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Costs and benefits: Is housebuilding in Bishop's Stortford costing us too much or are we ignoring the benefits?

Gavin Simpson, who was born and brought up in Bishop's Stortford, and Pete Clift host award-winning podcast Economics in Ten. Here they delve a little deeper into the economic situation that is impacting us all...

One of the first lessons you learn in economics is the difference between needs and wants. Needs are those items that are essential for your survival, like food and water, whilst wants are things you like to have that bring comfort to your life. Shelter is an essential need and therefore the building of houses is a must if a government wishes to maximise the welfare of its citizens.

Over a vast number of years, it has been obvious that across the country, the supply of housing hasn’t kept up with the ever-increasing demand, which is why now the average house price nationally is £274,000, up 9.6% from last year. The average UK salary is £31,285 and therefore we can see how difficult it is for many to get onto the property ladder.

Bellway is building 323 flats at the £200m Goods Yard development by the railway station - eventually there will be 743 homes on the site. Picture: Vikki Lince
Bellway is building 323 flats at the £200m Goods Yard development by the railway station - eventually there will be 743 homes on the site. Picture: Vikki Lince

Building houses is controversial. Most people understand the need to build new homes but many don't want them near them. This is known as Nimbyism, where Nimby stands for 'Not in my back yard'.

There are clearly private benefits of an increase in the supply of housing to those individuals looking to buy and to developers looking to sell new homes, but there are also costs and benefits to other members of society not involved in the transaction. In economics we describe these as ‘third parties’ and this area of economics is known as 'externalities' and is linked to an economist called Arthur Pigou.

Bishop's Stortford has not been shy in building new properties. The Stortford Fields site alone will have created over 2,200 new homes and the fourth phase has just begun. Add St Michael's Hurst, the Goods Yard project by the railway station and St James' Park at Stortford South and you can’t move around the area without seeing construction occurring.

Fifteen flats above a commercial ground floor have been built as part of the new multi-storey car park at Northgate End in Bishop's Stortford (56401671)
Fifteen flats above a commercial ground floor have been built as part of the new multi-storey car park at Northgate End in Bishop's Stortford (56401671)

It has not stopped the average property price in Stortford being well above the national average, at £387,950, although this is 16% down on the figure last year, which suggests the housing market is cooling thanks to the new developments.

We can understand why many people are unhappy about these developments, despite having nothing to do with them, when you see photos of the town centre gridlocked or videos of road rage around the narrow streets of Stortford. As an old market town, one could argue that the infrastructure cannot cope with the ever-expanding population and this is putting a strain on local services, despite developments that include new schools.

This is what Nimbyism focuses on, or what in economics we call the ‘negative externalities’ of housebuilding. If the facilities are not there, especially for the youth of the town, it can lead to anti-social behaviour and higher crime rates. It can also impact negatively on wildlife and the environment. This is most obvious to see around Stortford when there is a heavy downpour and roads are suddenly underwater due to the shortage of natural habitat to absorb the rainfall.

Many years ago, there was a big campaign (that one of us marched through the town for and our mum was one of the leaders) to save Herts and Essex Hospital in Bishop's Stortford from closure as a general hospital. The campaign eventually failed, with the A&E closing in 1990 and inpatient services moving in 1995 to Princess Alexandra Hospital in Harlow, which at this time is rated as ‘requiring improvement’ by the Care Quality Commission. A community hospital was developed, along with new housing, but, in hindsight, with the big growth in housebuilding, it may have been sensible to have kept Herts and Essex as a general hospital in order to support the big rise in population and its healthcare needs.

Nimbyism often focuses on the negatives and clearly housebuilding also brings benefits to ‘third parties’ – just ask businesses in the town, which have an increased clientele thanks to the rising population. It also brings new business to the area as well as bigger and better facilities, such as the new Grange Paddocks Leisure Centre.

Sometimes the ‘positive externalities’ get lost among all the negativity that surrounds housebuilding. There have been improvements in transport links, through new roads and the expansion of Stansted Airport. All of this creates jobs and brings economic growth to Bishop's Stortford and, by default, increases the standard of living for those who live in the area.

All economic decisions have costs and benefits and there are no easy answers, especially when it comes to housing. So what are your views? Are there too many developments happening in Bishop's Stortford and the surrounding areas? Are you a business that has really benefited from the new housing? It would be really interesting to hear from you all.

* Gavin and Pete's podcast Economics in Ten recently came second in the Independent Podcast of the Year poll in the PodBible Awards for 2021and two years ago it won the award. It can be found on any podcasting website at https://podcasts.apple.com/gb/podcast/economics-in-ten/id1450116373.

Gavin, who lives in Knebworth, was born and bred in Bishop's Stortford, attended The Bishop's Stortford High School and his mother still lives in the town. Through their Economics Ten podcast, he and Pete, who lives in Stanstead Abbotts, sponsor a player at Bishop's Stortford FC.

Gavin Simpson, left, and Pete Clift (56401389)
Gavin Simpson, left, and Pete Clift (56401389)

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