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The foundation, established in 1904 by the chocolate baron and philanthropist, is based in a charming Arts and Crafts house in York built by Seebohm Rowntree, Joseph's son and successor. "Seebohm started out the research for our creation, whereas Joseph started the hands-on creative tradition by buying up quite a bit of land and building our model garden village of New Earswick," explains Lord Best.

Though he does not share the Rowntree's Quaker faith – "I'm boring old C of E" – Best's career shows a similar Christian devotion to social welfare. After reading social administration at Nottingham University, he ran the British Churches Housing Trust before becoming director of the National Federation of Housing Associations. With his eloquent, if undemonstrative, English middle-class tones and charcoal-grey pin-stripe suit, Best is perfectly cast as an administrator of a Christian charitable organisation.

He was appointed director of the foundation in 1988, the same year that the chocolate company sold out to Nestlé, doubling Rowntree's share price overnight and hence the dividend on the foundation's endowment. At the Rowntree foundation, Best oversees an annual research and development budget of £300m, which is channelled mainly into housing, but also social care and social policy.

Best's success in running the foundation, along with his insight into housing and social issues, was recognised by his ennoblement in April 2001. Although Lord Best of Godminster sits in the House of Lords as an independent, he energetically promotes the mobilisation of market forces in the interests of social reform – policies that derive directly from the foundation's Edwardian benefactors but which also sit rather nicely with those of New Labour.

A century after the foundation's establishment, Best remains as convinced as the organisation's founders of the wisdom of combining research with experimental developments. He constantly leavens his discussion of new directions in housing with his hands-on experience of the trust's own developments. "Our search – we call it a search rather than research – means we do research academically, but we also look at testing on the ground and convening meetings," he says.

One of the foundation's most recent housing research reports made the dire prediction that government had underestimated the mounting housing crisis in the South-east by ignoring net inward migration. The report calculated that household formation demanded up to 65,000 more homes each year than were actually being built.

"We've been running those sorts of deficits now for two or three years," Best explains. "And we're noticing a major rise in homelessness. The deficit will pass the million mark before 20 years is up, and all this will land on London and southern England."

We’re noticing a major rise in homelessness. The deficit will pass the million mark before 20 years is up, all in London and south England

Best's solutions would be to release more land for housebuilding, both brownfield sites and scruffy greenfield sites at city fringes, and to get town planners on side: "I see planners as having a key role in making things happen, rather than as the people who say no.

"Take for example our new model village of 550 homes at new Osbaldwick, which we are developing in partnership with York council. The council owns the land and its planners determined that it would be a good thing for there to be a development. They're happy for us, as an agency outside local government, to commission a masterplan."

Best believes private rented housing in inner-city areas, marketed at young singles and couples with moderate incomes, is a vital ingredient in the housing development mix.

The foundation has developed two experimental "Caspar" schemes of 50 market-rental flats in Leeds and Birmingham in the past five years, which have proved a success: "People are moving in so fast when other people move out, we are getting a higher revenue than we had calculated.

"So I think there would be an almost insatiable market for this product, both by prospective tenants and by City funding institutions seeking a good return on their investment. I think there would be eight or nine major investors who would take £50m or £100m worth of decent new residential apartments for rent, just like that."

Another Rowntree idea to take pressure off mainstream housing stock is communities for the elderly. At an extension to New Earswick called Hartrigg Oaks, the foundation developed Britain's first self-contained US-style elderly community of 152 bungalows. For an annual service charge of £4500, the 250 residents enjoy a community centre with restaurant, spa pool and library, plus a full range of services including building maintenance, cleaning and laundry. The community centre also includes 41 places for nursing care, into which residents with dementia can move at no extra cost.

"I think housebuilders have not recognised the opportunities of continuing care retirement communities," says Best. "On quite a small site, you can get 250 people. And planners are keen – after all, we are emptying 130 other houses for families to move into, and older people don't generate much traffic."