Developers must be allowed to build over the green belt in order to provide homes the West Midlands needs, a Government inquiry has concluded.
The region becomes home to 17,800 new households every year – but there aren't enough properties to house them, economist Kate Barker warned.
Her final report on how to deal with Britain's housing shortage and reforms to planning laws was published yesterday. It was commissioned by the Chancellor, Gordon Brown, and John Prescott, the Deputy Prime Minister.
Regions such as the West Midlands and the South East needed to re-examine restrictions on development, she said.
Only 11 per cent of land in the West Midlands is developed and 88 per cent is green space, the report said.
The report said: "There is likely to be increased need for green belt reviews, both to ensure that the integrity of green belts is maintained where necessary and to ensure that the development that takes place in England is genuinely sustainable."
Local councils and regional development agencies such as Advantage West Midlands would be expected to carry out the review.
"Given the high proportion of land that is green belt, limited and properly justified change of classification could be allowed without jeopardising the overall goals for which green belts are designed."
Allowing major towns and cities to expand would actually help the environment, for example by undermining the existing tendency for commuters to live in rural areas and drive to work in an urban area.
But the report also warned that in some parts of the country, particularly the West Midlands and London, existing homes are allowed to lie empty.
In Birmingham, 19 per cent of properties are vacant – the third highest figure in the country.
In Sandwell 16 per cent of properties lie empty, and 13 per cent are unused in Wolverhampton.
Ms Barker, a former member of the Bank of England’s Monetary Policy Committee, also called for a major shake-up in the planning system to speed up controversial proposals for nuclear power stations, waste incinerators, motorways, windfarms and other large projects.
Decisions would be taken by a new independent Planning Commission after a consultation.
The recommendations were welcomed by Communities Secretary Ruth Kelly.
She said: "Kate Barker’s final report makes clear that planning is a valued and necessary activity that can deliver positive economic outcomes, alongside important social and environmental objectives.
"We have already introduced substantial reforms to the planning system to speed up the plan-making process and most recently to planning for housing as a result of Kate Barker’s first report."
The Government is to set out proposed changes to planning laws next spring.
Business leaders welcomed the proposals. David Frost, director-general of the British Chambers of Commerce, said: "Of course the Green Belt should not be destroyed but we cannot let outmoded views on development stifle economic growth."
He added: "The lack of progress in developing a runway at Heathrow and the slow movement on widening the M6 stand testament to the damage that our existing planning laws are creating."
Friends of the Earth warned that the Barker recommendations would give business and supermarket chains a bigger say in the decision making process.
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