The editor of Country Life, writing in the FT:
Planning has always been a thorny issue for the Tories. Look at a political map of Britain and (outside Scotland) most of the more scenic parts are blue. The rank and file view Constable-like scenes of rural tranquillity as the England for which they fought two world wars...
I wasn't aware that the British working classes all marched off to fight for The Kaiser or for Hitler, but if they did, fair enough. Their children and grandchildren deserve to be punished by being forced to live in Victorian tenements for ever.
After 1997, Richard Rogers produced a report for the newly elected Labour government recommending an increase in density of urban areas in the hope they would become more like Barcelona – happening places, with good services and pavement cafés.
Strangely, his view chimed with that from the other end of the spectrum, of the Prince of Wales. Both believed that brown field sites should be developed before open countryside. But little was done to make this urban renaissance a reality...
Wot? Then we get the urban NIMBYs wailing about 'garden grabbing'. One of the few things which Labour got right was reducing the exemption from Business Rates for vacant buildings to discourage speculative ownership of empty buildings on the High Street (which did improve occupancy ratios) but the usual shills are still wailing about that.
After the example of Mrs Thatcher, David Cameron wants to help Britons realise their aspirations for home ownership. Has he misjudged the tide of mortgage finance? For the foreseeable future, it appears to have flowed out to sea. According to Lucian Cook of Savills research department, there is a “fundamental shift” that could be as important as Mrs Thatcher’s right to buy, which enabled council tenants to purchase their homes. Only now, with lenders expecting deposits that equal a year’s income, the trend is the other way.
Banks are quite sensibly asking for much bigger deposits because they are worried that house prices will fall. If we just allowed house prices to fall, then we could go back to 90% or 95% mortgages.
We may have to accept that a generation may not get on the property ladder...
Which "we" exactly? We know that The Baby Boomers, NIMBYs and BTLs are more than happy to accept it, having engineered all this in the first place, but I doubt that young people are so inclined.
... it seems that an increasingly number are deciding against doing so out of choice. Rather than building more premium homes for owner occupation on green field sites, the government should be attracting large-scale investors to provide the rental property for which there is greatest need.
David Cameron appears to have his finger on the pulse - most Britons do want to own their home, fact. But this idiot concludes that more young people are renting because they don't want to own a house, they do want to own houses, just not at these prices. Never mind, the Baby Boomers will graciously knock up tower blocks for them and make them rent slaves, that's far more lucrative than allowing a few more houses to be built.
Two-Tier Prisoners
13 minutes ago
19 comments:
IMHO
It much more important that NIMBYs are charged the full rental-price of their view, than the state decide on the right number of houses.
AC1
"they do want to own houses, just not at these prices."
Yes they do and we probably have the technology to build them better and cheaper than those their parents aspired to. Massive vested interests ensure it doesn't happen.
I wonder where the editor of Country Life lives?
Constable paintings like this
http://www.telegraph.co.uk/earth/greenpolitics/planning/8737657/For-the-good-of-rural-life-we-must-build-houses-in-the-English-countryside.html
The debate over the Rating (Empty Properties)Bill in June 2007 (to which you refer?) reached it high point of silliness when Michael Gove(who else) came over all Oxford Union sarcastic with "The basic premise of the Bill
is that owners are deliberately keeping property empty and need to be taxed into putting it to good use.. who were (strange change of tense)these remarkable individuals..?"Same as all those developers who now have landbanks of plots with planning permission for five years' supply but who need taxing to build instead of rationing supply to keep prices up.(The Tories cannot face the clincher: that they can free up the planning system as much as they like but a glut of building is going to depress house prices and put them [Tories] out of business.)
AC1, yes, but where did I say that 'the state' should decide the number of houses? That's the whole problem with planning reg's - the NIMBYs use the force of the state to restrict the number of houses.
AKH, yup. £60k a pop for a very nice semi.
Den, that article cheered me up enormously. Saul on the road to Damascus etc.
DBC, I think that a few of the top Tories, foremost Osborne who appears to have no latent NIMBY tendencies whatsoever, have realised that in they have to allow more houses to be built in the interests of social cohesion, if nothing else.
The same as The Establishment bought off a large part of the population in the 20th century by allowing them to buy small patches of land to put a house on, thus making LVT electorally much more difficult.
Mark, I am afraid I am going to have to disagree with you on this one:
"The rank and file view Constable-like scenes of rural tranquillity as the England for which they fought two world wars...
I wasn't aware that the British working classes all marched off to fight for The Kaiser or for Hitler"
This is a perfectly sensible point about Tories tending to subscribe to the Rural Idyll, to the detriment of sensible discussion about planning issues and you seem to manage to extrapolate it to imply that he is saying the working classes fought for Hitler. How on earth did you do that? Outside the House of Commons what is there to suggest that saying the Tories support one side implies that Labour automatically supports the other?
"Wot? Then we get the urban NIMBYs wailing about 'garden grabbing'. "
This looks like the opposite of "damning with faint praise" ie "praising with faint condemnation". It remains true that the centres of continental towns and cities are nicer places to live, on the whole, because they haven't become a "retail desert" with all the flats over shops being left empty. Anyway "wailing about 'garden grabbing'. " isn't something that happens much outside the home counties AFAICS, and not much there.
"... it seems that an increasingly number are deciding against doing so out of choice. "
including a Mr M. Wadsworth. Are you suggesting no-one follow your example?
"David Cameron appears to have his finger on the pulse - most Britons do want to own their home, fact."
ISTR many posts passim pointing out that such yearning to "get on the property ladder" is entirely the result of Home-Ownerist brainwashing and that whereas sixty years ago many people preferred to rent, now everyone thinks they are missing out on money for nothing because house prices can only go up etc etc ad nauseam. Even back in the mid-eighties when I bought my first house, the calculation was that interest payments were slightly cheaper than rent and that there really wasn't much on the rental market anyway, not that the house was going to be an investment.
"Never mind, the Baby Boomers will graciously knock up tower blocks for them and make them rent slaves,"
as opposed to knocking up houses for them and making them debt slaves instead and proud owners of a depreciating asset, I suppose.
"(The Tories cannot face the clincher: that they can free up the planning system as much as they like but a glut of building is going to depress house prices and put them [Tories] out of business.)"
Which is why the letter from the man from the HBF was disingenuous: the last thing the HBF want is to do anything that is going to affect the value of their land banks. Yes, they want more green belt land freed up for them, but only enough so that they can sell their houses for the current inflated prices and certainly not so much as to destroy the valuable cachet of the green belt. Helping struggling first-time buyers my arse!
B, you usually disagree with me, I'm used to that and yes, i was exaggerating a bit. I was just saying, if the Tory NIMBYs think they fought two world wars to protect the countryside, against whom are they fighting now? The descendants of other people who fought in two world wars on the same side?
But I'm adamant people do like owning their own house, i.e. not having a landlord, even if this is just as mundane as being able to decorate it how you like, change stuff around, fit a new kitchen etc.
That's what's really important and why 'owning' is nicer (even in the absence of speculative gains), and one upside of being a mortgage slave not a rent slave is that the bank doesn't tell you what colour to paint the rooms or make you ask for permission if you want to get rid of a built in ward robe.
As to builders, they are not pure evil. I'm not bothered who builds the houses, local builders, Barratts, whoever. Barratts are just bigger, that's all, and yes, their houses are a bit feeble, but that's only because they can get away with it. Free up planning permission and slap them with LVT, they'll be churning out houses like nobody's business.
" I was just saying, if the Tory NIMBYs think they fought two world wars to protect the countryside, against whom are they fighting now? "
Ah, I didn't take it like that at all; I took it to mean the Tories think the countryside should stay exactly the same as it was when they went off to fight two world wars, ie. it should be preserved in a 1920's or 1940's time warp.
"But I'm adamant people do like owning their own house, i.e. not having a landlord, even if this is just as mundane as being able to decorate it how you like, change stuff around, fit a new kitchen etc."
Admittedly these are rare now, but it used to be possible to rent a house and treat it pretty much as if it was your own in the matter of improvements etc. but I suppose the 1970's rent acts all but killed off that sort of unfurnished letting. It was certainly very common in my grandparents' day.
"As to builders, they are not pure evil."
I never said they were. Of course they are going to try and maximise profits, every business does (or should). Although builders have a bad name, they are not always dishonest, the large ones just tend to be a bit economical with the truth when dealing with the GBP, but they are not the only ones. However, in this case I don't think your enemy's enemy is really your friend.
I think the desire to own one's own home is entirely natural. It's just the same desire as the desire to own any other damned thing; the same difference as to renting a car, or renting your TV. It's yours.
Mark will probably be surprised to know that some time back I upset everybody at Samizdata (I think it was the beginning of my walk towards banning, haha!) by aggressively promoting a temporary punitive LVT to split up current land concentrations. I am not in favour of the Georgist theory, or a persistent LVT. But I do think there is obviously an immense problem with the property market and some considerable part of that is due to historic land concentrations leading to powerful lobbies.
I really do believe in my heart that cheap housing- not subsidised, but allowed to fall to a "free land" market price/rent would be an enormous boon to the general populace. We've somehow wandered from housing being a hut you just build somewhere, to being something akin to a grand privilege bestowed on the lucky few. It's ridiculous. It wouldn't be so bad if we were all paying kings' ransoms for palatial accomodation, but most of it's fucking crap. I mean, ten years ago I rented a flat in London with my partner, and we were both earning a decent wage, but we were paying £260 for a one bed flat, and, I'm not fat and she was on the skinny side, but if the two of us were in the kitchen the cat had to wait outside, it was that small.
We can't go on like this. Those fuckers at the Telegraph with their "Hands Off Our Land" thing, I could kill them, really I could. Who is the "ours" specified in that slogan anyway? It sure as shit doesn't include me.
That was per week, btw, the £260
IanB, splitting up land concentration sounds fine in principle (albeit a bit revolutionary) but, in the absence of LVT, the concentrations will just re-emerge after a few decades.
Or if you do it as cack-handedly as the South Africans, within a few years.
Which would be/was a waste of a revolution.
So IMHO it is better to have a non-revolutionary, non-penal rate of LVT in perpetuity (in place of bad taxes) to ensure land is as diversely owned as possible in perpetuity (in economic terms if not in legal terms - I don't care if one guy owns 90% of all the land if he's paying 90% of all the taxes).
And £260 sounds like a lot, but it depends where in London. For East End, that would have been way over the odds. For Knightsbridge, that's very cheap.
Finsbury Park, and £260/week is exhorbitant :)
The question of land concentrations is not clear. Your example is a bad one. Penny packet farms handed out in land redistrubitions are often not much economic use to their owners. The reality is that land naturally concentrates- like other resources- in the hands of those who can use it, which in modern farming is a rather small number of persons. Big farms aren't the problem we have here.
The problem is inadequate residential land, which is only a small proportion of land use but is, as you know, being held drastically down below what that proportion would be in a free market.
I don't want another argument with you about Georgism and I'm not trying to start one, Mark. I'm just saying that my position is that if you can get a "year zero", after that you'll get a reasonably functioning free market with land usage assigned by market needs and prices and so on. The big problem is getting the Year Zero, and getting rid of the land usage controls admired by both Left and Right.
But back with the SA example; if the government gave us all a penny packet farm, most of us would just sell them because there are better ways to earn a living than penny packet farming. So that doesn't really prove a FAIL. What the SA example proves is that agrarian communist policies never work out, no matter how many third world countries try them.
IanB, yes penny packet farms is asking for trouble, but the same observation applies to selling off council houses at undervalue. What we ended up with was ex-council houses being owned by landlords who rent them back to the council. Ownership was even less diverse than before (assuming council housing to be collectively owned by all taxpayers).
Or e.g. what they did in the American colonies was basically to give every new arrival a few acres for a farm.
This worked absolutely fine until a) they had given it all away,
b) banks started lending to buy land to drive up speculative prices and
c) towns and cities grew up, so those whose acres ended up in the middle of a town or city became wealthy and those whose acres were in the middle of nowhere remained as peasants and ended up moving to the towns and cities to get a job and pay rent.
As Mr H George observed, the longer an area has been an urban area, the more extreme the gap between rich landowner and poor worker, at the time he was active, the gap was far greater in (old) New York than in (young) San Fransico.
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Either way, I think we are agreed that CPRE propaganda is pretty sick-making and freeing up planning at the edges of towns and cities would be a good thing all round.
Perhaps this whole planning furore has been deliberately stirred up by the government to take people's minds off the real problem, which is that interest rates are too fscking low.
The propaganda goes like this: you can't afford a house? that's because not enough houses are being built. We'll try and do something about that for you.
Oh, look, no-one wants us to relax planning constraints, sorry, you can't have it both ways, we did try, you know.
Dunno about Ian B's Year Zero ,but I've always thought JS Mill's pre George version of LVT would produce a similar outcome.You set a date and tax any land value increase after that.This should freeze land prices pretty well permanently ,allowing general inflation to reduce land charges relative to other components of the cost of living.Also the homeownerist whiners would have to admit that any land price increase is down to social activity and not their efforts .In fact,there is not likely to be any land price increase because speculative investors will be scared of being scalped.THe low land price Utopia!(You would n't collect much tax revenue,ideally none at all: the finacial benefits would whistle round the private sector.)
( I rather pretentiously named the line in the sand /so far and no farther land price tax the Sentinel Tax and added flutes and whistles but since it got a rather hostile reception,particualrly fron Georgists!,I have gone back to giving the credit/apportioning
the blame to Mill.)
@DBCR, I can see how such a tax would act to reduce/prevent future land price increases but without that price increase I'm not sure how it would direct the ground rent to public coffers -- which is the whole point of Georgist single tax reform surely.
Preventing land price rises may be a good thing in itself but it is only one of the benefits that "ordinary" LVT provides. It seems to me that the Sentinel tax only becomes equivalent to LVT after there has been steady inflation in land prices for some time. Which the Sentinel tax should prevent. And interest rates/MMT measures should be able to prevent general inflation too.
Or am I missing something ? How do you see it working ?
B, that's also a possibility.
D, DBC's sentinel tax might, in theory raise no revenues at all. But by simple virtue of cutting other taxes, land selling prices will go up anyway and then you can slap a small tax on them to keep the price at the agreed level, then you use those small revenues to cut other taxes and so on. It's a very circular calculation but it would lead to the desired outcome of low taxes on income and high taxes on land.
Ideally you would get the same situation as in Germany where house prices have not gone up since the 70's (through non-LVT measures).One of the clip-ons added by me to the basic Mill vehicle comes from Grant Shapps: that house price inflation should be lower than wage inflation.That way some vestigial market ,that people could buy and sell in, would persist.But not much revenue would be raised: the private sector being stimulated to provide wages and entrepreneurial opportunities in the way the Tory/Republican blowhards say it will (because ,contrary to their naive theories ,money will not inflate land values).Another addition to the Mill model is a generous attitude to the money supply with the cheap money being squirted in all directions particularly at the skint.(There was a good letter in The Guardian yesterday with some of the measures which I support).Since the cheap money is blocked by tax from going into land and property,it will be more likely to have the effects Keynes claimed.Another disadavantage of having no LVT is that we cannot use
Keynesian demand management.(Keynes appears to have been peculiarly dense about LVT ,although his idol Silvio Gessel ,relied on it for half his economic theory.)
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