Supporting planning and housing policy reform around the world
Research from the London School of Economics and Political Science (LSE) underpins policy reforms aimed at improving land and housing market efficiency and affordability. The research has led policy debates and informed public discussions across Australia, New Zealand, USA, Canada, Belgium, and the UK.
Issue
Housing affordability presents an urgent problem in many countries, especially for younger households in larger cities. LSE research was the first to recognise and rigorously estimate the impact of planning policies on the price, quality, and affordability of property. This was primarily achieved through the intentional constraint that these policies exerted on the supply of land for development.
Approach
Initial work was focused on the UK, and later extended to explore related constraints on the supply of housing elsewhere in the world. Research was undertaken on the effects of planning policies on house prices in the UK, the effects of tax incentives on acceptability of development, the effects of planning policies on UK productivity, and mortgage interest deduction in the USA.
Impact
Insights from the research have catalysed and informed public policy campaigns in the UK through meetings with ministers and presentations of the research, including at the Prime Minister’s Implementation Unit and the Department for Communities and Local Government (DCLG). Researchers have further maximised engagement with their work by publishing on blogs for non-academic audiences.
Work on the UK Stamp Duty Land Tax has also had a significant impact on public and policy debate, and has ultimately led to a reduction in the taxes paid by first-time buyers.
Ideas published by researchers at LSE, along with an accompanying letter to the then Chancellor and Secretary of State at DCLG, were instrumental in ensuring the reinstatement of the UK’s series on land prices, which had been previously discontinued in 2010.
The research provided supporting evidence for the reform of the USA Mortgage Interest Deduction (MID) policy. In 2017, the USA passed the Tax Cuts and Jobs Act, which led to a significant reduction in the cost of the MID, decreasing from USD 60 billion in 2017 to USD 25 billion in 2018.
It also provided evidence for the reform of the Mortgage Interest and Capital Deduction (MICD) policy in Flanders and Brussels. A review of the reform showed that reduction of the MICD lowered house prices and led to an increase in homeownership attainment.
More information:
Institution: London School of Economics and Political Science
Researchers: Professor Paul Cheshire, Professor Christian Hilber
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How to cite
Royal Geographical Society (with IBG) (2023) Supporting planning and housing policy reform around the world. Available at https://rgs.org/Supporting-planning-and-housing-policy-reform Last accessed on: <date>