Wednesday, May 23, 2012

Housing: What to do?

Why is providing new family sized housing such a difficult thing? Why is there so little built in our country? And why are most of the houses that are built so poorly designed and cheaply constructed?  

Recently I went to an event focusing on exactly these questions. One group of people - let's call them the 'enablers' - clearly identified the problem, which is this: There is a massive shortfall in housing provision. New housing starts are at their lowest for 65 years. Rents are rising, mortgages are unobtainable for anyone who doesn't have a very large deposit and house prices, at least in London, are still unbearably high due to limited supply. 

On top of this, benefit caps, higher rents for 'social housing' (up to 80%) and stalled regeneration projects have created growing homelessness numbers and rising housing waiting lists. One of the speakers at the event put up a graph illustrating new house build starts since 1947. The graph showed that up until the end of the 1970's, the number of house starts had remained pretty much even between private and public developments. Since 1979 however, the number of publicly funded projects has dropped off to almost zero. This is little surprise given the Thatcher administration's curtailing of the ability of local councils to build houses and encouragement of them to sell off their existing stock. What the graph also showed was that private sector house starts have stayed pretty much constant throughout that period, that is until the last three years when they have also tailed off dramatically. In other words, the private sector has emphatically not grown to plug the gap left by the emaciated public sector.  It is also currently largely moribund.

There are some other important issues too. Aside from sheer numbers, the quality of housing provision has diminished. The UK has the worst space standards for new housing in Europe. The conservative nature of the market, the limited land available, the difficulty and uncertainty of achieving planning, the high risks involved and the abandonment of  local authority built housing has stifled not just supply but also innovation, quality and creativity in this field. There have been decent, forward looking developments - I've been lucky enough to have been involved in some - but nowhere near enough. 

Having had the problems outlined clearly, a second group of people - let's call these the 'deliverers' - presented a number of residential developments they were working on. Almost exclusively these schemes focused on one and two bed flats, many sold to overseas bulk buyers and investors. Very few family or larger units were included. None of the 'enablers' had identified a shortage of coffee bars, luxury spas or interesting fenestration patterns and yet that was all  the 'delivers' were offering to provide.

So, here was the problem laid bare. An under supply of houses is answered by an oversupply of one and two bed flats. Town centres in need of life and revitalisation are given new developments full of one bed flats bought up and left empty by overseas investors or by landlords as buy-to-let properties. 

The market simply cannot supply decent, affordable housing. In reaction to this the current governments instincts are of course simplistic, erroneous and driven by the same deregulating, under-investing, state-averse neo-liberal ideology that has created the problems in the first place. Faced with evidence that the private sector emphatically doesn't deliver what is required, the government calls for more deregulation, more marketisation and less planning, control and investment.

One thing the government have done which might not be totally wrong headed is introduce the community right to build element of the NPPF and offer support (ish) for self-build, or more likely self-commissioned, housing. If these policies resulted in a growth in housing cooperatives and community land trusts along with an itinerant strain of ad-hoc self-build then it might do some good. But this needs to be developed alongside a reinvigorated and dynamic planning system not a demoralised and underfunded one.

So here's some other suggestions about what should be done:

  • Strengthen the power of local planning authorities to actually plan and allocate land for development and draw up proper spatial plans. Some local authorities do this but they are facing massive cuts and are being undermined by the NPPF.

  • Fund and empower local authorities to directly commission the kind of housing that is desperately needed but that the market won't provide.

  • Invest in new construction technology research, innovative energy conservation measures and progressive housing design.

  • Reintroduce statutory minimum space standards for new dwellings. 

  • Tighten 'buy to let' regulations, introduce a land value tax and remove tax loopholes that encourage bulk buying, empty homes and overseas property investment.

  • Extend the fair rent act to control spiraling rental costs. This would reduce the vast sums paid out to landlords in the form of housing benefit to provide over priced flats. It would also allow people to stay in their current homes rather than face eviction.

  • Move away from a focus on 100% home ownership and the ridiculous and destructive notion that houses are primarily a source of investment rather than a place to live.

  • Reform the lending markets to offer much more diversity and recognise different forms of home ownership and house building.

  • Instigate a massive house building programme. Now. 


Murphy said...

An interesting thing, if obviously nonsense- when questioned about why they don't provide more housing, the reasons housebuilders give are a) not enough land b) too much regulation, c) people can't afford them, d) they can't afford to build. No mention of how a strangled market helps keep the price of their product high...

Charles Holland said...

Yes, the answer is always: the market is still too regulated. That's not to say that lack of available land isn't a problem more that making it easier to develop more shit houses isn't the answer. Deregulation is what we'll get though....

terrapol said...

Utterly depressing prospects for the UK housing industry as usual. What Tory MP's seem to forget in all their calls for deregulation of the sector, is that the greedy speculation on land values and housing stock reached catastrophic proportions in the run up to the sub-prime meltdown. But hey, its ok as long as the main institutional investors get their cash back at a healthy profit, or enforce reclamation of their land assets. Forget communities, sustainable design, decent living standards...

The housing situation in London (at least) is completely crazy, how can someone on an average wage of £26,000 ever expect to own an averagely priced house at £400,000 without incurring lifelong financial slavery.

The comment about the strangled market and high prices is spot on - but don't forget that mortgage paying citizens are much less likely to cause political trouble whilst desperately trying to preserve their meager social stakehold.

Lets not also forget that the Tory's are slowly socially cleansing parts of the country by booting out all those unable to pay the exorbitant rents charged by practically criminal landlords instead of capping the rents at their greedy source. Yes, this is neo-liberal, deregulated, un-ambitious and un-inspired Albion 2012. How depressing.

If the situation isnt altered soon people must look to provide for themselves, beyond the planning laws. It happens in many other countries around the world - i hope not but will we see a day where shanty towns emerge on the British Isles?

Chris Matthews said...

Very concise - thanks for this. Recently read in the local archives that Nottingham City Council were given the authority to build 9,000 homes within 5 years back in 1930. Today this seems like an almost unimaginable use of reason.

Charles Holland said...

Amazing isn't it that all one is likely to hear is how dealing with the issue simply isn't an option, or is too complicated/expensive, interferes with the natural machinations of the market etc.

Measured Building Surveys said...

This is indeed extremely depressing. New abodes being constructed nowadays are getting smaller and smaller. There isn't even storage for common household items such as vacuum cleaners anymore. Tiny and of poor quality. Depressing.