Private Planning and the Great Estates (5/5)

Conclusion

(This is Part V of my publication that I have split into five for Substack.)

See: Part I, Part II, Part III, Part IV

What lessons are to be learnt from the great estates and their role in the development and redevelopment of London?

The physical development of a city is not, as is often supposed, merely another aspect of its economic activity. Decisions on the use of land are absolutely fundamental to the way people live on it. The nature of property ownership, the extent of public control, the styles of streets and buildings, the whims, fashions and pecuniary ambitions of land holders, all dictate not just the city’s appearance but the social behaviour of its inhabitants.¹

The first lesson is historical, namely that within the inner-London estates there was something resembling the best ideals of urban planning. Through a series of legal mechanisms and pecuniary – and perhaps reputational – incentives, the estates, architects, builders and others composed some of the most impressive parts of urban London. The image of Victorian London teeming with disease and privation must be set against that of middle-class London. The dimensions of this historical lesson bleed over into institutional economics and the capacity of markets to create their own systems of governance. This is relevant to the second lesson from the history of the great estates, which is contemporary and comparative-institutional, namely that the estates form one aspect of a broader case study of soft-touch regulation interacting with dynamic market forces in a large city.

Across the developed world some of the most productive areas – that is, cities – are the most incapable of building more, which has sizeable and widespread ramifications. The living standards of those who can afford to live in them are affected by artificial scarcity of living space. More than this, the types of urban design prevented by regulation are the very ones most carbon friendly and associated with other sociological benefits.²

Economic theory and historical examples shed light on what would happen in different regulatory environments and thereby inform debate about this important topic. London, especially in the nineteenth and early twentieth centuries, offers an excellent case study for both historical and institutional reasons. Over this period London was the centre of the world and became its most populated city. Its continuing growth was unprecedented. Although it is still a global city and the largest in Europe, inner London is still significantly less populated than it was a century ago. This is related to the institutional point that the history of London allows observers to see the self-organising and self-regulating nature of individuals and markets. Both in development and redevelopment, the ability of private contracting to result in positive outcomes is much stronger than many would expect. With large landowners in particular, the internalisation of spillover effects gave positive results, such as provision of green space and aesthetically cohesive planning, while negative effects, such as odious trades, were prohibited. Much of this occurred in the shadow of government rules but was market rather than public-policy led, especially in areas with middle- and upper-class tenants. The peculiarities of the concentration of London landowning offers a clear illustration of the benefits of large-scale landowners that internalise many spillover effects and reduce transaction costs associated with redevelopment.

Lessons of and potential for intensification

Contemporary London faces a housing shortage. Despite the rise of remote work and the pandemic-induced decline in rents, rents in 2022 reached new heights. Relatedly, house prices within London and surrounding areas have grown faster than wages, and homeownership lies increasingly out of reach of even white-collar professionals. The political economy of the situation is difficult. The current system of land-use regulation asks existing homeowners to allow nearby house building while offering concentrated costs and at best diffuse benefits.³ Development often brings noise, more traffic and loss of open space while offering few benefits to the individual (despite larger social benefits). It is no wonder that new projects get bogged down, diluted and drowned. The political reality of extensive development is perhaps more difficult than that of urban intensification and regeneration in London. Recent regenerations include council estates and increasingly mixed-use developments built by, for example, British Land and London Docklands. Some see such actors as inheritors to the great-estate tradition.⁴ The continued shortage of everything from lab space to housing shows that this is not enough.

Policy advocates such as Samuel Hughes and Ben Southwood suggest new regulatory procedures to change the pay-offs facing stakeholders and replicate some of what incentivised the estates in the eighteenth and nineteenth centuries.⁵ They argue that their proposed rules:

offer a way of replicating effects [of the great estates] under modern conditions. As part of the block plan process, residents set a design code governing any permitted building. Because design is thus determined at the level of the neighbourhood rather than the individual plot, residents will be incentivised to maximise value across the neighbourhood as [a] whole – rather than maximising it on each individual plot, potentially to the detriment of its neighbours. Block plans, implemented through street votes, thus offer a middle way between an architectural free-for-all and the imposition of rules by the state, potentially yielding a generation of popular and beautiful urban architecture.⁶

As the authors note, estimates suggest that ‘if London were intensified to the densities of the historic areas of Paris within the Périphérique, it would accommodate around forty million people.’⁷It is not necessary to go to Paris to appreciate that some of the best-loved parts of London, built by the great estates, manage to combine density and liveability with economic and social benefits.

1. Simon Jenkins, Landlords to London: The Story of a Capital and its Growth (London: Constable, 1975), p. 1.

2. Ramana Gudipudi et al., ‘City Density and CO2 Efficiency’, Energy Policy 91 (April 2016), pp. 352–61; https://doi:10.1016/j.enpol.2016.01.015; Sam Bowman, John Myers and Ben Southwood, ‘The Housing Theory of Everything’, Works in Progress (blog), September 2021; https://www.worksinprogress.co/issue/the-housing-theory-of-everything.

3. See Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, MA and London: Harvard University Press, 1965).

4. Sarah Yates and Peter Murray, Great Estates: How London’s Landowners Shape the City (London: New London Architecture, 2013), p. 005.

5. Ben Southwood and Samuel Hughes, ‘Strong Suburbs’ (London: Policy Exchange, 2021), https://policyexchange.org.uk/wp-content/uploads/Strong-Suburbs.pdf; Ben Southwood and Samuel Hughes, ‘Create Mews’ (London: Create Streets, 2022), https://www.createstreets.com/wp-content/uploads/2022/02/Create-Mews.pdf.

6. Southwood and Hughes, ‘Create Mews’, p. 36.

7. Southwood and Hughes, ‘Create Mews’, p. 31.