Wednesday 24 October 2018

"Fancy having your piss boiled?"

... asks Thomas Hall, who emailed in this:

IEA announces winner of the Richard Koch Breakthrough Prize

The prize, supported by entrepreneur Richard Koch, sought to find the best and boldest entry outlining a ‘free market breakthrough’ policy to solve the UK housing crisis...

The winning entry proposes the ‘Land Purchase Act’ – a market-based policy that centres on how swathes of public land can be made available for people to build homes according to their own choice and preference.

The essay argues that the shortage of affordable housing in the UK has been caused by strict and outdated planning laws. Government interventions to address the issues – such as Help to Buy – have, on the whole, exacerbated the problem.

The submission makes the case for releasing surplus or underused public land to help people onto the housing ladder. Such a move could deliver as many as two million new homes, the majority of which would be built in areas where there is high demand for housing.

How the Land Purchase Act would work

• The government would enter into a contract with the occupier, who will take out a mortgage to cover the cost of building the property on the land.

• The occupier would decide on the style of house to be built. Furthermore, they would be given choice over the timescale and structure in which they gradually acquire private ownership of the land. This would include options such as paying rent for the land, purchasing the land at set intervals over time, or buying the land at a discounted rate after living on it for a set period of time.

• The Land Purchase Act would also reduce the number of planning restrictions on houses built on land made available under the policy...

Benefits of the policy

• It offers people a ‘hand-up’ rather than a ‘hand-out’ and puts them on a path to homeownership, rather than government dependency

17 comments:

ThomasBHall said...

Let's be honest here, we Georgists do need to consider the free market from time to time... there is a lot we can learn here

Lola said...

Oh gawd. That'll all be run by yet another quango.
TBH. Georgist land taxes are IMHO one if not the way of raising taxes most compatible with the free market

DBCREED said...

Since we are not really capable of running a free market in this country without massive fiddles and are busting a gut to get out of a European free market on the whim of right-wing eccentrics buying the votes of racist yobbos, I am not bovvered whether "its compatible with the free market",Georgism is the only system that's likely to work in practical terms.

Graeme said...

European free market? Wot a larf! Where would I find that, DBCR? Show me anything in the EU that does not come complete with a 2000 page rulebook

ThomasBHall said...

Lola- your sarcasm detector due a check-up ;) I've reached out to the winner and we are going to have a chat. I'm tempted to ask him if he would be prepared to defend his thesis on a recorded podcast or something similar- against Mark? He might however just have looked at the brief, seen which way the wind was blowing, and submitted an intelligent entry on that criteria alone...

ThomasBHall said...

DBCR- welcome back- even if you do spout a load of nonsense much of the time! The EU is NOT free market at all. You are right about Georgism though. The question is: are we more or less likely to get Georgism by leaving the EU?

Mark Wadsworth said...

TBH "He might however just have looked at the brief, seen which way the wind was blowing, and submitted an intelligent entry on that criteria alone..."

I assume that's the case. Surely nobody can be that stupid?

mombers said...

Does the private sector do a good job owning land? Compare a BTL ex-council flat to the one still under council ownership next door and there's your answer. 3 times the price, worse condition and security of tenure. Owner occupiers do a better job for sure but often at great expense to everyone else

Bayard said...

It does, however answer the real problem of the "housing crisis", which is that people are no longer able to buy land at undervalue and thus make huge windfall gains.

benj said...

@MW

Read this a couple of days ago. Piss boiled twice. Thanks.

How is this free market if it only applies to public land, while selling it below market rates?

benj said...

@ MW

BTW, there's more stuff today about scrapping APD. Looking at it, its not a well formulated tax, being somewhat like a Head Tax, so its incidence would be mainly on the passenger.

Could you do an article with a reformulation whose incidence would be mainly on the landing slot instead, if such a thing is possible?

Mark Wadsworth said...

BJ, barely any of the incidence is on passengers. Only IEA or TPA claim otherwise.

benj said...

@ MW

The IEA/TPA assume that any tax is wholly borne by the consumer.

However, given the structure of APD I'd have thought they might have a point in this case. Could you explain why you think barely any paid by the consumer with APD?

There are two destination bands and really only two rates within those bands.

That's seems less likely to be related to slot scarcity, thus ticket prices than say a flat tax on sales prices.

What am I missing?

If you wanted to pick up the value of the slots in a ticket price, then wouldn't it be best to start a tax above a "cost to produce" threshold and then apply a flat rate upon it? Or something similar?

Robin Smith said...

Mombers, please allow me to generalise too - I know BTL's who do a far better job managing the land they provide than councils. Their main complaints are the council 'north korean work programs' demanding unnecessary upgrades to perfectly safe, comfortable and well managed homes.

Robin Smith said...

ThomasBHall, Really? Have you not read Protection or Free Trade? Written deliberately as a strategy for adoption of LVT via the back door using Free Trade as a sneaky inception. Free Trade and LVT are synonymous.

Mark Wadsworth said...

BJ, see here.

benj said...

@ MW

" APD is a dreadfully clunky way of collecting part of the rental value"

I would says its very similar in that respect to the Council Tax, if not worse. VAT would be much better and something tailored to pick up the scarcity value of the landing slot would be best (and not too difficult to formulate, I'd have thought).