The local political economy of the regulatory state:Governing affordable housing in England

Regulatory governance involves the use of heterogeneous mechanisms to extract welfare gains from market-based processes. While often viewed as a depoliticisation mechanism, we here explore a distinctly political manifestation of regulatory governance. Our study focuses on the governance of affordable housing in England, specifically on local authorities’ use of ‘Section 106’ (S106) powers to compel private developers to include affordable housing in new developments. We show that, following the financial crisis, the governance of affordable housing shifted from a partisan to a valence issue. As the crisis increased the issue salience of affordable housing, left-wing authorities’ hitherto higher tendency to intervene eroded in the midst of a broad-based increase in S106 deployment. In addition to extending insights into the political economy of regulatory state intervention, our findings shed valuable light on the undersupply of affordable housing in England.