Britain Can Build Its Way Out of Recession

With repossessions rising remorselessly, council house waiting lists soaring, building levels plunging, tens of thousands of construction workers laid off, and scores of regeneration schemes stalling, can anything lift the gloom in the housing sector?

A small shaft of light is appearing on the horizon. The new Homes and Communities Agency (HCA) super-quango in England wants to kick-start building with direct investment on a string of sites in London in collaboration with one of the country's largest housing associations, L&Q. This could be a pilot for elsewhere. Buying land, where values have dropped significantly over the past year - one of the few indirect benefits of the credit crunch - and preparing it for building is also high on its agenda.

Early days, of course. The HCA has been functioning for barely two months, but the scale of its ambition has been underlined not only by its chief executive, Sir Bob Kerslake, but also by the newish housing minister, Margaret Beckett, a member of the prime minister's key economic council. In an interview with Society Guardian earlier this month, she spoke of the agency undertaking a more interventionist role.

Housing offers the government a relatively fast and safe route towards reflating part of the economy, whereas big infrastructure projects take years to plan. Some sites with planning permission can be brought on stream fairly quickly, while others already have essential services in place, such as roads, drainage and utility connections.

But the government - taking a cue from Barack Obama's "rebuilding and retrofitting America" plan, unveiled at the weekend - needs to be much bolder. With the HCA in the lead, supported by councils and housing associations, why not develop a national building and renewal program, delivered locally where possible? It would get tradesmen back to work, bring new hope to building suppliers, to hundreds of thousands of people searching for a home, and to house builders and housing associations (increasingly big players in the market), while helping renew some of our most challenging urban areas.

Recognizing that the state of the sector amounts to a national emergency, the program would test the ability of not-for-profit associations - and, hopefully, encourage a new breed of private housing companies, underpinned by the state and institutions - to offer alternative forms of flexible tenure, without undermining social housing. But it requires political will, harnessing the resources of partly-nationalized banks - and, crucially, the fully-nationalized Northern Rock - to get the market moving.

For months, ministers have been making the right noises about the need for targeted intervention. With little focused so far, the forthcoming budget could include a new housing initiative. Asked if Britain might soon be looking, awe-struck, at Obama's program, Beckett replied: "A lot of housing problems in the US are not identical, but in terms of what can be done, and the scale of their ambition ... it may well be that there will be an impact here."

Of course, comparisons can be dangerous. The endless boarded up, repossessed homes in US cities such as Detroit so far bear little comparison to our own urban problems, although there is certainly no room for complacency. But Obama is talking big numbers - improving and insulating 2.4m homes, for instance, and building many more affordable properties. He is also creating a White House office of urban policy.

With thousands of jobs disappearing each week in Britain, and the lingering potential for unrest, it is time for our government to be similarly bold and ambitious in the one area that could show relatively quick social, economic and environmental returns. "Getting Britain Building" is not a bad slogan.

• Peter Hetheringon writes on communities and regeneration