... says Bob E, who spotted this in The Telegraph:
Conservative councils [in central London] are planning to build hundreds of "middle-class" affordable homes for nurses and teachers in Britain's most expensive neighbourhoods...
Today they will submit their plan for a pilot scheme of 300 homes on a new "middle-class" estate to the Communities Secretary, Eric Pickles. The councils say many working families on average incomes struggle to afford homes in central London, where a typical family home costs £1 million.
Officials from Mr Pickles’s department are believed to have worked with the councils on their plans. The councils’ business case states: "Home-ownership is increasingly unaffordable except to households on very high incomes, and families on middle and lower incomes are being driven away from the area."
Being fair to Dame P, in the end, she did actually stump up £12 million personally "in settlement of the surcharge for her role in the homes for votes scandal", which was basically Conservative councils in central London (like the one she led) flogging off existing council housing at huge discounts to potential Conservative voters.
Wednesday, 31 October 2012
One only has to say "Dame Shirley Porter" to see the mind numbing hypocrisy...
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31 comments:
Every other bloody landlord in London is making a killing renting to the affluent, so why not the councils? Basically, all W&C are doing is building council flats and letting them for slightly more rent than their existing council flats. How the hell they are going to tell whether their new tenants aren't rich enough to afford to rent privately, I have no idea, or perhaps they don't care, perhaps this is purely a money-making scheme. If it isn't, I forsee a lot of subletting going on in the near future.
B, agreed. Build council housing and spread the joy a bit. Even if the councils charge top whack, at least the money doesn't disappear offshore.
I don't get this concept of there being some kind of moral right to live in the most desirable parts of town whatever your income. I don't think the unworking should be given cheap housing in nice areas. I don't think that anyone working can assume they should get a flat in Westminster.
BE
BE, me neither, to be honest. I work in Westminster and commute in from miles away, the same as 90% of the other people who work here.
But the Homey contradiction is that they don't want low income social tenants to live in nice areas but they want low income homeowners to live in nice areas, I see no justification for either...
BUT to the extent that low income people live in nice areas, then it is better to give them a low-rent council house as a personal, non-transferable right, than it is to give them a permanent right to occupy that bit of land for free which they can sell for £ zillions, all of which will be backed by more bank debt.
The good thing about council housing (however badly allocated) is that the banks and bankers don't get their grubby mitts on one single penny of the rental value.
>The good thing about council housing (however badly allocated) is that the banks and bankers don't get their grubby mitts on one single penny of the rental value.
The bad thing is that council bureaucrats DO.
If it's not returned as a dividend it's going to be rent-seeked away.
SB, as somebody who knows about these things, allow me to remind you that 'council bureaucrats' do NOT get their hands on council rents, because (for some bizarre reason) they are paid over to the central fund.
And if council rents are set at running costs, then there simply is no land rent element being collected, it is enjoyed by the occupant as a kind on non-cash "citizen's dividend", and non-social tenants benefit from the overall downward pressure on rents. Everybody wins!
I agree there should be more council housing built where economic to do so. And I agree there should not be schemes to *give* cheap housing to specific favoured groups.
Sadly we are in the late stages of this money merry-go-round economy where everyone bails everyone else out. Hopefully the music will stop soon.
BE
Mark, two thing
1. If your rent is still high enough to "need" housing benefit despite moving out to Dagenham or somewhere, wouldn't costs for these people go up as they now have higher travel costs to get to work? So they lose in more ways in this situation.
2. Isn't the whole point that LVT would not just release more housing onto the London market, but also remove the pressure to live here meaning these desirable areas would no longer be as desirable?
MW,
You don't get it... If the tennants don't pay the full land rate then they're ripping the rest of us off.
Also bureaucrats will always use social housing preferences to try and Gerrymander votes and other advantages.
BE, it almost always 'economic' to do so, the only question is what rent levels to set.
Chr, point 1 is tricky, but HB is itself a subsidy for land rents. Point 2, no, LVT does not change anything about how desirable areas are, it just means that people who live there pay for what they get. For every Poor Widow "forced" to trade down, there'll be a younger, earning household which is perfectly happy to trade up.
SB, I do get it. Council tenants are not ripping "us" off, it is the same as if they are paying market rent and getting a Citizen's Dividend, which net off to a below-market rent. It is the Homeys/bankers who are ripping "us" off.
"bureaucrats will always use social housing preferences to try and Gerrymander votes and other advantages."
Well, you've missed the point. The worst Gerrymandering was when they SOLD OFF council houses at undervalue.
And the bureaucratic rationing only happens because there isn't enough council housing.
Just imagine that there was enough council housing that everybody could have one if he wanted, then there'd be "nice" estates with high rents, "nasty" estates with low rents and everything in between.
The government would be able to collect so much rent that it would barely need to impose taxes on output and employment. There'd be little need for cash welfare payments, because everybody can rent a cheap home and there'd be plenty more job or business opportunities (lower taxes).
It would be Georgism by the back door and the bankers and landowners wouldn't get a look in.
The worst gerrymandering was when they built them in the first place. Labours plan to "build the Tories out of London."
"Council housing" does not have the advantages of a market with different prices for different flats. It would be far better to have the CD and flats rented @ LVT+costs, than "free" (i.e. subsidised) housing.
SB: "Council housing does not have the advantages of a market with different prices for different flats. It would be far better to have the CD and flats rented @ LVT+costs, than "free" (i.e. subsidised) housing."
Oh yes, I completely agree with that, with LVT/CD there'd be little need for council housing anyway.
It's just that people don't understand LVT/CD, it's easier to use the example of a country where everybody rents from the local council, Crown Estates, Housing Assocation, whatever, pays low rent and doesn't pay income tax.
>bureaucratic rationing only happens because there isn't enough council housing.
No, there's not enough HOUSES (and an LVT and CD mechanism).
>Everybody rents from the local council, Crown Estates, Housing Assocation,
I think it's extremely important to separate the State/Crown (land owner) from the house owner/Renter.
SB, there are plenty of (privately owned) houses, they are just woefully badly allocated because there is no market pressure to do so properly.
I agree with the rest of your comment, you're preaching to the converted here.
Chr, as to 1, there is of course a trade off between rents and commute time/costs, it will sort itself out, and if low earners can't afford to live near Westminster or commute in from cheap areas, then employers in Westminster will have to increase wages etc.
As to 2, yes of course LVT would ensure optimum use of land and existing buildings. Total demand would stay much the same, so all things being equal (which they never are), gross rents payable would go down a bit.
MArk
1. I accept that, I was just querying the idea that moving out of Westminster would be no biggy.
2. I used the wrong word when I said desirable, I meant "in demand". By that I mean surely LVT would bring more housing onto the market (empty homes, undeveloped land etc) and that increase should reduce the demand for existing housing in Inner London?
Sorry that was my original comment which I was going to reword but you commented before I had the chance.
Mark
1. Are you talking about in the current climate or with LVT?
2. We should have more money in our pockets (no income tax, VAT etc) yes? Therefore that should mean rents would be lower in real terms shouldn't it?
Also wouldn't LVT pull/push people away from London to other parts of the country?
Chr, we have LVT in this country, only it is collected privately by landowners and banks.
Having it collected by the state/the crown makes no difference to the economics of rent levels. It is a widely accepted fact that the longer the commute, the lower the house prices/rents, that won't change under LVT.
2. Yes of course rents will be lower in real terms, especially if you replace the welfare system/personal allowances with a Citizen's Dividend. The median size household in a median value home would pay net nothing at all in LVT minus CD.
Yes, replacing current taxes with LVT will mean that some parts of the country which are currently economically unviable will become viable, but in the overall scheme of things, it won't make much difference to where people choose to live/work.
1. I know that we already pay "LVT". What I meant is that you said the trade off would sort itself out. So I was asking if you meant in the current climate or with LVT.
2. So then surely (with LVT) people on lower incomes would still be able to live in inner London (if they wanted to) then?
Sorry if I come across a bit annoying, I just want to make sure I fully understand the implications.
Chr,
1. The trade off always sorts itself out, whether LVT is collected publicly or privately. if you value your own free time at £10/hour and rent (or LVT) in the middle of town is £1,000 a month, then the rent (or LVT) on a similar home one hour's commute away would be £600 a month. This is borne out by observation (and yes, people do appear to value their own time at £10/hour, i.e. that is what they want to be paid for sitting in the car, on the train etc).
2. Not in the nice bits overlooking the parks, or in the fashionable bits. But with or without LVT, they can't afford to live there now, so I don't see a big problem.
Mark
1. I meant the people who haven't got a choice like those who've been moved out only to be burdened with extra costs. How is that going to sort itself out (for their sake) without LVT?
2. I didn't mean those areas tbh. When I was thinking about Westminster I was thinking about Kilburn, Queen's Park and the Harrow Road area rather than Mayfair or Belgravia...
"The worst gerrymandering was when they built them in the first place. Labours plan to "build the Tories out of London."
Sb, just where do you think all these council tenants lived before the council housing was built? Do you seriously imagine they were all imported, complete with flat caps and whippets, from oop north? Of course they weren't. They already lived in London, usually just round the corner from where the new estates were being built, or in some cases, exactly where the new estates were being built. Just because they had exchanged a private for a public landlord wasn't going to change their voting preferences, was it?
Chr, 1. without LVT, nothing ever fully sorts itself out.
2. Those areas will be as affordable as now, or hopefully a bit more so if you are working.
B, exactly. If there were enough council housing, you wouldn't be able to bribe people with it anyway.
It seems to me that this thing with supposedly "key workers" is a result of national pay scales and distortions in the labour market (+ the distortions of not having LVT ofcourse). If teacher's can't find places to live in reasonable distance, then their salary just isn't enough, or put in other words, if the school wants to attract teachers, it needs to pay what it takes to get teachers. Whether councils builds houses and looses rent in letting them to a teacher, or pays them more in salary is neither here or there. Except;that without LVT, the former is preferrable in avoiding the higher salary going straight into higher landlord-collected rents ofcourse...
Kj, I agree. But then we have the "tied worker" problem. There might be teachers or nurses or policemen who actually hate their job, but they stay with it because they know if they pack it in, they will become homeless.
My cunning plan for such people is to have a national pay scale which says "You will be paid £x0,000 a year salary plus the LVT bill on a house within five miles of your place of work"
So automatically, teachers in London schools get paid more than teachers in lower-rent areas, but that extra LVT goes straight back into the government's pocket and the net salary of teachers is exactly the same everywhere (and rightly so).
SB, as somebody who knows about these things, allow me to remind you that 'council bureaucrats' do NOT get their hands on council rents, because (for some bizarre reason) they are paid over to the central fund.
I'm just reading about council accounting, financial statements etc., and it seems there's a principle that in local govt, incomes and associated costs are not supposed to be treated together (no netting of the two). Ofcourse the departments do this in a separate accounting system, but all income has to be paid in to the central fund. I'm sure there's a reason for that which I don't know about.
MW: cunning plan indeed. Even better, privatise and voucherise the lot (for so many reasons), and the schools decide the pay-scale. Schools in high-rent areas will likely require top-ups if teachers are hard to find. Coppers will need to be on your plan though.
Kj, the reason for the central pooling is lost in the mists of time, and the Labour government (towards the end when it was too late to do anything) did suggest that councils be allowed to keep all net income from council housing (which I think is a very good idea).
Second comment: I agree, of course. But there is no need to 'privatise', if you 'voucherise' then the rest will sort itself out.
Vouchers are a good step to getting education out from the State provision, funding and management, which it is truly ill suited for.
Leave the state for force based things only like making sure parents provide an education for their children.
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