Over the past 18 months, significant attention in the housing policy space has been devoted to the idea of ‘Street Votes’. In the absence of more fundamental reform to the planning system on either side of the Atlantic, Street Votes offer an opportunity to deliver additional housing in a way that would overcome local opposition to development by delivering significant benefits to existing residents.
A detailed explanation of Street Votes and how they would work can be found here, however in the simplest terms: Street Votes would enable the local residents of a street to come together and vote on a proposed design code for their area. The code could include an extension of their existing property, the addition of a mansard roof or even more ambitious change. If a supermajority of residents approved the code then every house on the street (regardless of how they voted) would obtain the right to enact what had been agreed. Not all residents would take up this right but regardless of whether they did or not, the value of their property would increase significantly with the additional planning permission it now has.
This last part is the key benefit of Street Votes - that they provide residents with a significant financial incentive to approve additional development on their street. In a high demand area such as London, an additional storey could add six figure sums onto a property’s value. It is hoped that the fact local residents capture so many of the benefits of development means they will become much more willing to embrace it than is currently the case where they often only receive the costs.
Will people actually use Street Votes?
Although the potential benefits and few downsides mean that at least attempting Street Votes is a no-brainer, concerns have been raised regarding the policy’s ability to fundamentally increase housing supply to the levels required in many Western economies. One of the main concerns revolves around what could be called the “hassle factor”, where uptake for Street Votes could be low since the relevant parties simply lack the time or energy to coordinate their neighbours, draw up initial plans with architects, submit proposals to the local council and potentially campaign for a ‘yes’ vote - all the while knowing that the end result may not actually be in their favour. Stephen Bush of the FT voices similar concerns here from the developer’s side, where trying to move potentially dozens of residents through the process would involve significant costs and no certain outcome at the end of it all.
But what if there was a way to alter the Street Votes mechanism in a way that could alleviate some of these concerns? Reforms to private pensions over the past decade may provide a solution.
Automatic Enrolment and the Power of Inertia
Between 2012 and 2017, the UK Government introduced automatic enrolment to private pensions. Whereas previously workers had to actively sign up if they wanted to join their workplace pension, now all workers earning over a certain level were enrolled in their workplace pension and they would have to take an active decision to opt out if they didn’t want to participate. The impact the policy change had on enrolment rates to private pensions was dramatic - between 2012 and 2020 the % of private sector workers participating in a workplace pension increased from 42% to 88%, while Cribb and Emmerson (2019) exploited the gradual rollout of automatic enrolment by employer size to find that the policy increased participation rates by 45 percentage points.
That we saw such a dramatic impact in spite of the fact that the actual pension schemes themselves were unchanged is a great example of the the power of ‘default’ or ‘status quo’ bias. Were all agents acting rationally, we would expect the participation rate to be the same whether or not automatic enrolment was in place - if an individual is better off in a pension scheme then it shouldn’t matter whether they have to sign up or not. However, the success of automatic enrolment highlights how relatively low ‘hassle’ costs and inertia can have a significant impact on take-up rates, even if the benefits of doing so are large. The power of a policy such as automatic enrolment is that by changing the default option, the inertia now acts to keep people participating in their pension scheme. There is now a low ‘hassle cost’ to opting out of their workplace pension scheme and relatively few end up exercising that opt out, meaning that the number taking part in the beneficial activity (in this case pension saving) increases significantly.
This sort of thinking can be found in other policy areas, such as the campaign to change organ donation registers to opt out rather than opt in, raising the question of whether applying it to Street Votes could help to overcome some of the concerns discussed above.
Street Votes with approval as the default
Instead of development relying on proactive residents, what if the default option was to allow certain types of development on a street but to also give residents the ability to opt out of such development should they wish. This would transfer the ‘hassle’ cost and inertia from the pro-development side to the anti-development side, potentially expanding the number of areas where Street Vote type planning approvals would be in place, while retaining the ‘principle of consent’ through the opt out. Enacting planning reforms while giving local areas the opportunity to opt out is not new to housing policy. In 1998 the city of Houston reduced the minimum lot size required for a home. In order to overcome opposition to the move, the reforms included an opt out that areas that were opposed to the change. However, as these maps1 show - relatively few areas actually ended up exercising that opt out. Whether this was because of inertia or people responding to the potential financial benefits of being able to split their lot, we cannot be sure - but it was likely a mix of both.
As in pensions, you will have people who will be proactive in taking advantage of the opportunities Street Votes provide, whereas others, though not opposed to local development, may simply not see the process as worth the hassle. In ‘opt in’ Street Votes as originally formulated, only areas with enough of the former will end up with permission for development, whereas changing to ‘opt out’ Street Votes would capture areas with enough of either group.
So how would an opt out work in practice?
Below I provide two illustrative examples of how such a Street Vote system with development as default might work in both a US and UK setting. Please note that I am not an expert in the intricate details of either country’s planning systems, these are simply illustrations and the actual optimal details of the policy would likely differ from what I have proposed here.
A US Example:
The US planning system largely consists of a zoning system with relatively strict rules on what should type of development can be allowed in a particular area. Even in the most high demand US cities, much of the land consists of single family zoning: plots of land with a single family home like Sark Ct in the suburbs of San Jose, California. Despite only being a 20 minute drive from downtown San Jose and 30 minutes from Stanford/Palo Alto, Sark Ct consists of 1-2 storey homes on large plots with ample parking - which helps to explain why houses on the street sell for around $2m.
An opt out system could work as follows: 4 levels of residential zoning are established - again, the details of this aren’t really important for now.
Zoning Level 1: Single Family (1-2 storeys, 2+ parking spaces per unit)
Zoning Level 2: Townhouse (Split lot, up to 3 storeys, 1 parking space per unit)
Zoning Level 3: The Condo (up to 4 storeys, multi-family, no parking minimums)
Zoning Level 4: The 5 over 1 (up to 6 storeys, mixed use with commercial space)
The residents of Sark Ct are currently in Level 1, but in 2025 the local municipality announces that all Level 1 areas will be ‘upzoned’ to Level 2. At this point the opt out process begins e.g. letters are sent to each of the 15 households in Sark Ct notifying them of the planned upzoning (hopefully explaining the benefits of doing so) and that they have the chance to opt out should a majority (or some other suitable threshold) of households object by a certain date. Of the 15 households on the street, 5 are actively pro-development, 5 are actively anti-development and 5 are apathetic enough to not get involved either way. Under an opt in Street Votes approach, it is unlikely this street would end up approving upzoning since only a minority are actively pro-development. However, under the opt out system, only 5 object to the upzoning and it goes ahead.
Regardless of the result of the Vote, no further upzoning can take place on the street for a further 15 years (this time frame is illustrative). Had the residents exercised their opt out, that would have ‘protected’ the street until 2040, when the local municipality would have run the process again (and the residents could have opted out again should they have wished to do so). However, since the opt out threshold was not met, the street was upzoned to Level 2, meaning all residents now have the right to split their lot and build up to a 3 storey townhouse on each. Some residents will exercise this right immediately, whereas others will prefer their existing house, however over time townhouses will gradually replace the single storey homes currently on the street.
After the initial 15 year period is over in 2040, the municipality again reviews the zoning of Sark Ct. Should 80% (again - this threshold is just for illustrative purposes) or more of the original plots now be occupied by townhouses, the municipality will propose that the area get upzoned again to Level 3. However, by 2040, only 10 of the original 15 plots were now occupied by townhouses, meaning that upzoning does not occur.
After a further 15 years, in 2055 another review is carried out and this time 13 of the original plots are now occupied by townhouses meaning that the threshold for further upzoning is now met. Again, the street will have an opt out should the majority of residents vote in favour, otherwise Sark Ct will move to Level 3. And so the process could continue.
A UK Example:
The lack of a history of clear ‘zoning’ regulations in the UK, combined with the greater diversity of ‘street types’ (e.g. terraced, semi-detached), means that the type of system suggested above for the US would be unlikely to work here. Instead, a less prescriptive system based on number of storeys would likely be required.
Under a UK version, any existing property would be allowed to be extended to the median number of storeys in the census MSOA2 +1. For the vast majority of MSOAs outside of inner London, the median number of storeys would be 2 meaning that each property would have the right to be extended to 3 storeys (in most cases this would mean an additional storey). The local council would write to each household notifying them of this change and if they wanted their street to opt out of it. If the majority of households responded saying they did wish to opt out then permission to build an additional storey on that street would not be granted (this opt out would need to be reaffirmed after 15 years just as in the US case). In the streets that did not opt out, over time additional storeys would be added (relevant authority could issue design codes e.g. stipulate that the additional storeys be in keeping with the rest of the house). Eventually, the median number of storeys in the MOSA would reach 3, meaning that permission for up to 4 storeys would then be granted (streets would again have the option to opt out) and so the process of gradual densification would continue.
Discussion of the pros and cons
Such a policy described above would have similar effects and benefits to the original Street Votes proposal, only arguably to a greater extent given we would expect more areas to be granted additional permissions for development under the opt out system. Under the opt out system, current residents will again capture many of the benefits of redevelopment through higher property values, even if they do not immediately carry out the redevelopment themselves. However, the cost to gaining permission for such development is now significantly lower than under the opt in system. This would arguably mean that the benefits of redevelopment would no longer be restricted to areas with the resources and connections to organise a formal Street Vote.
The opt out system retains the ‘Principle of Consent’ to planning, with no redevelopment being forced upon streets where a majority of residents are opposed. The cost of opting out should be relatively low to ensure this continues to be the case. Furthermore, as with the original Street Votes, even in streets where additional permissions are granted, residents are under no obligation to redevelop their property if they do not wish to.
Crucially, both systems are demand led and achieve the gentle densification of currently low density but high demand areas. The opt out policy would be responsive to local housing demand along two key channels. First, the pressure not to opt out would be greater in areas of high demand since the financial benefits foregone if a street did opt out would be larger. Therefore, we would expect fewer streets to opt out in areas of high housing demand. Second, in high demand areas, there will be greater financial incentives to use the new planning permissions sooner rather than later. In the US, this will mean an area of high demand will pass the threshold for further upzoning sooner, while in the UK the median number of storeys will increase more rapidly.
However, even in areas of acute housing shortage, any change would be at very gradual pace. Even in an area of high housing demand such as North London, a decade after residents were granted permission to add an additional storey to their house, many have still decided not yet to do so. Moreover, protections regarding the minimum number of years that must occur before a street would be considered for upzoning again would further ensure changes were gradual and would protect the policy from accusations of ‘undermining neighbourhood character’. In the US example, even on the fastest timescale it would take at least 30 years for a street to go from single family zoning to a 5 over 1 (and in almost all cases it would take much longer).
I recognise that the gradual nature of both versions of Street Votes means will be too slow for some who would wish to see change sooner, and it is unlikely that these policies would overcome a housing shortage that has been 75 years in the making in time for my generation. However, in spite of that, an opt out system would still be more likely to increase supply faster than an opt in proposal - simply since more areas would be covered with additional planning permissions. In addition to this, opt in Street Votes could continue to be used alongside the opt out system, meaning that areas of particularly high demand that wished to move faster than the opt out system would allow could organise a Street Vote to allow more ambitious development (e.g. adding two storeys instead of 1, skipping a Zoning Level early in the US case).
Furthermore, the fact that the change would gradual would enable the surrounding infrastructure of an area to keep pace with the changes in population and dwelling type. This is particularly true in the US and non-London UK where current car dependency means that simply building apartments where there is currently no public transport infrastructure leads to isolated and poorly connected communities.
In Summary
Street Votes is arguably the best idea currently proposed to overcome current housing shortages in a way that wins the consent of existing homeowners. However, concerns regarding the costs of organising and conducting a Street Vote mean that take up may not be as high as needed. Switching to an opt out system, where certain types of permission are automatically granted but streets retain the option to opt out could help to overcome this problem.
Many thanks to John Myers for pointing me towards these maps
An MSOA (Middle Super Output Area) is a statistical unit used in the UK. It consists of between 5000 and 15,000 people. I opted for MSOAs over LSOAs (1000-3000 people) since the latter tend to regularly cut across streets in dense urban areas