New York recently passed its “City of Yes” housing strategy. Calling it “strategic” is a bit generous and not for the first time, there are uncomfortable comparisons with what’s happening in the UK. In both places, private developers are being given a virtual carte blanche to build what they like, where they like, in a desperate attempt to fill the housing shortage. NYC’s Mayor, Eric Adams (under numerous criminal investigations and known for having received lots of money from developers to fund his election campaigns) thinks saying “Yes” will lead to the building of 80,000 homes in the next 15 years. The Labour government, adopting a similar policy, is hoping for 1.5 million in five years.

It’s a massive triumph of hope over experience. There are things to be said and done about the planning system (usually known as “zoning” in the US). It needs improving. But to present it as the root of the problem shows both New York Democrats and UK Labour are looking through the wrong end of the telescope.

Their false perspective rests on blind faith that the private market can solve a problem it created – and has a financial interest in perpetuating. We now have decades of evidence that a developer-led approach doesn’t work.

For balance, there are some good things in the City of Yes, like converting the glut of empty office space for housing. But that won’t help, unless those homes reach the people who really need them. There’s also a commitment to spend $5bn on “social” housing, but this is very vague and could just be used to continue the privatisation of NYC’s vital supply of public housing. So far, I’m struggling to see any genuinely positive signs in the Labour government’s shared conversion to YIMBYism.

I don’t know if Mayor Adams has been to London lately. But if he has, he might have noticed that precisely the kind of new housing he says he wants in NYC has become ubiquitous. Look across the London skyline and you’ll see numerous clusters of identikit housing blocks located near transport hubs. Almost every borough has them. But there is no evidence that it has helped to reduce housing need (or carbon footprints, another claim for “Transport Oriented Development”). What they have done is increase community anger about housing that is labelled “affordable”, when it is out of the reach of most local people.

In NYC (and other parts of the US), a particularly pernicious calculation is used to define “affordable”. It’s based on the Area Median Income (AMI) for which the current figure in the city is $127,100. Housing is defined as affordable if it meets a given percentage of the AMI, based on paying 30% of income on rent. So, for example, a developer can say it will provide a certain number of two-bedroom homes to households with 60% of the AMI. In practice, this means applicants with income of $74,580 are eligible for this “affordable” housing, potentially paying as much as $3,000 per month rent. But in the poorest parts of NYC, the median income is around 70% less than for the city as a whole. In other words, a lot of the new housing Mayor Adams wants, won’t help the people who need it most.

Sorry, that’s all a bit complicated – and that’s another issue. NYC and the US have a byzantine web of housing policies. Provision is salami sliced to target different income groups, with a host of complex subsidy mechanisms underpinning them. Very few people understand it, which leaves the field open to control by technocrats – and potentially abuse. Again, UK Labour has increasingly similar tendencies. What they seem to ignore is that private developers thrive on this kind of opaque system. They pay consultants and lawyers millions to find loopholes that ensure they can maximise profit by minimising the amount of homes they provide that are not sold to the highest bidder.

Even if the planning system is a significant obstacle to housing delivery (which I doubt, certainly in the UK context, where there are estimates of a million unbuilt homes that already have planning permission), it’s not the place to start. Planning policy, like housing policy, is ultimately about political policy. We might think of the NYC/Labour government efforts as what David Harvey calls a “spatial fix” – an attempt to avert or divert economic crisis by giving capitalist interests a way of absorbing surplus capital. This is sometimes referred to as using housing as safe deposit boxes for the rich. What Adams and Raynor are trying is to combine a spatial fix with a political fix. Instead of addressing the underlying causes of chronic housing policy failures, they reach for the simplistic notion that if you build more homes, prices will fall and there will be less housing need.

Reaching back in history for counter-arguments isn’t always helpful. But we might consider the situation in both US and UK cities in the 19th century. There was no planning system, the fantasy world of some 21st century “YIMBYs”. What this led to was not plentiful housing, with the magic of “supply and demand” driving down costs. It led to millions living in slums, constantly faced with rent rises and the threat of eviction.

Houston, Texas has famously lax zoning regulations, so it shouldn’t have a housing problem. But recent research found it has the second worst record in the US for meeting housing need.

I also consider this issue in relation to what’s happened in my home borough of Tower Hamlets in the last 40 years. In 1981, the Thatcher government foisted the London Docklands Development Corporation (LDDC) on the area. The LDDC ripped up local democratic controls over new housing, replacing it with a permissive regime that allowed developers far more freedom to build. Following the Adams/Raynor/YIMBY rationale, this should have led to a reduction of local housing need. It had the opposite effect. Even since the departure of the LDDC, Tower Hamlets has continued to be a development hotbed, with tens of thousands of new homes built. But the number of homeless people and length of the housing waiting list haven’t reduced. If anything, things have got worse.

The other important lesson from the LDDC housing experience is how it fuelled racism. The failure to build enough homes working class people could afford led to fury and resentment in the local community, particularly on the Isle of Dogs (where I was working at the time). Sadly, some of this was turned, not against the LDDC or government, where it belonged, but towards the Bangladeshi population. In 1993, this led directly to the first election victory of the neo-fascist British National Party, which made housing its key campaign issue. The renewed threat of the far-right means the City of Yes and its Labour government equivalent are both ill-conceived and dangerous.