Thread by @sophusticated

Can England build all the homes the govt says we need *whilst* staying within our carbon budget & achieving national biodiversity policy goals?

The answer's 🤯

So excited to share what we’ve been working on for the last year – our new Preprint osf.io/5kxce/

Mega 🧵:

Turns out it's too complex & interesting for any one field to answer. So worked with amazing team of housing economist @jryancollins, ecological economist @CorletWalker, biodiversity scientists @wildbusiness @mattiacmancini & industrial ecologists @MichalDrewniok & Andre Serrenho

I study ecological impacts of infrastr. For years I’ve thought, "how much infrastructure is enough"? It’s all been inspired by the figure in Haberl et al. nature.com/articles/s4189…, showing past a certain point, there’s no correlation between more infrastructure & social progress.

Infrastructure is essential for people to flourish & live well. But infra comes at a huge environmental cost. ¼ of all species on the IUCN Red List are threatened by residential & commercial development, & construction & housing makes up 27(!)% of all global carbon emissions

So here’s the problem: we need enough infra to meet the infra needs of all (enough homes, hospitals, transport etc.) – but ‘excess’ infra risks causing damage so we transgress climate/nature goals.
Analysing this is a huge challenge, so we picked a context: housing in England.

I started this project thinking just wanted to work out how much housing we need to meet everyone’s needs, & model sustainability implications. But the more I learned from coauthors, the weirder it got. Has been the most interesting academic journey of my career. Let’s dive in.

England has some of most unaffordable housing globally. Some estimate there’s 7 million people with some kind of unmet housing need. But weirdly, as @ianmulheirn shows housingevidence.ac.uk/wp-content/upl…, we have a growing *excess* of homes – around 1.2 million more homes than households.

So why so much unmet need? The govt & most commentators say it’s cos not enough housing supply, & high prices are cos demand exceeds supply. Hence we need to build more homes. Govt aims to build 300,000 homes/yr by mid-decade.

But the number of homes keep growing in excess of the number of new households. Over last 20 years, it’s grown from ~700,000 to 1.2 million more homes than households. And in that time… prices have risen by 181%.

So what’s causing this huge price increase? This is where the work of superstar collaborator @jryancollins comes in, who’s been studying this issue for >10 yrs. It’s really complex & interesting – read the paper. But key is the way finance has changed over last 40 years

Commercial banks create new money when they make loans (this is where most new money in the economy comes from - 🤯). They used to create money for investment in productive businesses, which is a good thing – lets innovative business invest and develop

But in reality, since financial liberalization in the 80s, that changed – now commercial banks in England create around twice as much money for the purposes of mortgages – buying existing housing – as they do for productive investment

So, lots else going on here, but key point is we have an enormous flow of money being created solely for the purposes of buying existing housing assets. Hence, prices rise – but it’s not cos there’s not enough supply to theoretically meet England’s housing needs!

All of this means, with very different policies from those we have today, England could theoretically meet a lot more people’s housing needs without needing to rapidly expand the housing stock. Now how does this relate to national environmental policy goals?

Well England has committed to Net Zero by 2050, but a cumulative carbon budget (@ProfTimJackson methods cusp.ac.uk/wp-content/upl…) consistent w 1.5 degrees is ~2.8GtCO2 by 2050. It’s also committed to halting wildlife declines by 2030. Obv housing impacts on these… but how much?

Our team's amazing industrial ecologists tested this out. We combine a material flow analysis developed by @MichalDrewniok with Serrenho et al. model of housing operational emissions sciencedirect.com/science/articl…, & estimate emissions of future scenarios for England’s housing

And shockingly, under the govt’s business as usual rate of housebuilding and rate of retrofitting/decarbonisation of the existing stock, housing in England consumes THE ENTIRE CARBON BUDGET FOR 1.5 DEGREES (113% in our models) BY 2050

101% from operational emissions of the existing stock, & 10% from the embodied emissions of just building all that new housing! Even scarier, our models actually incorporate the material decarbonization rates that industry is promising, so account for industrial innovation

We model a couple of other scenarios – 1 where we take the govt’s housebuilding rate as given & focus hard on retrofitting the existing stock, & another where we also reduce the rate of housebuilding to net zero additions by 2035.

These scenarios consume much less of the carbon budget each, but it’s still high – 79% & 69% of the carbon budget for 1.5degrees respectively. It’s still high cos the emissions of the existing housing stock as just so high – around 4% of the carbon budget each year!

We also model the biodv impacts of continuing with current rates of housebuilding, & find it’s expected to cause some biodv loss if Biodiversity Net Gain #BNG or species mitigation legislation don’t work effectively & the impacts of new housing construction aren't compensated for

So. If the govt’s housing policy might not actually address the main drivers of housing unaffordability, & is ecologically unsustainable, why don’t we do something different? Bring in the work of @CorletWalker, political economist specializing in ‘growth-dependence’

Basically, we argue if the govt took measures to stop money flowing into housing, it could bring down prices & satisfy more people’s housing needs. BUT, there are some important beneficiaries of keeping the whole system ticking over as is…

The main one is existing homeowners, esp new buyers. If houseprices fall, all of those peeps who made what they thought were sensible investments in their future could face losses. Ain’t too many peeps who’ll vote for that. In England 63% of peeps are homeowners!

Other major challenges if we slow housebuilding are what to do with all the peeps it employs – around 1/8 of England’s workforce… Also we’ve designed a system through S106 agreements where local authorities can only deliver social housing if they accept market housing...

Then there’s the role of the housebuilding industry. @TransparencyUK found it represents 20% of the Conservative party’s donations – an astonishing £60m over the last 10 years. Let’s just say slowing the flow of money into housing isn’t in their interest transparency.org.uk/sites/default/…

So all of this comes together to basically mean: it’s ecologically unsustainable to continue with business as usual; but also probably politically infeasible to change course. This was the most depressing part of our paper’s journey.

But, some hope: what kind of policies could be used to satisfy more people’s housing needs without massively expanding the housing stock? We review a bunch of these, mostly focusing on slowing the flow of money into housing (e.g. macroprudential policy)...

... taxing overconsumption of floor space (disincentivising second homes & foreign investors buying English homes as financial assets) & land value taxation (widely supported by economists).

Where new housebuilding is necessary, it's vital to build social housing to specifically target those with unmet housing needs, & improve building standards. Lastly, the single most important thing in our models is RETROFITTING THE EXISTING HOUSING STOCK

Look at how residential emissions have changed over the last 30 years - serious improvements until around 2014... but the trend has REVERSED since then.

So what are my major takeaways. For me: 1) supply-side vs demand-side debates on housing NEED to start thinking about sustainability. All them new homes eat up a vast proportion of our cumulative carbon budget. We don't have the answers - we need to turbocharge work in this area

2) for my field of conservation science: we need to deepen and focus thinking on the ultimate drivers of unsustainability. Our paper essentialy hypothesised that monetary policy might drive land use change & biodiversity loss - seriously needs further exploration.

My ideas in this area have been inspired by years of reading & admiring my co-authors' work, as well as @ProfTimJackson @JKSteinberger @AndrewLFanning @DrDanONeill @giulio_mattioli @NEF @beth_stratford @aurora_torresm @KateRaworth. Collab @DICE_Kent @IIPP_UCL @Leep_Institute