Tuesday, 5 May 2015

Readers' Letters Of The Day

Both from The Guardian:

• The latest Labour pledge to abolish stamp duty for first-time buyers is not the policy it should adopt to help people to buy or rent their homes.

This latest subsidy proposal will push up house prices. History shows that all government subsidies ultimately capitalise into land value and go into the pockets of landowners. Enterprise zones, common agricultural policy payments, rate-free periods for new businesses, housing benefit payments for private tenants, wind farm subsidies – all have ended up as unintended subsidies for landowners paid for by all of us as taxpayers, with the poorest of people subsidising the richest.

It is shameful that politicians and their economic advisers do not understand how land wealth arises and how a shift in taxes off earned incomes on to land value and other natural resource wealth will not only right the historic wrong of our land being held by a minority but will return land wealth to the public purse to use to maintain and develop our public services.

Land value is not created from owning land. It is created from our public and private investments that benefit all residents and businesses in the immediate and wider areas and thus raise the rent and price of land which private landowners collect as an unearned income. Land speculation and monopoly land ownership is actually what makes homes unaffordable to rent or to buy.

Heather Wetzel, London.

• Contrary to your leader (Editorial, 28 April), we do not have a choice about our corrupt housing system, which degrades the whole economy by not allowing people to move where there’s work; or leave them enough to spend in the shops after the rent or mortgage has been paid. All the major parties subscribe to home ownerism, the name given by radical land taxers to the policy of deliberately encouraging house price inflation to secure elections by bribing homeowners with unearned capital gains in house prices (while wages can go hang).

There has already been something of a riot about house price inflation in Brixton. Only a return to an era like the 1950s to 1970s when the house price graph was flat in the UK can defuse a potentially revolutionary conflict between the interests of the housing haves and have nots.

As the cause of the evil of house-price inflation (so much worse than wage inflation) is land price inflation, it is merely a matter of introducing the age-old land value tax to keep land prices and house prices flat forever.

DBC Reed, Northampton.

10 comments:

Shiney said...

Mark

You need to recruit Heather to YPP!

ThomasBHall said...

She is one of the main people in the Labour Land Campaign... Good letters though both!

Ben Jamin' said...

Good feisty stuff from Heather and DBC.

Lola said...

Given that people on both notionally the right and the left are onto the land monopoly issue you'd think it'd gain some traction.

Personally, I reckon that most of us are 'libertarian' (left Libertarian or right libertarian) but we just haven't worked it out yet. The lefties because they don't like landowner monopoly rent seeking and its consequential enslavement of 'workers', and the righties because they don't like cronyism and prefer free enterprise to private enterprise.

Bayard said...

"all have ended up as unintended subsidies for landowners"

I very much doubt that they were unintended.

Random said...

http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html
Paul Krugman is a Home-Owner-Ist!
I expect he will treat Georgists as he does the MMT community.

Random said...

http://mobile.nytimes.com/blogs/krugman/2015/05/04/explaining-us-inequality-exceptionalism/
Hereth. We gotta reduce "inequality." No mention of land.

Mark Wadsworth said...

SM, as TBH says, she is spoken for.

L, pencil me in as Left Libertarian (to wind up the Faux Libertarian who worship rent seeking).

B, probably not.

R, well spotted

Claim: "rent controls reduce the quality and quantity of housing".

That's total bollocks.

Rent controls reduce the quality and quantity of RENTED housing (nobody's arguing about that) but increase the quantity of OWNER-OCCUPIED housing, which on the whole is of better quality.

And it's just about possible that rent controls increase the quantity of housing, full stop. Or else why were private builders building slightly more homes back in the day when we had rent controls than they are doing now? If they earn less per home built, then they have to build more to make a living, is the simple answer.

Lola said...

MW

Last para in your comment.

Perhaps it's because there is a higher demand for homes - which will be at a lower price, but not necessarily at a lower profit per unit - that drives the increase in sales when rents are lower/controlled. That is more people are able to buy or to transition between renting and buying.

Mark Wadsworth said...

L, that's another possible explanation, but I think the point is that if rents (and hence prices) were capped, there's not much point in sitting on idle land, you might as well get building As you say, the price cap would affect landowners more than actual proper builders, like your father.