The perversity of the politics of housing

The abject failure of housing policy is among the biggest challenges facing this country yet it barely gets a mention on the hustings or in any political debate.

(Anthony Hilton, Evening Standard, 28/05/13)

There was a time when the stance taken by the major political parties on housing issues was a key General Election battleground. But that was half a century ago. With high costs and insecurity pervasive, the UK housing market is evidently very sick at the moment. This has significant short- and long-term consequences for the broader macroeconomy and significant impacts on households’ well-being. Yet, housing policy has so far failed to gain real political traction.

When the Government does propose to intervene on a substantial scale – in the form of Help to Buy – the policy is all about political calculation and very little about doing what needs doing to get the housing system into better shape. Indeed, beyond the Treasury and the industry interest groups that stand to benefit directly from the policy, commentators across the spectrum – including the IMF and the OECD – display near unity in condemning the policy as extremely unwise. I have had words about Help to Buy on a couple of previous occasions (here and here).

Most recently, Isabel Hardman posted yesterday at the Telegraph and linked the Chancellor’s pursuit of Help to Buy to the failure to pursue serious reform of the planning system in order to increase housing supply. Action on supply – which most informed commentators agree is long overdue – fails the test of political calculation. Older home owners who don’t want more development in their areas vote – and often vote Tory – while younger people living in high cost rented housing are less likely to. Too much talk of increased housebuilding means Shire Tories start to get antsy about their support in their local parties. So support for any reform to encourage more development withers.

And this is the case when we focus on planning alone. As regular readers of this blog will know, my view is that it is foolish to lay the blame for Britain’s supply failure exclusively at the door of the planning system. We need also to be looking at concentration in the land market and the construction industry as barriers to increasing supply. But that is so far off the political agenda as to move into the realms of fantasy politics.

If we switch focus to renting we see great political concern over the size of the housing benefit bill. Moves to restrain the aggregate bill focus on symptoms and consistently misdiagnose causes. There is a failure to acknowledge that the situation we face is the legacy of thirty years of housing policy action and inaction, and the interaction between housing policy and wider economic and policy change.

There are widespread calls for government to support more housebuilding directly, rather than indirectly through guarantees. This would deliver a short-term economic boost as well as longer term gains in economic efficiency. There are calls for a return to constructing conventional social housing at subsidized rents. This will reduce the reliance on housing benefit as the primary means of ensuring low and middle income households are able to access adequate housing. It would also be better value for money when judged over an appropriate investment horizon.

A turn in this policy direction would represent a reorientation of 30 years of policy thinking. But perhaps more importantly it would require politicians to stop thinking like contemporary politicians – obsessed with short-term electoral calculation.

At the moment the incentives are not there. The housing benefit bill is high. In order to get that bill down via constructing more social housing in the short term total housing policy spend is going to have to increase. The housing benefit savings emerge in the medium term. But this appears to fail the test of electoral calculation. That is certainly the case for a Government that continues its perverse and slavish adherence to the rhetoric of austerity and couples it with what appears to be an increasing commitment to protecting spend on traditional Tory shibboleths – defence, security, immigration.  The problem is compounded by the fact that housing is an area where responsibility is split – with supply the responsibility of CLG and housing benefit part of DWP’s empire – so potential costs and benefits accrue to different Ministers. Holistic thinking is required, but it is not in any particular politician’s interest to do any.

A publication by Shelter last year made the reorientation point neatly in relation to a rebalancing between housing benefit and price subsidies:

The challenge for Ministers is to think less like politicians focused on populist benefit cuts and short-term thinking, and more like business people working towards a long-term investment plan.

But as soon as you see the words you are struck by how unlikely this is to happen among the current generation of politicians.

The task for those who are passionate about housing, and addressing the problems caused by inadequate housing, is to think about how the problem can be reframed. It needs to be reframed in such a way that dealing with it aligns with the sort of incentives to which modern politicians are sensitive. I noted a couple of weeks ago the way in which, of perceived necessity, some housing problems are being reframed in relation to health in order to access health budgets. That is one example of telling the story differently in order to gain traction and reorient priorities.

The narratives surrounding housing and its consequences need to be changed. The conversation needs to be taking place on a different terrain. The breadth and the depth of the ramifications of the housing problem need to be spelt out. The issues need to be reconstructed in ways that mean they achieve sufficient urgency and significance to penetrate the Westminster bubble and hit the top of the agenda. Dealing with the housing problem needs to become politically unavoidable.

Politicians may suddenly discover a sense of broader vision and a commitment to statesmanship and stewardship. That might compel them to embrace longer-term thinking over shorter-term electoral calculation. But I’m not holding my breath on that one. So the alternative is to engage in a process of reframing to get their attention.

And if we could encourage greater democratic participation among those most adversely affected by current policies then that would act to intensify the pressure for a different sort of housing politics. But that, of course, raises a whole other set of challenges.

Image: © Stuart Miles – Fotolia.com

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4 replies »

  1. Is part of the problem that while a large fraction of Brits now have reason to want lower house prices and more homes built, they – rightly or wrongly – don’t see this as the government’s responsibility? Immigration, or health, or even the economy as a whole, are seen as things that government can and must act on, but housing is seen more as a grin-and-bear-it, ‘what can you do?’ issue like the weather.

    • Adam – Interesting. That isn’t an idea I’ve seen floated before, so I’ve no idea if there is any evidence in that direction. Personally I’m more likely to encounter people who work on the presumption that the Govt should be doing something. But that may just be that I’m moving in the sort of circles where that’s the way the issue is approached. Equally, I guess, it may be no so much that people don’t see it as govt responsibility but that there’s much the govt can do – can’t rather than shouldn’t. But, again, I’m not sure if there is any evidence that that effect. Either way, they’d be wrong.

  2. Disagree Adam.

    Large part of society is being pushed to either pay high rents or pay high house prices. With housing such a large percentage of the monthly outgoings this is a very serious issue for many households and one where a solution is needed asap.

    Strategic solution (housing supply) and Tactical (improve tenants rights).