Housing

Policy capture, busy work and the housing problem

It is tempting to think that the UK housing system is uniquely dysfunctional. Policy over so many years has so manifestly failed to get the measure of the problem and failed to take sufficiently radical action that we might be tempted to consider those in charge uniquely inept. If it’s a choice between cock up and conspiracy, go for cock up every time. Type of thing.

We might, however, review the recent policy past in the light of a paper by Gurran and Phibbs entitled Are governments really interested in fixing the housing problem? (£), which has just appeared online in Housing Studies. It tells a story of policy inadequacy in the face of chronic housing affordability problems that feels rather familiar. But the authors take Australian housing policy at federal level and in New South Wales as their subject.

The themes of their policy story have features strongly in the British context over the same period: placing the blame for sluggish housing supply on overly burdensome regulation and state attempts to capture value from rising prices for public benefit; in the face of calls for more radical action, rejecting public housing as a solution to affordability problems. Gurran and Phibbs offer some examples of high profile policy pronouncements that seek to carefully construct the issue as one to which income redistribution or public housebuilding cannot be seen as effective solutions. The policy response is therefore to dilute planning regulations and lift requirements to provide affordable housing and infrastructure through the planning system. Significant funding for public housing only featured as part of the extraordinary response to the Global Financial Crisis of 2008. All the while prices and rents continue to rise.

Gurran and Phibbs are, however, very much not on the side of the cock up theory of inadequate policy. The point of their paper is to argue that housing policy in Australia has largely been captured by sectional interests. In particular, they highlight the way in which right wing think tanks have peddled ideologically preferred policy solutions branded as “research”; the housing building interest has inserted itself in the policy process and existing home owners have exerted themselves through the political process. The first two groups push for deregulation, even if it isn’t the driver of sluggish housing supply. Of course they would, why wouldn’t they? If I were a builder who could make several percent more on every sale by reducing the regulatory burden I’d be a mug not to press the government to go down the deregulatory route. The latter group don’t want to see more properties build if it risks undermine existing property values. With the ideology of home ownership being particularly strong in Australia this is a proportion of the electorate that demands attention.

Perhaps the most vivid quote in Gurran and Phibbs’ paper comes from an ex-planning minister in New South Wales, reflecting on the role of a development lobby group in seeking to capture the policy process:

The Urban Task Force tried to meddle wherever it had interests. [The CEO]’s job was to generalise the private ambitions of his small band of members to give the appearance of a broader philosophical and whole-of-industry view. In reality, it was a small band of speculators trying to hustle the government into making policy decisions that suited them. The Urban Task Force started to turn on the government and me as minister from the middle of 2007.

Gurran and Phibbs argue that the net result of all this pressure from sectional interests is “busy work”. That is, the government appears to be acting but without those actions making much of a discernible positive impact upon the problem. In the Australian context this entails setting up a range of Commissions and Taskforces as much as it involves implementing specific policies. In many ways “busy work” could be thought of as one version of Edelman’s symbolic politics. We need to be seen to acting even if there is no great expectation that the action will be effective.

Observers of the British housing policy scene will, of course, already have recognized that it would be possible to offer a rather similar account of the way in which recent British policy has evolved. After all, much housing policy over the last five or so years has been a minimally reworked version of proposals emanating from the Policy Exchange; the National Planning Policy Framework was written with a major input from house builders; and the differential engagement of older home owners and younger renters with the political process can arguably go a long way to explaining the flavour of recent policy.

The similarities are perhaps not surprising. Gurran and Phibbs argue that a number of the policy capture and lobbying practices they observe in Australia were consciously imported from the UK. But we have yet to see a definitive account of the way in which British housing policy process was so comprehensively captured. We do, however, see policymakers engaged in plenty of busy work, and housebuilders reaping handsome reward.

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6 replies »

  1. I am reminded of the long connection between politicians and building forms.
    John Poulson and Maudling; Beeching and Marples; many local councillors… it’s a very common occurrence.
    And where outright wrongdoing is so common, “capture” by the private interests is usually equally rife.
    So this is definitely an important part of the story.

    However, channelling a previous post of yours, I’d probably point the finger most strongly at the toxic mix of the “laissez-faire” philosophy and changes in the structure of economy/society/culture. Even today, after many years of housing demand growth, it’s still possible to say that mostly*** there are enough houses for people, but too many are in the wrong place.

    Our housing stock was built at a time when our economy was relatively widely distributed. So, as forces of hyper-urbanisation have grown, we have had lots of areas shrink in population. The housing often decays to a certain point and then is knocked down***. (e.g. Liverpool, Stoke, S. Yorks).

    ***The “knocked down” bit in recent years is why it’s less reasonable to say this than it was a few years ago.

    Why hasn’t the market provided? Work hasn’t moved to cheaper areas very often. It’s just not happening.

    (My defence for posting on Bank Holiday? The rain…)

    • I agree that this issue of policy capture is only one part of the story. Broader societal changes have reshaped the (space) economy in important ways, and some of the forces at work are yet to be fully understood. I think the question of distribution across space/cities/regions (of economic activity/housing stock/infrastructure) isn’t one that gets nearly enough attention, let alone policy action.

      The point here, I guess, is just the simple, subsidiary one – why has the policy response to manifest problems been so inadequate? I don’t think it is that policymakers don’t recognise what the issues are. It is that they are either ideologically disposed against relevant action or feel that they are constrained not to act or to act in line with particular interests.

  2. Metatone has a good question.

    However let’s question the question.

    Is it really true that the market has not provided? With the poor relatively poorer nowadays, why would the market rush to provide them with housing (given, also, that land and housing are now relatively much more expensive)? This does seem to be a distribution story (there’s the distributional impact of globalization, and the pro-asset-rich impact of stimulating the economy through QE).

    Social housing is one way of swimming against the tide. Maybe its the only realistic way, but it doesn’t provide very nice houses, and it often makes the wrong decisions about where to put them. The author of this blog certainly does not live in social housing, and it’s not just because he can afford a larger house, it’s also because they’re just not very nice.

    As to getting public support for a large-scale public housing program in a Europe with substantial cross-border population mobility, well, good luck with that.

    • Your position and profession would seem to rather confirm the initial thesis.

      To add some precision to the question. The question is not “why did the market not provide poor people with housing?”

      It is: “Why have businesses concentrated in the most expensive to live parts of the country in the last 30 years, where in the 30 years before that they spread much more evenly?”

      Now there are multiple answers to that. But few of them have been injected into the housing debate and my contention is that is a big oversight.

    • I’m sure the broader story is one of distribution. The effect of policies like QE is, I’ve no doubt, important in understanding what is happening in the UK housing market – as is turbulence in stock markets elsewhere in the world – but that connection is rarely made effectively in policy terms. The market will cater for the sectors of the population where there is effective demand. That’s not a criticism. But two questions follow. The first would be to what extent is effective demand conditional on the broader institutional structure. Would institutional reform (to eg the land market) increase the number of households for whom home ownership was in reach? Second, what do we do about those households for whom the market will not provide, or for whom the market provides accommodation of extremely poor quality?

      Public housing would be one possible solution. It is the one that Gurran and Phibbs refer to in their paper on Australia. It is what I’m advocating? Not in this blogpost. I think social housing is part of the answer, as it delivers more on a value for money basis than personal subsidies, but it isn’t the whole answer. It may even be that it is better thought of as a transitional and we develop a much more fluid sense of what constitutes subsidized housing, as in other continental European countries.

      Social housing doesn’t have to be poor/poorly designed housing. Although in the past there have clearly been periods when it has been.

      I think you might well be right about the politics of the issue in the context of a borderless Europe, even though such views – that anyone can just waltz into the country and get access to a “council” house – are based on a misconception of how social housing allocation policies work.

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