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Rethinking Planning: The Interface with Spatial Economic Forces

Professor Colin Jones

Professor Colin Jones

The role of planning has been pared back in England since 2010 with the regional tier of planning abolished.  Planning is under threat from a localism policy agenda that on the one hand seems to offer greater scope for NIMBYISM while at the same time in some places provides the opportunity for unfettered market forces. It is the latest episode in a continuing story of the changing institutional role of planning that has in particular seen the balance between the hegemony of the free market or planning regulation seesaw.  The reasons are partly ideological driven: at the one extreme liberal economics asserts that planning stifles enterprise and economic growth and at the other planning is seen as protecting communities from the ravages of the market.  In the middle the precise relationship between planning and market forces is fuddled. In its origins planning sought to address the unsatisfactory living conditions in cities created by the unbridled market and developed Utopian ideas about social justice and the promotion of garden cities.  Some planners see the solution to the present malaise of planning in a return to a reiteration of these ideals.

While the concept of planning has a broad consensus particular policies are often much more politically contentious, and planners are easy targets when a community is unhappy about land use market outcomes.  Hence planning is seen as the scapegoat for the decline of the high streets or too many/not enough houses and so on.  Is this fair? The problem is that theories of planning, such as addressing market failure, focus on the generic activity and provide little or no basis for policies.  Policies are values or social goals driven and often determined by a government’s political complexion.  The relationship between planning policies and the market is at the implicit heart of most debates about the efficacy of planning.  Planning policies are clearly designed to limit market forces but planners are often reluctant to acknowledge this and economists have regularly criticised the lack of market content and economic knowledge in planning policies.  The debate has been framed by economists narrowly in terms of the (negative) impact of planning on (market) outcomes/property values.  In my recently published paper in Land Use Policy I ask the opposite question, to what extent do market forces limit planning policies?  This is a much more fundamental issue for planning.

In particular the paper examines the relationship between the efficacy of different planning policies and long term spatial market forces which have been dominated by decentralisation/suburbanisation over the last hundred years.  Planning activities can be characterised as shaping, regulating and stimulating the market to achieve social goals.   However, this is too simplistic and optimistic.  Planning has been most successful when it has been shaping urban growth and decentralisation, in other words when it is has been working with the market and shaping it through for example the post World War II new town programme.  It is a fundamentally different task to shape market flows as opposed to stem market flows and the probability of success is very different.

This issue can be seen by looking at urban regeneration/containment strategies that have been deliberately designed to stem population decline and decentralisation trends and have held broad sway since the late 1970s.  Citywide structure (strategic) plans have sought to maintain the existing retail hierarchy status quo, especially town centres, and restrict off-centre development. From 1996 planning permissions for new out of town shopping centres have also faced a sterner set of sequential test hurdles before such development is permitted.  Yet every town and city centre is now encircled by retail parks and out of town centres reflecting consumer demand as retail catchment areas change with the growth of car usage and suburbanisation.  New flatter retail hierarchies have evolved albeit shaped by the planning system but in a chaotic manner.

This failure to stem market driven decentralisation forces by a planning system aiming to preserve the status quo of a centralised retail hierarchy has been almost Canute like, trying to stem the tide of history, but also they have lacked a theoretical base.  It is not planning but misplaced conservation and has parallels in trying to keep an agricultural landscape created in a previous technological age.  A more effective strategic approach for example to retail planning would have been not to attempt to fossilise the hierarchy of shopping centres of the 1970s, but to work with spatial economic changes to develop a new hierarchy over time that met the needs of the population in an environmentally and socially  systematic way.

In the case of housing urban containment planning policies have arguably been even more of a failure.  From the early 1990s a series of government strategy documents promoted house building on brownfield (previously developed) land rather than greenfield sites.  The policy has been successful in increasing the percentage of new houses built on brownfield sites to over 70% but supply has been held back as a consequence.  The number of new houses built has fallen substantially and supply has not kept pace with the demand generated by demographic trends pushing up house prices in real terms.  Attempts in the latter half of the last decade to make planning for housing more market responsive failed partly because of the contradiction between market forces pushing demand for housing with gardens and containment policies that promote higher densities.

Particular planning policies will shape the form of urban decentralisation but the fundamental issue of the questionable long term efficacy of containment policies still applies.  Planning policies need to find a new historic compromise with market forces, and the strength of decentralisation.  The UK new towns programme is now universally accepted as a great planning success but it is less widely recognised as flowing with market decentralisation forces.  The experience of retailing suggests that planning cannot entirely stop fundamental market forces and constraining policies have only shaped retail decentralisation in a rather unsystematic way.  At the same time there are failing high streets that do not meet the needs of customers and increase the cost of living.  The supply of housing has not met growing demand for a generation.

Planning is not working in its own terms at the macro-urban scale, and it is not simply down to the way policy is implemented.  Policies suffer from the lack of a systematic and realistic interface with land use markets and this stems partly from the skills base/education of planners.  The built environment should not just be seen in physical and community terms but also as a series of inter-related land use (sub) markets.  There is a need to recognise at its core that planning not only regulates/constrains the property market but it also shapes and stimulates it.  Planning is most successful when it is shaping urban growth and decentralisation but has yet to succeed at the fundamentally different and more difficult task to stem market flows.  In a changing, rather than static, spatial economy planners need the motivation, strategic understanding and means to work with the market to produce desired social outcomes.  The localism agenda is a step back in addressing this challenge.  Planning needs a rethink.

Read more in:

Jones C (2014) “Land Use Planning Policies and Market Forces: Utopian Aspirations Thwarted?Land Use Policy, 38, 573-579.

Colin’s previous blogs include:

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