John Kroencke: Mutually Beneficial Solutions to the Housing Crisis

Housing reform efforts in both Britain and the United States have tended to get caught in the quagmire of fractious politics. For years, figures on the left have called for below market rate or social housing. Those in the free-market camp have called for easier private market development rights. Renters have emphasized the outsized returns that homeowners have benefited from over the last decades. Homeowners have emphasized their rights (perceived and real) to control the nature of local new development. The sound and fury of competing claims has meant that the status quo has continued to rule the day and every year the total shortage is exasperated as fewer housing units are built than they would be under less restrictive rules. Despite these familiar arguments there are in fact many reforms which both allow new housing and benefit existing homeowners.

Accessory Dwelling Unit Reforms in the United States

In the United States— where land use planning is done at the municipal and state level- multiple accessory dwelling unit reforms have passed in recent years. Under these rules homeowners can build an additional unit in their back garden, convert a garage, or subdivide an existing home into two or more units. While the laws impose limits on things like the size of the units and their distance from neighboring plots of land, they have been a huge improvement on the status quo.

Data from recent years in California shows that thousands of homeowners have taken advantage of this change with about half of them retaining the living space for their private use and the other half renting the newly created spaces out on the market. Additionally, many of those who choose not to rent out the space on the market use it for elder relatives, siblings, children, or friends.

The housing shortage means that as more and more people desire to live in places with little ability to build, the prices are bid up above the construction cost. Because of this, newly permitted space can be incredibly profitable for homeowners both as a stream of new revenue for those who choose to rent out the space but also in the resale value of the home.

Potential Reforms in the United Kingdom

While there haven’t been reforms of exactly this type in the UK, there is great potential for mutually beneficial reform. Unlike much of California, London and other cities in the UK were developed far before top-down planning systems emerged. As such, one useful starting point for thinking about these types of reforms is to look around at the type of development that was allowed in past decades before researching which factors stop current contemporary markets from responding in similar ways.

In a recent briefing paper for Create Streets, Dr. Samuel Hughes does just this for mansard roof storeys. Mansard roof storeys are distinct from a standard loft conversion because they feature a roof line with two slopes. The steep lower slope of the roof allows most of the added interior space to be unrestricted in height while the shallow upper slope limits the added height to the exterior. The general effect of this ingenious architectural feature is to provide the most increased interior volume within the smallest envelope.

While in the Georgian, Victorian, and Edwardian eras it was entirely natural for residents to add additional space as land prices rose, this practice has been stopped by subsequent regulations. With these changes some streets were ossified in transition: some terrace homes had already built mansard roof storeys while others hadn’t, leaving what Hughes calls a sawtooth effect. Hughes proposes that residents on streets already exhibiting this sawtooth effect should have the right to add mansards of their own. Perhaps more importantly he proposes a rule that would allow the residents of parapeted houses built between 1700 and 1918 decide by simple majority at the street level if they wish allow mansards on their street. As part of the proposal, Hughes provides a basic design guide that would limit the pitch, height, and other aesthetic aspects of any mansards allowed by the two mechanisms.

While this proposal would make new mansards much easier, the system does occasionally allow them. For instance, as Hugh Graham describes in the Times the residents of Fitzroy Road in leafy Primrose Hill London were allowed to eliminate the existing sawtooth effect on their street in the last decade. The additions were only approved in joint- every one of the remaining eleven freeholds had to agree to build additions matching the preexisting mansard on the twelfth terrace house.

As a result of this permission, thousands of square feet were created in an expensive part of London with no downside. For places like Primrose Hill where the floor space is valued so highly, the construction costs of the additions yielded a return of around one thousand per cent.

This recent briefing paper follows up on a February 2021 Policy Exchange proposal from Hughes and Ben Southwood which allow even more street level based bottom-up planning for post-1918 structures.

While the oppositional politics of housing reform dominates the pages of newspapers, there is great hope for mutually beneficial housing reform in both the US and the UK. 


John joined the Centre in 2021 after finishing his Ph.D. in Economics at George Mason University. He spent the 2020-21 academic year as a Final Year Fellow at the Center for the History of Political Economy at Duke University.

His role involves research on family business as part of the Centre’s Ethics and Theology project and contributions to the wider work of the Centre. As part of this, he will complete research on the role of the great estates in the private provision of land planning and other work on the role of markets in housing and environmental issues. John’s past research has focused mainly on the history of economics and housing.

A native of California, John looks forward to travelling around the U.K. and Europe.