Housing in a civilised society – how did we get it so wrong?

DSCN1078Over the last week or so I have been immersed in reading about housing policy in the UK (all part of essay writing and planning for my dissertation). As a result, I now know more about housing markets, housing bubbles, sub prime lending, commodification, securitization, tenure transition and all kinds of other housing issues and problems than I ever thought I would or indeed would want to. The problem is that so much of it doesn’t actually make sense, it doesn’t appear to be logical or even appear that policy interventions could ever be expected to achieve their aims or deliver the desired change. Maybe that’s the point, maybe that’s why UK housing policy seems to be such a contradiction of ideology and failed delivery and why we still have an ever increasing housing crisis?

Undoubtedly, as a novice in this whole area, part of the reason it doesn’t make sense is inevitably down to my inability to understand and comprehend, as I am sure there are many policy people out there who do get it. But what struck me during the many happy hours of reading was the lack of clarity over what precisely our government has been trying to achieve with their housing interventions other than the obvious ideological drive for a property owning democracy introduced in the 1980s by Thatcher and largely supported by successive governments. For sure, none of them really seem to be trying to stabilise prices over the long term by creating the right conditions for increasing the supply of new homes to meet the demand for houses – they might say they are but the evidence is against them. Different policy interventions either seem to solve one problem whilst causing another or have all kinds of unexpected consequences that undermine the initial intention of the policy to start with – assuming we can believe what they say they are trying to do.

A good example is the recent contradiction of supply and demand measures that on the one hand support first time buyers (through schemes like Help to Buy) to access owner occupation by making it easier to borrow, whilst also removing national housebuilding targets through the abolition of Regional Spatial Strategies, ensuring the supply of new houses has hit an all time low which, when coupled with the aftermath of recession and its impact on the building industry, merely serves to reinforce the housing crisis as demand outstrips supply. The end result appears to be an increase in house prices which of course will surprise no one, but which does of course make it more difficult for many households to purchase their own home as they become more unaffordable to growing numbers. So home ownership declines further despite the government still re-stating its ambition for promoting home ownership – confusion abounds!

But you might ask, why do we care so much about housing markets anyway? What’s the problem with boom and bust cycles in housing? Shouldn’t we just leave it to the market, isn’t that what neo-liberalism is all about? And this is where yet another confusion or contradiction occurs, when government tries to intervene to reduce volatility in the housing market. The whole approach in recent years has been about state intervention, from counter-cyclical measures like credit controls and property taxes to incentives for new build, not exactly leaving it to the market then?

Having said that the implications of continual boom and bust in the housing market go beyond housing, to economic, social and political impacts, so you can see why governments get nervous and feel the need to do something. We have a dysfunctional housing market where house price increases far outstrip any increase in earnings which in turn leads to all kinds of problems such as unequal housing choices, increased risk, and repossessions, causing a growing divide between those that have been able to enter the realms of owner occupation and those that have not.

The answer to the problem according to many commentators is increasing housing supply, we are simply not building enough new homes to meet the continual and growing demand. So the focus should be on land availability, unblocking stuck sites, enabling conversions and supporting the construction industry to deliver. Indeed some policies have been aimed at doing just that but with limited success whilst other policies have conflicted with this aim – increasing land supply is difficult when the government seems to be stuck on pandering to Nimbyism by resisting calls to review green belt boundaries or by refusing to have national housing targets and thereby leaving the difficult decision of how many houses we need to make space for in the hands of local politicians. The net result is fewer homes being built and a worsening housing crisis.

Others, such as Dorling, have argued that we have enough housing but that it is unequally distributed therefore what is required is a dramatic redistribution of housing. According to Dorling if we build more houses it will just result in the wealthy owning more homes, so a more sophisticated solution is needed that redistributes housing. The problem with this is it is unlikely to be very popular and will therefore be unpalatable politically.

So we know what the problem is but the solutions appear unclear and policies in one area create problems in another. As I said in my last post on housing, is it any wonder politicians  are confused, I know I am. But at the heart of the housing issue are the principles of equality and choice, creating the conditions for people to have access to decent accommodation is critical to a civilised society, yet even now we seem to be failing!

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9 thoughts on “Housing in a civilised society – how did we get it so wrong?

  1. Politicians also set the conditions with their rhetoric and can have much influence on especially younger buyers who have not experienced the pitfalls. The famous “no more boom and bust” played a part, and continually talking up the economy as if it will always grow encourages over borrowing, because housing becomes a “one way bet”. But it’s what all governments do. They want us to feel better-off and watching your house rise in value does just that, and feel good factor means spending and that in itself boosts the economy and the tax take, so why wouldn’t they. It’s all short tem solutions because there is more to it than just housing people. Think it would take a Novel to explain all that goes on with housing!

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    • can’t help but agree with you there Paul, short term rather than long term responses are a real problem and yes so much of housing policy is interlinked with other areas, welfare, economy etc that would take more than one book to explain

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  2. A few thoughts (questions?) although I agree with you the whole issue is so complicated it is impossible to come to a solution.

    Is it just a numbers game?

    House builders are companies set up to make profits so they have no real interest in delivering numbers/quality or indeed anything else that does not contribute to the bottom line. In a way, why should they be any different to any other company.

    I have never understood the ‘tax’ on housing developers to provide affordable homes- why isn’t all development so taxed? or none?

    Putting planning in the hands of local neighbourhoods will inevitably lead to less planning permissions being granted for housing as most people appear to want no change. And in a way, who can blame them. (Although I do not agree the control should be there in the first place.)

    So we have a complete conflict between those tasked with providing houses (who should not be doing it) and those tasked with permitting it happen (who also shouldn’t be doing it!).

    The population is growing at an ever increasing rate so more housing is necessary. I think the price issue is simply a case of supply and demand.

    Whilst I think the Regional Spacial Strategies appeared to be a very blunt instrument they at least focussed local authorities minds on the need to plan for more housing. I can’t see any coherent strategies which have taken their place.

    On a local note. I think the City of Bristol has not woken up to the real changes in the population. From BCC’s figures, the population in the city (ie. that part administered by BCC) declined from 1951 to 2002 and only then started to grow. it is expected to grow at about 11% over the period 2011 to 2021 and then continue at a similar rate for the next ten years. Much of the increase is in the increase in number of births so maybe families are getting bigger but if the same average house size is still prevailing (i can’t find the statistics) then Bristol needs to build about 1800+ homes every year for the next 20 or so years with the city.

    Cities have to become denser if we are to avoid building in the countryside and to do this we have build higher. So where we have had 2 storeys maybe 4 would be needed and where we have had 4 then 8 might be appropriate. I’m all in favour of more towers, but that is just me. More people will have to live in apartments which will have to be designed in a way which accommodated families in a much better way. This will require larger floor areas/volumes and better communal facilities ie it is not just a quantitative issue but a qualitative one as well.

    ah numbers!

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    • Hi Robert, thanks for your comments. Yes RSS whilst imperfect at least focused minds which once they were abolished meant local councils could pretty much go backwards on housing supply – certainly in areas like West of England where demand is high.
      Bristol has a particular problem, space for new homes is limited due to tight boundaries and they are surrounded by councils that by and large do not want to provide new homes. Agree there are opportunities within Bristol to densify – particularly old council estates which traditionally had very low densities. The problem is this isn’t exactly popular with residents either. We have built very little but apartments in Bristol for the last few years, we now have too many and not enough houses – people still prefer to live in semi-detached houses with garden. Will need quite a culture change for preferences to change.

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      • Just reading Bristol Residential Survey 2012 the number of dwellings added in the 10 years 2001 to 2011 averages 2198 dwellings per year so maybe we are providing enough within the city. However, the way this has been achieved may hamper the development of these numbers in the future. I know people want to live in two storey houses with a garden but
        this is becoming almost impossible within the city itself. On the other hand the entire development of Filton Airfield is this type of housing!

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  3. There are plenty of semi-detached with gardens that are under occupied by older people. Give them a decent alternative and I’m sure many would take it, whether they could be afforded by many new buyers is a different argument. Have you looked at St. Monica’s in West Street? May be too expensive for some and there are plenty of “additionals”, but it certainly sets out the type of accommodation that is popular with older people and could be an example of what should be aimed for.

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    • Hi Paul, yes I have been to St Monica’s and I can certainly see it would be attractive to some, although I did personally have concerns about the segregation issue – older people in an entirely older person environment just seemed a little insular, particularly with so many facilities under the same roof. It is also expensive. But as I said I can see it is popular and may be what many would prefer. There would have to be some pretty serious incentives for people to move though as many are also attached to their larger homes and reluctant to move away from place they have lived for a long time in a community they know.

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  4. Larger homes mean more maintenance, the DIY can’t go on forever, and this brings it’s own problems. As for “insular”, yes, but it also feels pretty secure which does become an issue when older, and there is the big wide world of Bedminster on your doorstep. Book me a place now!

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  5. Pingback: #HousingDay – why housing is important | TessaCoombes

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