Sunday 11 September 2011

"Why are housing problems not more visible?"

The Building & Social Housing Foundation sent me a hard copy of their latest report, which is full of interesting statistics (none of which are any big surprise to me). The best bits are on page 11...
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Problems caused by housing undersupply are largely unseen (1). They receive sporadic attention in the media and are not a school-gate conversation topic. Much of the impact of these problems is experienced literally behind closed doors. Education and healthcare are accessed in shared communal spaces; police visibly patrol; and buses pass up and down our streets. Housing is different. Our homes are private spaces for those close to us. Few people may enter, particularly if we perceive them to be inadequate or not matching the standards that we expect.

Housing as a broad topic rarely tops the list of public concerns and yet individual housing problems fill the mailbags of MPs from across the country. The worst housing problems affect only some parts of society. Much of the population is well housed and benefits from the status quo. They may be unaware of the significant harm the system is doing to others, or unwilling to give up the benefits that the current system has given to them.

Crucially, the beneficiaries tend to be those with the greatest power and wealth (2), which gives them the loudest voices in housing debates. Those who are most affected by housing crises may struggle to have their say, or may not realise that their personal circumstances are part of a wider problem in society. There is no social consensus that more housing would be positive, or is a national priority.


1) There's an easy way of making this visible: here's a chart from the BBC:2) I'm unhappy with the expression 'wealth', elsewhere the report says that "[Housing] wealth represents the largest store of wealth in Great Britain".

For sure, bricks and mortar are net wealth, if your house burns to the ground, then that is a loss of a valuable asset and we are collectively poorer. But the underlying land values in themselves are not wealth at all, they are merely a measure of the wealth that is transferred from the productive economy to land owners, partly via our bizarre system of taxing incomes to provide the services which push up house prices and also because land 'ownership' in itself gives the 'owner' the right to income generated by others, even in the absence of publicly collected and spent taxes.

I'd guess that a bare majority of people are both a) active in the productive economy and b) home owners, so by and large, they break even under the current system (in a hopelessly inefficient and distortionary fashion).

Another good way of looking at this is to compare housing with public sector pensions. We're all dimly aware that the net present value of the accrued liability for future pensions is about £1,000 billion, but from the point of view of the recipient, that is an asset - it is a right to future income. But for some reason, with public sector pensions, we only look at the expense side (and wail about the burden on future generations) and with housing we only look at the income side (and completely ignore the fact that it is an equal and opposite burden on future generations). So-called housing wealth and public sector pensions are in fact more or less the same thing; they are a transfer of wealth from future generations to today's incumbents.
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... and on page 66, of course.

5 comments:

DNAse said...

That first paragraph quoted is an interesting take on it.

In other news I am soon take the plunge with my own blog. I think the first post will be on housing.

Bayard said...

I can't see that the BBC's chart has any relevance to the article quoted, unless you assume that "housing problems" means "not being able to buy a house". Without reading all 66 pages of the report, I can't say for certain, but usually, "housing problems" means "not being able to find somewhere to live" and I can't see that a tenure shift from owning to renting has any bearing on this. In fact, given that most people who can't find somewhere to live can't, and never will be able to, afford to buy somewhere by reason of being unemployed or on a very low income, the rise in supply of rented accommodation has to be a good thing.

Mark Wadsworth said...

DNA, send me a link.

B, there are a million or two widowed pensioners shivering in a 3-bed family home which they can't afford to heat, and a rather larger number of young couples squashed into one-bed flats. Similar issue arises in areas with lots of second or holiday homes. Whether they own or rent is indeed a secondary issue, but to me this allocation does not strike me as optimal.

Bayard said...

Doesn't that rather weaken the case for building new housing (whilst strengthening the one for something that will get the pensioners to downsize)?

Mark Wadsworth said...

B, yes of course it does.

New construction is just a sticking plaster for the fact we don't have LVT, just like Council Housing, or banking regulation or all the other failed sticking plasters. But in the absence of LVT, we need all these things and more.

But ultimately what pisses me off about NIMBYs is the sheer unmitigated hypocrisy and downright lies they subject us to, so if I annoy them a bit, that's a bonus.