Via PricedOut FB group, from the BBC:
Living in micro-homes could "expand choice" for young professionals and help tackle London's housing crisis, a report has suggested. A neoliberal think tank is calling for the Greater London Authority (GLA) to scrap its rules on minimum floor space.
The Adam Smith Institute said homes in the capital with less than 37 sq m of floor space could be an "affordable opportunity" for young people. But the GLA said "cramming people in" was not the answer to the problem.
If by "housing crisis" they mean high rents and prices, they could hardly be wronger.
By and large, demand in the "housing market" is not for bricks and mortar in themselves, it is for access to public services, i.e. all services or amenities opportunities accessible by the public from any location. It makes no difference whether those things are provided by the government (schools, hospitals) or private businesses (jobs, leisure opportunities).
We also know that a) the total rent or price payable is a function of average wages in an area, so is pretty fixed, and b) the value of urban land depends on how many units you can build on it, so we know who the biggest EU nets will be.
The total payable to live anywhere is the value of bricks and mortar (less than half in most parts of the UK) plus value of public services. You can shave down the value of bricks and mortar a bit, but the value of public services would stay the same, or even go up a bit because of agglomeration benefits. If more people live somewhere, the private businesses will offer a greater variety of leisure and spending opportunities and a greater variety of jobs.
Compare - flats in Hong Kong or most Japanese cities are absolutely tiny, but they are still outrageously expensive. Homes in Germany are a lot larger than in the UK, but they are no more expensive.
Monday, 21 January 2019
"Micro-homes could solve London's housing crisis"
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17 comments:
Does no one realise that no matter how many houses, whether normal or micro sized, are built, there will never, ever, be enough. Where I live, many young people, working and paying their dues, spend years on the social housing lists. When they nearly reach the top, a sudden influx of illegal immigrants is rushed past them, pushing them further back. In some cases, complaints, or even voiced concerns, have apparently seen couples or families being removed from the housing list completely as being 'not the type of tenants the local authorities wish to help'.
The situation became even worse thanks to Joanna Lumley's efforts to allow ex Gurkhas to live in this country. In itself, and in principle, a suitable thanks to those who served this country so well (I served alongside Gurkha units during my Army career and have nothing but admiration and respect for them). In practical terms, they arrive with, often, parents and grandparents of both husband and wife, all requiring accommodation. Their Army pensions allow a middle class life in Nepal, their country of birth, but gives them nothing in the UK, and social housing and B&Bs are their way of life.
With more and more, legal and illegal, immigrants arriving daily, the situation will only get worse and the tax paying families ending up further and further down that housing waiting list.
PS, gruesome anecdotes aside (and there plenty), immigrants get a small preference in allocation of social housing, but it is not material.
I for one will not peddle the myth that the "housing crisis" is down to immigration. Did they lobby for an end to controlled rents in 1988? Did they campaign for replacing domestic rates with higher VAT and council tax? Did they force the BoE to keep interest rates low? Did they push for Help to Buy?
Methinks not.
This is a chicken and egg argument. With net immigration having run at about 250,000 a year over the last ten years it is clearly nonsense to say immigration has NOTHING to do with it. On the other hand if we'd built enough houses to accommodate them (and meet the demand for larger homes by natives) then prices would not have risen, or would not have risen so much. So which is to blame: immigration or failure to build? Like I said, it's chickens and eggs.
RM, I never said "immigration has nothing to do with it", I have always pointed out that it was provably only a very small element in creating 'the housing crisis'.
Have you looked at the numbers? New construction + homes sold by heirs were more than enough to meet population growth, even over the last twenty years with high immigration and low construction rates.
Funnily enough, private landlords increased their 'portfolios' by more than the number of new homes built each year over the last twenty years. That's the problem - not who lives in them. Had they built more, landlords would just have bought more.
@" Had they built more, landlords would just have bought more."
Landlords can't do that for ever - sooner or later there are more rental properties than tenants - which creates voids.
When it comes to social housing immigration does seem to have an effect.
https://www.migrationwatchuk.org/briefing-paper/260
"
Who is being allocated social housing in London?
Housing: MW 260
Summary
1. London has long waiting lists for social housing which have grown by 60% in the past eight years.
2. Priority for social housing is given to those declared technically “homeless” or those living in overcrowded conditions.
3. The impact of immigration is downplayed or denied.
4. Official data is available on the nationality of those allocated social housing. It shows that at least 11% of social housing lets in London were given to foreign nationals. In the boroughs of Ealing and Haringey nearly half of all social housing lets went to foreign nationals.
5. The official data is patchy. Some boroughs have a large number of lets that went unreported in the data, in some cases more than half.
6. Other boroughs reported the lets but with a large proportion of tenants, in some cases more than a third, refusing to respond on nationality (which is optional). By contrast, in the rest the England only 1.5% of respondents are recorded as having refused to disclose their nationality.
7. As a result on this very poor coverage, only a limited proportion of social housing can be confirmed as going to British nationals, in some boroughs as low as 37%.
8. Most local authorities refused to answer Freedom of Information requests on who is getting social housing or claimed to be unable to do so.
9. Migration Watch recommends that it be made compulsory for the tenant’s nationality to be recorded and published for all social housing lets. We also call for a debate over who should be entitled to social housing in the UK."
LF, no, landlords can't keep doing that forever, but home builders would never build that many.
And yes, recent immigrants are over-represented in social housing, I've never denied that either. Part of that is political correctness and part is because recent immigrants tend to be in low paid jobs. Issue needs addressing, but they are still not responsible for 1988 Housing Act, Help to Buy, lax lending standards etc.
@Mark Wadsworth
I think that house builders in other countries - with looser planning restrictions have done that see Spain or Ireland.
Very true about "but they are still not responsible for 1988 Housing Act, Help to Buy, lax lending standards etc."
The housing mess is caused by lots of things - not just immigration.
I would like to add that I don't have anything against immigrants who get council housing, I don't think it is fair. However who would turn down cheap housing on the grounds it should go to someone else?
I wouldn't if I lived in Spain - although I would expect some locals to hate me and wouldn't complain about that!
Immigration has zero effect on the "housing crisis" because there is no "housing crisis". What there is is a shortage of affordably priced homes in expensive areas.
Immigration can have no effect, so long as there is a single empty home anywhere in the country. If Londoners can't find anywhere to live and there are a large the number of immigrants in London, that has nothing to do with the immigrants. What difference would it make if all the immigrants went to live elsewhere in the country and London was stuffed with Britons coming in from outside London? None at all, as far as Londoners finding somewhere to live was concerned.
LF, different countries have different rules and a different mentality. The housing markets of two different countries can only be compared very loosely.
B, of course there is no "housing crisis", we've done that to death, it's a "transfer of wealth crisis". I don't think that recent immigrants are beneficiaries of that, most are at the bottom paying rent upwards. A lucky few get a council house, deservedly or otherwise. Infuriating to those locals bumped down the waiting list, but apart from that, big deal.
One thing I have noticed in the last 10-15 years is that new homes where I live in South East London are a lot smaller than before (a lot more flats).
It maybe true
"New construction + homes sold by heirs were more than enough to meet population growth, even over the last twenty years with high immigration and low construction rates."
However the new construction has been rubbish. If we had zero immigration and very little construction the quality of housing today would be a lot better than before.
Of course it is not the immigrants fault that we build small homes, however of course if people move to an already crowded city it is not surprising that small homes are built and the average home size falls which is bad.
Of course the easiest way to reduce rents in an expensive area is to say "In expensive area no more housing benefit live somewhere cheaper" over night rents would drop!
@"LF, different countries have different rules and a different mentality. The housing markets of two different countries can only be compared very loosely."
I am not sure about that, look at speculators in the UK who have bought rubbish in the past. I think that there are enough greedy idiots in the UK to keep buying properties until they can't find any other tenants.
Sorry to post so much.
"Of course the easiest way to reduce rents in an expensive area is to say "In expensive area no more housing benefit live somewhere cheaper" over night rents would drop!"
but only in a particular sector of the rented housing market. Most landlords won't rent to HB claimants, because of the insurance hassles, so these rents would be unaffected. Homes that rent to HB claimants tend to be worse and smaller for the same rent. If HB was cancelled in expensive areas then these homes would either be improved or the rents would adjust to the same as those for houses without HB. However that would make zero difference to the tenants, who have the option of renting a non-HB home for slightly already.
"However the new construction has been rubbish. If we had zero immigration and very little construction the quality of housing today would be a lot better than before."
Why would it? Housebuilders build as cheaply as they can get away with, always have done, always will do. "zero immigration and very little construction" wouldn't turn them into philanthropists who add extra quality but still sell for the same price. There'd just be fewer housebuilders building the same old crap. In any case, today's homes are better insulated and thus easier to heat than they were before. Flimsier than what was built a hundred years ago, but not compared to what was built thirty years ago. I appreciate that, if something is wrong, then, in your mind, immigrants must somehow be to blame, but this one just doesn't add up, I'm afraid.
Sorry I should have said
"zero immigration and zero construction" would mean the quality stayed the same (ie better).
I never said is immigrants fault that new homes in the UK are smaller than existing ones (thank you John Prescott).
However if population increases and we need new homes which are smaller then obviously the quality has decreased).
BTW why do you think that you can read my mind?
This is an absurd thing to do say about me
" I appreciate that, if something is wrong, then, in your mind, immigrants must somehow be to blame, but this one just doesn't add up, I'm afraid."
I think many things wrong in the UK are not due to immigrants, for example most/all problems in schools predate mass immigration.
Teresa May's Brexit deal is a 100% British mess up - nothing to do with immigrants. I could go on but I have made my point.
I do think if population increases it causes an increase in demand for housing and increase in demand does make it easier to sell poor quality products.
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