Zoning and housing supply - the case of UK

Martin Wolf has a couple of opeds on the restrictive role played by zoning regulations in limiting housing supply in the UK. He could just as well have been saying about many other countries. 

He points out that housing in the UK is as expensive today as the latter part of 19th century, with the ratio of average house prices to earnings in the fourth quarter of 2020 being 8.4, higher than any other year since 1880s.

He writes,

Housing completions averaged 325,000 from 1950 to 1970 (inclusive) and reached a peak of 425,000 in 1967. But average completions were a mere 182,000 from 1990 to 2019... owner-occupation rose from 33 per cent in 1939 to 70 per cent in 2001, but fell to 64 per cent in 2018-19. Moreover, between 1997 and 2017, the proportion of people aged between 35 and 44 living in rental accommodation in England rose from 9 to 28 per cent. Soaring house prices helps explain the decline in owner-occupation, since that increases the deposit needed for purchase.

He points to the sharp decline in public housing projects for the reduced supply - in the 1950s and 1960s they formed more than half all dwellings.

In fact, council housing have been continuously declining since the sixties. 

In another article, he points to restrictive zoning regulations which are representative of several countries,

Here are two facts about land use in England: houses and gardens occupy just 5.9 per cent of available land; and land with permission to develop can be worth 100 times as much as land without it... 63 per cent of land is currently farmed, while all developed land, plus gardens, plus outdoor recreation, is a mere 15.3 per cent. Moreover, 84 per cent of the UK’s population lives in urban areas, which must generate a still bigger share of gross domestic product. The share of farming in GDP is 0.61 per cent: economically, it is a hobby.

A distinctly British zoning restriction is the use of Great Belt, which are aimed at preventing urban sprawl by keeping land permanently open. The Green Belts were introduced in the forties and fifties in London (a belt 1-5 miles wide) first and then across the country. A paper by Paul Cheshire and Boyana Buyuklieva proposes releasing for development of Green Belt (or agricultural) land "within 800 m of any stations which have a service of 45 minutes of less to a major city". 

The authors write,

London Green Belt is now 35 miles wide in parts and 514,000 hectares in total – this is more than three times the total size of Greater London and more than 13 times the total area of land in London used for residential gardens.

The paper also tries to capture the costs imposed by the planning system. It disaggregates the costs and documents the value gain per hectare for a typical residential plot starting from its original conversion from agricultural land use. In fact, almost 86% of the land value increase from agriculture to developed residential land is from cost of infrastructure and the planning levies paid by the developer to obtain the right to develop the land.

The break-up would be as follows:

While this varies across the country, the broad orders of magnitude are similar.