My HOUSE used to be a PUB: How to save the UK high street

Ultimate brownfield — Shops to houses

Plus, the other issue many have noted is that we appear to have a shortage of places where people can live. My answer would be to shoot the planners and let rip the free market. Agreed, that is also my solution to most things. It's just that here it's obvious that it would actually work.

We've too many shops in town centres for the new shopping technology. A reasonable solution would be that some of them switch over to being housing units, that thing of which we've a shortage. We could think of the conversion of an ex-shop as being the ultimate brownfield development.

And I know very well that in my home town of Bath the architectural constraints mean that the upper floors of the main shopping streets are entirely empty. So a conversion opens up several stories, not just the shopfront itself.

We could also note that many of these shops remain empty: their value is in fact zero under the current rules and regulations for their use. Given the desire for housing they would gain value by being switched in use, and that's the very definition of wealth creation, the movement of an asset from a lower to a higher value use. So, we all, as a society, become richer by the switch.

Then there's the question of business rates. These are a crude form of land value taxation, and LVT is a very good tax indeed. It's a tax upon the value that the rest of society creates for a given piece of land by the activities of the society around that piece of land. Society's creating the value, so it seems fair enough that society gets to tax that.

Further, given that they're not making land any more, the distortionary effects are very low (and at times even positive).

Thirdly, while it may be the tenant that actually coughs the cash, in reality it's the landlord who pays it, being able to charge lower rents because of the existence of the tax.

We like business rates, thus they should stay. But this does mean that online retailers are advantaged in some manner against brick-and-mortar ones? Yes, but that's just fine: the online retailers aren't using that scarce resource – the urban built environment – so obviously they shouldn't have to pay tax on it.

We like the fact that retailing is moving from an expensive land-hungry technology to one that isn't. Because that opens up more of that expensive land to be used for that other thing we can well do with it: housing. The same will also be true of those land banks the supermarkets have — the places where they were going to build more superstores, but now seem less likely to.

All of which leaves us with this final question: how do we manage what changes and what doesn't?

Use prices as a guide

The obvious answer is simply to use prices. That marginal shop unit down the side street probably has roughly the same value (or perhaps even a higher one, being off the main road) as housing, when compared with that unit right on the high street. However, it obviously has a lower value as a shop site. So, if we're converting shop units to housing, those prices will guide us to what should (and will) get converted.

All of this is equally true of those pubs going bankrupt at a rate of up to 50 a week. Sure, I like a boozer as much as the next bloke, but neither I, nor my generation, can keep them all open – not with our livers. They do need to change use, and why not housing?

All of this ends up being rather Marxist in a way. For Ol' Karl did tell us that the technology of production determines social relations. And we can think of how we shop, and where, as a form of social relations.

Technology is changing, and thus so is the way we shop. The way we use our built environment is changing, and should change. The only other thing we've got to remember from Karl is to make sure that we don't use his preferred methods of dealing with such things. Rather than the bright people trying to tell us how we should be doing things, just open up the market to how people would actually like to do things.

In other words, abolish much of the planning permission system and allow people to convert, either way as they see fit, retail to housing, housing to retail. Then we can allow prices, those guides to the value people put on things, lead us as to which property should be going which way. ®