Here is the solution on how to get Britain building the houses the country so desperately needs

The housing crisis in the UK requires bold, forward-thinking solutions that address the needs of all communities

Christopher Worrall is a housing columnist for LFF. He is on the Executive Committee of the Labour Housing Group, Co-Host of the Priced Out Podcast, and Chair of the Local Government and Housing Member Policy Group of the Fabian Society. 

The urgent need to address the UK’s housing crisis calls for innovative and inclusive solutions, particularly in the realm of affordable housing. As highlighted in the recent report Get Britain Building from the Fabian Society Member Policy Group on Local Government and Housing, critical elements like inclusive planning, innovative partnership models, and the introduction of Low-Income Housing Tax Credits (LIHTC) offer a practical way forward. By addressing these factors, policymakers can ensure that housing development is equitable, efficient, and sustainable.

The Get Britain Building report sponsored by Weston Homes was launched to a packed out room in Westminster on Monday 14^th October 2024 in Portcullis House. Having had to move to a larger room due to overbooking. Florence Eshalomi MP, recently elected Chair of Housing, Communities, and Local Government Committee, opened up the report launch with a passionate speech on the need to build more homes. Hosted by myself Chris Worrall and Adam Allnutt, the member policy group’s launch had over 250 RSVPs, highlighting the keen interest in the reports findings. It featured a collection of essays and contributions across community consultation, planning, innovative affordable housing funding mechanisms, and specialist housing to name all but a few. Set out below are some of the key contributions that included proprietary research, international lessons, and industry and advocacy expertise.

Inclusive Planning: Reaching Every Corner of the Community

One of the core failures of the current planning process is the exclusion of diverse community voices. As the case for inclusive planning contribution from Leeds Building Society and Public First highlights, public consultations tend to attract only a narrow, often unrepresentative segment of society, typically older and wealthier individuals who are more likely to oppose new developments. Tim Leunig stated at the launch the findings show how the current systems skewed participation stymies efforts to generate support for much-needed housing projects.

Chris Curtis MP’s contribution to the Get Britain Building report Weighing  Everyone’s Opinion Equally, emphasised the importance of representative polling in planning decisions. He notes that the current system favours vocal minority groups who are often older and wealthier, which are not representative of the broader community. He states that we have taken all the worst aspects of polling and applied it to the current planning regime. And that this needs to change.

Inclusive planning means rethinking consultation to ensure that all voices are heard, particularly those from underrepresented groups. These include renters, young people, low-income families, and those from minority communities. Innovative approaches, such as meeting people where they are—be it on social media, at local events, or through accessible online platforms like Give My View—can help close the gap. Additionally, simplifying planning documents and ensuring they are available in multiple languages can make the process less daunting and more accessible.

Harry Quartermain discussed at the launch LandTech’s platform and how such engagement can be enabled digitally, which was welcomed by former Cabinet Lead for Regeneration, Planning and Growth of Brent council Cllr Shama Tatler. Tatler demonstrated the best practices undertaken by Brent in some of their local neighbourhood plans that effectively engaged local Somali women’s networks.

Gemma Gallant from Iceni Projects, lent on her decade of experience working in local authorities in community consultation. She found that only when you get representative samples, by directly approaching the community, do we really find a broad range of opinion. At the moment the system fails to engage widely enough and puts up barriers to entry. Often requiring registration of accounts, long planning application reference numbers to use, alongside cumbersome local authority websites that do not make engagement accessible.

Stu Donovan and Oscar Sims’ contribution offered valuable lessons from New Zealand and Canada, where they found stark differences in support between self-selected voluntary consultation polls versus those that are more inclusive. This enabled the New Zealand government to take more radical approaches to planning reform that enabled more housebuilding that resulted in major improvements to housing affordability in Auckland.  

By embracing the recommended reforms, the UK government could make the planning process more democratic, representative and, ultimately, more effective. Local authorities would then have a clearer mandate to pursue the development of affordable housing, with the support of the wider community. Moreover, inclusive planning would reduce local opposition, a major barrier to development, as communities better understand the benefits that new homes could bring.

Innovative Partnership Models: Reducing Burden and Increasing Impact

Local authorities in the UK are facing significant financial strain, which limits their ability to invest in new housing projects. One solution proposed in the report is the use of innovative partnership models that spread the financial risk across public and private sectors. This approach not only eases the financial burden on local governments but also fosters greater investment in affordable housing.

A key aspect of this strategy is the potential for partnerships between housing associations, local councils, private developers, and investors. Such models enable local governments to collaborate with private-sector partners to fund and manage temporary and permanent housing solutions. These partnerships could involve the private sector taking on more of the upfront costs in exchange for long-term returns, making the financing of affordable housing more viable without overburdening the public purse.

Contributions from Matt Downie, CEO of Crisis, set out how there needs to be a range of solutions to set us on a path to a future free from homelessness, and welcomed the recommendations to explore innovative partnership models that consider how we can increase housing supply over decades, not just overnight. Contributions from Cllr Jack Shaw and Cllr Vanisha Solanki looked at the challenges faced by councils and the need to explore innovative housing solutions. Ike Mbamali of Prowgress set out their innovative partnership model that utilised a new take on housing benefit, which can be utilised as investment capital rather than an operational expense if used to acquire new or existing stock, which are then leased back to the council over 40 years and ceded back for a nominal amount at the end of the term.

Low-Income Housing Tax Credits (LIHTC): A Proven Model for Affordable Housing

The introduction of Low-Income Housing Tax Credits (LIHTC) to the UK could revolutionize the funding of affordable housing. Originating in the United States, LIHTC is a public-private partnership that incentivizes private investment in affordable housing by offering tax credits to developers. This program has been instrumental in the construction of millions of affordable housing units in the U.S. since its inception in 1986.

Under LIHTC, private developers receive tax credits in exchange for building or rehabilitating affordable rental properties. These credits can be sold to investors, generating equity for the project. This reduces the amount of debt needed to finance construction, which in turn lowers the rents that can be charged to tenants. Importantly, properties financed through LIHTC must remain affordable for at least 30 years, ensuring long-term affordability.

One of the major advantages of LIHTC is its “pay-for-success” model. Tax credits are only issued once the housing units are built and leased to eligible low-income tenants, ensuring that the private sector delivers on its commitments before public funds are expended. Furthermore, LIHTC compliance standards help maintain high housing quality, addressing a significant issue seen in other affordable housing programs.

Krista D’Allesandro, Senior Policy Advisor at the Pension and Lifetime Savings Association, set out the case for considering a new fiscal incentive utilising housing tax credits that could create a pipeline of investible assets. Vice President of ESG Equity Research at Berenberg Bank and Fabian Society Econ and Finance Network Secretary, Lauma Kalns-Timans, set out how sustainable investment initiatives could work hand in hand with LIHTC. She highlighted the severe drop in UK pension funds investing in the UK and set out how the programme could help overcome these issues.

Implementing LIHTC in the UK could help bridge the gap between the need for affordable housing and the financial limitations faced by developers and local authorities. Not only would it stimulate private investment in housing, but it would also encourage developers to create high-quality, affordable homes that remain accessible to low-income families for decades.

Chief Executive of the Home Builders Federation, Neil Jefferson, described the challenges faced with the current method of provision of homes for social rent, namely the section 106 system of developer contributions. He cited how homebuilders are currently being left in limbo with legal obligations to provide affordable housing but without any Registered Providers (RPs) to buy them due to the finances of such organisations. In particular, the current system risks failing to fund other forms of infrastructure if not seriously taken into consideration.

The report featured a number of US contributions from LIHTC experts. Notably, Mark Shelburne of Novogradac, Jenny Netzer, Elaine Magil, and Andrew Lozano from the Affordable Housing Tax Credit Coalition. Vic O’Brien and myself have long been proponents of bringing the Low-Income Housing Tax Credits to the UK. And now it appears to be more relevant than ever.

Overall the introduction of LIHTC could help the UK government reduce its reliance on direct subsidies, which have proven insufficient to meet the growing demand for affordable housing. By shifting to a tax-credit-based model, the government could mobilize much-needed private capital while maintaining oversight and ensuring that affordable housing is built where it is most needed. Ultimately, with a system that does not have to increase the public sector borrowing requirement.

Unlocking Affordable and Accessible Housing for an Ageing Population

In the Homes for Later Living section of the report authors such as Elaine Bailey and Emma Webster emphasised the critical need for affordable, accessible housing designed specifically for the UK’s growing elderly population. Speaking at the event, they highlighted the health, social, and economic benefits that specialist retirement housing can provide. Such as reducing isolation and healthcare costs, while also supporting local economies. Both stress that addressing barriers like the restrictiveness planning policies and increasing awareness of shared ownership models, such as the Older Persons Shared Ownership scheme run by Homes England, will improve housing options for older people.

Conclusion

The housing crisis in the UK requires bold, forward-thinking solutions that address the needs of all communities. By reforming the planning process to be more inclusive, adopting innovative partnership models to reduce financial strain, and introducing Low-Income Housing Tax Credits, the government can create a more robust, sustainable framework for affordable housing development. These approaches, as outlined in the report, offer a clear path forward to ensure that every person in the UK has access to a safe, affordable home. Now is the time for policymakers to act, embracing these recommendations to build a more equitable and prosperous society.