Political theatre at St Ives: the second homes ‘ban’

Nick Gallent, Iqbal Hamiduddin, Phoebe Stirling and John Kelsey, ‘Prioritising local housing needs through land-use planning in rural areas: Political theatre or amenity protection?’, Journal of Rural Studies 66 (2019), 11-20.

In 2016 the St Ives Neighbourhood Plan hit the headlines. Its Policy H2 limited the sale of new houses to those who intended to use them as their full-time principal residence. Backed by 83% of those voting in a referendum on the plan and surviving an appeal, the policy was widely misreported as a second home ban. London-based journalists knocked out scary stories of how they and their friends were now feeling unwelcome when they popped down for a weekend at their holiday cottages.

Policy H2 followed revelations that new houses were being let as holiday homes as soon as they were being built. Moreover, this was in a context where estate agents in St Ives were reporting that up to 60 or 70% of sales were being made to second home buyers and investors in holiday lets. As one of those interviewed for this study said; ‘something had to be done’.

Something was done and Policy H2 was the result, although this was not the first attempt to impose use orders on housing, nor the only one, as several places promptly followed suit. This article, based on interviews taking place within six months of the Neighbourhood Plan’s agreement, argues however that the policy was misplaced and will actually make the supply of ‘affordable’ housing more precarious.

The problem is clearly stated. The transfer of urban wealth to rural locations produces ‘market asymmetry’ in a context of a ‘restricted’ supply of new housing because of landscape protection. There are two possible responses. Supply can be increased through providing more ‘affordable’ housing. This is the route taken by Cornwall Council, although to do this in the current context, where only 25-35% of housing is ‘affordable’, demands increasing the supply of unaffordable housing by a much greater amount. Alternatively, restrictions can be placed on the use of housing. This latter was the option turned to in St Ives.

However, Gallent et al. in this article argue this will have unintended consequences. By making new speculative building less viable there will be a knock-on effect on the supply of new housing and the ‘affordable’ housing it funds. Furthermore, restricting demand for new housing will merely shift the demand for second homes to the existing stock, increase prices and therefore make the affordability crisis even worse. The authors conclude, even before introducing their evidence, that local needs policies like that at St Ives are merely ‘an act of political theatre … dominated by the objective of amenity protection rather than the goal of making housing more affordable or accessible to local families and workers’. Moreover, it benefits in-migrants and retired households who raise the drawbridge in a cynical move to boost their own property values. Restrictions such as those as St Ives also act as ‘a green flag to investment capital’, as scarcity makes the town even more attractive for asset speculators.

The research conducted in this study involved interviewing 12 ’stakeholders’, whose comments were then used to bolster the case the authors had already set out. These interviewees included eight with a greater or lesser interest in more house building. They comprised three estate agents, a development manager, a valuation surveyor, a landowners’ representative, a Cornwall Council planning officer and an unstated ‘professional’. On the other side, there were three members of the St Ives Neighbourhood Plan Housing Topic Group and a town councillor.

Discussion took place around five issues: the path to intervention, the logic of intervention, the evidence base, observed and anticipated impacts, and market segmentation. The description of the interviews is unremarkable, serving to support the effects of policy H2 already set out by Gallent et al. in their introduction. Although the latter were also forced to conclude that the ‘majority of those interviewed did not anticipate major changes to either housebuilding or the local economy’, the tenor of the discussion is crystal clear. Restrictions such as those at St Ives are a ‘bad thing’, leading to higher prices and a shortage of affordable houses. For instance, they will worsen problems such as under-occupation or streets that are dead out of season by concentrating second home demand in the existing town. The authors seem strangely unaware that this has already occurred and can hardly get worse.

The research contains a number of problems which might induce a certain level of scepticism about its conclusions. First, while noting that the St Ives Housing Topic Group didn’t consult academic work on the effects of similar policies, the main academic evidence cited here is the experience of similar policies in the Lake District in the period 1977-84. A more than 30 year-old study of a region with a very different demographic context (resident population is stable in Cumbria unlike Cornwall) seems a rather shaky basis for the generalisations drawn.

In recent years nowhere in the UK has seen as many houses built in proportion to the resident population as Cornwall has.

For a study that criticises local campaigners for not consulting ‘academic evidence’ its own use of Zoopla to track house price movements looks a bit casual, to say the least. In any case, more recent Zoopla data are ambiguous. There is no evidence yet of the predicted greater than average rise of house prices in St Ives as a result of H2. In fact, prices of all property sold in St Ives have fallen by almost 14% over the past year and that of terraced houses by 6%. The fall in the price of terraced housing is somewhat less than in Cornwall as a whole or in England, but the general fall in St Ives has been far greater than both.

Second, many of the generalisations in the study turn out be just based on anecdotes or partial accounts. For example, the article confidently proclaims that ‘there was greater support for Policy H2 amongst households that were relatively new to St Ives than from the town’s long-term residents’. No evidence for this is offered other than a comment of a St Ives Housing Topic Group member: ‘There was possibly more support from people who are brought up here for things like holiday lets that were going to bring an economic benefit to the area than there was from incomers … there was probably a divide there’. ‘Possibly’ and ‘probably’ are flimsy bases for concluding that ‘the defence of property values seemed to have been an important factor’. This is then confirmed by … an estate agent! An ‘expert respondent’ turns out to be the landowners’ representative, claiming that voters in the local referendum were merely being appeased by those ‘not rooted in any appreciation of development economics’. This is hardly unbiased evidence; it’s special pleading.

In similar fashion, ‘the “development industry” was said to be important … sustaining a circulation of money’. This was ‘said’ by an estate agent. ‘Other studies’ back up the argument that second homes ‘support an eco-system of maintenance activity’. The ‘other studies’ turn out to be authored by the person who is the lead author of this article. Second homes ‘become an economic life-line during the low season’, according to the surveyor interviewed. All this accepts the curious myth that full-time residents don’t spend a penny on maintaining their houses, instead passively watching as they fall into rack and ruin. The authors at least admit that it is ‘difficult to size this potential impact’, thus effectively undermining their own argument.

Third, the implied explanation is based on unfounded speculation. According to this study, St Ives’ housing policy was driven by an anonymous but all-powerful group of in-migrants and retired nimbies intent on protecting the value of their houses. This is not supported by a shred of evidence other than the assertions of those who make money from the current speculative building frenzy. The assumption seems to be that opposition to such speculative building and the transformation of St Ives into a second home ghetto is merely the result of defending ‘amenity and local landscape’.

As so often in external research on Cornwall, there is a complete and utter failure to notice, let alone examine, the ethnic dimension behind moves such as that at St Ives. There is little awareness of the wider Cornish context, or the fact that housebuilding in Cornwall is the highest in the UK. Concerns about this are instead dismissed as a ‘perception of rapid development and change’, as if local people are mistaken and nothing out of the ordinary is going on. This fundamental lack of understanding of the cultural context or the nature of opposition to speculative building leads the authors to their superficial and simplistic conclusion that it must be the result of nimbies. These are of course ‘bad’, as they slow the ‘pace of development’. But its rapidity is clearly regarded by the authors of this study as a ‘good thing’.

All that said, and while its conclusions may be unpalatable for local campaigners or found credible by Cornish academics, this study is broadly correct in its description of how the housing market works. Interventions such as Neighbourhood Plans are indeed political theatre, because housing outcomes are already ‘shaped upstream’, by tax strategies, banks’ policy, and market deregulation encouraging a flow of assets into housing. This ‘tends to overpower local solutions before they have even been formulated’, rendering local action as political theatre, merely working to assuage local concerns. Local government might seek ‘to carve more equitable housing outcomes from problematic structures’ but at the same time central government ‘supports those structures by reasserting property rights’.

Governments, especially the current Conservative Government, have prioritised the ‘human right to own property (in any desired quantity)’. In this, we can fully agree with the conclusion of this study, that instead of that right we need another, ‘a universal right to a secure and stable home’. Except that that universal right demands a specific localised response. If state priorities render local action meaningless then an autonomous space has to be carved out of those state structures. When control over planning and the housing market is devolved to a democratically elected Cornish Assembly then the structures can be reformed to ensure that local needs are respected and historical wrongs remedied. Measures to ensure the Council of Europe’s Framework Convention’s Article 16 can then be properly implemented through effective limits on housing use. The market will then be tamed and action become more than political theatre.