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    BCP’s vision is that free-market municipal policy solutions are broadly available, widely acceptable, and regularly employed, enabling American cities to achieve their full potential as engines of economic prosperity. We reject the idea that cities are lost to free-market principles or policies.
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Home Community, Growth and Housing

London’s housing crisis is a warning about the power to say no

Zoning reform matters. But London shows that cities can restrict housing just as effectively through discretionary review and layers of veto power.

Patrick TuoheybyPatrick Tuohey
August 3, 2026
in Community, Growth and Housing
Reading Time: 4 mins read
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London’s housing crisis is a warning about the power to say no
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American debates over housing tend to focus on zoning. That makes sense. Rules limiting apartments, density and building height can make new housing illegal before anyone submits a plan.

London suggests that zoning is only part of the story.

The British capital does not rely primarily on the sort of zoning familiar to American cities. England instead uses a discretionary planning system. Projects are considered individually against local plans and a range of other “material considerations.” The development plan matters, but compliance with it does not necessarily settle the question.

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That distinction may sound technical. Its consequences are not.

The Wall Street Journal recently reported that London needs an estimated 1.1 million additional homes just to reach the Western European average for homes per capita. The city has an official annual target of roughly 88,000 homes, yet construction began on only 4,170 units in 2024–25.

One proposed development in Shoreditch has spent four years seeking approval and produced more than 9,000 pages of documentation. Planning officials rejected it in part because demolishing two existing office buildings would erase what they considered an interesting period of industrial history.

That is not zoning in the traditional American sense. But for someone trying to build housing, the distinction may offer little comfort.

Political scientist Francis Fukuyama has used the term “vetocracy” to describe systems with so many opportunities to block action that accomplishing almost anything becomes difficult. Housing policy offers plenty of examples. Zoning can serve as one veto point. Planning commissions, neighborhood advisory boards, historic preservation bodies, environmental reviews, administrative appeals and discretionary staff decisions can serve as others.

Better Cities Project has examined how public participation can gradually become an unofficial neighborhood veto. New York City is working to reduce the influence of advisory bodies that can slow or obstruct development. The problem is not that residents have opinions about development. They should. The difficulty comes when an advisory process gives existing residents repeated opportunities to stop projects that otherwise meet a city’s rules and stated housing goals.

London provides a useful comparison because it separates two problems that are often treated as one.

Zoning usually sets the limits in advance. Before anyone proposes a project, the law already determines what can and cannot be built.

Discretionary review creates a different problem: uncertainty after the fact. A project may appear acceptable under existing plans, but developers still cannot know whether officials will approve it, what additional studies will be required or what objections may emerge before a final decision.

That uncertainty is not free.

The Journal describes one London developer who spent £40,000 on an application to convert a derelict building in Hackney into two apartments. The council said a decision should take eight weeks. Two years later, the developer was still waiting.

Along the way came requests for additional reports on trees, sustainability and sunlight. Each new request sent the project back through public consultation. Financing, insurance, security and other carrying costs continued to accumulate. The developer estimated that the process could eventually cost more than £200,000.

Nothing in that story requires a zoning prohibition. Delay can do the work instead.

The same dynamic appears in American cities even when the institutions have different names. Kansas City-area projects have been slowed or stopped by public processes and neighborhood opposition to additional housing. A project need not be formally prohibited to become economically impractical. Delay, litigation and repeated opportunities for objection can produce much the same result.

That complicates the usual discussion of zoning reform.

Allowing duplexes, apartments or greater density on paper matters. But the reform means less if local government then subjects those projects to several additional rounds of discretionary approval. Remove one veto point and political pressure may simply move to another: design review, historic preservation, neighborhood commissions or some other stage of the process.

None of this requires eliminating public input. Residents often know things about a site that planners and developers do not. Public participation can identify drainage problems, traffic conflicts and other legitimate concerns.

The question is what happens after that information is provided.

A system designed to gather useful information is one thing. A system that allows substantially the same development question to be reconsidered again and again is something else.

Cities can reduce that uncertainty by moving more compliant projects toward by-right approval, in which developments that meet established standards can proceed without another political vote. They can also make greater use of pre-approved housing plans to reduce design and permitting delays while still allowing cities to establish health, safety and design standards in advance.

Austin offers another example. Its recent housing reforms did not depend on a single change. The city allowed more housing types, loosened parking and lot-size rules and also worked on the development process itself. Housing supply responds not only to what cities allow on paper, but also to how difficult they make it to turn permission into an actual building.

London is a reminder that cities have more than one way to prevent housing from being built.

Restrictive zoning is one. A process with enough discretion, delay and opportunities to say no can be another.

Rewriting the zoning map may be necessary in many American cities. But it may not be sufficient.

Tags: Economic DevelopmentHousingHousing AffordabilityPermitting and LicensingRegulationZoning
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Patrick Tuohey

Patrick Tuohey

Patrick Tuohey is co-founder and policy director of the Better Cities Project. He works with taxpayers, media, and policymakers to foster understanding of the consequences — sometimes unintended — of policies such as economic development, taxation, education, and transportation. He also serves as a senior fellow at Missouri's Show-Me Institute and columnist for the Missouri Independent, as well as a regular contributor the The Kansas City Star and The Hill.

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