The government is solving the housing crisis, apparently

frameOn Thursday Kris Hopkins, the Housing Minister, published a post at the Spectator entitled This government is solving Britain’s homes crisis. The post was designed to coincide with the publication of statistics about the unlovely, and largely unloved, Help to Buy scheme. When I saw the post I was intrigued. It seemed, superficially, to be making a rather implausible claim. I anticipated an orgy of spin and statistical chicanery.

As it turns out I wasn’t too far off the mark. [Read more…]

Rehabilitating social housing

8182240298_f9770a9cbeA substantial essay by James Meek on the housing crisis, entitled Where will we live?, has appeared online today at the London Review of Books. It will appear in the print edition in the New Year. The essay roams widely across the terrain of housing policy. It focuses on past and current policy failures and contradictions, but en route touches on the problematic nature of the housebuilding industry, modernist architecture, underinvestment in social housing, and the land market. It is well worth reading in its entirety.

Meek does an excellent job of laying out why we find ourselves with our current dysfunctional housing market. The premise of the essay is that we need to rewind to the Right to Buy to start to make sense of the mess we’re in. Whether by grand design or simply through a series of unfortunate incremental steps, subsequent policy has compounded problems that have their roots in Thatcher’s most populist policy. [Read more…]

Careful now

Richmond HillIf you were entertaining any idea that changes to property and land taxes could help to curb the volatility of the UK housing market then just stop it. That is the message of a new report Taxing Issues? released by the Policy Exchange this week. This is a highly political document, and fascinating as a result.

The think tank offers a host of reasons why property and land taxes just won’t do the trick.

The report starts from the premise, based on OECD figures, that the UK already has the most highly taxed property in the developed world. This premise is, if not erroneous, then rather misleading. The OECD includes all sorts of things in the calculation to arrive at that figure – including business rates. Business rates are largely irrelevant to managing the housing market. Except the rhetorical strategy adopted by Taxing Issues? means that they aren’t.

The reasons for thinking property taxes will fail to deliver reduced volatility are a melange of some reasonable points, some basic economic theory, some casual empiricism – including making brief reference to a range of non-comparable taxes in other countries, and a massive dose of street-fighting politics. [Read more…]

Meet the new boss … the arrival of Reeves and Hunt

7929568108_32b18088e1_nLabour seem to be getting themselves in a bit of a tangle. Again.

Ed Miliband – he of the energy price freeze and the ‘use it or lose it’ approach to development land – claims to be bringing socialism back. The removal of Stephen Twigg and Liam Byrne from the shadow cabinet and the shuffling of Jim Murphy to International Development was interpreted by some a cull of the Blairites. Some on the left hoped that this was a further indication that Labour aimed to produce a policy platform that was less Tory-lite and more identifiably social democratic. There were those who hoped control of their party may have been wrestled out of the hands of the Tory B team. But I don’t think anyone sensibly thought the party was going to travel as far as genuine socialism.

Today must therefore present a bitter prospect for those hoping for a bright new dawn. [Read more…]

Interpreting Osborne

8501244926_80f2423585_nThe more I think about economic policy the more I think that there isn’t a big enough dose of interpretivism applied to it. This thought recurred yesterday reading George Osborne’s set piece speech in which he, as Isabel Hardman of the Spectator put it, “trashed” Plan B. I think trash-talk would perhaps be a better description of his approach.

One thing that – some – economists have learnt from the Great Recession of 2007-08 is that our understanding of the economy is rather more partial than had hitherto been assumed. That doesn’t mean that economists don’t have interesting and useful things to say. But the economy can behave in ways that economists found difficult to read. Some would say this means models need to be refined, respecified, recalibrated. Other would take a more radical stance and say that the economy and economics needs to be rethought. Conventional models and methods don’t have room for some of the characteristics that are fundamental to the way the economy functions. Chris Dillow highlighted some key points last week in the context of a post about the difficulties of forecasting.

If you were thinking about it in terms of narratives you might suggest that what is needed is a change of root metaphor. [Read more…]

Aggressive intolerance as a substitute for aggressive housing policy?

info signageSomething’s been bugging me, but I’ve not fully thought it through. That may well become apparent in a bit.

I’ve a sense there is a link that isn’t being made as effectively as it needs to be.

Within the housing policy community there is a widely shared presumption that housing supply in the UK has been inadequate for at least the last couple of decades. The detailed numbers can be debated, but there is broad agreement that the number of homes constructed annual falls well short of the numbers needed to meet the growth in the household numbers. At the moment we are operating at around half – or perhaps a little more – of the rate of new build that most commentators consider necessary. So the shortfall continues to increase. As a consequence we witness problems of affordability and access. Rapid tenure transformation – the resurgence of private renting – can also, partly, be explained by this lack of supply. [Read more…]

What went wrong? The rethinking of council housing

Here’s a curiosity. Today I came across a piece on council housing that I’d originally drafted back in 2006 as a chapter for a book. Unfortunately, the book never came into being, for a variety of reasons. The piece has been sitting, neglected, on a memory stick ever since.

It struck me that it would be a shame not to do something with it. No point leaving it in the cupboard even longer. The argument might be of some interest.

I have lightly edited the text so that it can be read as a freestanding piece of work. There are one or two places where subsequent policy change has altered the trajectory of the sector’s development, but I have resisted the urge to modify the substance of the argument. The piece reflects how I was thinking about the issue all those years ago.

You can read the whole thing below the fold. Just a warning, it’s written as a proper academic piece – with references and everything – not the sort of rather airy broad brush arguments that you normally encounter on this blog. :-) [Read more…]

Shared ownership and the changing reality of middle income Britain

HousesToday I participated in a conference organised by the National Housing Federation on the theme Affordable home ownership and intermediate tenure. I spoke in a session alongside Gavin Kelly of the Resolution Foundation and Owen Jones of the Independent. They discussed broad economic currents, in particular the trajectory of household incomes. They also considered the broad question of where housing policy currently features in the political universe, and how prominently it might feature in the General Election 2015. I focused more on some observations about shared ownership in this context.

The text to go with my contribution is posted on Scribd. You can also access it beneath the fold. [Read more…]

Curbing the welfare hate

414585868_2c8513d269_nWe’ve now had three years of the blue-tinged contingent of the Coalition perpetrating a sustained attack on social security recipients – those slugabed skivers – in the name of curbing the deficit. Yesterday’s post at the Guardian again maps the profoundly negative tone of the language that has accompanied the agenda. This has had serious consequences. It has further poisoned the debate and eroded empathy. In moving the agenda forward the Conservatives have been aided and abetted by their junior Coalition partners, at the cost to the party of many members and supporters.

Resistance to this agenda has gained limited traction. In part this is because the Government believes that when it seeks to curb the generosity of social security it has the majority of popular opinion on its side. In part it is because the mainstream media has done a feeble job in engaging critically with the Government’s agenda, or even holding the Government to basic standards of honesty. There has been very limited scrutiny of the way the high-flown rhetoric of “making work pay” and ensuring “fairness” has been matched by the squalid detail of policy implementation. And in part it is because Her Majesty’s Loyal Opposition has been unutterably useless at actually opposing anything.

But are there signs that the complexion of the debate is changing? [Read more…]

The politics of the bedroom tax

wheelchairLet’s start with the most important point. The Coalition’s proposal to cut the housing benefit to social housing tenants who are deemed to be underoccupying is going to cause further hardship for households who are already poor and vulnerable. Reflecting on the experience of the WCA regime administered by ATOS, it is not beyond the realms of possibility that the changes will make life intolerable for some.

The second most important point about the bedroom tax is that it is likely to lead to some housing associations going out of business as a consequence of rising rent arrears. This could spread the misery and uncertainty to a much wider group of households who are not directly affected by the changes to the rules on underoccupancy.

And this story is going to begin to unfold for real in less than two months’ time, unless the government has a major rethink.

But stepping back and looked at the issue from a more detached position the politics of the underoccupancy changes are interesting.

The welfare reform agenda is made up of several distinct policy changes. Some of them are genuine reforms of the system – such as the move to universal credit. Some are simply cuts. All of these changes have be criticised heavily by those close to the social security system. But only the changes to the rules on underoccupancy – the so-called “bedroom tax” – seem to have gathered any political traction. And even here the momentum behind opposition is gathering rather late in the day.

One reason for the failure of opposition to these reforms is the fact that the Government’s reworking of language – its version of fairness and its crude division of the world into skivers and strivers – strikes a populist note. It goes does well will the tabloids.

The Government has done a good job of boiling their agenda down to a few simple, divisive messages that can secure majority support. [Read more…]