Housing

Dissent in the ranks

Modern HousingYou’d expect lefties to kick up a fuss about the Coalition’s austerity-justified policies. An agenda that is having serious negative impacts upon the most vulnerable, while at the same time transferring wealth to the already wealthy, will have a tendency to annoy those who prioritize solidarity, dignity and security over the search for profit and the appeasement of plutocrats.

But that can be dismissed as just so much hot air from the naïve and irresponsible.

The problems really begin when your own people start cutting up rough.

And perhaps we’re beginning to detect that that is what is happening in the housing sphere.

Yesterday we saw Nick Boles, the Planning Minister, seeming to contradict earlier assurances by Nick Clegg that the new garden cities being planned by the Coalition will include provision for affordable housing. It appears that Boles, in contrast, indicated the Government is to make no explicit stipulation on the matter. Rather it will leave developers the freedom to come up with proposals which may or may not include provision for affordable housing, as the market dictates. So it is perfectly possible that Ebbsfleet may turn into an opulent enclave and make no real contribution to the housing affordability problem in the south east.

At around about the same time we received news that Conservative-controlled Milton Keynes council is not happy with some of the Coalition’s changes to the planning framework. Developers can now renegotiate planning permissions to reduce or remove the requirements to provide affordable housing. The Guardian reported the Deputy Leader as arguing that:

the problem has been caused by ministers treating builders as “poor lambs” after they “squealed” about the viability of developments where they were required to build 30% or more affordable homes. He has written to the planning minister, Nick Boles, demanding he drop a policy “that unfairly and inappropriately favours the interest of developers over the needs of present and future residents”.

And today we have a column by Anne Williams and Peter Oborne in the Telegraph that is suffused with outrage at the way in which housing policy is being conducted. The column is particular interesting because of the way that it seeks to frame the issue. The key argument is that “true Conservatives” should be appalled at the housing situation. Households with established roots in communities are being priced out. Hardworking families, even in two earner households, find ownership in their area unattainable without external assistance. It appears that policy is more interested pandering to plutocrats than the aspirations of working- and middle-class families.  Whatever happened to the Conservative ambition for a broad-based property-owning democracy?

The rhetoric may be in place when the Coalition talks about housing, but the reality is that policy has been timid. And a number of the Coalition’s schemes and wheezes to get more homes built have failed to achieve even the modest impact they were intended to have.

These high profile interventions may turn out to be of little consequence. But they may signal an increasing realisation on the Right that all things housing have got badly out of kilter. If that is the case then the prospect of building a stronger cross-party consensus on the need for more radical action to address our housing problems may have clicked up a notch or two.

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6 replies »

  1. Difficult to see why there should be a requirement for low-cost housing. Surely the key is more houses in the right places. If you build more houses that people want to buy, the rich will upgrade and the increase in housing supply should make some previously occupied homes available to poorer people. That way people will end up living in homes that someone actually wanted to buy, rather than in houses whose only raison d’etre is that they were indirectly subsidized through the planning system. If you want to redistribute income, do it through the tax system or the educational system, not through housing supply.

    Why is it different from shoes or white goods? If you want poor people to have shoes, you give them more money. You do not make business permits for shoeshops conditional on them selling a special line of ‘shoes for poor people’.

  2. Hello Matthew – your comment raises a huge range of interesting issues. At one level I agree – in the sense that some new housing, even if built entirely for the rich, could well be better than no new housing.

    Equally, I would agree that seeking to create affordable housing through planning requirements is probably not the best way to do it. But since Westminster governments stopped being willing to fund sufficient affordable housing directly planning requirements were a mechanism they came to rely on ever more heavily.

    In relation to your last point, I would say that the market for housing is very different from the market for shoes or white goods. Competition doesn’t work in the same way, for one thing. And that is partly because spatial fixity changes the nature of the market. Housing consumption is not something to be judged in isolation – it is the foundation upon which much of the rest of life is built. So residential location carries with it implications for accessibility to just about everything else. If garden cities were built exclusively for the rich, for example, then it would mean that those working in lower paying service industries would be required to commute longer distances. One might argue that if that turns out to be a problem then it would lead to labour shortages that would push up wage rates locally. But I’m not sure how much evidence there is that that mechanism works very strongly. A lot of the new jobs being created at the moment are minimum wage, with the expectation that tax credits deliver enough for people to live on. So you end up with people on low wages incurring high transport costs. We could agree that that is because the labour market is dysfunctional, and that might well be true, but that is the context in which housing development takes place at the moment.

    The broader problem is that demand side subsidies in the face of a limited supply response just pushes up prices. So giving people more money to try to help them to afford housing risks doing nothing other than increasing housing costs. That’s one of the reasons we’ve got a huge housing benefit bill at the moment. Building one garden city will not, in itself, make any difference to the imbalance of supply and demand in the south east – so it will not ease that pressure.

    Your comment also raises the issue of filtering in urban housing systems. How long does it take for the housing vacated by the rich to filter down to poorer households?That is a question that has been debated for a century and the academic literature concluded, if I remember correctly (and it’s a long while since I looked), that this isn’t a very certain or speedy general mechanism for improving the housing circumstances of lower income households. It can work at some times in some places, but it doesn’t necessarily work so well at other times in other places.

  3. Paul, I am sorry but I find that an offensive comment. In no sense do I believe in trickle-down economics. I believe in redistribution via the tax, education, and health care systems.

    I agree that spacial fixity makes the housing market somewhat different. Part of the answer, though, is to reduce fixity by not tax-subsidizing home ownership, equalizing the tax position of the buy-to-let sector, and not tax-supporting sectors such as housing associations and council housing, which tie people to particular locations. If we tended to rent our houses (as Maynard Keynes’ generation often did in London, and as the Germans largely do in big cities), the market for houses would be more like that for shoes and white goods, i.e, it would be competitive. It would also have the huge economic benefit of making geographical mobility easier, something the state-subsidized housing sector has been catastrophically bad at.

    I agree with ‘admin’ that giving people demand-side subsidies doesn’t help, but that’s not what I am suggesting. To repeat – I favour redistribution, which takes money away from the rich (reducing their demand) and gives it to the poor (increasing their demand). It is ‘admin’ who is in favour of subsidies (through the planning system) not me.

    A number of problems prevent enough houses being built. Maybe UK planning system problems loom large, as the brokers’ reports ritualistically say, but I can’t tell you whether that is true. What IS obvious is that we in the UK have some of the ugliest housing in Europe, and that the legacy of council house building and ‘special housing for the poor’ has not been good. Why people would want to go further down this route, as well as extend the unhappy new town experiment, is beyond me.

    What always disappoints me in such discussions is how weak the discussants’ knowledge of comparative planning systems seems to be. You have a problem, you look at the universe of solutions. If you haven’t looked at the comparative universe, why talk? ‘Wereof one cannot speak, thereof one must be silent’ and all that.

  4. The problem is Matthew that I’ve looked at alternative planning systems (including Germany and the Netherlands) and most of them include “council house building” and “new towns” and “special housing for the poor” in varying percentage mixes.

    Now none of them is perfect, but basically the evidence just isn’t on your side. Fixity is a huge problem and it requires direct actions – and successful countries like Germany and the Netherlands take those actions. We have ugly housing in the UK because:

    a) we always try to do things on the cheap – we have just as many good architect firms willing to work with councils as DE or NL – but we don’t give them the budgets to make buildings that work in the long term

    b) we destroyed our local democracy, gutted the ability of our local government to build, commission and create. That’s the difference between us and other, better parts of Europe…

  5. That may be so. I’ve only lived in UK 4 years out of the last 25, and I have almost everything to learn about the planning system.

    About lack of local power you’re obviously right.

    I live in a pretty square in Clifton and I often wonder why councils couldn’t insist that developers build should nice Georgian squares elsewhere, with gardens in the middle. After all, in Germany whole bombed towns were rebuilt after the war pretty much as they were before. Presumably German cities imposed highly restrictive visual conditions on anyone who built, otherwise the level of restoration we now see would have been impossible. The results are certainly beautiful.

    The thought here is maybe we’d be better off if (as you say) a) we restored our local democracy and b) gave towns more not less power over planning.

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