Works in Progress Podcast

- Hi, welcome to the
Works in Progress podcast.

I'm Sam, I'm here with Ben
Southwood and Samuel Hughes.

Samuel, what was the Great Downzoning?

- So historically cities grow in two ways.

Like putting it simply, they grow

outwards or they grow upwards.

Today, most cities around the
world still grow outwards.

In fact, there's like
massive outward expansion

of cities in most countries,

but in suburban areas, which
is most of the surface area

of cities, they don't really,
really go upwards anymore.

They tend to be regulatory constraints

that say once you built a
suburb at a low density, it has

to stay like that forever.

So it's completely novel.

Historically, it's all
changed since the late 19th

century and the present day.

So I call this process the Great
Downzoning process whereby

zoning restrictions
have gradually introduced

and lowered such that neighbourhoods

were frozen in place forever.

- And basically this happened what,

around the second World War or
before the Second World War?

- It's a bit more complex.

So it's starts in actually
the German Empire

and Austria-Hungary in
the late 19th century.

It spreads in the interwar
period to the United States,

Canada, then to Australia.

And then it comes in in Britain

and France, really in the
postwar period, quite a kind

of a strange way we can discuss later.

But it's proceeded by a kind

of private sector downzoning,
which happens much earlier.

That goes back into the 19th
and even the 18th centuries.

So the long story begins
in the sixteen, seventeen hundreds

with the first development

of like not really low density suburbia,

but at least like medium
density elite residential

suburbs in Britain.

And those have private

zoning rules pretty much
from the start names

that then gradually expands

around the world in the 19th century.

So Germany, France, United States, Canada,

they all develop low density suburbs

and they've all got, like, again,

pretty much from the start,

they're getting more sophisticated

and more detailed over time.

They've got private
zoning rules, covenants

that are restricting
density. Public zoning -

so the state restricting density

that comes in in the late
1800s in central Europe in

Germany and Austria, spreads

to North America British
Empire in mainly

the interwar period.

And then finally comes
in in kind of Britain

and France, mainly in I
think probably the forties,

fifties in the postwar period.

So it's the overall process

is pretty long.

But the short version
is like whenever low density

suburbia develops in a country
elite low density suburbia

develops in a country,

private zoning follows
pretty quickly after that.

And then public zoning, like
after the modern state emerges

and norms start shifting about what kind

of state intervention
is appropriate, it tends

to come fairly quickly when
private zoning mechanisms start

to fail or when low density
elite suburbia comes under

serious intensification pressure.

So the the key thing I've
learned like studying,

so the first thing to say
about the Great Downzoning,

like an amazingly under-discussed
underappreciated subject,

Americans write a bit
about the introduction

of zoning in the United States

and there's a bit of a kind
of classic literature on

how it arrived, but
Europeans don't really write

about it at all.

So most British

and French people, even if
they work on housing policy,

even if they work on
suburban densification

as a policy area, don't know
where's like rules against

densification when they started,

why they started, how they started.

So I've like kind

of gone from scratch when
I've been reading about this.

The first place where public zoning,

like the state putting
in zoning policy started

was probably, I can't quite
work out the first one.

The standard people
often say it's Frankfurt,

but there seem to be some
earlier ones like Dresden

and Budapest seem to maybe
have been earlier in the

1870s and 1880s.

And it's very much like German
speaking places that do it.

First they have maybe a more
interventionist tradition

of state government
may, maybe it goes back

to like the Prussian
state in the 18th century,

more authoritarian approach

to government in the 19th century.

The big thing I hadn't
appreciated at all is

that in pretty much
every country, downzoning

by the government is
proceeded by downzoning

by the private sector.

So what I mean by this
is in the middle ages,

cities do have suburbs,

but the suburbs are like
poverty stricken, mixed use.

Like basically they're where like

noxious industrial functions are placed

and where people who can't pay

to get into the city itself
have to have to live.

- They're actually outside the walls

in mediaeval times, right?

- Often it's like
- Shanty towns against the wall.

- It's the dangerous
place which will get burnt

by the authorities if the city's besieged

to avoid giving cover to the attackers.

So you live under constant threats

that the authorities might
burn your home down if the town

becomes is a town is in danger,

maybe you don't have like full protection

of law in these places, like bad places.

You don't want to be there
if you can possibly avoid it.

Then in the like basically England,

you start getting
something like modern suburbs

and the west end of
London is maybe the first

- The west end starts as a suburb.

- Well kind of, it's an elite
residential area built at

much lower densities.

It's exclusively, exclusively
for wealthy people

and exclusively for housing

and some kind of retail functions.

So it's like the key tests, it passes

and it starts as early
as the 17th century,

but really gets underway
in the 18th century

and that right from the beginning.

So that's where like
one big landowner says,

I'm gonna make this whole
neighbourhood into a

a sanctuary from the things
we don't like about urban life

and also maybe a sanctuary
from like the things

that we don't like about
mediaeval suburban life.

So we're not gonna have any
slaughter houses or brick kilns.

We are not gonna have any like
through, well little, as little

through traffic as possible

and the more
morally dubious side of it.

Basically we've
gotta try to avoid having

poor people living in this area

and they've got this challenge like

how do you preserve once
I've sold homes here,

sold plots here, like I can
sell them for house building

or I can build houses, but

how do I keep them in that use forever?

And in order to attract
really like wealthy buyers

to spend a lot of money
on this neighbourhood,

they're gonna want to guarantee

that the neighborhood's going to remain

as an elite residential
suburb into the medium term.

So what they do is they impose
covenants which are like kind

of like a contract where
not only the first buyer,

but all future buyers have to agree

to keep the house in basically
like in elite residential use

and in single ownership, right?

In single ownership often.

So as a slightly technical detail,

but often the original
landowner doesn't even build the

house, they sell it to
a house, a developer

to build the individual house.

So they often put in some
restrictions on what kind

of house can be built,
what it can be used for,

often a minimum price.

Sometimes they put in detailed
architectural restrictions,

sometimes they put in really
like minute stuff restrictions

on what pets you can have

or restrictions on where
you can hang the laundry

or any of the kind of things
that they think is going

to help preserve the
tone of the neighbourhood.

- One impression I got from
reading the novel, The Quincunx,

which I gather is by based
on very careful historical

research of the period, is
that everyone at this time

who was middle class was terrified

of their neighbourhood falling into penry

and becoming like a very
dangerous, unpleasant place

with 20 people cram to a room

and they gave the example of
the Devil's Acre in Westminster

where all the streets are lined

with these crumbling grand mansions,

which are now split into 20
people crammed into every room

and all kind of criminality
is being carried out around.

- So it's extremely common
for neighbourhoods to go

through social decline in
pre-modern times, partly

because of course they didn't
have like Europeans now think

an older house is like prima
fai better than a new house

and it's like a heritage,
heritage property commands a

premium, but Europeans
in the past didn't think

that they thought them like, like

cars or computers or something.

Like you've got like a shoddy
old house which is gonna have

loads of defects and at
some point gonna require

loads of expensive work.

So you had the properties
themselves constantly degrading,

just physically fashion, you
know, it was capricious then

as now, and then the tendency
just if we they're building

new suburbs, the new
suburbs will be built to

be maximally attractive
and try to draw people out.

So you have a constant
tendency for neighbourhoods

to fall into decline.

People are always afraid
of this neighbourhoods

that aren't covenanted,
certainly in London,

but I generally around Europe there's like

people often pretty comp...
like it's going to happen.

- Mm.
- You've got a time limit on

how long you can live here at the,

with the same like
expectations for the character

of the neighbourhood as when you bought it

and quite a short time limit,

maybe like a 15 year
time limit or something.

Neighbourhoods that were
covenanted could sometimes survive

indefinitely, although even
they would decline sometimes

and eventually sometimes the

like people would stop bothering
to enforce the covenants

because they think oh
it's, it's hopeless at this

point.

And is and is this happening because

so many people are moving into cities?

Why is it that
presumably if you have a lot

of people considered

to be undesirable moving
into a particular area,

they're moving from somewhere else,

are they like moving within the city

and does that mean that
there are other areas

that are becoming kind of
less dangerous let's say?

Or are they moving into
the city from rural areas?

- I think it, my sense is it usually

accompanies urban growth.

I see. So it's normally,

there aren't usually
urban neighbourhoods

becoming more genial.

There are normally,

the default is all in urban
neighbourhoods are in decline

except maybe the business centre

of which might retain like
an elite character.

All in urban neighbourhoods are in decline

and the middle classes are slowly moving

further and further outwards.

That's the pattern in
London. It's a bit more

complex in other parts of Europe.

- And this is what year, what kind

of year period are we
talking about? Again?

- I mean it, this starts in
a big way in the 18th century

and runs all the way
into the 20th century.

Okay. This process and it's, yeah,

but Covenanting was successful
in preserving some areas

of London from this process

and Britain, I mean London had
the particularly interesting

process, the freehold system
whereby the original landowner

would retain a kind of ownership.

Yeah, partial ownership in the properties

and the, these so-called great estates.

And these landowners were
often really vigorous about

enforcing the covenants

because they wanted to avoid
the neighbourhood declining

because they had a long-term
financial interest in it.

- In a hundred years they would

regain ownership and resell
the leases. That's what happened.

Yeah, they'd sell the leases for about

80 or a hundred years.

And so they, and because
they were extreme like church

bodies or charities or
aristocratic families,

they were extremely long termist

and actually cared about what happened

in 80 or a hundred years.

So they were thinking if this
neighborhood's become a slum

in 80 years, my grandchildren

will inherit a worthless asset.

Whereas if I retain it
as a summit of fashion,

then they'll retain,

they'll get to inherit
this amazingly prestigious

and and lucrative asset.

So I'm gonna fight really
hard to retain its character.

And like Bloombury was a
key like neighbourhood on the,

on those like edge of genteel London owned

by the Bedford family.

And they were famously like
one of the most conscientious

of the great states in enforcing covenants

and even supplying public services

and this kind of thing because
they were really, really keen

to keep its character and they
didn't completely succeed.

It gradually decayed

and became a kind of bedsit territory

by the early 20th century,

but it didn't completely fall through.

And that sheltered the
neighbourhoods to the west of there.

And the mechanism here is basically

units becoming subdivided.

Like it's, it's like you
start with a kind of ...

I guess a nice apartment.

Is it apartments or is it houses?

And then the mechanism is, it's kind

of always more economical
to just cram more

and more people into these
units than to maintain them

as being nice for a
single family or whatever.

- Yeah. So London,

in the classic greater states
period, that's, that's all correct.

It started as houses and the
main form of densification,

it's like population densification
rather than mainly floor

space densification.

So it's mostly just the same
buildings being subdivided.

That's not quite true because
they did fit in the back

garden sometimes, but they
weren't at this point mainly

talking about knocking them
down and building flats.

That becomes an issue in the 20th century

or late 19th, 20th century
when flats become in

Anglo-American settings, they become a

start becoming more
common, get lift shafts

and steel frames, which enables you

to build really tall blocks of flats.

And then you start getting the block

of flats appearing in a green

and leafy suburban neighbourhood.

And that becomes another huge issue

and a huge like key battleground

around the, around densification.

- Where are we then when
the kind of dense city

that you're talking about
begins to change, like

how do we get from what
you're talking about this sort

of 18th century, 19th
century, the, the emergence

of the suburb, how do we then
get to the kind of dense,

I guess upzoned but

but seemingly kind of
desirable place to live?

That that, you know, we like
the, the kind of

the Georgian apartments, things like that

or you know, in Spain, the
kind of nice bits of Madrid

or the, the, the or
Barcelona, things like that.

Like how do we get from
the emergence of suburbs

to this sort of beautiful,
gentle, dense city that

- Oh, they started as
beautiful gentle density.

- Okay,
- So that's one of the, if

for like us reading about
this now, that's one

of the elements which is a bit
like surprising or confusing

or confounds our expectations a bit

because we have this
like papier mache villain

of low density suburbia where
it's like car dependent,

extremely low densities,
totally single use

and you know, it's a, an easy
thing for us to be against.

Whereas your early suburbs in the 18th

and 19th century were very
beautiful, gentle density,

like far above the densities

that you'd build a suburb
out nowadays, normally,

and they're all, I mean
certainly ones from the 18th

century, will all be under heavy

heritage protection now.

So when we look
at these neighbourhoods,

virtually everyone feels
positive affect towards them

and they really don't feel
like, oh, this is a villain

of the urbanism story.

This is a real hero of
the, of the urbanism story.

But it's generally, I
mean on the whole, the very fact

that the private sector
brings in these covenant

restrictions explodes some

of the standard narratives about
density restrictions was it

shows when these
restrictions were introduced,

they were actually value
maximising for the neighbourhood.

It's kind of seems
like a paradox that by

losing rights over your property,

you actually gained property value overall

because even though those
rights were valuable to you,

it was even more valuable to you

that your neighbour had
lost the rights

to do things that might
compromise your property value.

- Yeah, I mean it's not, not

that it's not that crazy, right?

Like I'm very happy

that my neighbour doesn't really
have the right to play music

after midnight and you know,

maybe once in a few years
I'd like to play music

after midnight, but it's
definitely worth it to me.

Yeah, that's right. That we
both have that, we both have

our, our hands constrained on that.

- Yeah, it's not crazy at all.

And that's another thing,
like researching the history

of this has made me a bit more,

I mean I come from a background
of working on housing reform

and specifically on like
pro densification reform,

but looking at the history has made me

have a somewhat more nuanced view about it

because you can see like a
lot of this stuff was kind

of solving a collective action problem.

And these were like, in a way this is,

these are societies
without a housing shortage.

I mean they had housing
shortages in the sense

that they were extremely poor
and often very overcrowded

and so on, but they were without
a housing shortage in the

sense that floor space values
were equal to build cost.

- What do you mean by that? Just explain,

explain why that's significant.

- So if you've got restrictions
on house building imposed

by the state and they're
quite tight restrictions,

then gradually floor space

that starts being the state
starts stopping you from

creating floor space - building stuff.

Even when the floor space
that you created would be

sufficiently valuable, that
it would cover the cost

of building it and more and
the type those restrictions get

and the more people who want to build

and can't build, the
higher prices will creep

and you end up with a big
difference between sales prices

and, and build costs.

And that the huge differences
all across western capitals

today, often like buildings
will sell for three

or four times more than
it costs to build them,

sometimes even bigger
differences than that.

That's all the artefact of, of regulation.

But that wasn't there at the time.

At the time they were building
at like whatever density was

value maximising sales prices
were approximately the same

as build cost or just
enough above build cost

to incentivize people to build.

And as soon as sales prices were drifted

above build cost at all,
you get some more building

and they'd push the sales prices down.

So there was a market that
was basically ine equilibrium

and at that point in
improving the immunity

of these neighbourhoods by
putting in covenants was

in the eyes of an economist
was kind of a good thing.

Now it gets more complex than that, partly

because like morally we might
have quite mixed feelings

about lots of the
preferences that they were,

that the market was satisfying here.

So like in the United States, a big part

of Covenanting was racial exclusion.

It was white people
didn't want to live near

to African Americans, Asian
Americans, Jewish Americans,

or occasionally Catholic Americans.

And so they put covenants in

to exclude those people from
neighbourhoods in Europe.

That doesn't seem to have,
I can't find evidence of

that having happened in Europe,

but obviously social class
exclusion was a huge part of it.

Like people want to bask
in the reflected glow

of living next to high status people.

And that was like, of course
the 19th century people are

much more open about this.

It wasn't regarded as a
particularly disruptable motive.

So, so like the landowners
will be totally clear,

like we are going to
make here a neighbourhood

for the best sort of people.

Nobody else will be allowed in

except as servants or whatever.

So it's morally quite chequered.

It's a, the preference is that
the market is solving here,

you know, the market is the,

the reason why your prices go
up when you have covenants is

partly because people are
being protected from noise

and traffic and disease

and overcrowding and tall
buildings cutting out their light

and all the trees being cut down

and stuff that's like morally neutral.

But it is also partly like
various kinds of social exclusion

and both of those are part of
the story we can't like ...

- So I wanna go back to the
start of the story here.

So we, it sounds like we're
starting off with the first,

the first bits being in
lots of different places,

the first bits of downzoning
being in many different

countries, but the UK
included private downzoning

and I'm gonna speak for you

and say your, when you said
the great estates you're

thinking of like Belgravia
and, and places like that.

What I'm interested in is you
then said the state starts

doing it in certain places

and I think you said Frankfurt
was the, was the first place.

What, like what do they downzone it to?

So I can see in my mind
Belgravia, we've got like four

to six story townhouses basically.

And instead they have gardens

and they're not maximally
full up of people

and in the city they're
presumably filling in like

every bit of space.

What's happening in
Frankfurt, what are they,

what are they downzoning it to?

- So there's a tendency in all
countries for the densities

to fall over time.

And that's basically

because like the densities of
suburbs are falling over time.

I think probably the main driver of

that is railways developing,

which mean like opens up
large expanses of spaces for

low density housing

and you can have your,

in Germany they'd call
them villa colonies.

So they're like a colony

of large detached houses in
the middle of the countryside

built around a railway station.

And then you take your train,
you can get into the city

centre for work every day those, so

by the late 19th century at the top

of the market you are usually
looking at big detached

stories with like big detached
houses with two stories

or maybe two stories plus a basement

or a roof story or something like that.

And that's true probably all around the

Britain, France, Germany,
British Empire, United States,

that's like the elite housing
type that they like, so

by the end of the 19th
century we are talking about

densities that aren't so far
off what you'd get in a

a rich suburb today.

But covenants also operate
lower points in the market.

So middle class suburbs will
also generally be covenanted

and those will still be at
somewhat high densities.

Those are still like two story

terraced houses at that point.

So what happens next?

So the problem

with covenants is they don't,
I mean people really want

what they purport to offer
restrictions on density,

restrictions on use, but covenants are not

very good at providing it.

So they've got a bunch of weaknesses.

For one thing, they're really
expensive, you have to,

I mean they're not
expensive, they cost nothing

to put in place, but to
enforce them you have

to have a lawsuit.

I asked some lawyers about this

and they said in Britain today
you'd have a starting price

of 25,000 pounds to bring a
lawsuit to enforce a covenant

and it could go way higher than that.

That's to anticipate what
we'll talk about later.

That's much more money than
it cost to local government

to enforce zoning
restriction - like maybe 10

times more money than it cost to.

They are, they're not, courts
don't always enforce them.

They're kind of taught,
law courts don't always

accept that they're reasonable.

They also have a very serious
collective action problem.

So most of them are in London

as we discuss the Great
Estates sometimes enforce them,

but in most countries you
are reliant on neighbours

to enforce them against
each other, the system

of reciprocal enforcement.

So for any given neighbour
you think, well I don't want

to be the one who pays 25,000 pounds

to enforce against this guy

for like building an
extension in its vanguard.

Couldn't someone
else in the neighbourhood

take the, take the hit on this.

And even if it's doing
more than 25,000 pounds

of aggregate damage to the neighbourhood,

it's probably not doing
25,000 pounds of damage

to any given person in the neighbourhood.

So there's a serious free rider problem

and that means you tend to
get very little enforcement.

The other key weakness

that covenants have is they can't
be imposed retroactively on

neighbourhoods that didn't
have them at first.

And you also can't fix
loopholes with covenants.

So if there's something
imperfect in the drafting,

which there frequently was,

or if there were kinds of densification

that they hadn't anticipated,
which frequently happened,

there's nothing you can do about it.

This became a huge problem
in the first world war

because the, in the 19th
century, most European countries,

so the one of the totally
standard, the most common kinds

of zoning, zoning rule, covenant rule was

a minimum price threshold.

Really simple and would just
exclude all the people you

don't want and exclude flats being built

and exclude holes from being built

The price thresholds were
always fixed in nominal terms,

which worked fine in the 19th century

because there was no inflation.

1914 inflation takes off

and pretty quickly all these
price thresholds become

trivially easy to reach to, to meet.

So this whole part

of the covenanting system
just collapses straight away

and there's nothing they can do about it

because they can't go back

and impose a contract on people

that they haven't signed up to.

So it's like theoretically the system,

the covenanting thing is
fascinating for what it shows about

how much people wanted some kind of zoning

and it was sometimes
effective in some places,

but basically it was like
a rickety weak system which

often collapsed under pressure.

And we had some great
cases of neighbourhoods

where once pressures

for densification grew really strong,

the covenants just collapsed

and were unable to stop them from

stopping densification from happening.

Friedenau in Berlin is a classic example

of this laid out beautiful
street network with lots

of villas then like the main body

of basic electric trams arrive

and the main body of Berlin sweeps

outwards, reaches freedom now.

And the covenants basically do nothing.

The whole neighbourhood
is turned into blocks

of dense flats pretty quickly

and there's only today
you can just find like,

I dunno maybe like 10
villas left in Friedenau

that didn't get demolished
by the time and

survived long enough for
listing protection to

come in.

So basically it's a system
that doesn't work very well

then you get what, so the key thing

that happens next is the state
starts to provide the kind

of protections that the private
sector is trying to provide

but is not very good at providing.

And the country that starts
in, as I said earlier, Germany

and Austria-Hungary, we don't
really have a very good theory

for why it's in those countries.

They're not the countries
where suburbia is oldest

but probably, the standard
theory that planners have,

the planning historians
have is these are countries

with the sort of relatively
authoritarian tradition

of government and so they're more happy

to have zoning controls than
other places are, so

that first gets introduced
1880s, 1890s spreads across

the rest of German speaking
Europe over the next two decades

and then spreads across
other countries in the,

in the decades after that.

And it's not at the
time very controversial.

There's like, people tend
to regard the introduction

of zoning in existing
urban areas as like kind

of a straightforwardly
a good thing to exist,

The local people like it,

but there's no no sense this is going

to cause a housing crisis in the long run

or going to like seriously constrained

housing supply in the long run.

So there's no sort

of big pressure in the other
direction from economists or,

or people worried about housing need.

The, the main determinant of
which countries it spreads

to tends to be like

how much densification is
going on in those countries,

how threatened people
feel by densification

and how much pressure they put on the

government to do something about it.

So there are some places
where it takes ages to arrive,

but that tends not to be
because there are like

principled opponents.

It tends just to be because
densification wasn't a thing

and so the state doesn't,
get round to doing this.

So where are those places
where it comes in late?

So you've got countries
like Ireland, New Zealand

and so on where it doesn't,

they didn't even have
planning systems really

until like the 1960s.

The other really interesting case is,

well the weird case is Britain

and France, which do have,

I mean France always
builds pretty densely.

Britain has some densification
going on in the Victorian

period, the Edwardian period

and the first World War they
introduced rent controls which,

and the private, so the market

for flat building is completely
dependent upon build-to-let.

Basically they, in France they don't,

I don't think there's even a
way in which a building can be

owned by multiple owners at the same time.

They do have one now copropriété,

which is like condominium ownership,

but it doesn't, literally,
there is nothing in 1914.

So it becomes, once rent controls kick in,

it becomes financially kind of impossible

to build anything except
for single family housing

to be sold into owner occupation.

Britain does have the leasehold system,

but it's unpopular for flats.

So basically flat building is killed off

in the first world war.

It comes back only very fitfully when bits

of the market are decontrolled
in the interwar period

and the postwar period.

And it's not until like quite
late in the 20th century that

the market,

the rental market is
de-controlled in both countries

and flat building
becomes a big deal again.

- Is it, is there a
reason that building flats

to sell wasn't happening at this point?

- So France, it's just

because they lack a system for people

to own flats in a building

that's also owned by someone else.

- So for example, in the,

in the US when they
invent condominiums,

they get a massive explosion
in building flats to sell them.

But they don't have them,
they don't, no one does it

before then because
there's no legal, it's amazing

how individual legal tools can,

- How did the con how did
the condominium get invented?

- So they just realised that wait,

we've invented homeowner associations

and you could actually just apply them

to individual buildings as well.

So let's do it.

I could be wrong on the
exact details of that.

Yes, but it's essentially the
same legal title as home ...

- It was a slightly sort of trial

and error process as well, right?

They started building
cooperatives was an as an early,

which is a different legal
structure which still exists in

like properties from the 1890s.

- Yeah. But they barely,
they barely ever took off.

Cooperatives basically
only exist with subsidy

and they, what's the difference
between a cooperative

and a, so I I can't give you,

I can't give you a proper answer roughly.

My papier mache understanding

I mean I'm not a American

and I don't really, I'm not
really across the detail,

but my, my understanding is condominium is

where the underlying fabric
of the building is owned

by everyone and then each flat is owned

by the people who live in that flat.

Whereas cooperative is where
like the whole thing is owned

by everyone and then in a
complicated way you are given use

rights to different parts of the building.

- I see. - So you get a
result which is pretty similar

but through a legal structure,

which is in some ways quite different.

And that is sort of, they're kind

of mythic the cooperatives,
right? The kind of, they

- Still exists in New York in certain

places and in other countries as well.

But my understanding is
there has never been a mass

cooperative build out except
for in periods where - that's

how they did social housing -

So in various periods the main
way they've subsidised social

housing is through co-ops
and then you've seen

co-op buildings sprout up.

But other than that you just don't

see them get built.

But the amazing thing is that,
like Samuel was saying, the

unless you have condominium title,

no one builds flats for sale.

And in the UK we did see some built

through the leasehold system like that.

But my impression is that from the 1890s

freeholders basically believe

that one day they were gonna
beated from their leaseholds,

which eventually happened within

enfranchisement in the 1960s.

Yeah, that's right. And so
they were right about that.

And so they were were
reluctant to build leaseholds

because they knew they were
gonna be taken off them at some

point in the next like five decades.

- They were actually amazingly prescient.

They, they standard lease sold
leaseholds on an 80 year time

span and in about the 1880s
they started thinking, yeah,

I reckon that the state is going

to somehow steal the
freehold from me at some point.

And it sure enough it was
exactly 80 years later.

Can you just briefly explain
the difference between a
freehold and a leasehold?

- So freehold is normal ownership

that everyone's very familiar with.

In some countries, like
primarily the UK we've retained a

kind of feudal type of sub ownership

and it could go infinite number
of times downwards as well.

So in the Victorian area
you'd often have one guy own

something and then he
rents out the right to

or sells off the right to own it

for a given number of years.

That's the leasehold to someone else.

And then that guy sells
the right the sublet

to to another person.

And it can go very, very far through.

And this has been retained in
its full form in places like

Hong Kong and Singapore

where they took the British
legal leasehold system

and they've retained the
fact that after 99 years

or 999 years, you will
in fact be kicked out

and they can demolish the
building and redevelop it

or do whatever they like with
it, sell it to someone else.

In the UK in the 1960s
with enfranchisement,

you got the right to stay
in your leasehold building

after a certain period of time.

And then if franchisement was,

was strengthened various
times, including in the 1990s.

And so now if you're a
free holder, you don't,

you're not really a free
holder in the sense we would

usually have understood it before 1960s

because you can't kick a
lease holder out even when the

lease comes due and they have the right to

extend it at a rate set
by a tribunal rather than

you accepting it as a a bid.

But before that point you
could have done leasehold.

I reckon that in the 1930s, one if the,

the reason why the flats
didn't go that big is

because of leaseholders, so
free holders didn't expect

that they'd be able to resell

leaseholds going into the future.

- Yeah, people also, like flats were seen

as a very transient people.

Even today people often prefer

to rent flats rather than buy them

because they don't expect to
stay in flats for that long.

- I guess there's also, I mean the thing

that always puts me off
buying a flat is the risk

and yeah, exactly the fact,
fact that you're much more

exposed to risk if you've got
a bad neighbour as in a flat

and owning that is obviously much, much,

much riskier than renting
it for however many years.

So maybe that, maybe that
kind of thing is a factor.

- So the English and the
Americans have these,

the English have this weird
feudal leasehold model

and they can kind of start carrying

that over gradually to flats.

But the market's quite reluctant.

The Americans have cooperative
model which they've developed

in for homeowner associations.

They can sort of start carrying that over

to flats in France.

They've got like nothing.

They really, the only way
you've ever done flats is

through renting and
there's just no legal way

to divide a building
between a bunch of people.

So they, when French introduced
rent controls, there are,

I mean these quite amazing
to go out to the, these

communion, the Paris region

and you can see blocks of flats
that were finished in 1914

and then just like little
houses built next door

because it became impossible
to build flats as soon

as the war had had broken out.

And the market just like was completely

vaporised for decades.

And France, I mean the main
effect was a massive dead weight

loss because the French housing
market wasn't really ready

for loads of single family houses,

but they did also build quite
a lot of single family houses.

And the French started to fall in love

with suburbia in a way that they,

like unbeknownst we never
talk about French suburbia,

it's kind of unbeknownst to
English and American people,

but like it is actually a huge thing.

And it did all start
through this weird story

of rent controls in the,
in the first world war.

- So the sequence is you have
what you are calling kind

of early suburbia, which is
much, much, much denser than

what we would imagine today.

That then begins to become even denser

as apartments become possible.

People begin to be, to get
quite upset about that.

Then the second, sorry,
the first World war hits,

and rent controls hits,

and then that sort of freezes everything.

And then while the,

world is
frozen via rent controls

or at least Britain and France
are frozen by rent controls,

this state downzoning also
kicks in and means that even

after the rent controls are
removed, you are stuck or,

basically you can never
go back to the, to the sort

of apartments that you had before.

- Yeah, that's right. So
what happened in Britain

and France, the state downzoning,

public downzoning comes in very slowly.

They don't really bother with
it in the interwar period

because there's no pressure for it.

But it kind of comes in almost maybe

by accident in the post-war period

where local officials say like,

oh we're putting a local plan in place,

I guess we'll ban putting,
you know, turning these,

these terraced houses into flats

and like it's not gonna happen anyway.

But we might as well ban
it 'cause it's clearly

an anti-social thing to do.

That's, there's no
controversy at the time.

Nothing's ever written about it,

but we notice it when the restrictions,

the rent controls are finally removed

because in 1980 In the eighties,
yeah, eighties in Britain

and in France a bit more gradually.

- Oh, so the so sorry. So the rent,

the rent controls are present

for most of the 20th century, right?

- Oh yeah. In Britain, right?

There are rent controls
from the what, 1914?

I think so sometime in the
first World War, right up

until the Thatcher government
decon controls it in

the 1980s.

And it totally destroys the rental market.

Like it falls from being a
large majority to or minority

of the British stock in France,

extremely tight rent controls
coming in the first world war

and then in the, from the late 1940s,

the markets very gradually decontrolled.

They you like, I think
maybe you are allowed

existing stock stays under rent control,

but if you heavily refurbish the property,

you can get it out from the rent control

and there's various
sort of get out clauses

and slowly they start to take stock out

and there's still some of
it's still controlled today,

like 2% of the French housing
stock is still rent controlled

and has been since the first world war.

- So what's the situation in places

that don't bring in rent controls?

- Basically there's much more
pressure for densification

and government acts fast to
block it using public zoning.

That's the state in United States, Canada,

Australia, and then even

before the first World War, that's

what happens in Germany
and Austria-Hungary.

- Okay, so I predict

that almost everybody listening
is screaming the word car

and you haven't mentioned
cars at any point yet so far.

And the traditional story that
I hear that I, that I kind of

take, I think is widely taken to be the,

the real story is you
get cars are invented,

people suddenly can extend
themselves out to much,

much further a field

and they suddenly can
afford to live somewhere

that they can have a house and a garden

and the kind of low density
suburbia that is maybe nicer,

maybe safer than cities,

but they can still have a job in the city.

And so the car kind of opens
up all of all of this land to,

to low density building and
those people simultaneously

don't want those places
to be exposed to the sort

of inner city building
that they've just left.

Is that true? Is that part of the story?

What's, why
are you giving the car such a,

a small role in your story? So

- I started out thinking

that something like that would be true.

I now think it's mainly not the story.

The the basic reason to
mistrust that is that so much

of this process has already taken place

before cars come into play.

So all these private
covenants have spread to

basically all elite suburbs

and many, probably most middle
class suburbs before 1900

before there are any cars at all.

So we can see there's
lots of demand for it

and there are some mechanisms in place.

Public zoning has arrived
in Germany and Austria

before there are any cars

and it's already, you know, it's,

I suppose cars are starting

to come in in the states
in the 1910s and twenties,

but like most of the neighbourhoods

where zoning is introduced were built

before cars had arrived.

So cars don't seem
to have created the kind

of suburbia which originally
pioneers either private
downzoning or public downzoning.

People seem to have already wanted it

before then.

I think there's the tech,

the transport method which is closer.

So here's a, here's a
story which I think may be

like partly true.

So railways create, they

do have a big role in expanding
suburbia in the 19th century

because do make it possible

to live in green leafy neighbourhoods

that are remote from the city centre

but still commuting to
the city centre for work.

They also have a kind of
natural exclusionary structure,

which is that they're extremely expensive.

I mean even today, if you take a railway
from like Seven Oaks into London, I
think it's like a 6,000 pound annual

ticket if you want to,

that's the cheapest way you can do it.

So, like commuting by

heavy rail is still
extremely expensive now.

It was totally prohibitively
expensive then.

So technology creates
neighbourhoods which are like

impossible you can't get,
you can't live there

unless you are very wealthy

and those, so those are like a
natural exclusionary filter.

And then I think probably the,
the technology which breaks

that is to some extent the car later on.

But earlier on it is the

electric tram which
is far cheaper than railways

and means that the like city

of ordinary people can start spreading out

and reaching these elite
villa colonies,

these elite islands of rich houses

that have previously only
been accessible by railway.

I think like that story
of railways creating

elite suburbia and then
the elite suburbia created

by railways being threatened by trams

and later on by cars which are more like

democratic forms of transport.

I think there's some truth in that,

but it's not even, that's
not the whole story

because you find in
lots of small towns all

around Europe you find

elite suburbs developing
in the 19th century

without any railways being involved.

Like the west end wasn't
developed through railways.

It developed long before railways.

- Everyone used to commute
to work via walking. So

- Yeah,
- Everyone walked an hour from,

from their west end house
into their city job.

- Yeah, Europeans in the
19th century walked a lot,

even rich ones every
morning from Belgravia,

like a huge flock of top hatted,

frock coated men would set out

and pour through Covent Garden and Soho

and like going to their jobs in the city

and then every evening
they'd all pour back

through the streets and that was,

and you would see like even
little towns like Shrewsbury near

where my parents live like

that has its own little
villa district.

In Shrewsbury there's certainly no
commuter rail around Shrewsbury but,

and so that the development of that kind

of suburbia I think has more to do

with basically availability of capital

and like the swiftly growing middle class

and it makes it financially
possible for a developer to,

to a landowner to take a big,
a big bunch of land, big plot

of area of land and say I'm
gonna develop this whole thing

as an exclusive residential area

and it's gonna be totally
different to the kind

of impoverished mixed use suburbia which

is existed historically.

Instead this is gonna be
somebody's like it's big enough

and I can raise enough
money to design it in one go

and it's going to become a kind

of exclusive place
exclusive in terms of use,

exclusive in terms of social

and all these kinds of ...

actually think the core
mechanism behind the development

of suburbia is probably
not transport types,

it's probably just growing
wealth, faster urban expansion

and the availability of like
easy capital for developers

to do unified development
of suburban areas.

Once those exist, people
try to protect them.

- So I have a question for you.

What about the places that don't

seem to have a great downzoning?

So I've looked, I spend a
lot of time, I, I spend a lot

of time on Google Maps satellite view

and I spend a good fraction of

that time on Google Maps satellite view

looking at Spanish cities.

And my weird impression
is that they tend to,

the city like Valencia
just ends with six story,

maybe even eight story apartment
blocks and then open field

and then like maybe an
eight story satellite town.

And then open field doesn't
seem like there's any

great downzoning there.

So what's going on there? So

- That's definitely true.

I don't, I don't have a
complete explanation of this.

It's definitely true that the
cities of Mediterranean Europe

are still structured more
like cities in the middle ages

were so they have a, the
whole city is pretty dense,

rich people live either
right in the middle

or in kind of inner suburbs

and then suburban areas are poor mixed use

and unplanned.

They're like ragged haphazard development

of stuff which has been like
spat out from the city that

there are some exceptions to that

and there's exceptions of gradually

growing more common over time.

But that's still the basic
profile of a Mediterranean city

and they don't have, and

and in many cases you still find

as you say this phenomenon
like you get to the city limits

and it's six story apartment,
six story apartment,

six story apartment and it just stops

and you have open countryside afterwards,

which is the thing which is
like almost never happened in

the whole history of the
English speaking world

where no English country has
ever had six story flats built

in large quantities on the
edge of the countryside.

The short, I can give short explanation

for why the great downzoning
hasn't happened in those

places and that's just,

they didn't have elite
suburbs in the first place.

If you don't have elite suburbs
then there's nothing to ...

the basic mechanism for
the great downzoning,

which is suburban people
demanding it doesn't happen.

Why did they not develop elite suburbs

That's much more puzzling.

The reason why they didn't in
the 19th century is maybe just

these countries were still too poor

and the capital accumulation
hadn't happened.

But why haven't they done so since then?

I think, you know, we might want

to do a Works in Progress
article about this.

I have
a papier mache theory,

but like this is
completely conjectural,

but my wild theory is maybe
if you don't develop suburbia

during the railway age, cars arrive

and then like these areas

around the city are completely
democratised and opened up

and anyone can build a house there.

And at that point the appeal of suburbia

as like an elite zone is lost,

and if you haven't established
elite suburbs already at

that point then you are like
path dependently stuck on

suburbia being ironically

stuck on it being like it
was in the middle ages.

Like a poor area

where like people don't want
to live unless they have to.

Whereas if you had the railway age,

you had the railway
towns then those places

and you've created, you
get this window

where technology created the possibility

of having these this
socially exclusive suburbia,

then the people in that socially
exclusive suburbia strive

to keep it in being forever.

And they're generally pretty
successful in doing so

because they enlist
the state to help them.

That's, that's a wild theory
but I'm not sure it works

and I can see some reasons
why it might be wrong.

So I'd quite like us to, to get
someone to write about that.

- I have another question
because, so we had,

we are talking here about
why everyone inevitably wants

to downzone their area if possible

and it was imposed everywhere
is extremely universal

and people try and do it through
like almost any mechanism

or bear gigantic costs for doing it.

Which, and so does this mean
that our project that you

and I have been working on for
the last five years of trying

to upzone various parts
of suburbia is now over

because we've proven it's impossible.

- Yeah,
- Historical dozoning is just a

historical inevitability.

- Like or or undesirable.

I mean the like it kind
of sounds like maybe,

maybe we should just take it on
the chin maybe maybe downzoning
is just a price we have to pay

for people getting what they want.

- Yes. It's, so

one key thing has changed
since the downzoning happened,

which is that the down
zoning itself

has generated massive housing shortages.

In Britain it's a bit more

complicated because we have green belts.

So the downzoning isn't
the whole explanation,

but in most countries the
downzoning is basically,

I mean pretty much the whole explanation

for why they have housing shortages.

And this is why you can see
in the United States

housing shortages are very
concentrated in big cities.

The places where their
already vast urban expansion

can't really meet further housing need.

What they really need is to densify some

of their existing areas

- Also they're often
geographically ringed in, like San

Francisco's on a peninsula.

A lot of New York is on islands.

- Yeah, yeah, yeah that's,

and New York's got national
parks around some areas

so like in some cases they've got

physical constraints on further expansion.

But I think there's, I think,

I mean I haven't looked
into this properly,

but I think there's
also an effect that like

when a city reaches a certain size,

where a further physical expansion becomes

like quite an unsatisfactory way

of meeting its housing need.

Like if you're out deep in
new New Jersey on the actual

periphery of the New
York metropolitan area

and you build a new
subdivision, someone in

that subdivision, even if they
get into their car at 5:00 AM

in the morning and drive like
crazy may not be able to get

to Manhattan in time for the
start of the working day.

So they actually can't
meet the housing needs

of the Manhattan Employment Centre

by further expansion in Long Island

or further expansion on the mainland.

- I mean give an example of that.

So you have Houston,

which obviously has a famous sprawl city

where it's relatively low density in Texas

and they have an enormous amount of roads.

The going out west of the city
is like 16 lanes at one point

and generally they flow

quite well 'cause they're toll roads.

But even in Houston where
they basically allow unlimited

outward expansion, right?

So there's no overall gap between

how we're talking about
this before house prices

and housing sale costs
on the edge of town.

There's still a strong push

to densify the inner
suburban neighbourhoods

because they're just such,
so much more convenient.

And when you get to the point
where like Houston is probably

bigger than the urban area of London,

if you put them together on a map

and it has less than half
the population of

that overall urban area,
when you get to that level

of spread, it's just
worth adding some more

housing in the middle if you can.

But sorry Samuel, carry on.

- Yeah, so if you remember
when the downzoning was

introduced, when it was introduced
about the private sector,

we are pretty certain

that it was increasing the
value of these neighbourhoods.

The reason why
we're certain of this is

that it was done again and again and again

by profit seeking developers
all around the world.

It was extremely unlikely they
were all wrong about this.

So at that point when you
didn't have a housing shortage,

the immediate value that you
preserved through covenanting

or like, you know, the racist
preferences that you satisfied

through covenanting or
whatever it may be, was

sufficiently great that covenanting

maximised the value of the neighbourhood.

It's pretty clear that's
no longer true in areas

with acute housing shortages.

So in these areas with
acute housing shortage,

like the great downzoning
itself has forced up floor space

values so that they're now like
it's floor space sells

for four times more than it
costs to build in these places.

And when you see, so

that's like one reason why we
might think why we might not

be so pessimistic about the situation.

It's true that in all countries

that don't have tight
regulatory constraints on house

building, when you start
introducing zoning restraints,

zoning controls, they probably
do increase property prices.

But because those zoning envelopes
don't increase over time,

you get a housing shortage

because you've got a housing
shortage, you get high

floor space values and you reach a point

where the value maximising
thing would actually be

to upzone the neighbourhood

and allow more density
which is quite unlike the

situation when it was first developed.

- And, and you're using total
value as a sort of proxy

for human welfare or human wellbeing.

- Yeah, it's an imperfect proxy

obviously.

I like it.

- I think it's a good
- One.

Yeah, I don't like, I
mean there are problems

so clearly like the financial

value ... economic
value will weight the

preferences of rich people
more than it would weight

the preferences of poor people.

Like a rich, a billionaire's
view might count

for more than the homes
of a hundred people

because of billionaire's
preferences are like

have so
much more pricing power than,

than people who have no money
to, to give effect there.

So like economic value is a very imperfect

corollary for, for like
social bad social welfare,

but like it is at least it's the best,

probably the best we've got
for aggregating vast numbers

of preferences, of vast numbers of people.

- Yeah. It's a way of, it's a, it's a way

of people demonstrating what
they actually want to happen

and how much are you willing

to give up for this

- The other thing is that
if there are distortions

that result from any inequalities
of income, like those,

the distortions will tend

to be in fa like will bias us in favour

of more downzoning.

If it's the case
that building all the flats

for poor people maximises economic value,

even though it disrupts the
billionaires view, then like

the poor people must really wanted a lot.

- Yeah.
- Because they can beat the billionaire

with his
enormous buying power.

- And the the other, the other
standard flaw in just taking

kind of overall output

or overall value as the proxy

for welfare is externalities, right?

Like we don't just think that,
I don't know, you know, a,

a country that mines a lot
of coal and then burns it all

and makes a lot of stuff, we know

there is something missing there, right?

There's the pollution and the CO2

and that is part of the story

because obviously the story

of the great downzoning
is one of externalities.

You know, you're talking
about basically people trying

to control negative externalities.

But when you talk about a single area

or talk about maximising
the value of a single area,

this is why the Great
Estates worked so well.

'cause they internalised all
of those externalities much.

They had this, they have been,

you've written about this a lot, but you,

when you have a kind of
single owner, the single owner

has a really strong
incentive to weigh up all

of the externalities
kind of within that area.

And this is obviously
one of the reasons that

streets differ in quality and so on.

- And also if we go back to the,

the Great Estates in
their private zoning,

the Great Estates in
their private zoning do

occasionally upzone themselves, right?

So the, the Great Estates
are a perfect example of

what Samuel's saying, because
most of the time they're like,

keep it low, keep it low.

And then occasionally floor
space values rise so high

that they think, well,
this will be busier,

this will be slightly less exclusive.

- Mm. - But we can fit
double as many people in here

and they really want to
live here in the centre

of this city, which is a really
economically valuable city.

And so you can go, you could go right now,

you could be like me and go
and Google's satellite view of

around Chelsea or Marburn

and look at the edges of places

where there are Edwardian
blocks of flats next to Georgian

or Victorian houses.

And they have, they'll
be in greater state land

and they literally have upzoned
their own Great Estate land.

So that private version of
zoning is able to balance it

when it actually is necessary.

- Yeah. Han's place, probably one

of the most expensive
streets in the world that was

that owned by the Cadogan estate I think.

So they, in the 1880s,

it was all developed originally
in the late 18th century

as terraced houses, four stories

or something reached at the
end of the 19th century.

And the estate owners,
when the leases were all coming

to their end.

They say to us, think actually
there's loads of demand

to live in Knightsbridge

Why don't we just demolish the whole thing

and rebuild it at like twice or two

and a half times the density.

Sure we'll lose a bit of ammenity value

because the density will be
higher, but we've got two

and a half times as much floor space

and like people really,
really want to live here.

And they did it and it worked.
They made it/

They can't do that anymore

because the planning system
now overlays the private zoning

controls by the greater states.

But if you remove the planning system,

I'm sure the greater states
would start demolishing bits

of their 19th century stock

and replacing it with denser development.

And we knew like, this isn't
just like us speculating.

We've, there are plenty
of international examples

where if you give blocks or neighbourhoods

the right
to upzone, they do it

because it like increases
the total value of the

of the block when they do.

So Ben's done some work on
the case of Houston here?

- Yeah, well yeah. We didn't, we

did an article on Works in Progress

That was very good.
I'll credit Anya Martin

for doing most of the work on that.

But, but yes, there are many examples.

I've seen lots of examples.

My favourite example at the moment who,

we've got an article coming in.

So I've been reading all these
drafts of all these details

and I'm one of the few
people who knows about all

of this stuff because no one seems

to go into Korean archives in Korean

and look through all the details.

There was this policy called
the Korean Dream in the

eighties where you could
take your neighbourhood

that was potentially like a,
a shanty town slum on the edge

of town because Korea had,

had a very high birth rate
at the time, funnily enough,

and also a very high urbanisation rate.

So their cities were
growing at like 15% per year

or something off or faster than that.

And they allowed whole
neighbourhoods to opt into up zoning

to be allowed to build whatever
they wanted, if they wanted.

And at that time, the value
for them was no, okay,

we is actually better despite
the there being more people

around, it's still gonna
be net more valuable

because there's the demand
for floor space is so high.

And so they all opted in to upzoning.

So we clearly
can see examples of it,

- The question, so like how
optimistic should we be?

So the case of pessimism as you lay out is

everywhere which has elite suburbia

or even like middle class
suburbia has downzoning,

Like it's pretty much without exception

and there aren't many
cases of that changing yet.

So that looks like quite a
powerful argument of pessimism.

But the case for optimism to summarise

what we've been saying is all that's true,

but the very success

of the downzoning maybe
has created the conditions

for the ends of the
downzoning in some places

by removing this totally key feature

that was there was in
the beginning, which is

that originally downzoning
was value maximising.

And now downzoning is massively
value destroying in in the

places with the bad housing
shortage, of course there's still lots

of places woithout bad housing shortages.

So I, I'd say like I will
be very pessimistic about

upzoning parts of, well parts

of the United States in the United States

or in in Europe, which don't
have housing shortages.

I think there zoning is probably good,

it's certainly economically good

for people in suburban areas who,

and they, they almost certainly

improves their property value.

But in the places

where we've got terrible
housing shortages,

which includes nearly all the
great capitals of the world,

there we are in uncharted territory

and the whole thing, the whole reason

that brought the downzoning into being

is no longer in place.

So maybe we can be more optimistic about

what might happen in those places.

- What's the relationship

or what's the connection between
what you often write about

and think about, which is beauty
and design and architecture

and this, other than the fact

that they're, they're all about housing.

Like does the, does your
interest in the built environment

Yeah, I hate that expression,

but does your interest in
beautiful buildings relate

to this at all or are

You just interested in cities generally?

- They're definitely related,

but they're, sometimes they have a,

I mean it's a complicated,
intense relationship.

So like some, when I first
started working on this,

I thought great, improving the
density of suburbia will tend

to create more flourishing,
more beautiful places

because the classic examples that we have

of flourishing beautiful
places typically are at like medium

or high density or often.

So, you know, I've always
loved terraced streets

and the kind of old corridor streets

and the sense enclosure
that you get from that.

So I thought, well
densification is probably likely

to generally make urban
spaces more beautiful

and that's another reason
to be in favour of it.

And maybe a reason that's

particularly close to my own heart.

Like we've all got this right
when we, when we work on policy

and we've got our own like
publicly our own assessment

of the, the stuff that's
actually important.

And then we have the thing that like kind

of really motivates us

and that we clearly, if
you look at the history

of zoning, it's more
complicated than that.

And part of the reason why down
zoning was introduced in the

first place was to
protect aesthetic values

of neighbourhoods, at least perceived

aesthetic values of neighbourhoods.

So like people in these 19th
century villa districts,

one of the classic problem
with beauty right, is

that you bear all the costs

of making your property beautiful,

but the beauty of your
property is a benefit

to all the other plots nearby.

And to everyone who goes past
it's classic, like totally

like pure, like one of
the best examples of a,

of a positive externality.

So the free market with
fragmented ownership will

normally under-deliver beauty.

And there are, there are fun
classic studies about this

looking at front gardens, like

to take out a driveway
and put in a front garden.

Your, your net property value
goes up a little bit under

certain circumstances,
but, but not very much.

But your neighbor's property
also takes a big jump,

like maybe larger than your jump

because they didn't lose their driveway,

they just get some nice
flowers to look at.

So you've got, you know, classic,

classic collective action
problem and private zoning.

One of its like totally clear, one

of its purposes at the
start was to overcome

that collective action problem.

And public zoning has tended

to be less like fine grained
on aesthetic questions.

Like the private zoners would
really fuss over what kind

of fence you can have and what colour you

can paint your house and so forth.

But like public zoning in course
terms probably motivated by

these aesthetic
considerations to an extent.

So there I have like emotional dissonance

that urban density, which
is good for the economy

and good for society as a
solution to housing shortages is

seemingly bad for aesthetic purposes.

The case that really interests
me here would be actually the

one we've been discussing the
case with like greater states.

So what they did,

because there was still
this one unified owner

who was coordinating the
densification process,

they thought, okay, we're going

to redevelop this at higher densities,

but we are still going to
think about aesthetic values.

We don't want to densify one property

in our estate in a way which
is parasitical on the other

properties because we also
own all the other properties.

So whenever we identify a property,

we'll think really carefully
about the fa the massing

and the facade and all
these kinds of features.

And it created these neighbourhoods.

Like Hanover Place is an
extremely beautiful street.

You can see why all these incredibly

rich people want to live there.

So I like what thinking about this

for several years has led me
to is the conclusion that

there are some prima facie tensions

between densification and urban beauty.

And those tensions are obvious

and like clearly were one

of the things which drove the development

of zoning in the first place.

But there may be ways if we
can get the upzoning right

and make it not just like an
uncoordinated free for all

where parasitical building is allowed

and where you get like
the free rider problem,

aesthetic free rider problem
goes like totally rampant.

If there are ways we can, we can counter

that then we could get
much denser neighbourhoods

that were nonetheless beautiful.

So what are those ways? Well,

where you've got a unified owner,

like in the greater states
in London it's much easier

because there you've got an
underlying economic agent

who can control what the
new development looks like

and who's also internalised externalities.

So they care about beauty.
The problem we have is like in

nearly all places you don't have that

because the original
landowners have sold the plots

into fragmented ownership.

And so the freeholder the
the free rider problem

becomes quite serious.

Clearly like part of the solution.

Like sometimes you can
create the solution just

through having a good
planning system like that is

where you've got fragmented ownership.

The state will step in to
provide some of the services

that a unified owner would've
provided if they existed.

- Like what,
- Like controlling the design

of buildings controlling saying
that no, you can't build a

multi-story car park there out of concrete

or whatever, even if it's
the most valuable thing to do

for your individual plot

because it will still
destroy the,

the ammenity of all the plots around it.

And the planning system does
do that to some extent in,

in this country as in all countries.

So that is definitely part of the answer.

We do have problems there.

So like famously planning
systems can end up suffering from

design disconnect where the professionals

who run the planning system
have like different aesthetic

preferences to the wider public.

So it's a standard like planners

and architects are much
more likely to be in favour

of radical modernist designs,

which are quite reparative
to normal people.

- One thing I often see
is buildings where they,

they have an old building,
there's an extension onto it

and the the extension seems to be designed

to be like maximally different
from the original building

as though it's like, I really
want to show you that this,

this is an extension
rather than part of this.

- Yeah. Doctrine of legibility.

It's widely, so lots

of English planning authorities have this

as official or semi official

- Policy.

They, they require it to look different,

- They require it to look different.

'cause they don't want the, if the,

if it blends into the original
building, it could be seen

as a fake extension that was
trying to pretend to be part

of the heritage

Jesus, that would be terrible.

- Yeah. So it's now probably
if you had a unified owner,

they would be, they
would have the discipline

of the basically the discipline
of the profit motive.

Yeah. They'd know this
doesn't maximise the value

of the neighbourhood and I care

about value of the neighbourhood.

So I care about the preferences

of ordinary people

because those preferences
drive that value.

Whereas if you are a public
authority to some extent you get

that through democratic
feedback mechanisms,

but those are often weaker

and like people don't really
vote on the basis of the,

of the conservation area
policy of their neighbourhood.

Like they don't know the technical

detail, they don't follow that.

So the democratic feedback

mechanisms are probably quite weak.

And so you do get this drift,
the design disconnect effect.

And I think that I, that
doesn't mean I want to get rid

of planning controls and densification.

I think they're definitely
better than nothing.

But that is a problem that you'd have.

Ben and I have worked a lot,
well you've worked a lot

as well on the policy street votes

where we look at a way in
which like low density streets

could vote by qualified majority to go up

to like medium densities,
marvan density or Paris density.

And there we've always said
the street would introduce like

strict rules on the external
appearance of these buildings.

And the idea there is that the
street is operating like a,

like a democratic version
of a greater state.

So they, their incentive
is to maximise the value

of the street as a whole.

They want to block free riders

because they will suffer
if there are free riders.

The free riders will destroy
the value of, they want

to be in the good bit of the,

I mean ideally each person
would like to be the one

who can be a free rider
while everyone else is forced

to follow the rules,
but they can't do that.

So failing that they want to be in the,

the positive equilibrium
where everyone's controlled

by rules of value maximised
for the street as a whole

- Because that means they individually

'cause the the same
rules apply to everybody.

Exactly. So they individually,
yeah, that's the best way

for them to individually
maximise their income. I see.

- So that is an attempt
to, among other things,

that's an attempt to like
reconcile the tension

between densification

and beauty, which is
important for me emotionally

also is value maximising

and also I suspect is very important

for like the politics of densification.

- Mm. - I don't know, like we
don't, there's one question

of like how much is the effect
on prices on the streets?

But there's a second question,

which is what's the effect
on the public response

to a radical policy like this?

And if the first photographs
start coming out from the first

street votes and the post-street
vote developments are like

hideously ugly and they get
plastered all over the tabloids

and over social media,
that's like potentially

a killer for the policy.

Whereas if they come
out and they look okay,

then that's better.

And if they look great, if
people say, wow, hang on, that's,

you've made that street a lot denser,

but you've actually made
it nicer, then you are,

you are really looking at like,

the emotional response is very different.

People will think like, well
they're actually making this

city into a better place.

Let's let's, you know,
we should keep trying

with this policy and see what happens

and maybe we should expand it.

So I think it's pretty
important to get this right,

especially in places like
where places where there's a

long tradition of of like
caring for neighbourhoods

and control over places
and people are very

sensitive to these kinds of features.

- Is there anywhere that does,
let's say, kind of beauty

and density right at
the moment in your mind?

The only, the only place that
I know of that I've been to

that seems to have a really
good land use policy is Japan,

but it's not a very,

it's it's actually quite
nice in its own way,

but the buildings are
individually in, in a lot of Tokyo

for example, not particularly
pretty, they're, they're made

to be torn down as, as most people know,

there is something kind of quite
wonderful about being there

and the the actual urban
form Yeah, makes fantastic,

makes it feel really, really good.

But the individual buildings
are not, I don't think,

are often not beautiful.

And there are beautiful
parts of Japan of course,

but do you think there's
anywhere that gets these

things, these two things,

- Right.

I don't think there's any like whole

country that is the example.

I mean there are, there
are a bunch of countries

where the urbanism

of new developments is
typically pretty good.

Mm. So Spain

and the Netherlands are the two

most obvious examples of that.

Quite different, but
both quite impressive.

But neither of them does
that much justification

of existing neighbourhoods

and even in the good new
neighbourhoods, again,

it's kinda like in Japan, they're not

individually beautiful buildings.

They're like fairly ugly buildings that

nonetheless create good neighbourhoods

because the planning is

so good and the infrastructure and so on.

There are interesting, there are lots

of interesting individual examples.

There's like, which is a, a

World War was a kind

of a decay post-war social
housing estate outside Paris

built up fairly low densities.

And that's gradually being
regenerated at much higher

densities like very beautifully

and has been extremely
popular with local people

and is starting to create more

and more of a splash internationally.

So that like clearly shows how it's done.

And we've got, there are
similar like densifying estate

regeneration schemes in, in Britain

where they've clearly
improved the neighbourhood.

Like post regeneration estate

is like obviously better
on the eye than the pre

regeneration estate, even though it's two

or three times denser.

So, so there are success stories,

but I wouldn't say there's any country

where like the success
story has become the norm.

- Thank you very much Samuel Hughes.

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