Piecemeal policies for Scotland's housing crisis don't cut it - this is a wake-up call

My new report, Prosperity Begins at Home, commissioned by the David Hume Institute, exposes the economic cost of this outdated thinking and calls for bold, disruptive reform to build a fairer, more prosperous Scottish economy.

The report argues that housing is not just about shelter – it is core economic infrastructure. Poor affordability, inadequate supply and an unresponsive system are now active drags on national productivity and wellbeing.

Scotland’s housing crisis is not new, but the risks are escalating. An ageing population, persistent regional inequality, and mounting climate pressures mean that continuing with business-as-usual approaches will only deepen social and economic divides.

A series of Glasgow tenements. Picture: John Devlin

We need more than short-term, piecemeal policy. We need a long-term, systemic shift that places housing at the heart of Scotland’s economic and environmental strategy.

The Cost of Inaction

Substandard housing outcomes are holding back economic growth. Supply shortages and unaffordability in key areas restrict labour mobility and productivity.

People are stuck in the wrong homes, in the wrong places, unable to reach the jobs that suit their skills. Rising costs drain household incomes and widen inequality. These are not fringe effects – they are fundamental constraints on Scotland’s growth potential.

Professor Duncan Maclennan

For years, policy has focused on quick fixes: subsidies, rent caps and marginal land releases. But these responses barely touch the deeper issues – land market dysfunction, rigid planning systems and fragmented governance. Without systemic change, outcomes will continue to deteriorate.

Housing as Infrastructure

Scotland must begin to treat housing as economic infrastructure, just as we do transport or digital networks. This means integrating housing into long-term economic planning, improving investment models, and creating effective governance structures – something that currently does not exist.

Disruptive reform is essential. Land reform and planning overhaul are not side issues – they are central levers. We need a planning system that facilitates, not blocks, the creation of sustainable, connected communities. Public investment must benefit everyone, not just landowners who profit from outdated policies.

Break Down the Silos

Housing must be integrated across all levels of government and across policy areas – economic development, transport, education and net zero. Too often, housing decisions are made in isolation, missing critical links and compounding problems. Growth zones without affordable homes push workers to the margins; developments without public transport links deepen inequality.

The Scottish Government must urgently direct Regional Economic Partnerships to treat housing as a priority and demonstrate how policy actions in all areas impact housing – and, in turn, national missions like reducing child poverty and boosting productivity.

Local authorities also need the power and resources to lead, not just administer. Instead of centralising action, government should enable combined authority housing initiatives, as seen in England.

Time for Political Courage

None of this will be easy. It will require political will to challenge vested interests, bridge policy silos and empower local leadership. But the alternative – continued housing failure, stalled growth, and deepening inequality – is unacceptable.

This is a wake-up call. If Scotland is serious about building a fairer, greener and more prosperous future, housing must be placed at the heart of our national economic strategy. And that will require courage – to rethink, restructure, and disrupt.