Why We Can't Build Anything Any More – And How To Fix It | Sam Bowman, editor of Works in Progress

The Scale and Nature of Western Stagnation

• Western developed nations, particularly the UK and US, are experiencing economic stagnation characterized by falling birth rates, worsening climate outcomes, and declining public health.
• A primary driver of this stagnation is an inability to build housing, transit infrastructure, and energy supply.
• In the UK, housing construction has been lower for 50 years than in the 1930s despite higher population growth.
• UK industrial electricity prices have more than doubled in inflation-adjusted terms over the last 20 years, leading to 15% output reductions in energy-intensive sectors like chemicals and cement in the EU since 2022.
• The UK has built no new reservoirs since 1992 and has not increased flight capacity at Heathrow since 1990, creating severe infrastructure bottlenecks.

The Economic Harm of Housing Constraints

• In London and San Francisco, the price gap between building a home and selling it can reach a factor of 4 to 5, indicating massive regulatory barriers; in 80% of US cities, this gap is negligible.
• Restrictions prevent agglomeration effects, costing the average US worker an estimated $16,000 annually in lost wage potential by preventing movement to high-productivity cities.
• Housing shortages suppress innovation by limiting the density required for unconventional breakthroughs in knowledge-based industries like biotech.
• In the UK, permission to build on farmland in the southeast can increase land value 180-fold; in London, the uplift is estimated at 1,400-fold.
• The "Lower Thames Crossing" tunnel project illustrates the inefficiency of the planning system: 360,000 pages of documentation costing £297 million, which is double the construction cost of Norway's largest road tunnel.
• Housing restrictions contribute to regional inequality, wealth inequality (driven by real estate appreciation), higher obesity rates, and reduced fertility.

The Political Economy of Obstruction

• The core barrier to construction is a "veto point" system where local objections trigger legal reviews, environmental assessments, and "gold-plated" standards that drive up fixed costs until projects become unviable.
• Local authorities have little incentive to approve development because post-1947 planning laws removed the requirement to compensate landowners for lost value, while business rates are largely retained by the central government rather than local councils.
• "NIMBYism" is often driven by a desire to maintain neighborhood character and avoid localized negative externalities (noise, traffic) rather than a desire to keep national house prices low.
• Top-down targets often fail because they incentivize the construction of low-quality housing or trigger political backlash that leads to policy reversals.

Proposed Solutions: Incentivizing "Buying In"

• Street Votes: A policy allowing residents of a specific street or block to vote on their own design and density codes, effectively allowing them to "opt in" to higher density in exchange for capturing the uplift in their property values.
  • Success Case: In London council estates, 93% of residents voted in favor of redevelopment schemes that would add 1,200 new units to fund better housing for existing tenants.
  • International Precedent: Israel's Tama 38 policy, which allows apartment blocks to vote for vertical expansion or demolition/rebuilding, accounts for one-third of new housing in the country.
• Benefit Sharing: Explicitly compensating or offering discounts to those negatively impacted by projects (e.g., cheap electricity from a new nuclear plant) rather than just paying cash.
  • Historical Example: The UK's NHS privatized GPs by letting them retain private status ("stuff their mouths with gold"), and the Thatcher government sold public housing to tenants at significant discounts to secure political support.
• Opt-Out Mechanisms: A system where city-wide upzoning is the default, but local blocks can "opt out" to preserve their current zoning if a local majority votes against change (as seen in Houston, where ~30% of the city opted out).
• Restoring Local Incentives: Returning property taxes and business rates to local councils to align local government revenue with the approval of new developments.
• Parallel Institutions: Creating new, agile regulatory bodies alongside failing incumbents (e.g., ARIA for research funding) to bypass bureaucratic inertia without immediately antagonizing existing stakeholders.

Aesthetic and Regulatory Reform

• Aesthetics as Policy: Architect-led design often prioritizes "challenging" or avant-garde styles that are unpopular with the general public; enforcing "agreeable" aesthetics could reduce NIMBY opposition by ensuring new builds look pleasant to non-experts.
• Regulatory Arbitrage: Allowing specific projects (like data centers) to operate under separate, streamlined regulatory regimes (similar to "behind the meter" power generation) to bypass the thicket of environmental objections.
• Second Staircase Rules: Current UK fire safety rules requiring mid-rise buildings (6-15 stories) to have two staircases make such buildings economically unviable, forcing construction into either low-rise or high-rise categories.

Underrated Technologies

• Nuclear Power:
  • The UK's nuclear costs are high due to regulatory over-compliance (e.g., the "ALARA" principle requiring infinite safety investment) and a lack of build pipelines, not technological failure.
  • South Korea builds nuclear reactors for ~25% of the UK's cost per megawatt by building fleets of standardized designs rather than one-off custom projects.
  • Locally, communities near existing nuclear plants often welcome new ones due to high-quality local jobs; opposition is often driven by abstract safety fears rather than local impact.
• GLP-1 Agonists (e.g., Semaglutide, Ozempic):
  • These drugs have effectively solved the obesity crisis for the majority of users, offering a technological fix to a problem previously treated as a lack of self-control or a result of the "food environment."
  • The technology allows for delicious food consumption without the physiological drive to overeat, avoiding the need for restrictive policies that harm the general population.