The future of urban development

The fifth and final TRUUD podcast explores the future of urban development and the necessary investments for creating healthier places. Host Andrew Kelly with experts Daniel Black, TRUUD Research Co-Director and Thomas Aubrey, Credit Capital Advisory, discuss the issue of short-termism in planning and the importance of long-term vision, drawing parallels with historical and European examples. 

They highlight the need for integrated planning that includes transport, green spaces, and social infrastructure alongside housing. The conversation examines methods for measuring the impact of urban development on health and the economy, introducing the HAUS model from TRUUD. Financing models, including land value capture, are considered crucial for delivering sustainable and high-quality urban environments. 

The podcast also touches on the significance of leadership, devolution, and community involvement in achieving these goals.

Funded by the UK Prevention Research Partnership which aims to reduce non-communicable diseases such as cancers, type-2 diabetes, obesity, mental ill-health and respiratory illnesses, TRUUD is providing evidence and tools for policy-makers in government and industry.

Find more at the TRUUD website: https://truud.ac.uk/ 

Books recommended in the episode

Daniel Black:

The Death of Rural England by Alan Hawkins 

Small Is Beautiful by E.F. Schumacher 

How Institutions Think by Mary Douglas 

Thomas Aubrey:

Good Cities, Better Lives: How Europe Discovered the Lost Art of Urbanism by Peter Hall, with contributions from Nicholas Falk.

Andrew Kelly:

The film They Came to a City (1944) directed by Basil Dearden and adapted from a play by J.B. Priestley. Available on BFI Player.

Music credit: New York London Tokyo by Petrenj Music

Produced by Beeston Media.

Transcript

00:00:03 Andrew Kelly

Welcome to our fifth TRUUD podcast from the University of Bristol – I'm Andrew Kelly. TRUUD looks at how we can shape places for healthier lives. In previous podcasts, we've discussed new ways of valuing urban health and short termism. So let's look to the long term. What obligations do we owe future generations?

00:00:24 Andrew Kelly

I'm joined by Thomas Aubrey, founder of Credit Capital Advisory and author, most recently of All Roads Lead to serfdom: Confronting Liberalism's Fatal Flaw, and Daniel Black, Co-Director for TRUUD, to discuss the future of Urban Development and how we make the case for investment to make change happen. A question I asked myself often is.

00:00:44 Andrew Kelly

Am I being a good ancestor? How can we become good ancestors for urban areas? Thomas.

00:00:51 Thomas Aubrey

Well, I think it's absolutely critical that we can leave a world that's better for our children and grandchildren. Unfortunately for the last of 20 years, things have been getting worse and not better. Clearly economic growth as part of that, but part of economic growth is actually ensuring we have the right urban environments with better public transport that allows us to scale up and have far more houses in a high dense area. I think that is key for us to generate faster growth and higher incomes. 

Andrew Kelly: 

Daniel?

00:01:20 Daniel Black

Yeah, absolutely agree. I mean we have to do both, and we have to get the quality as well as the quantity. And unfortunately at the moment, we seem to be hearing a lot about quantity and very little about quality. But we have to do both.

00:01:35 Andrew Kelly

When it comes to short termism it, it's not just a a government problem, is it? It affects all sectors. Daniel could you talk about that.

00:01:45 Daniel Black

Yeah, absolutely. Basic economics, bird in the hand is worth 2 in the Bush. You know, it’s human instinct really to think about the short term over the long term. There are models, ancient models, where they consider far longer than we do today. You know, notions of – which I learnt through you, Andrew – Cathedral thinking when people started building the cathedrals in the Middle Ages. You know, they had to start building it knowing that they wouldn't see the final output. So I do think we need more of that thinking, but it is incredibly difficult in a in a modern democracy, and when you've got quarterly financial returns and shareholders that need to get those returns.

00:02:27 Andrew Kelly

And Thomas, in your work, you come across short termism presumably in in the private sector as well?

00:02:34 Thomas Aubrey

I do, but I think when we're thinking about the built environment, I do think that it's the state that has the role here to drive long termism. And I think in the past, the UK has demonstrated in many eras that of long term vision to invest for the future. But for the last 40 or 50 years, we just haven't been doing that. There's a whole host of reasons behind that. But I think really the whole long term Vision's got to start at the public sector.

00:02:59 Andrew Kelly

One of the things that TRUUD has done is to look at how you measure change or how we potentially measure change. Daniel, take us through this, because if we're going to convince people to invest, we've got to convince them that not only is there a return, and that return could be a social return as well as a financial return, but it does create the healthier places we need. So it's not just about volume, for example, with housing, it's about quality of spaces.

00:03:25 Daniel Black

Yeah, we have been over the last decade, we've been developing a a tool called the Haus tool which stands for health appraisal of urban systems. It's not, it's based on health and environmental, economic valuation approaches and it takes a lot of data that we've produced from systematic reviews, multiple systematic reviews looking at buildings, transport, neighborhood environments, food, the natural environment, and it links that quantifiable data to health outcomes, and then links those health outcomes to cost and the cost of medical treatment cost in terms of lost productivity and wider pain and suffering. And it's starting to provide an evidence base that people can use and the government particularly interested in it, as are various others and lots of private sector as well.

It is only part of the answer though, because we're never going to be able to quantify everything. And in fact, there's even arguments to say, should we even be trying to? We have to think about this more broadly, but it is definitely part of the solution, we think.

00:04:33 Andrew Kelly

Thomas, when you look at investment in places and so on, is this the kind of model that you need which looks more holistically at an issue?

00:04:44 Thomas Aubrey

Absolutely. If you're looking at a lot of the great models you've seen across continental Europe in the last sort of 30 or 40 years, they're looking at a whole series of sort of living spaces which include health, education, transportation, green spaces, etc. And I think that sort of has been lost in the in the UK, where we've had very much the sort of piece meal approach to development and I think without that integration, you're just not going to create the places that people want to live in. And I think that remains actually fundamental to public policy.

00:05:17 Andrew Kelly

Do you find other places do this better? I mean, do we spend badly in this country, for example?

00:05:23 Thomas Aubrey

Yes, we do. I think there's a whole series of of examples – and we used to do it well. I have to say, you know, the Garden City movement, the new towns, but we we don't really sort of do it at at that scale anymore. But you know, looking across in the Netherlands, in France and in Germany, they've all been embarking on, and Sweden, there’s quite large in urban developments, integrating public transport with green spaces with higher urban density living, connected to where the jobs of the future are. Often these are obviously knowledge intensive service jobs as well, and that thinking stretches out twenty 30-40 years and I think that's what we're not doing at the moment. Everything's far too piece meal. And I think when you do it, piece meal, you never really get the sort of good outcomes that you're really trying to reach for. 

Andrew Kelly:

And that must echo with TRUUD research and TRUUD findings, Daniel?

00:06:11 Daniel Black

Absolutely. I mean the in TRUUD we're looking at the decisions that caused those outcomes to happen. And I just wanted to follow on from what Thomas was saying. You know, some of the examples in Europe are truly, truly inspiring in terms of the transport that they're able to provide in terms of, you know, high functioning, high frequency tram systems, medium to high density, it's high density, but as quiet as the countryside! But, there are there are a whole range of different complex reasons for why that that was able to happen and for a whole other range of reasons.

There's a system of delivery in this country which isn't really geared towards delivering that high quality, high density environment.

00:06:55 Andrew Kelly

Thank you, Daniel. Let's go a bit deeper into this and look particularly at house building because we're about to embark on quite a major house building program. 

Thomas, not just house building a house, but general infrastructure as well. You've been critical of private finance initiatives and you see opportunities and other forms of investment like land value capture. Could you tell us about this through the work you've done looking at the East West Corridor: the Cambridge Milton Keynes, Oxford developments in terms of both infrastructure and actually affordable housing as well?

00:07:27 Thomas Aubrey

So I think there's a couple of really important things when you're trying to sort of plan at scale and accelerate house building. And the first is you need to put in the infrastructure up front. You know, without the infrastructure being put upfront, obviously the demand for housing is going to be lower just because the communication between places is poorer, but also then house builders are less likely to want to go and build there anyway, so I think that's absolutely key.

When you then start to think through, OK, so if we're gonna put the infrastructure up front, we do not need to start thinking about different financing arrangements. So, if we go back to the new towns, the garden cities. This is exactly how they we're thinking about these processes. We put the infrastructure and upfront and then we create service plots and sell those off to house builders, and then the house builders can start building out the town through time.

One of the major drivers of funding is the uplift in land values you get when you're buying agricultural value and then once you put the infrastructure in, you can then award planning permission for those plots. But that big jump in the values of those plots is quite an important part of funding the success of that infrastructure as well. Of course, there are other funding streams as well you'll get, such as the track receipts from partially the track receipts from the public transport networks, as well as smaller areas like business rates and you may get some car parking fees as well, but really the central viability for all of the new towns and garden cities, and it's very much the case across Europe, is to be able to capture that uplift in in sort of agricultural values to residential value. But of course you have to put in the infrastructure to ensure that those values remain high.

00:09:07 Andrew Kelly

And is that predominantly government spend that needs to put that infrastructure in or does it come from other sources?

00:09:11 Thomas Aubrey

Well, the way you can do this is to raise capital in the capital markets. You could raise a 40 year loan, obviously the people buying those bonds will be private investors and the bondholders will get getting their money back as the cash flows come through from the rest of the project. So, although these are publicly-led projects and the important thing in the end is that you get these private sources of funding that actually pay it back. That's very important when you start to think about fiscal rules, one of the central criteria for the European Union with the MASTRICK criteria was to enable projects that were funded by private sources to be off balance sheet, and I think that's why we've had such higher levels of investment across parts of the European Union. But where you having to fund things from taxation, then that's on balance sheet, and that obviously has a a fiscal impact. So I think those two are quite different ways of doing things, but I do think the public-led model where you're having private sources of funding has certainly been very successful and across many parts of Europe.

00:10:11 Andrew Kelly

And Daniel, when you're working in in the TRUUD project, how much attention have you paid in your discussions to these issues of financing, particularly the change to more healthier places?

00:10:24 Daniel Black

They certainly came out. I mean, I was just thinking about in terms of land value or land value capture and uplifting land value. It was interesting we in our pilot project ‘upstream’ we interviewed around 30 Senior decision makers from across public and private sector and there was broad support actually for it, but a very senior person from the private sector said it would be dangerous to try and intervene in that area and it it's been a discussion ongoing for a long time with little progress made. And So what I'm curious about is why it's taking so long to get progress in that area. 

I did want to pick up on another point that Thomas was making around the infrastructure provision and being clear about the type of infrastructure, because, you know, infrastructure is always provided for any kind of housing development, but it tends to be roads. And actually doing high density housing along public high frequency public transport corridors is a completely different business model. It tends to require government intervention to make that work and make it work well, but otherwise, we end up with car dominated, low density housing and we need to be doing quite different. So yeah, that that came out emphatically in our in our evidence.

00:11:37 Thomas Aubrey

Just following on from one point that Daniel made the levelling up and Regeneration Act that was passed by the last government made some very major changes which does actually allow us to do land value capture again, which is obviously the mechanism we used to do for the new towns. And so I think we are in a much better position than we've been in a very long time, which does mean that a lot of the sort of large scale projects in the South East, South West and the Midlands and parts of the northwest, where you have slightly higher demand for housing, it does make these projects financially viable now.

00:12:08 Andrew Kelly

A new town? What? What? Where would you start in terms of advice when it comes to building a new town?

00:12:15 Daniel Black

Location is absolutely fundamental and walkability. You know, we've had so many different attempts at new towns over the last number of decades we've had eco towns, healthy new towns, and now we've just got new towns. And part of me wonders what happened to the eco and what happened to the health. But so yeah, they do need to be located on a high quality, high frequency public transport corridors. But they they're not that prevalent and even actually where they are, it's quite difficult, there's very significant developments that have been going on for quite a while now, but unfortunately it feels like it's still very heavily card dominated. 

Even though they've got great railway infrastructure very close by. It does feel like it's sort of at anywhere sprawl again and we somehow need to figure out how to do things differently. And it does require a new type of model of delivery, and there is a challenge in terms of, you know, what are we trying to build in rural areas? Because you can't stick skyscrapers in rural areas, they have to be blended into the landscape. We need to figure out a way of doing that at a density that's going to enable people to walk and cycle. But at the moment it feels like that's not possible. The other alternative, of course, is densification of cities, which is very politically challenging. And again public transport in certain cities, I mean we're in Bristol at the moment and public transport's notorious in Bristol for being very poor. So there are real challenges that that we need to overcome in order to enable it to happen.

00:13:46 Andrew Kelly

Thomas, one of the things I've been keeping an eye on is development around railway stations and in Bristol. We have a an example where some people describe what's happening around Temple Meads as almost a new town. Is it better that we go for those urban extensions or greater densification than actually building them elsewhere?

00:14:01 Thomas Aubrey

I think that's a really important point. So I think one of the great learning experiences across Europe over the last 30-40 years has been a sort of shift away, I'd say from sort of plonking a, a new town in the middle of nowhere, towards extending existing settlements or densifying existing settlements. You know, whether that's in Hamburg or Gothenburg or parts of the Netherlands.

There's a couple of reasons why that's so important is that one that's, you know, a you're gonna have demand for housing there. So you already gonna have employment for people locally and where you have growing areas that there is a demand for housing and demand for jobs. Obviously the economics then work much better where you can densify and sort of link up and expand those settlements with new settlements as well. So I think that has to be really be the way that we start to approach this. You know, so it may be densifying partly inside the city and extending that that city out. But I think that's been a much more successful way of the way that certainly the developments happened across Europe, but that also partly reflects the changing dynamic of our economy, which has obviously moved away from manufacturing more towards knowledge intensive service jobs as well.

00:15:09 Andrew Kelly

And just looking at alternatives, first of all, in terms of housing, Daniel, what about things like community land trusts, and other examples you could give?

00:15:18 Daniel Black

Yeah, I think these are tremendously exciting. There's there's a very vibrant scene now in the UK, it's still fairly marginalised, but there's a lot of appetite to work with community land trusts who you know are really getting back to the foundational principles of the Garden City. You know, in terms of stewardship and community ownership. It doesn't always work. Sometimes it's just we get the same old business as usual with something sort of tokenistic on the side. And actually it needs to be fully embedded into the entire process. 

It's difficult though, because that form of engagement takes a lot of time and effort, but ultimately it's about, again, comes back to your point about long termism: How do we try and put that value on long term outcomes and make them relevant right now?

00:16:00 Andrew Kelly

And do you think these will be able to create some of the kind of volume that's needed, as well as the quality for people that's needed?

00:16:09 Daniel Black

I think ultimately they will, once we get the processes in place and up and running, but there is a transition period and again, this is where we need government intervention and we need to figure out how to move from where we are now into that new delivery. And, you know the all the all the big delivery providers, the big volume house builders, real estate investors, they all have their part to play in this. But we do need to figure out what those different models look like.

00:16:32 Andrew Kelly

And Thomas, what about other forms of funding? There's been talk about using pension funds, better community infrastructure levies, what what's available out there?

00:16:41 Thomas Aubrey

I think the funding is going to depend largely on the approach that you take. So if you say just wanted to look at maybe a 5000 units extension for a small town, but not putting in large amounts of infrastructure, you know I think there are ways where you could tap into pension fund money that could become sort of part of the equity provider with a developer, but I don't think that model scales particularly well, you know, and I think that if we're going to be serious about, you know, house building. We have to be thinking around sort of a hundred, 150, 200 thousand, you know, unit extensions plus densification. And I think with that model, I think really the tried and tested approach really is to raise money in the capital markets directly and then we have to think around the funding mechanism. So as I mentioned before, obviously there are the receipts from selling off those land plots with planning permission, but you know track receipts from public transport, affordable housing receipts, even some areas of sort of car parking receipts as well. 

Again, these are not large amounts, but I think when you're thinking through the financing approach, you do need a diversity of sources of funding. And so if you can sort of bring all these different diverse sources of funding together, it definitely makes the project overall much more viable.

00:17:56 Andrew Kelly

It's not just about housing, though, is it, Thomas? We've it, it has to be integrated with transport.

00:18:00 Thomas Aubrey

Absolutely, it's absolutely critical when we're thinking through the built environment that we like, fully integrating our transportation networks with housing, but also you know health, hospitals, GP surgeries, schools, cycle paths, and critically green spaces, you know, green spaces is part of infrastructure. It often gets ignored. But you know, even if you're densifying an urban area, there's a lot of opportunity to improve the built environment by introducing new green spaces as well.

00:18:29 Andrew Kelly

One of the critical things about leadership in national government and in local government, Daniel, you've done quite a lot of work with national government. You've had some interest from ministries and so on. What issues have come up for you in terms of leadership?

00:18:42 Daniel Black

The first thing that comes to mind in leadership came through loud and clear in our evidence and the first thing that comes to mind is just how fundamental leadership and culture is for when you're thinking about standards and minimum standards, because actually minimum standards stand or fall depending on what the culture of the leadership of the organization is. You know you'll get away with the bare minimum if it's not important to you. If it is important to you, you use those standards and you push for the absolute maximum. 

I think also the other thing that comes to mind is is around a long time. Your point around short termism is around how health is prioritised in government. And at the moment, health is very much seen as a healthcare issue. How do we treat people after they're sick and we need to get prevention on the top of everyone's agenda across government and including in treasury and cabinet and elsewhere. That's absolutely fundamental. How we do that because there's so many trade-offs that need to happen, is not clear, but that we do need to do it is clear.

00:19:42 Andrew Kelly

And Thomas, when it comes to leadership, we're likely to see quite a extensive programme of devolution, particularly to combined authorities. What kind of leadership issues come up there and what do we need for devolution to deliver?

00:19:57 Thomas Aubrey

I think this is absolutely critical. I think one of the challenges we've had has been that the local authority has really been the sort of central body of local government responsible for thinking around our built environment. But they are two sub scale. You know we need to be thinking at the functional economic area, which is really thinking around the sort of city region slash sort of county level. So I think the sort of programme of devolution that sort of embarked on with the last government is absolutely critical for success. 

I think there's a couple of points though for this, the built environment to be transformed, it does require very, very strong municipal leadership and of clearly with our sort of previous structure of local government that hasn't been there.

We also need to recognise it will take time for those local institutional infrastructures to develop as well. You know, we may have a great leader can come in to a combined authority, they're not going to transform it overnight. You know, we need to ensure that the people are there across the different areas of planning with the relevant experience and I'm sure are bits of experience that central government can help support these local areas with, but that will take time to ensure that we have the right of teams in place.

00:21:04 Andrew Kelly

Daniel, you've devoted 10 years of your life to this project. How confident are you that it will be used?

00:21:13 Daniel Black

Well, we're now very confident that the economic model will be used, which is fantastic. That's due to be adopted by government this summer formally. And as such it will be rolled out across large projects that publicly funded projects across the country. We think it's a very important part of the solution, but it's not the entire answer. 

So there is still a lot, lot more work to be done. I've talked about, you know, issues of embedding health or prioritising health across government, but also that needs to be everywhere, across all aspects of society, it's about culture change, isn't it.

00:21:45 Andrew Kelly

Ahow optimistic are you, Thomas, about the future of urban areas?

00:21:50 Thomas Aubrey

I'm very optimistic. I think now we can start to use the sort of land value capture mechanism. I think that and we've got this sort of devolution program already starting. I think the future looks fantastic for areas that really want to get up and do something about it, but I think people need to recognise that devolution also comes with requirement to be much more independent, it's important for the combined authorities and city regions and counties to start to think around how they can become much more financially independent using different sources of funding streams. Just going back to government, given the fiscal challenges of the country – that that has to end, and I think it's important that people see that as an opportunity rather than as something that's negative.

00:22:31 Andrew Kelly

Thank you. A final question is we ask our guests to contribute to what we now call the TRUUD bookshelf. Thomas, which book would you recommend that that listeners should read?

00:22:41 Thomas Aubrey

I recommend they should read Good Cities, Better Lives: How Europe Discovered the lost Art of Urbanism by Peter Hall, with contributions from Nicholas Falk. It's a great set of case studies about how these European cities, by integrating transportation, housing with great leadership, were able to transform their built environment and their economies. And I think if anyone's interested in this topic, that's a great place, just to see how it can be done.

00:23:07 Andrew Kelly

And Daniel?

00:23:08 Daniel Black

I'm actually going to recommend three if that's OK. The first one I read when I was studying urban design and it was actually by an agricultural specialist from Reading University called The Death of Rural England by Alan Hawkins. And he basically made it clear to me I hadn't really realised it before, but made it clear that modern rural living is obviously nothing like. What traditional rural living has been for so many years before that and that sort of cognitive dissonance, if you like, that we have that, that living in rural areas is, is normal, if you like. But, it's a very recent phenomenon.

The other very influential book was E. F. Schumacher's Small is Beautiful, which I read as a student, was given to me by my father and got me interested in this whole topic really, but just introducing me to alternative thinkings around economics. 

And my final one, Mary Douglas is How Institutions Think. It introduces the theory of what they call Plural rationality, which is really just about respecting and working with different people and how they see and understand the world.

00:24:11 Andrew Kelly

Well, thank you. It's a very healthy bookshelf we've got!

Now for my recommendation and I'm actually going for a film. It's called. They Came to a City. It's from Ealing Studios in 1944, based on a play by JB Priestley which was produced the year before. It's about a group of people who encounter an ideal city and give their reactions to it. You can see it online on the BFI player and it sometimes appears on the talking pictures channel. I've used it many times in discussions about the future of cities.

The TRUUD website TRUUD.ac.uk has links to all podcasts, background research and issues and recommendations discussed today. Thank you Thomas, Aubrey and Daniel Black for joining me and thank you to UK PRP UK Prevention research partnership for funding the TRUUD project, thank you.

00:25:03 Daniel Black

Thanks very much, Andrew.

00:25:05 Thomas Aubrey

Thank you, Andrew.