Abstract

The housing shortage in our cities, the North-South divide, and rising wealth
inequality are three of the greatest challenges facing Britain today. Public debate
has until now thought about these problems as separate issues. But addressing
them requires understanding the connections between all three, and how
political choices are deepening these inequalities.
As the housing crisis in Britain’s most prosperous cities has grown, so has the
wealth of their homeowners. While local demand for housing is driven by the
strength of the local economy, supply, in contrast, does not respond to demand
or economic performance. The housing shortages caused by these planning
failures push up house prices in growing cities. This drives housing equity
growth for a few existing homeowners, fuels increasing housing costs for renters
and first-time buyers, widens regional inequality, and destabilizes the national
economy and the financial system.

The housing shortage in our cities, the North-South divide, and rising wealth inequality are three of the greatest challenges facing Britain today. Public debate has until now thought about these problems as separate issues. But addressing them requires understanding the connections between all three, and how political choices are deepening these inequalities.

As the housing crisis in Britain’s most prosperous cities has grown, so has the wealth of their homeowners. While local demand for housing is driven by the strength of the local economy, supply, in contrast, does not respond to demand or economic performance. The housing shortages caused by these planning failures push up house prices in growing cities. This drives housing equity growth for a few existing homeowners, fuels increasing housing costs for renters and first-time buyers, widens regional inequality, and destabilises the national economy and the financial system.

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Capital Cities

How the planning system creates housing shortages and drives wealth inequality

Author(s): Anthony Breach

Author(s)

Anthony Breach

Anthony Breach

Analyst Centre for Cities


authors website
Anthony works as part of the economics team for the Centre for Cities team, where he focuses on housing. He has also worked on research on commercial property in cities, services exports, productivity, and manufacturing. He also has a particular interest in lessons for UK cities from Japan and the countries of the former Soviet Union.

Anthony joined the Centre for Cities in April 2017. Before this he worked at the Fawcett Society as a Research Officer. Anthony has an MSc in Comparative Social Policy from the University of Oxford and a BA in Philosophy, Politics, and Economics from the University of Oxford.”



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