the story.
The the basic reason to mistrust that is that so much
of this process has already taken place
before cars come into play.
So all these private covenants have spread to
basically all elite suburbs
and many, probably most middle class suburbs before 1900
before there are any cars at all.
So we can see there's lots of demand for it
and there are some mechanisms in place.
Public zoning has arrived in Germany and Austria
before there are any cars
and it's already, you know, it's,
I suppose cars are starting
to come in in the states in the 1910s and twenties,
but like most of the neighbourhoods
where zoning is introduced were built
before cars had arrived.
So cars don't seem to have created the kind
of suburbia which originally pioneers either private downzoning or public downzoning.
People seem to have already wanted it
before then.
I think there's the tech,
the transport method which is closer.
So here's a, here's a story which I think may be
like partly true.
So railways create, they
do have a big role in expanding suburbia in the 19th century
because do make it possible
to live in green leafy neighbourhoods
that are remote from the city centre
but still commuting to the city centre for work.
They also have a kind of natural exclusionary structure,
which is that they're extremely expensive.
I mean even today, if you take a railway from like Seven Oaks into London, I think it's like a 6,000 pound annual
ticket if you want to,
that's the cheapest way you can do it.
So, like commuting by
heavy rail is still extremely expensive now.
It was totally prohibitively expensive then.
So technology creates neighbourhoods which are like
impossible you can't get, you can't live there
unless you are very wealthy
and those, so those are like a natural exclusionary filter.
And then I think probably the, the technology which breaks
that is to some extent the car later on.
But earlier on it is the
electric tram which is far cheaper than railways
and means that the like city
of ordinary people can start spreading out
and reaching these elite villa colonies,
these elite islands of rich houses
that have previously only been accessible by railway.
I think like that story of railways creating
elite suburbia and then the elite suburbia created
by railways being threatened by trams
and later on by cars which are more like
democratic forms of transport.
I think there's some truth in that,
but it's not even, that's not the whole story
because you find in lots of small towns all
around Europe you find
elite suburbs developing in the 19th century
without any railways being involved.
Like the west end wasn't developed through railways.
It developed long before railways.
- Everyone used to commute to work via walking. So
- Yeah, - Everyone walked an hour from,
from their west end house into their city job.
- Yeah, Europeans in the 19th century walked a lot,
even rich ones every morning from Belgravia,
like a huge flock of top hatted,
frock coated men would set out
and pour through Covent Garden and Soho
and like going to their jobs in the city
and then every evening they'd all pour back
through the streets and that was,
and you would see like even little towns like Shrewsbury near
where my parents live like
that has its own little villa district.
In Shrewsbury there's certainly no commuter rail around Shrewsbury but,
and so that the development of that kind
of suburbia I think has more to do
with basically availability of capital
and like the swiftly growing middle class
and it makes it financially possible for a developer to,
to a landowner to take a big, a big bunch of land, big plot
of area of land and say I'm gonna develop this whole thing
as an exclusive residential area
and it's gonna be totally different to the kind
of impoverished mixed use suburbia which
is existed historically.
Instead this is gonna be somebody's like it's big enough
and I can raise enough money to design it in one go
and it's going to become a kind
of exclusive place exclusive in terms of use,
exclusive in terms of social
and all these kinds of ...
actually think the core mechanism behind the development
of suburbia is probably not transport types,
it's probably just growing wealth, faster urban expansion
and the availability of like easy capital for developers
to do unified development of suburban areas.
Once those exist, people try to protect them.
- So I have a question for you.
What about the places that don't
seem to have a great downzoning?
So I've looked, I spend a lot of time, I, I spend a lot
of time on Google Maps satellite view
and I spend a good fraction of
that time on Google Maps satellite view
looking at Spanish cities.
And my weird impression is that they tend to,
the city like Valencia just ends with six story,
maybe even eight story apartment blocks and then open field
and then like maybe an eight story satellite town.
And then open field doesn't seem like there's any
great downzoning there.
So what's going on there? So
- That's definitely true.
I don't, I don't have a complete explanation of this.
It's definitely true that the cities of Mediterranean Europe
are still structured more like cities in the middle ages
were so they have a, the whole city is pretty dense,
rich people live either right in the middle
or in kind of inner suburbs
and then suburban areas are poor mixed use
and unplanned.
They're like ragged haphazard development
of stuff which has been like spat out from the city that
there are some exceptions to that
and there's exceptions of gradually
growing more common over time.
But that's still the basic profile of a Mediterranean city
and they don't have, and
and in many cases you still find
as you say this phenomenon like you get to the city limits
and it's six story apartment, six story apartment,
six story apartment and it just stops
and you have open countryside afterwards,
which is the thing which is like almost never happened in
the whole history of the English speaking world
where no English country has ever had six story flats built
in large quantities on the edge of the countryside.
The short, I can give short explanation
for why the great downzoning hasn't happened in those
places and that's just,
they didn't have elite suburbs in the first place.
If you don't have elite suburbs then there's nothing to ...
the basic mechanism for the great downzoning,
which is suburban people demanding it doesn't happen.
Why did they not develop elite suburbs
That's much more puzzling.
The reason why they didn't in the 19th century is maybe just
these countries were still too poor
and the capital accumulation hadn't happened.
But why haven't they done so since then?
I think, you know, we might want
to do a Works in Progress article about this.
I have a papier mache theory,
but like this is completely conjectural,
but my wild theory is maybe if you don't develop suburbia
during the railway age, cars arrive
and then like these areas
around the city are completely democratised and opened up
and anyone can build a house there.
And at that point the appeal of suburbia
as like an elite zone is lost,
and if you haven't established elite suburbs already at
that point then you are like path dependently stuck on
suburbia being ironically
stuck on it being like it was in the middle ages.
Like a poor area
where like people don't want to live unless they have to.
Whereas if you had the railway age,
you had the railway towns then those places
and you've created, you get this window
where technology created the possibility
of having these this socially exclusive suburbia,
then the people in that socially exclusive suburbia strive
to keep it in being forever.
And they're generally pretty successful in doing so
because they enlist the state to help them.
That's, that's a wild theory but I'm not sure it works
and I can see some reasons why it might be wrong.
So I'd quite like us to, to get someone to write about that.
- I have another question because, so we had,
we are talking here about why everyone inevitably wants
to downzone their area if possible
and it was imposed everywhere is extremely universal
and people try and do it through like almost any mechanism
or bear gigantic costs for doing it.
Which, and so does this mean that our project that you
and I have been working on for the last five years of trying
to upzone various parts of suburbia is now over
because we've proven it's impossible.
- Yeah, - Historical dozoning is just a
historical inevitability.
- Like or or undesirable.
I mean the like it kind of sounds like maybe,
maybe we should just take it on the chin maybe maybe downzoning is just a price we have to pay
for people getting what they want.
- Yes. It's, so
one key thing has changed since the downzoning happened,
which is that the down zoning itself
has generated massive housing shortages.
In Britain it's a bit more
complicated because we have green belts.
So the downzoning isn't the whole explanation,
but in most countries the downzoning is basically,
I mean pretty much the whole explanation
for why they have housing shortages.
And this is why you can see in the United States
housing shortages are very concentrated in big cities.
The places where their already vast urban expansion
can't really meet further housing need.
What they really need is to densify some
of their existing areas
- Also they're often geographically ringed in, like San
Francisco's on a peninsula.
A lot of New York is on islands.
- Yeah, yeah, yeah that's,
and New York's got national parks around some areas
so like in some cases they've got
physical constraints on further expansion.
But I think there's, I think,
I mean I haven't looked into this properly,
but I think there's also an effect that like
when a city reaches a certain size,
where a further physical expansion becomes
like quite an unsatisfactory way
of meeting its housing need.
Like if you're out deep in new New Jersey on the actual
periphery of the New York metropolitan area
and you build a new subdivision, someone in
that subdivision, even if they get into their car at 5:00 AM
in the morning and drive like crazy may not be able to get
to Manhattan in time for the start of the working day.
So they actually can't meet the housing needs
of the Manhattan Employment Centre
by further expansion in Long Island
or further expansion on the mainland.
- I mean give an example of that.
So you have Houston,
which obviously has a famous sprawl city
where it's relatively low density in Texas
and they have an enormous amount of roads.
The going out west of the city is like 16 lanes at one point
and generally they flow
quite well 'cause they're toll roads.
But even in Houston where they basically allow unlimited
outward expansion, right?
So there's no overall gap between
how we're talking about this before house prices
and housing sale costs on the edge of town.
There's still a strong push
to densify the inner suburban neighbourhoods
because they're just such, so much more convenient.
And when you get to the point where like Houston is probably
bigger than the urban area of London,
if you put them together on a map
and it has less than half the population of
that overall urban area, when you get to that level
of spread, it's just worth adding some more
housing in the middle if you can.
But sorry Samuel, carry on.
- Yeah, so if you remember when the downzoning was
introduced, when it was introduced about the private sector,
we are pretty certain
that it was increasing the value of these neighbourhoods.
The reason why we're certain of this is
that it was done again and again and again
by profit seeking developers all around the world.
It was extremely unlikely they were all wrong about this.
So at that point when you didn't have a housing shortage,
the immediate value that you preserved through covenanting
or like, you know, the racist preferences that you satisfied
through covenanting or whatever it may be, was
sufficiently great that covenanting
maximised the value of the neighbourhood.
It's pretty clear that's no longer true in areas
with acute housing shortages.
So in these areas with acute housing shortage,
like the great downzoning itself has forced up floor space
values so that they're now like it's floor space sells
for four times more than it costs to build in these places.
And when you see, so
that's like one reason why we might think why we might not
be so pessimistic about the situation.
It's true that in all countries
that don't have tight regulatory constraints on house
building, when you start introducing zoning restraints,
zoning controls, they probably do increase property prices.
But because those zoning envelopes don't increase over time,
you get a housing shortage
because you've got a housing shortage, you get high
floor space values and you reach a point
where the value maximising thing would actually be
to upzone the neighbourhood
and allow more density which is quite unlike the
situation when it was first developed.
- And, and you're using total value as a sort of proxy
for human welfare or human wellbeing.
- Yeah, it's an imperfect proxy
obviously.
I like it.
- I think it's a good - One.
Yeah, I don't like, I mean there are problems
so clearly like the financial
value ... economic value will weight the
preferences of rich people more than it would weight
the preferences of poor people.
Like a rich, a billionaire's view might count
for more than the homes of a hundred people
because of billionaire's preferences are like
have so much more pricing power than,
than people who have no money to, to give effect there.
So like economic value is a very imperfect
corollary for, for like social bad social welfare,
but like it is at least it's the best,
probably the best we've got for aggregating vast numbers
of preferences, of vast numbers of people.
- Yeah. It's a way of, it's a, it's a way
of people demonstrating what they actually want to happen
and how much are you willing
to give up for this
- The other thing is that if there are distortions
that result from any inequalities of income, like those,
the distortions will tend
to be in fa like will bias us in favour
of more downzoning.
If it's the case that building all the flats
for poor people maximises economic value,
even though it disrupts the billionaires view, then like
the poor people must really wanted a lot.
- Yeah. - Because they can beat the billionaire
with his enormous buying power.
- And the the other, the other standard flaw in just taking
kind of overall output
or overall value as the proxy
for welfare is externalities, right?
Like we don't just think that, I don't know, you know, a,
a country that mines a lot of coal and then burns it all
and makes a lot of stuff, we know
there is something missing there, right?
There's the pollution and the CO2
and that is part of the story
because obviously the story
of the great downzoning is one of externalities.
You know, you're talking about basically people trying
to control negative externalities.
But when you talk about a single area
or talk about maximising the value of a single area,
this is why the Great Estates worked so well.
'cause they internalised all of those externalities much.
They had this, they have been,
you've written about this a lot, but you,
when you have a kind of single owner, the single owner
has a really strong incentive to weigh up all
of the externalities kind of within that area.
And this is obviously one of the reasons that
streets differ in quality and so on.
- And also if we go back to the,
the Great Estates in their private zoning,
the Great Estates in their private zoning do
occasionally upzone themselves, right?
So the, the Great Estates are a perfect example of
what Samuel's saying, because most of the time they're like,
keep it low, keep it low.
And then occasionally floor space values rise so high
that they think, well, this will be busier,
this will be slightly less exclusive.
- Mm. - But we can fit double as many people in here
and they really want to live here in the centre
of this city, which is a really economically valuable city.
And so you can go, you could go right now,
you could be like me and go and Google's satellite view of
around Chelsea or Marburn
and look at the edges of places
where there are Edwardian blocks of flats next to Georgian
or Victorian houses.
And they have, they'll be in greater state land
and they literally have upzoned their own Great Estate land.
So that private version of zoning is able to balance it
when it actually is necessary.
- Yeah. Han's place, probably one
of the most expensive streets in the world that was
that owned by the Cadogan estate I think.
So they, in the 1880s,
it was all developed originally in the late 18th century
as terraced houses, four stories
or something reached at the end of the 19th century.
And the estate owners, when the leases were all coming
to their end.
They say to us, think actually there's loads of demand
to live in Knightsbridge
Why don't we just demolish the whole thing
and rebuild it at like twice or two
and a half times the density.
Sure we'll lose a bit of ammenity value
because the density will be higher, but we've got two
and a half times as much floor space
and like people really, really want to live here.
And they did it and it worked. They made it/
They can't do that anymore
because the planning system now overlays the private zoning
controls by the greater states.
But if you remove the planning system,
I'm sure the greater states would start demolishing bits
of their 19th century stock
and replacing it with denser development.
And we knew like, this isn't just like us speculating.
We've, there are plenty of international examples
where if you give blocks or neighbourhoods
the right to upzone, they do it
because it like increases the total value of the
of the block when they do.
So Ben's done some work on the case of Houston here?
- Yeah, well yeah. We didn't, we
did an article on Works in Progress
That was very good. I'll credit Anya Martin
for doing most of the work on that.
But, but yes, there are many examples.
I've seen lots of examples.
My favourite example at the moment who,
we've got an article coming in.
So I've been reading all these drafts of all these details
and I'm one of the few people who knows about all
of this stuff because no one seems
to go into Korean archives in Korean
and look through all the details.
There was this policy called the Korean Dream in the
eighties where you could take your neighbourhood
that was potentially like a, a shanty town slum on the edge
of town because Korea had,
had a very high birth rate at the time, funnily enough,
and also a very high urbanisation rate.
So their cities were growing at like 15% per year
or something off or faster than that.
And they allowed whole neighbourhoods to opt into up zoning
to be allowed to build whatever they wanted, if they wanted.
And at that time, the value for them was no, okay,
we is actually better despite the there being more people
around, it's still gonna be net more valuable
because there's the demand for floor space is so high.
And so they all opted in to upzoning.
So we clearly can see examples of it,
- The question, so like how optimistic should we be?
So the case of pessimism as you lay out is
everywhere which has elite suburbia
or even like middle class suburbia has downzoning,
Like it's pretty much without exception
and there aren't many cases of that changing yet.
So that looks like quite a powerful argument of pessimism.
But the case for optimism to summarise
what we've been saying is all that's true,
but the very success
of the downzoning maybe has created the conditions
for the ends of the downzoning in some places
by removing this totally key feature
that was there was in the beginning, which is
that originally downzoning was value maximising.
And now downzoning is massively value destroying in in the
places with the bad housing shortage, of course there's still lots
of places woithout bad housing shortages.
So I, I'd say like I will be very pessimistic about
upzoning parts of, well parts
of the United States in the United States
or in in Europe, which don't have housing shortages.
I think there zoning is probably good,
it's certainly economically good
for people in suburban areas who,
and they, they almost certainly
improves their property value.
But in the places
where we've got terrible housing shortages,
which includes nearly all the great capitals of the world,
there we are in uncharted territory
and the whole thing, the whole reason
that brought the downzoning into being
is no longer in place.
So maybe we can be more optimistic about
what might happen in those places.
- What's the relationship
or what's the connection between what you often write about
and think about, which is beauty and design and architecture
and this, other than the fact
that they're, they're all about housing.
Like does the, does your interest in the built environment
Yeah, I hate that expression,
but does your interest in beautiful buildings relate
to this at all or are
You just interested in cities generally?
- They're definitely related,
but they're, sometimes they have a,
I mean it's a complicated, intense relationship.
So like some, when I first started working on this,
I thought great, improving the density of suburbia will tend
to create more flourishing, more beautiful places
because the classic examples that we have
of flourishing beautiful places typically are at like medium
or high density or often.
So, you know, I've always loved terraced streets
and the kind of old corridor streets
and the sense enclosure that you get from that.
So I thought, well densification is probably likely
to generally make urban spaces more beautiful
and that's another reason to be in favour of it.
And maybe a reason that's
particularly close to my own heart.
Like we've all got this right when we, when we work on policy
and we've got our own like publicly our own assessment
of the, the stuff that's actually important.
And then we have the thing that like kind
of really motivates us
and that we clearly, if you look at the history
of zoning, it's more complicated than that.
And part of the reason why down zoning was introduced in the
first place was to protect aesthetic values
of neighbourhoods, at least perceived
aesthetic values of neighbourhoods.
So like people in these 19th century villa districts,
one of the classic problem with beauty right, is
that you bear all the costs
of making your property beautiful,
but the beauty of your property is a benefit
to all the other plots nearby.
And to everyone who goes past it's classic, like totally
like pure, like one of the best examples of a,
of a positive externality.
So the free market with fragmented ownership will
normally under-deliver beauty.
And there are, there are fun classic studies about this
looking at front gardens, like
to take out a driveway and put in a front garden.
Your, your net property value goes up a little bit under
certain circumstances, but, but not very much.
But your neighbor's property also takes a big jump,
like maybe larger than your jump
because they didn't lose their driveway,
they just get some nice flowers to look at.
So you've got, you know, classic,
classic collective action problem and private zoning.
One of its like totally clear, one
of its purposes at the start was to overcome
that collective action problem.
And public zoning has tended
to be less like fine grained on aesthetic questions.
Like the private zoners would really fuss over what kind
of fence you can have and what colour you
can paint your house and so forth.
But like public zoning in course terms probably motivated by
these aesthetic considerations to an extent.
So there I have like emotional dissonance
that urban density, which is good for the economy
and good for society as a solution to housing shortages is
seemingly bad for aesthetic purposes.
The case that really interests me here would be actually the
one we've been discussing the case with like greater states.
So what they did,
because there was still this one unified owner
who was coordinating the densification process,
they thought, okay, we're going
to redevelop this at higher densities,
but we are still going to think about aesthetic values.
We don't want to densify one property
in our estate in a way which is parasitical on the other
properties because we also own all the other properties.
So whenever we identify a property,
we'll think really carefully about the fa the massing
and the facade and all these kinds of features.
And it created these neighbourhoods.
Like Hanover Place is an extremely beautiful street.
You can see why all these incredibly
rich people want to live there.
So I like what thinking about this
for several years has led me to is the conclusion that
there are some prima facie tensions
between densification and urban beauty.
And those tensions are obvious
and like clearly were one
of the things which drove the development
of zoning in the first place.
But there may be ways if we can get the upzoning right
and make it not just like an uncoordinated free for all
where parasitical building is allowed
and where you get like the free rider problem,
aesthetic free rider problem goes like totally rampant.
If there are ways we can, we can counter
that then we could get much denser neighbourhoods
that were nonetheless beautiful.
So what are those ways? Well,
where you've got a unified owner,
like in the greater states in London it's much easier
because there you've got an underlying economic agent
who can control what the new development looks like
and who's also internalised externalities.
So they care about beauty. The problem we have is like in
nearly all places you don't have that
because the original landowners have sold the plots
into fragmented ownership.
And so the freeholder the the free rider problem
becomes quite serious.
Clearly like part of the solution.
Like sometimes you can create the solution just
through having a good planning system like that is
where you've got fragmented ownership.
The state will step in to provide some of the services
that a unified owner would've provided if they existed.
- Like what, - Like controlling the design
of buildings controlling saying that no, you can't build a
multi-story car park there out of concrete
or whatever, even if it's the most valuable thing to do
for your individual plot
because it will still destroy the,
the ammenity of all the plots around it.
And the planning system does do that to some extent in,
in this country as in all countries.
So that is definitely part of the answer.
We do have problems there.
So like famously planning systems can end up suffering from
design disconnect where the professionals
who run the planning system have like different aesthetic
preferences to the wider public.
So it's a standard like planners
and architects are much more likely to be in favour
of radical modernist designs,
which are quite reparative to normal people.
- One thing I often see is buildings where they,
they have an old building, there's an extension onto it
and the the extension seems to be designed
to be like maximally different from the original building
as though it's like, I really want to show you that this,
this is an extension rather than part of this.
- Yeah. Doctrine of legibility.
It's widely, so lots
of English planning authorities have this
as official or semi official
- Policy.
They, they require it to look different,
- They require it to look different.
'cause they don't want the, if the,
if it blends into the original building, it could be seen
as a fake extension that was trying to pretend to be part
of the heritage
Jesus, that would be terrible.
- Yeah. So it's now probably if you had a unified owner,
they would be, they would have the discipline
of the basically the discipline of the profit motive.
Yeah. They'd know this doesn't maximise the value
of the neighbourhood and I care
about value of the neighbourhood.
So I care about the preferences
of ordinary people
because those preferences drive that value.
Whereas if you are a public authority to some extent you get
that through democratic feedback mechanisms,
but those are often weaker
and like people don't really vote on the basis of the,
of the conservation area policy of their neighbourhood.
Like they don't know the technical
detail, they don't follow that.
So the democratic feedback
mechanisms are probably quite weak.
And so you do get this drift, the design disconnect effect.
And I think that I, that doesn't mean I want to get rid
of planning controls and densification.
I think they're definitely better than nothing.
But that is a problem that you'd have.
Ben and I have worked a lot, well you've worked a lot
as well on the policy street votes
where we look at a way in which like low density streets
could vote by qualified majority to go up
to like medium densities, marvan density or Paris density.
And there we've always said the street would introduce like
strict rules on the external appearance of these buildings.
And the idea there is that the street is operating like a,
like a democratic version of a greater state.
So they, their incentive is to maximise the value
of the street as a whole.
They want to block free riders
because they will suffer if there are free riders.
The free riders will destroy the value of, they want
to be in the good bit of the,
I mean ideally each person would like to be the one
who can be a free rider while everyone else is forced
to follow the rules, but they can't do that.
So failing that they want to be in the,
the positive equilibrium where everyone's controlled
by rules of value maximised for the street as a whole
- Because that means they individually
'cause the the same rules apply to everybody.
Exactly. So they individually, yeah, that's the best way
for them to individually maximise their income. I see.
- So that is an attempt to, among other things,
that's an attempt to like reconcile the tension
between densification
and beauty, which is important for me emotionally
also is value maximising
and also I suspect is very important
for like the politics of densification.
- Mm. - I don't know, like we don't, there's one question
of like how much is the effect on prices on the streets?
But there's a second question,
which is what's the effect on the public response
to a radical policy like this?
And if the first photographs start coming out from the first
street votes and the post-street vote developments are like
hideously ugly and they get plastered all over the tabloids
and over social media, that's like potentially
a killer for the policy.
Whereas if they come out and they look okay,
then that's better.
And if they look great, if people say, wow, hang on, that's,
you've made that street a lot denser,
but you've actually made it nicer, then you are,
you are really looking at like,
the emotional response is very different.
People will think like, well they're actually making this
city into a better place.
Let's let's, you know, we should keep trying
with this policy and see what happens
and maybe we should expand it.
So I think it's pretty important to get this right,
especially in places like where places where there's a
long tradition of of like caring for neighbourhoods
and control over places and people are very
sensitive to these kinds of features.
- Is there anywhere that does, let's say, kind of beauty
and density right at the moment in your mind?
The only, the only place that I know of that I've been to
that seems to have a really good land use policy is Japan,
but it's not a very,
it's it's actually quite nice in its own way,
but the buildings are individually in, in a lot of Tokyo
for example, not particularly pretty, they're, they're made
to be torn down as, as most people know,
there is something kind of quite wonderful about being there
and the the actual urban form Yeah, makes fantastic,
makes it feel really, really good.
But the individual buildings are not, I don't think,
are often not beautiful.
And there are beautiful parts of Japan of course,
but do you think there's anywhere that gets these
things, these two things,
- Right.
I don't think there's any like whole
country that is the example.
I mean there are, there are a bunch of countries
where the urbanism
of new developments is typically pretty good.
Mm. So Spain
and the Netherlands are the two
most obvious examples of that.
Quite different, but both quite impressive.
But neither of them does that much justification
of existing neighbourhoods
and even in the good new neighbourhoods, again,
it's kinda like in Japan, they're not
individually beautiful buildings.
They're like fairly ugly buildings that
nonetheless create good neighbourhoods
because the planning is
so good and the infrastructure and so on.
There are interesting, there are lots
of interesting individual examples.
There's like, which is a, a
World War was a kind
of a decay post-war social housing estate outside Paris
built up fairly low densities.
And that's gradually being regenerated at much higher
densities like very beautifully
and has been extremely popular with local people
and is starting to create more
and more of a splash internationally.
So that like clearly shows how it's done.
And we've got, there are similar like densifying estate
regeneration schemes in, in Britain
where they've clearly improved the neighbourhood.
Like post regeneration estate
is like obviously better on the eye than the pre
regeneration estate, even though it's two
or three times denser.
So, so there are success stories,
but I wouldn't say there's any country
where like the success story has become the norm.
- Thank you very much Samuel Hughes.
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