Urban Studies, Vol. 28, No. 6, 1991 853-870

`Rabbit Hutches on Postage Stamps' : Planning,Development and Political Economy

Alan W. Evans

(Paper received in final form, April 1991]

Summary. The supply of land for housing has been restricted by planning controls . The prices of landand of houses have risen in consequence . As a result land has been used with increasing intensity withinfill, `town cramming' and smaller houses on less land-rabbit hutches on postage stamps' ; adestruction of the urban environment of the many to preserve a rural environment for a few . Why isthe supply of land restricted? Firstly, it is suggested, because the British misapprehend the degree ofurbanisation in their own country. Secondly, because rural and farming interests ensure that theplanning system operates in their favour . And thirdly, and most importantly, because the planningprocess is tilted in favour of the existing residents of an area who seek to preserve their environmentby resisting intruders . A number of suggestions are made to resolve the situation by increasing thesupply of land or reducing the demand for land.

Introduction

Some early work of mine looked at aspects availability for development, not just withof the economics of town planning. One of respect to green belts, but where, as inthe results of that research was a study of southern England, development is re-the economic effects of `green belts' . It was stricted over the whole region . Thiswork hasshown that there could be substantial been published both by the Housebuilderseconomic costsjourneys to work could Federation and as an Institute of Economicbe longer than they otherwise would be Affairs Occasional Paper called No Room!and the cost of housing in a city sur- No Room!(Evans, 1987, 1988) . When I wasrounded by a green belt could be higher invited to deliver the Denman Lecture I wasthan it otherwise would be. These costs asked to develop these ideas further.were usually ignored but needed to betaken into account when deciding whether The Effects of Restrictions on Landthe benefits of green belts outweighed their Availabilitycosts (Evans, 1973, ch . 15; 1985, ch. 12 ;House of Commons, 1983) .

First we have to set the scene. For thoseThis work was done some time ago but unaware of the ideas which were put

more recently I have started to look again at forward in these earlier publications wethe economic effects of restrictions on land have to review the empirical evidence as to

Alan W. Evans is Professor of Environmental Economics at the Department of Economics, University of Reading, PO Box 219,Whiteknights, Reading RG6 2BU, UK. This paper is a revised version of the Denman Lecture delivered at the University ofCambridge on 15 February 1990 .

My first academic appointment was as a Lecturer in Urban Studies at the University of Glasgow in 1967, researching aspects ofthe economics of planning, the topic of this paper. Gordon Cameron was involved in this research and so became initially acolleague and then a friend. When I was invited to give the Denman Lecture I discussed the subject with Gordon, but I regret thathe was in hospital at the time that it was delivered .

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the effects of restrictions on the availabil-ity of land for development on the patternof residential development and the cost ofhousing .

The first and most essential fact to noteis the difference between the price of landin the South East when this land is inagricultural use, and its price with plan-ning permission for residential develop-ment. The price of land in agricultural usein the vicinity of Reading is of the order of£2000 per acre, but with permission forresidential development the price can riseto between L500000 and Elm per acre.The price might have been even higher oneor two years ago but land prices have fallenbecause of the depression in the housingmarket. Nevertheless there is even now asubstantial difference between the twoprices which has to be explained. Else-where in the country the prices of agricul-tural and residential land also differ sub-stantially but the absolute differences arenot quite as great .

Why should there be this substantialdifference between the price of land withplanning permission for development andits price in agricultural use? The answer isthat since planning controls were insti-tuted in the late 1940s there has been asubstantial increase in the demand for landfor housing whilst the supply of land fordevelopment has not increased at anythinglike the same rate .The demand for land for housing has

increased for several reasons . The first andmost obvious reason is that the populationof the country has increased, so that thenumber of people needing to be housed hasincreased . The second reason is that thispopulation has been distributed amongstsmaller households . We have a largernumber of old age pensioners or youngerpeople setting up house, and we have alarger number of single-parent households .Thus even if the population had remainedthe same a larger number of dwellingswould have had to have been built . Thethird reason is that incomes have increasedsubstantially since 1947 and with increas-

ALAN W. EVANS

ing incomes people want larger houses .They want more space and, in some parts ofthe country, they want second homes. Thefourth reason can be found in the transportimprovements that have occurred over thelast 40 years. Car ownership has becomewidespread and people have been able tomove away from the cities, away from thehigh densities which they had to occupy,often in slum areas in the inner cities, whenthey had to live close to their work-placesand when these work-places were alsoconcentrated in the inner cities . In the post-war era they have been able to move out tonew towns and other settlements outsidethe large cities. The fifth reason can befound in the tax advantages of owner-occupation. These tax advantages reducethe cost of housing to those who can affordto buy. As a result, and also because of rentcontrols, over the past 40 years the propor-tion of the population renting from aprivate landlord has fallen dramaticallyand the proportion owning has increased .Because the cost of housing is cheaper forthose who own their own homes these taxadvantages have also encouraged people toattempt to buy more housing than theywould have done if they had rented .

On the supply side the situation has beendifferent . Certainly it is true that back inthe 1940s undeveloped land was zoned forresidential development in anticipation ofan increased number of dwellings . It wasplanned that there should be decentralisa-tion from the cities, that there should beslum clearance and that people shouldmove to new towns. But the increase in thedemand for housing for other reasons, inparticular the increase in the size of thehomes which would be wanted by peoplebecause of economic growth, was notanticipated and by the 1960s most of theland which had been zoned for housinghad been developed . Local authorities be-came increasingly unwilling to zone non-urban land, i .e. rural land, for develop-ment. Moreover as the supply began to runout developers had to scavenge for sites,desperate to find somewhere, anywhere,

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price index . The weighted index shows thathouse prices rose rather faster than isindicated by the unweighted index in thefirst column. The weighted index rose from100 to 691 over the 14-year period whilstthe unweighted index rose from 100 to557. Thus as house prices rose, peopletraded down by buying somewhat smallerproperties, although the amount that theyspent on these smaller properties rose inline with their incomes .

Table 1 . Weighted and unweighted house priceindices, South East (ex. Greater London)

where they thought they could obtainpermission to develop . So by the early1980s about a third of sites for residentialdevelopment in southern England werefound by developers, usually within theboundaries of existing urban areas-siteswhich had not actually been identified byplanners beforehand as being suitable fordevelopment .

This disparity between demand and sup-ply had certain consequences in the way inwhich housing was developed, which Ishall now examine . Firstly, both house andland prices rose considerably faster thanretail prices or incomes . This is made clearin Figure 1, which shows indices of theaverage price of new dwellings and housingland, incomes in the South East (outsideGreater London) and also the nationalretail price index . In each case the indexfor 1969 is set equal to 100. The figureshows that whilst retail prices rose fromapproximately 80 in 1963 to about 660 in1989, land prices over the same periodrose from about 50 to about 3000 . Sowhilst retail prices increased eightfold landprices increased 60-fold. At the same timeincomes and house prices rose somewhatfaster than retail prices, as one wouldexpect with a rising standard of living, butrather more slowly than land prices .

What then happened was that because ofrising house and land prices people tendedto trade down, buying smaller houses thanthey otherwise would have done . This canbe seen from Table 1 . The left-hand col-umn is an index of an average cost ofhousing in the South East, i .e. the averageof what people actually spent. This roseabout fivefold from about 1975 through toabout 1989. It is this index which isindicated by the white squares in Figure 1showing the average price of new dwell-ings, which rises in line with incomes . Theright-hand column of Table 1 is an index ofhouse prices which is weighted in that it isbased on the assumption that people buythe same types of house in the sameproportions in each year. In other words itis constructed in the same way as a retail

Source: Housing and Construction Statistics;Family ExpenditureSurvey; Economic Trends.

Because land prices had risen there wasconsiderable pressure to use urban landintensively and this has further conse-quences as it affected the way that peoplebehaved. Firstly, people discovered that, ifthey could get planning permission, theirback gardens were worth a lot of moneyand so in many cases these back gardenswere sold off for development . Typicallypeople sold them off at the time that theymoved away so that whilst they wereunwilling to sell at the time they wereliving in the house they were willing to atthe time that they left . Moving allowedNIMBY-Not In My Back Yard-to bereplaced by BIMBY-a Bungalow In MyBack Yard .

(1975= 100)

Year Unweighted Weighted

1975 100 1001976 106 1071977 112 1141978 129 1331979 168 1771980 203 2141981 204 2241982 202 2261983 230 2561984 255 2901985 276 3201986 331 3781987 391 4611988 495 5981989 557 691

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Secondly, whilst higher incomes meantthat people wanted larger houses, housingland had become increasingly expensive sothat the way in which houses were con-structed changed. Michael Ball found thatthe square footage, the internal area ofhouses, seemed not to have increased overtime but that the average number of roomsin the house had increased (Ball, 1983) .People got larger houses in terms of thenumber of rooms but they got more or lessthe same size of house on average, so thatrooms in newer houses tended to be smal-ler. And, of course, they got a house with asmaller garden .

ALAN W. EVANS

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1[IIIIIIIIIIIIIIIIIIIIIIIII63

65

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Figure 1 . New house prices (0), housing land prices (0) and incomes ( •) in the South East(outside Greater London) and retail prices (national) (∎) . Source: Housing and Construction

Statistics; Family Expenditure Survey ; Economic Trends .

a -

Thirdly, as mentioned earlier, in orderto find sites for development, developershad to hunt them out . According to a studyby Roger Tym & Partners in the early1980s, about a quarter of the sites devel-oped in the South East were found in thisway (Roger Tym & Partners, 1987) . Theconsequence was the infilling of the built-up area in towns and villages as developerssought out small sites-sports grounds,back gardens, allotments, houses with largegardens which could be demolished-any-where where housing could be fitted in . Inthis way, it was quipped, `town planning'had been replaced by `town cramming' .

Fourthly, as land became more expen-sive there was a gradual shift from con-structing buildings which used a lot of landto constructing those which used landintensively . This is illustrated in Figure 2 .This figure shows, for England and Wales,the types of dwellings provided in theprivate sector between 1969 and 1989 . Thevertical axis shows the percentages. Thusfor each year there is a vertical columnwhich represents 100 per cent of dwellingsbuilt in that year. Now it can be seenlooking along the bottom of the figure thatwhilst bungalows accounted for 26 per centof dwellings built in 1969 the number ofbungalows has fallen steadily over theyears to approximately 13 per cent of thetotal by 1989. On the other hand, lookingat the top of the figure, whilst only 3 percent of dwellings built in the private sectorin 1969 were flats and maisonettes, by1989 the proportion had increased tonearly 17 per cent. In the same way it canbe seen that the proportion of new houseswhich were terrace or town houses had alsoincreased substantially. It might be arguedthat this was due to a demographic change .We know that the number of smallerhouseholds had increased and one wouldexpect that smaller households would pre-

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fer smaller dwellings, such as flats, todetached houses and bungalows. Neverthe-less other evidence indicates that thisargument is wrong .

Figure 3 presents the first piece ofevidence . This shows that bungalows haverisen rather faster in price since 1969 thanother types of dwelling . Indeed, Figure 3appears to show that the larger the amountof land used per dwelling, the faster thatkind of dwelling has risen in price . Sobungalows have risen in price faster thandetached houses for most of this period,and the price of these has in turn risenfaster than the price of semi-detachedhouses; they in turn have risen in pricefaster than terrace housing, while flats haverisen in price least of all . Now if there hadbeen a shift in demand towards flats onewould have expected the reverse to be true,i .e. flats would have risen in price fasterthan other types of dwelling . These priceindices show that in fact the differencesbetween the rates of price increase of thevarious types of dwelling seem to havebeen caused by the increase in land price,which has pushed up the price of dwellingsthat use a lot of land .Table 2 presents a second piece of

evidence. This table shows the variation

Figure 2. Distribution of different types of dwelling mortgaged . Source: Housing and ConstructionStatistics .

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ALAN W. EVANS

1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

Figure 3. Dwelling price by type of dwelling mortgaged in the UK (1969 = 100) : (£) bungalows ;(0) detached ; (*) semi-detached ; (0) terrace; (A) flats and maisonettes . Source: Housing and

Construction Statistics.

between regions in the types of dwelling onwhich building work was started in 1990 .The bottom line of the table shows that 67per cent of dwellings started in GreaterLondon were flats and maisonettes andthat 22 per cent were terrace housing . Ofcourse we should expect this . London is amajor city and land will be used inten-sively. Yet if we look outside GreaterLondon at the rest of the South East wefind that 57 per cent of new dwellings werein the form of flats, maisonettes andterrace houses, even though this is a regionin which there are no really large cities .

Now this intensity of development must bedue to high land prices . It cannot be due toan increase in the demand for smallerdwellings because of demographic change .If it were due to demographic change wewould expect the same pattern of develop-ment across the whole country . But thetable shows that as we move outwardsfrom the South East through the SouthWest and East Anglia, the proportion ofdwellings being built as flats, maisonettesand terrace houses declines until, in York-shire and Humberside, where land pricesare the lowest in the country, only 26 per

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Table 2. Dwelling types started in 1990, by region (percentage)

Source: National House-building Council (1990, table 6) .

cent of new dwellings are flats, maisonettesand terrace houses . On the other hand 20per cent of new dwellings in that regionwere built as bungalows, whilst only 5 percent of new dwellings in the rest of theSouth East were bungalows. Now it seemsclear that these regional differences couldnot be the result of any demographic shift,since this would have affected each regionin the same way. The only explanation weare left with is that the regional differencesresult from an attempt to economise onland by building at a higher density inareas where land is more expensive .

Visual Consequences

This pattern of development has had cer-tain visual consequences. These conse-quences were, I am sure, not intended byplanners but have certainly resulted fromthe policies of preserving rural land andusing urban land intensively . The first ofthese consequences is that there is a veryvisible edge to any urban development . Onone side of the boundary we have greenfields and on the other side we have a high-density urban area. This effect is verynoticeable in areas such as Lower Earley,on the southern edge of Reading, wherenew development has taken place at a veryhigh density. As a result, as one travels

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south from the centre of Reading densitiesfall until they are at their lowest in areasdeveloped in the 1950s; then they start toincrease again as one passes through areasdeveloped in the three succeeding decades .

Within those urban areas it is interestingto see the way in which developers havereacted to a combination of increasingincomes and rising land costs . People withhigher incomes expect gardens and theyexpect their houses to be detached . Devel-opers have tried to give people what theywant but they have had to do so subject tothe constraint imposed by the high cost ofland. This results in certain design fea-tures, the explanation for which is nototherwise immediately obvious. Forexample, in some developments one seesthe houses built close up against the road .The reason for this would appear to be thatalthough it results in a very short frontgarden-one that may not even be a car'slength, so that to get the car off the road thegarage itself at the side of the house is`recessed' away from the road-it stillallows a back garden of a reasonable size,say one large enough for the children toplay swingball.Another design feature that one sees

occasionally is the removal of the garagefrom its usual location next to the house .Sometimes it is removed some way, and allthe garages related to a group of houses are

House type

Bungalows DetachedSemi-

detached TerraceFlats and

maisonettes

North 14 37 16 13 21North West 10 45 20 10 15Yorkshire and Humberside 20 38 17 12 14West Midlands 7 38 18 21 16East Midlands 10 41 25 16 8East Anglia 11 34 17 27 12South West 8 28 14 30 21South East (excluding 5 27 12 25 32Greater London)

Greater London 3 4 5 22 67

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put in a separate block . In one or two cases,however, one sees that the garage is aseparate building placed in front of thehouse. When I first saw this kind ofdevelopment I found it rather surpris-ing-I could not see why anyone shouldwant to sit in their front living room andlook out at the back or side wall of theirgarage. But after a time I realised that thisdesign allowed the developer to buildsubstantial houses which could be sold asdetached. If the garages had been putadjacent to the houses in the normal waythen, because of the width of the site andthe size of the houses being built, all thehouses would have had to have beenadjacent to each other and connected.There would have been no gaps betweenthe houses because there would have beenno room for any. So houses which thedeveloper wished to sell as substantialhomes for high-income households wouldhave been terrace houses or `semis' at best,and the price the developer could haveobtained would have been much reduced .

A third way of achieving the developer'sdesired objective of the maximum numberof substantial detached houses within arestricted amount of land can be seen inthe use of communal drives for a numberof homes . This can appear quite attractive .Some of the area around which four or fivehouses are grouped is used jointly by thehouseholds as a communal driveway intotheir own separate garage spaces . Theresult is to economise on land because thespace is being used jointly. If the area infront of each house is merely grassed andnot fenced off, then the land area at thefront of each house is reasonably spaciousbecause this land is shared, visually atleast, even if, in practice, only the drive-way is actually shared physically. As I haveargued, I regard this form of design asbeing an attempt to economise on spacebut it is worth repeating that it has oftenresulted in a rather attractive grouping ofhouses .

A further consequence of the high priceof land has been a tendency for househol-

ALAN W.EVANS

ders to extend their homes . Families wish-ing to move to larger homes have lookedaround and found that any new houseswhich were being built seemed to haveminiscule gardens and to be rather expen-sive. After searching for some time theyhave taken stock of the situation and said,"The garden of our existing house is largerthan anything we have seen that we couldafford. Could not we extend the house welive in now? Then we would get a largerhouse at a price we could afford and wewould not even have to move!" Sometimesthe process of extension is more deliberate .Having found nothing that they couldafford of the size and with the garden spacethat they want, households may delib-erately move into a house which is smallerthan they feel they need but which has theright amount of land, then set out toextend the house to the size that they want .In this way many streets in outer Londonand the towns of the South East aregradually `terraced' as each house is ex-tended to fill the gap between it and thenext.

The Urban EnvironmentThe end result of all the trends describedabove has been the intensification of landuse within existing urban areas and theelimination of any urban open space whichis not in some way safeguarded . Houses areextended over their garden space and theends of gardens are sold off, as are sportsgrounds `surplus to requirements', gardennurseries, allotments and any other 'un-used' pieces of land. As part of this processwe also see the demolition of existinghouses built at a low density and theirreplacement by flats or town houses tointensify further the density of urban de-velopment. In some cases this pressure hasbeen so great as to lead to what can only bedescribed as the destruction of the urbanenvironment . In Harrow-on-the-Hill, iden-tified as an Area of Special Character andalmost wholly included within variousConservation Areas, it was recently calcu-

lated that there were 22 construction siteson which 194 flats or houses were beingdeveloped and that, in addition, there wereoutstanding applications for planning per-mission for a further 376 dwellings (HarrowObserver, 1989) .

The cause of this intense developmentpressure is the low density of development.This low density of development makesthe area desirable as a place to live . But ofcourse it also means that redevelopment toa higher density can be highly profitable,whilst, at the same time, it is of course thereason why most parts of the Hill havebeen designated as Conservation Areas .

The Council for the Protection of RuralEngland has fought successfully to preventthe development of land in rural areas . Theconsequence of this conservation of ruralland has been pressure for the destructionof the few areas in England which aredesignated as urban Conservation Areas . Itseems odd to preserve millions of acresunspoilt for the few and spoil the urbanenvironment for the many. I have some-times thought that as well as the Councilfor the Protection of Rural England thereought to be a rival organisation called, say,the Union for the Protection of UrbanEngland .

Given that the policy seems to be that weshould preserve rural areas and usuallyallow development only in urban areas thequestion arises as to why there should besuch a policy . There seem to be threepossible answers to this question which Ishall try and deal with. Each of theseanswers is partially true but not the com-plete answer-each, I think, reinforces theother .

The three possible answers are, firstly,that, yes, it is what the British people want .People do believe that rural land should bepreserved even if this is at the expense ofhigher densities of development . But Iwould argue that in some senses theirinformation, the information on whichthey are basing this view, is incorrect andthat this information is incorrect partly forthe second reason-the policy is in the

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interests of various groups which might becalled the agricultural and rural interests .But these interests would be too weak torestrict development in this way withoutwhat I would regard as the third and mostimportant reason-the balance of politicalforces in the planning system reinforcesthe status quo by giving undue weight tothe views of those who live in an area,particularly a rural area, and no weight atall to the views of those who might moveinto an area. We shall deal with these threeanswers in turn .

The Public InterestIf you discuss the pattern of developmentin this country with people, particularlythose who are not involved in the analysisof the problem, you will often find thatthey have very strongly held beliefs thatthere is not enough land in the country fordevelopment, that there is a shortage ofrural land and that therefore urban landshould be developed as intensively aspossible-the existing pattern of develop-ment is therefore thought regrettable butinevitable . Now the problem here is thatthe evidence shows that Britain is not asdeveloped as everyone thinks . A classicstudy of land use in Britain by Robin Bestpublished in the early 1980s showed that atthat time south-eastern England was 19 percent urbanised and 81 per cent rural. Ishould anticipate, and my own experienceconfirms this, that if you talk to a Lon-doner he or she is more likely to believe thereverse to be true, that the South East was81 per cent urban and 19 per cent rural . Asan aside one might note that 19 per centdoes not indicate a very high level ofurbanisation. For example the whole of theformer West Germany is only about 12 percent urbanised (Best, 1981) .Even if people in the South East are

willing to concede that there might besome room for further urban developmentin the region, they are then likely to arguethat this development should be divertedto the North. The South, it is felt, is more

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highly urbanised than the North . Now thetrouble with this argument is that theNorth West, which is 26 per cent urban-ised, is in fact the most urbanised region inthe country. Whilst the South East is, as Ihave indicated, 19 per cent urbanised, themain reason for this relatively high propor-tion is the existence of London at thecentre of the region . As one moves outwardfrom London, the outer South East andtwo regions bordering the South East-theSouth West and East Anglia-are rela-tively non-urbanised. It is therefore notclear why urban development should besteered away from the outer South East,the South West and East Anglia towardsthe northern regions, which are at least asurbanised if not more so .

Finally, even if it is conceded that thereis room for urban development and thatthe regions in the South are not heavilyurbanised relative to the more northerlyregions, it is likely to be argued thatcontrols are necessary to prevent develop-ment in the South because if controls wererelaxed then the whole region would beurbanised. The hyperbolic clich6 is that"the whole of the South East would becovered with tarmac". This argument hasbeen effectively dealt with by my colleag-ues Paul Cheshire and Stephen Sheppardat the University of Reading . Theyshowed, using a fairly sophisticated econo-metric model, that in the absence ofinmigration if there were no controls in theSouth East the proportion of the areawhich was urbanised might in the verylong run increase to about 28 per cent, sothat the region would still be 72 per centrural. Virtually all of this increase in thearea would actually be an increase ingarden space, and so would not be anincrease in the area under housing exceptin the sense that land would be describedas developed because it was includedwithin people's gardens (Cheshire andSheppard, 1989) .

Now even if the evidence shows that theSouth East is not over-urbanised, the ques-tion arises as to why people believe this

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myth of new development ; why do peoplebelieve, as many seem to, that the SouthEast is more urban than rural? I havethought for some time about this to try tofind a rational answer . In the end I seem tohave come up with not one but fivepossible reasons .

The first reason is that most people,particularly Londoners, live in towns, donot often go out of towns and, if they do,tend to move between towns. What theysee all the time, therefore, is an urban area .Indeed, as we have indicated it is ratherdifficult to see anything else. Because ruraldevelopment is not generally allowed, peo-ple are, in effect, prevented from living inthe country and therefore do not see verymuch of it in their everyday life. Sincepeople live in towns and see urban areas allthe time they believe that this is actuallywhat the whole of the South East must belike.

The second reason is that, even if peopleget out of the cities and towns in whichthey live and work, the way in whichtransport routes are built means that theyrarely get out of sight of urban areas .Roads and railways follow urban corridorsbecause the major traffic flows, for whichthey cater, run along these corridors . Forexample, if one travels west from Londonby rail from Paddington or by road alongthe M4 one travels initially through or pastSlough and Maidenhead and then to Read-ing. Other routes might possibly avoidthese urban areas but would not be used byso many people . Moreover, the situation isaccentuated by the way in which motor-ways have been used to define planningboundaries for urban development . So, onthis western route out of London the M4 isused to define the southern boundary ofSlough and then Maidenhead and then thesouthern boundary of Reading. Thus theplanning system allows urban develop-ment along one side of the motorway, andthen prevents it on the other side . Anyonetravelling along the motorway thereforeperceives a high degree of urban develop-ment. Indeed, because of the use of the M4

as an urban boundary it has been suggestedby one developer, whether seriously or not,that the M4 should be diverted to a moresoutherly route so that more land to thesouth of Reading could be used fordevelopment!

The third, and I think the main, reasonwhy people believe that the South East ismore developed than in fact it is, isbecause of their perception of space. Onehas to distinguish between distance on theground and the time spent travelling thatdistance. As people travel out of theirtowns and cities and through the country,what they perceive for most of the time isan urban area because travel in urban areasis slower than travel through rural areas . Ifyou drive across the South East, more thanhalf the time would be spent travelling inan urban area . When I travelled to Cam-bridge from London to give the DenmanLecture, the journey took about an hourand a quarter, but approximately half anhour was spent getting out of the Londonsuburbs and getting in through the Cam-bridge suburbs . Only three-quarters of anhour was spent on the motorway travellingthe intervening distance through ruralareas. But more than 60 per cent of thejourney was through rural areas-indeedthe proportion was probably nearer 90 percent. It seems to me that people have ineffect a time map, a mental map with time,not distance, contours . Even though per-haps less than 20 per cent of the landacross which one travels may be urbanised,because travel is slower through urbanareas it may take more than half the timeand therefore people perceive that the areathrough which they travel is more urban-ised than it is.

The fourth reason why people perceivethe pressure from development to begreater than it is, is because of the way theplanning system concentrates applicationsfor development into particular areas . Thisis very evident in the vicinity of Reading .To the west of Reading and to its norththere is an Area of Outstanding NaturalBeauty, the North Wessex Downs running

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into the Chilterns. Every developer knowsthat he will not get permission for anymajor development in this area . To theeast of Reading, in east Berkshire, isLondon's green belt and every developerknows that there is very little chance ofobtaining permission for development inany area that is designated as green belt .Thus in Berkshire the area where one ismost likely to obtain permission for devel-opment is central Berkshire, south ofReading. To the south of this, in north-eastHampshire, where there has also beenconsiderable pressure for urban develop-ment in the past, the area is also boundedby green belt to the east . Then again to thesouth of this there are the Surrey hills andthe North Downs, both Areas of Outstand-ing Natural Beauty, so that once again thearea where development might occur ishighly bounded. To the west and south-west of London, therefore, the number oflocations where one might get permissionfor development is rather small. The resultis that the applications for developmentare concentrated into these areas, which,because they are not green belt and notAreas of Outstanding Natural Beauty, arewhere most of the existing population liveanyway. Therefore the population per-ceives that there is considerable pressurefor development in the area around them,and they assume that there is a similarpressure for development over the wholeof the rest of the region.Finally, the fifth reason why people

believe the `myth of over-development' isthat this view is propagated by the agricul-tural and rural interests . After all, if peopleliving in the towns and cities hear the ruralresidents talking about "preserving theremnants of the countryside", or preserv-ing "two fields behind our house in orderthat future generations may know what afield looks like", then the urban popula-tion, presuming the rural population toknow something at least about the country-side, are likely to accept their argumentthat the countryside is under the threat oftotal destruction .

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The Agricultural and Rural InterestsThere are two alternative theories of eco-nomic regulation . The first, which derivesfrom Pigou, holds that economic regula-tion should be designed to ensure themaximisation of human economic welfareso that policies are implemented to bal-ance the social costs and social benefits oftheir consequences . If this `public interest'view of British town planning were correctthen the restraints on development wouldreflect the fact that in the view ofthe population the social costs of furtherdevelopment would exceed the socialbenefits .

An alternative view of economic regula-tion was put forward by George Stigler andRichard Posner in the early 1970s (Stigler,1971 ; Posner, 1974) . According to thisview economic interests seek economicregulation of a kind which benefits them,and that where there is any kind ofregulation it is necessary to see who theregulation benefits in order to appreciate inwhose interest the system of regulationmight have been set up. If we take this viewand look at who benefits from the planningsystem, then it could be argued that thesystem derives from and benefits the in-terests of those working in agriculture orliving in rural areas. A substantial body ofevidence would support this view . Thepublic interest view that we have justdiscussed would argue that the planningsystem is trying to balance the preservationof the rural environment against the costsinvolved in increased development in ruralareas which could affect the environment .Yet the planning system is not set up toprotect the countryside . Almost the reverseis true. There is certainly a case to arguethat in fact it is set up almost at the behestor to protect the position of the agricultu-ral and rural interests, and this is not thesame thing as protecting the countryside .After all, the Town and Country PlanningActs do not actually apply to agriculturaldevelopment . You can set up farm build-ings-develop piggeries or construct corru-

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gated iron barns or any buildings which arenecessary to agricultural purposes-with-out obtaining planning permission . Inother words you can put up the most`monstrous carbuncle' in the countrysidewithout planning permission . What youcannot do is put up a house, even thoughthe house may look considerably betterthan the corrugated iron shed which mightotherwise stand in its place .

Moreover the lack of planning controlover rural development would appear partof a general policy which allows ruralchange and prevents urban change . Eventhough the population may favour thepreservation of the rural environment,many farming activities that alter thecountryside, for example stripping outhedges, have been subsidised and generallyencouraged. Bowers and Cheshire havedocumented the way in which agriculturalpolicy has actually led to the deteriorationof the rural environment (Bowers andCheshire, 1983). Even now, when agricul-ture is in surplus, and when the possibilityof setting aside land from agricultural useis being seriously discussed, there arevirtually no planning controls on agricultu-ral development . If you stop to think aboutit this is really a rather odd situation .Despite a general view that the Town andCountry Planning Acts are meant to pres-erve the rural environment, agriculturaldevelopment is uncontrolled . The Acts aredesigned to control development in urbanareas, and to prevent urban developmentin rural areas, but to leave development byexisting rural interests uncontrolled.

It should also be noted that the ruralinterest which benefits from this situationhas changed over the years. In the 1940sthere was an overwhelming national needto increase agricultural output, but overthe years two changes have occurred .Firstly, there has been a massive increasein agricultural output . In view of this itdoes not seem to be at all necessary toencourage further increases in agriculturaloutput which may merely be stocked bythe European Community and eventually

dumped . Secondly, the character of therural population has changed . The numberof people employed in agriculture hasfallen drastically, from approximately 10per cent of the working population in 1947to about 2-3 per cent now . Thus astransport costs have fallen and incomeshave increased, there has been a change inthe character of village life as middle-income commuters and second home own-ers have moved in . The villages have beengentrified; demand by commuters and sec-ond home owners has been for a nice housein a pretty village. Often two labourers'cottages have been put together to formone of a size regarded as adequate. Inconsequence the demand for this ruralhousing has increased while the supply hasbeen restricted, so that house prices inthese villages have risen and houses havebecome too expensive for lower-incomehouseholds . Indeed, recent reports talk of aconsiderable rural housing shortage. Asthis rural housing has become too expen-sive for lower-income households the localemployees have been forced to commutefrom housing estates providing cheaperhousing in nearby towns . At one extremesome local inhabitants in Wales haveresponded by fire-bombing the homes ofEnglish second home owners whom theyregard as interlopers. And elsewhere, inEngland, the newcomers, the gentrifiers,the Mrs Snells of Ambridge, have beenthose most fiercely opposed to any newdevelopment which might spoil the amen-ity in which they have invested throughtheir purchase of a house in the country.

As an aside one might ask why there is somuch opposition to the idea of permittingindividual houses in the country . I dis-cussed this once with Professor PatsyHealey, formerly of Oxford Polytechnicand now at the University of Newcastle,and who has therefore been involved withtwo of the largest schools of town planningin the country . In her view it was not aplanning policy that was taught in planningschools. It seemed to be something thatstudents, having graduated, absorbed `on

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the job', and both she and I wondered whythis view was so ingrained.

To my mind it seems to be a question ofaesthetics . Yet it does not seem to accordwith any romantic vision of the Englishcountryside as wilderness . After all theEnglish countryside is certainly man-madeand could even be described in some casesas hand-made, but it is certainly not awilderness. Nor does the ideal Englishlandscape exclude buildings if one viewsthis as exemplified in English landscapepaintings. Since I started thinking aboutthis problem and looking closely at land-scape paintings, it has seemed to me thereverse is true . One always sees a dwellingin a picture, usually at some focal point.The aesthetic criteria therefore seem to bethat there actually should be a dwelling inthe view in order to improve it. Yet we stillseek to exclude isolated dwellings. In theend I concluded that the aesthetic criteriabeing obeyed were those of the Englishlandscape gardener. We see it in the waythe English landowner in the 18th centurydemolished the village adjacent to themanor house in order to create a parkaround his house. The villagers, be itnoted, did not have any say in the matter.Their views did not count. The idea wasto create an empty landscape aroundthe owner's house, although some ruin,grotto or temple might be constructed toprovide a focus for the view, but withoutinhabitants .

Finally, one should note that there is aparadox in that although the English seemto be so against housing in rural areas inEngland they seem quite happy to acceptthe idea in other countries . The Englishwill go to Tuscany on holiday or to live .They will find that it is rather difficult tofind a location anywhere without a housein the view and yet still regard the Tuscanlandscape as beautiful. They might go toSwitzerland where they would find, scat-tered across the mountainside, both housesand villages and yet still regard the Swisslandscape as beautiful. I am not quite clearwhy what is apparently beautiful elsewhere

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is worth paying an enormous price toavoid in this country .

Political ImbalanceThe views of the agricultural and ruralinterests, and indeed the views of existingurban dwellers, would not be effective inpreventing development if it were not forthe political situation and the way theplanning system operates . The positionwith respect to any proposed developmentis that the existing residents have votes,and can put pressure on their local author-ity to refuse permission for the develop-ment. If it goes to appeal then they can putpressure on the Secretary of State to call itin and reject it . They can exert thispressure through their councillors andMembers of Parliament, and in variousways, and their view that the proposeddevelopment will affect them in a negativeway will therefore carry considerableweight. But the views of the people whomight benefit from the development carrylittle weight. Newcomers do not havevotes; the people who might move into thedevelopment are unidentified and almostunrepresented. They are represented at theenquiry only by the developer and by theowners of the land who seek permission forthe houses to be built for them, who can berepresented as acting solely from motivesof greed and intending to destroy theenvironment for the sake of a quick buck.The political system therefore does notactually balance the advantages and disad-vantages of development in the way thatthe public interest theory of economicregulation suggests . The political systemalways favours the existing residents .

To illustrate what I mean by this, sup-pose one took an existing village, perhapsone which was a Conservation Area, andconsidered what would happen if it wasproposed that this village should be demol-ished in order to create an unspoilt piece ofEnglish landscape. Clearly there would bean uproar and the residents of the existingvillage would be leading a campaign

ALAN W. EVANS

against this proposal on the grounds thattheir village was attractive and that theyliked living there, etc . Now suppose thisvillage had never existed, and it wasproposed that such a village should now bebuilt; then the residents who, if the villageexisted, would be leading the battle toretain it, would not now be identifiable .The only people represented in any inquirywould be those who lived nearby . They, ofcourse, would be against the ruination ofthis unspoilt piece of English countryside,etc. even if what was proposed was asattractive as a village in a ConservationArea. The nearby residents would perceiveit, nevertheless, as resulting in a reductionin the quality of their environment. Thusthere is an imbalance-the situation isalways in favour of the status quo .

Of course to some extent the imbalanceresults from pure conservatism . Take, forexample, the situation with regard to theSettle viaduct in North Yorkshire . At themoment there is a proposal that this railviaduct across a valley in North Yorkshiremight be demolished . As a result thereexists a group pressing to retain this via-duct as an attractive feature of the valley .But can you imagine what the situationwould have been if in fact there had beenno viaduct and British Rail was proposingto build a new one across the valley? Itdoes not need much imagination to believethat the result would have been consider-able pressure, indeed uproar, and protestsabout the invasion of one of the lastunspoilt valleys in northern England by anintrusive piece of industrial engineering,etc .

Curiously enough, I have only comeacross one recent case where the idea ofunspoilt English countryside was pursuedto its logical conclusion, i .e. the demolitionof an existing building . A lady in Yorkshiredemolished a house adjacent to hers, be-cause she said it spoilt her view. Aninteresting feature of this case is thatShelter, the housing charity and pressuregroup, protested about the loss of a house .It occurred to me to wonder why Shelter

did not complain, has not complained, andis not on record as complaining, about thevarious planning refusals of rather moresubstantial amounts of housing around thecountry. After all every planning refusalresults in a house which is not being builtand in some way increases the price ofhousing. It seems to me that logicallyShelter should also be complaining aboutplanning refusals, since these also reducethe quantity of housing available .

Now bearing in mind that newcomers donot have votes, it is worth looking at theway in which the planning system operatesand what the consequences are in respectof the form that development takes . Witheach proposal for development the resi-dents of the local area attempt to create acoalition to block that development, and aswe have indicated the position of theincomers, the possible newcomers, is soweak politically that it is probable that if itwere left to the lowest level of localauthorities there would be little new devel-opment because each proposal would beblocked at the local level. Because of thisthe Department of the Environment for-mulates proposals as to how many newdwellings are going to be needed in thefuture to accommodate the new house-holds. Having calculated the number ofhouseholds likely to exist the Departmenttells each local authority how many dwell-ings have to be built in its area . What thenhappens is that local authorities attempt tominimise the opposition to the amount ofdevelopment which they are going to haveto allow, and this alters the form ofdevelopment.

I would suggest that there are at leastthree ways in which the requirement thatlocal authorities build a certain number ofdwellings interacts with the way in whichpressure groups operate to try and blockdevelopment, each of which creates asituation in which the new built environ-ment is rather worse for those who move into the new housing than it otherwise mightbe. The first of these I call Sardines afterthe children's game. That game, you may

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remember, involves trying to pack as manypeople as possible into a given space .

What happens in the planning version ofSardines is that the local authority, be-cause it realises that any expansion of thearea of development will be opposed, triesto minimise the extent of the opposition bylimiting the area of land over which devel-opment occurs, and it can only do this, andstill accommodate the numbers the De-partment requires, by increasing the den-sity of development on the sites whichhave been zoned for development. Thusthe local authority, if asked to providemore dwellings by the Department, re-sponds by simply increasing the density ofdevelopment on the sites which have beenzoned for development . The high demandfor housing means this is economicallyfeasible. The new residents have costsimposed upon them because they are livingat a higher density than they would other-wise want to; on the other hand, theexisting residents will accept the situationbecause the development is concentratedinto a particular location and not spreadaround, whilst of course complainingabout the nature of the urban developmentand expressing their determination to pre-vent any further development of that kind.Along with this we have the second

situation, which I call Eeyore s GloomyPlace. Eeyore's Gloomy Place, you mayremember from the stories of Winnie thePooh, was a dark and boggy corner of theforest. In the planning version a ratherpoor area of land which is not highlyregarded by anyone in the area becomesthe most likely site for development, for ifit is developed relatively few people willobject. Indeed the worse the site environ-mentally, the less likely it is that develop-ment will be opposed by the existingresidents. It follows that, since the localauthority has to zone some land for resi-dential development in response to theDepartment's demands, the answer to itsproblem is to zone sites for developmentwhere the environment is rather poor. Afavourite is land next to the railway or

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between the railway and a main road. Noone is going to object very strenuously tosuch a site being developed. The fact thatthe environment for those who move in israther poorer than it might have been if thedevelopment had been located somewhereelse if of course immaterial because, as Ihave indicated, newcomers do not havevotes, and the object is to minimise theobjections of existing residents.

The third case I call The Faustian Pact .In planning terms this is a pact betweenone large developer and a local authority toput up one very large, high-density devel-opment. This large development will pro-vide in one single location all, or virtuallyall, the housing which the local authorityhas been enjoined by the Department toprovide in its area. In this way the localauthority can solve its problems withminimal political opposition, because oncethis single development has been steeredthrough, then, if there are any futureplanning applications for development inthe area, the local authority can opposethem by using the argument that no morehousing is needed because all that isnecessary, as requested by the Depart-ment, has been provided in this singledevelopment. Thus the local authority ishappy: it needs to zone no more land and itcan oppose, on behalf of existing residents,all future proposals for development . Thedeveloper and the owner of the land arehappy because, having negotiated onelarge, high-density development on th site,both make a considerable profit. Andfinally the local authority will be evenhappier if the land which is developed island owned by the local authority. Ofcourse the new residents might have pre-ferred to live in a better environment thangiven on a large housing estate . They mighthave preferred something else-but thenthey do not have votes . And of course theresidents of the commuter villages roundabout who do have votes are extremelyhappy because the local authority is resist-ing development pressures on their behalf,and they will, of course, regard this new,

ALAN W. EVANS

large, high-density development as pre-cisely the sort of thing they are opposing .

ConclusionsI shall now try to draw together the threadsof this discussion. There has been anincreased demand for land and housingbecause of an increasing population, anincreasing number of households, risingincomes and the tax advantages of owner-occupation. There has been a restrictedsupply of land for housing, and I haveargued that there appear to be three rea-sons for this . Firstly, the British populationbelieve it is necessary . They do not recog-nise the social costs and, in my view, over-estimate the extent of urban development .The second reason is that the existingsituation is approved by the agriculturaland rural interests which it serves . Finally,and most importantly, there is an imba-lance in the political system, which resultsin the existing residents being able toprotect their environment, whilst possiblenew residents do not have votes. Theconsequence is the description of recenturban development as comprising the con-struction of `rabbit hutches on postagestamps', the term I have used in the title . I

All this seems paradoxical if you con-sider the aims of the founders of townplanning in this country. Their idea oftown planning was to get people out of thecities and into more rural areas where theywould have space to live and to breathe ;that people should have houses and gar-dens and live in garden cities. In the late20th century it would seem that the aim oftown planning is to try and push peopleback into the cities. But is this really whatwe want?Of course, in this paper I have only

really dealt with the situation as regardsresidential development. Development re-strictions have also affected industrial andcommercial development . There have alsobeen macro-economic consequences . Thehigh price of land for industry results indeindustrialisation, particularly in south-

em England. Rising house prices and highland prices result in low levels of savingand push up the rate of inflation, a processwhich has been investigated by JohnMuellbauer and his colleagues (Bover eta!., 1989). The high price of housing in thiscountry has caused many people to importhousing services by buying homes, particu-larly second homes, abroad . This has beenvery noticeable in the last few years aspeople in southern England have tried tobuy houses in France, where house pricesare half those in southern England. Thisresults in the export of capital which mightpossibly be better invested in this country .Finally, the high price of land and housingmeans that obtaining planning permissionis itself financially profitable. This resultsin what economists call `rent seeking ex-penditure' as developers spend moneytrying to obtain planning permission . Thisexpenditure results in no useful economicbenefit ; as far as the economic system isconcerned, it is a deadweight loss.

Now, how do we deal with this situation ;what can be done? The suggestion that Imade in the Institute of Economic Affairspaper No Room! No Room! (Evans, 1988)was that it might be possible to allow thedevelopers to make what economists call`side payments' to compensate objectors . Ifthe objectors feel that they are sufferingfrom the proposed development then theycould be compensated, with an agreementbeing reached in which compensation ispaid for the reduction in the quality oftheir environment. Unfortunately thislooks a little like bribery and for thatreason this solution would probably not beacceptable. Nevertheless some move inthis direction has occurred with the spreadof planning gain agreements by which, ifthey obtain permission, developers agreeto provide or pay for various amenitieswhich may benefit local residents . The factthat compensation might work is indicatedby an example I came across recently inKenton, in north-west London . For someyears Sainsbury's has been trying to build asupermarket there against strong opposi-

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tion by local residents . Only the weekbefore the delivery of the Denman Lectureit was announced that some local residentshad agreed terms with Sainsbury'swhereby the firm would buy their homes ata price 20 per cent above the market valuein order, allegedly, to provide increased carparking space, and it was reported that thelocal home owners were deciding whetherthis would mean that they would supportthe Sainsbury's proposal . In other words, ifthe price was high enough to compensatethem for having to move they would bewilling to move and also to support theproposed development.

A second possibility is that there mightbe a firmer lead from the centre, from theDepartment of the Environment, directinglocal authorities to increase the supply ofland. However, I regard this as politicallyunlikely because the Department is nowbidding for the green vote . Paradoxically,of course it seems odd that rural land isregarded as better ecologically than backgardens, because in fact the way in whichthe modem farmer farms the land resultsin monoculture-the only thing that isallowed to be grown in the field is the singleproduct which it is intended should begrown. Pesticides, insecticides, fungicides,etc. are used to eliminate all other vegeta-tion and animal life. If you want to findfrogs you are more likely to find them inback gardens in suburbs than in the coun-try and the intensive development of agri-cultural land is one reason why, forexample, foxes and magpies have beenmoving into the suburbs . The countrysideis more hostile to wildlife .A third possibility is to attempt to

reduce the demand for housing . This de-mand is artificially inflated . As I indicatedat the beginning, a major reason for theincreased demand for housing is. the extentof the tax advantages of owner-occupation,and it is worthwhile listing what the taxadvantages are . There is mortgage interestrelief on loans up to E30000 ; there is notax on what economists would call theimputed income from the investment in

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housing-Schedule A, which was such atax, was abolished in 1961 ; there is novalue added tax on housing (except onextensions); there is no capital gains tax onhousing; and finally, since 1 April 1990 inEngland and Wales (and 1 April 1989 inScotland) there have been no rates onhousing. The sole change in the tax systemwhich might result in a reduction in the .demand for housing is the double commu-nity charge on second homes, but theneven this may simply result in people beingmore likely to buy their homes in France .Now, to put it no more strongly, it seemsparadoxical that on the one hand we have aplanning system which many people be-lieve is aiming correctly to restrict theamount of land which is used for housing,while, on the other hand, we have a taxsystem which encourages people to spendmoney on housing. So we restrict supplyand we increase demand . Now it is virtu-ally self-evident that these incentiveswhich increase demand, given the supplyrestrictions, merely result in increasedhouse prices. (The argument' one has heardrecently that because of high house pricesmortgage interest relief should be in-creased would indicate that some peoplebelieve that fires can be fought by pouringoil on them .)

If asked whether I anticipate any changein the situation in the 1990s, pessimisti-cally I have to answer that I do not . The1990s will re-run the 1980s; the housingmarket will be depressed for 2 or 3 years,and everyone will believe that the onlyproblem is that of stimulating the demandfor housing. Somewhere around 1992 anew boom will start and a year or so afterthat people will begin to worry about theavailability of housing. There may be somesort of rethink of the position towards theend of that boom in 1995-96 but I am

ALAN W. EVANS

afraid that when that boom ends theproblem will once again be forgotten .

Note

1 . Giving credit where it is due, the phraseoriginated with Lord Northfield, Chairmanof Consortium Developments Ltd .

References

BALL, M. (1983) Housing Policy and EconomicPower. London: Methuen .

BEST, R.H. (1981) Land Use and Living Space.London: Methuen.

BOVER, 0., MUELLBAUER, J. and MURPHY, A .(1989) Housing, wages and UK labour mar-kets, Oxford Bulletin ofEconomics and Statis-tics, 51, pp. 97-136 .

BOWERS, J.K. and CHESHIRE, P. (1983) Agricul-ture, the Countryside and Land Use: AnEconomic Critique. London: Methuen .

CHESHIRE, P. and SHEPPARD, S . (1989) Britishplanning policy and access to housing : someempirical estimates, Urban Studies, 26, pp .469-485 .

EVANS, A.W. (1973) The Economics ofResiden-tial Location . London: Macmillan.

EvANS, A.W. (1985) Urban Economics . Oxford :Basil Blackwell.

EvANs, A.W. (1987) House Prices and LandPrices in the South East-A Review . London :The Housebuilders Federation .

EVANS, A.W. (1988) No Room! No Room!London: Institute of Economic Affairs .

Harrow Observer (1989) 16 March, p. 9 .HOUSE OF COMMONS (1983) Green Belt and Landfor Housing: Appendices, First Report fromthe Environment Committee, Session1983-84. HC 275. London: HMSO.

NATIONAL HOUSE-BUILDING COUNCIL (1990) Pri-vate House Building Statistics. London: Na-tional House-building Council .

POSNER, R.A. (1974) Theories of economicregulation, Bell Journal of Economics andManagement Science, 5, pp . 335-358 .

STIGLER, G.J. (1973) The theory of economicregulation, Bell Journal of Economics andManagement Science, 2, pp. 3-21 .

TYM, R. & PARTNERS (1987) Land Used forResidential Development in the South East:Summary Report. London: Roger Tym &Partners .