Red BrickThis blog has often made the case for housing investment to stimulate economic growth and boost employment.
Housing, pound for pound, creates a lot of employment and as we’ve said many times before housing pays for itself, even social housing. It’s why I don’t like the term subsidy; it’s investment, which pays back and provides a return (if over several decades).
I often find two opposing knee-jerk reactions to housing when I go to Labour meetings and events. They hinge around council housing – and are lightening rods for other ideological debates.
Some members when they hear people arguing for more council housing and greater power for councils to build homes again, seem to think that this is an old Labour plot to drag Labour back to 1983 and anti-aspirational, left-wing electoral oblivion. Dennis MacShane’s article yesterday implicitly recognises that tendency in parts of the last Labour government.
Grant Shapps has always professed a profound personal attachment to the cause of homelessness and rough sleeping:
“When a family is made homeless or someone has no choice but to spend a night sleeping on the street, they become some of the most vulnerable people in our society. I am shocked and saddened when I see people bedding down for the night on our nation’s streets, or hear of a family spending another night in temporary bed and breakfast accommodation. Tackling homelessness and rough sleeping is what first got me into politics.”
No, not that Mr Osborne, but Patrick Osborne, the former Buy-to-Let landlord featured in today’s Guardian.
Mr Osborne has quit being a landlord because:
“It’s not nice to profit from someone else’s need to sleep somewhere. I think it’s wrong some landlords have strings of properties. It restricts supply, and tenants have very few rights, or aren’t aware of rights they do have.”
Unlike many landlords and their representatives, Mr Osborne is honest about:
“You hear all kinds of horror stories, such as three months’ rent in advance, or houses let out that aren’t safe but if tenants say anything they’re evicted.”
“I was quite surprised by how much I could set against tax and that was without hiring a flashy accountant, so I probably could’ve claimed more. The tax rules were, believe me, very generous.”
He took his responsibilities seriously and when he asked his tenants to move on gave them six months notice, when two would have done.
It’s a shame he’s quit being a landlord. Who knows who lets out the home he once owned and on what terms.
Most renters have had a range of experiences with landlords – many have had dreadful experiences; unsafe homes, nicked deposits, last minute evictions. Most have had good experiences with trustworthy landlords.
The problem is that you just don’t know what you’ll get when you sign the tenancy, and that’s why we need better regulation and better enforcement of the rules we have.
Such regulation wouldn’t impose any extra costs and duties on landlords like Patrick Osborne, who provide a safe and secure home for the longer term anyway. It would force the others out of the market or get them to up their game.
Even The Economist agrees that:
When demand outstrips supply against a background of profound housing need, tough action is required.
If that bastion of the free-market thinks state action is needed, then Grant Shapps’ charge that regulation is red tape can hardly stick. His views on the situation for private renters are increasingly divorced from reality:
“I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords … the Government has no plans to create any burdensome red tape and bureaucracy.”
I may have been quiet on the blog recently (thanks Steve as ever for holding the fort), but I’ve been out and about speaking on housing at Labour meetings.
I thought I’d report back on a few of the themes and interests.
Housing is as close to the hearts of Labour members as ever and the debates and discussions have been energetic and very well informed.
I was especially pleased to find some people advocating wealth and property taxes. I’m a fan of reducing taxation on working people’s income by increasing it on unearned wealth – and Britain’s top-end house prices are a good place to start.
The generational divide is clearly on display. Younger Labour members, especially in London, know their chances of owning a home are slim unless they’ve got parents to help them out. Those of us under a certain age have a litany of dodgy landlord stories – nicked deposits, sudden ending of leases and shoddy repairs (when you could get them done). Increasingly, poor quality housing is an issue that younger people higher up the income chain are experiencing. It’s further proof that Ken’s campaign is onto something – uniting the interests of those on low and middle incomes.
Labour members also haven’t forgotten the difference a Labour government made. Many were pleased to see their councils building some council housing for the first-time and there’s always been someone speaking up for the decent homes programme. The latter is one of those things that isn’t headline worthy, but was one of those programmes that has a big impact on the lives of those who benefitted.
The toughest question I’ve had is how to turn £25bn of housing benefit paid every year into investment in new homes, without borrowing more upfront (answers on a postcard). Though the person who posed this question I’m sure had some ideas himself.
It’s been good to hear members’ housing stories, good and bad. Here’s an excerpt of a story someone sent to us at the meeting:
“I am a local Labour member. I had wished to attend the general meeting but I am working. I just wanted to share my view on housing. I am 20 years old and live in a two bedroom council house with 5 other family members. From personal experience I can’t stress enough the importance of housing, especially those with a poorer income. Often it is education that is key to getting people out of poverty but poor housing has a bad effect on children’s education. Housing can also play a huge role in determining someone’s quality of life. In my case it has put a huge strain on family relations and often with housing being the main cause of arguments between my parents. For me my housing situation has added to pressures that teenagers face. I have no space of my own and it has made me easily irritable”.
Our correspondent also had a suggestion:
“People in houses like mine have empty space in there attics. Perhaps if they were developed via loft conversions it would ease some of the housing pains? I know if the space in my attic was converted it would ease the tension in my house”
An exceptionally reasonable request given the circumstances – no ‘culture of entitlement’ here, we’ll leave that to this bloke.
If you’d like a speaker on housing for your local meeting, just drop us a line and we can normally send someone along. [email protected]
I’m a bit behind Steve on catching up with the government’s new Right-to-Buy announcement. He’s right: there’s no serious provision for replacing the homes being sold. It’s just flogging off the community’s assets.
Here’s a worked example direct from the government’s consultation paper:
Don’t worry about most of it. Just look at the top-line: The sale of 16 homes for this council earns them £800,000.
Then look at the bottom line: that then turns into £92,000 to fund the replacement homes (after sales costs and the government taking a great big chunk back to the Treasury (£420,000)).
So the housing minister is going to build 16 affordable homes for £93,000 is he?
With that kind of financial wizardry, he should be in the Treasury – the deficit will be conjured away in no time.*
*I wondered if this could be part of his houseboat strategy, but it turns out you can’t even get 16 second-hand boats for that:
I was reading a very interesting pamphlet this morning by Labour MP Gregg McClymont and Ben Jackson.
The pamphlet tries to look at the lessons of past periods of economic austerity and Tory government.
They ask a key question: How have Tory governments succeeded in being re-elected in the past, during periods of high unemployment, economic stagnation and deep government cuts in public services?
It’s a good question. Britain’s worst economic periods have been presided over by Tory governments racking up consecutive election victories. In the 1930s The Tories won in 1931 (Tory dominated National Government) and 1935 (the largest ever Tory majority). In the 1980s and early 1990s of course they won four in a row.
The authors give a range of reasons for this. One of these is that even in economically dire times the Conservatives have managed to increase the prosperity and stability of some key groups in society, who then supported them strongly. Critical to this has been increasing homeownership.
In the 1930s the boom in suburban house building created a new class of homeowners and pushed homeownership further down the income scale. In the 1980s, the Conservatives repeated the trick, not by building more homes, but creating 2 million working class homeowners through right-to-buy.
Could that happen again? Well, they may manage to build a coalition of those less affected by austerity and stagnation, but I can’t see how housing will be part of it. The prospects for more house building are grim and despite their attempt to warm-up right-to-buy this could only be at a fraction of the scale of the 1980s.
But it is a lesson for Labour too. If you can provide people with a quality, secure home that they feel they can call their own, you can change the shape of the political landscape in fundamental ways.
This exchange in the House of Lords caught my attention recently:
Lord Kennedy of Southwark: So, who’s responsible here for joined-up government?
Baroness Hanham: Dunno, it’s not my department.
Actually, that’s not quite what they said. In full:
Lord Kennedy of Southwark: There is also the impact of 80 per cent of market rent, which means that a family of two adults and two children living in the London Borough of Newham needs an income of £48,000 a year to afford a home without claiming universal credit. Does the noble Baroness understand that, because of the lack of joined-up thinking across government and failed policies, hard-working families are paying the price?
Baroness Hanham: My Lords, that scoops up a whole lot of things, some of which are not entirely to do with me. The universal credit is not part of my department, although I recognise that the housing benefit goes towards the contribution of housing facilities. We are trying to provide, and will provide, affordable housing for as many people as we can. The universal credit and the amount of money paid in housing benefit is something that my noble friend Lord Freud will deal with in due course.
Over the course of the last few months, we’ve seen how the government’s benefits policies clash with their housing policies. This is just one example. Lord Freud tells us that housing benefit must be cut for private renters, because it creates too much benefit dependency. Yet, the combination of his welfare policies and the government ramping up social rents creates vastly more benefit dependency in the so-called affordable housing sector – as Roy Kennedy pointed out.
It would be good if there was a parliamentary way for our MPs or noble Lords to get Grant Shapps and Iain Duncan Smith to sit together and explain how their policies add up. At the moment, DWP says it’s CLG’s responsibility and vice versa.
This is too convenient for them.
I was critical of Channel Four’s Great British Property Scandal for obscuring the real housing problem: supply of new homes.
The media, along with the government, the house building industry, local authorities, mortgage lenders all share some blame for this. However, it seems to me more and more that these institutions are the wrong targets.
The biggest barrier to new homes is the public – an awkward and uncomfortable fact for housing campaigners because it’s always easier to blame the government, the media and private companies.
People don’t want new homes to be built anywhere near them. Here’s a quick reminder from a presentation by Ben Page from MORI:
83% of people think there are too few homes for local young people. Only 18% of people believe we need to build more homes (in this case in Essex).
Unless we can convince enough of our fellow citizens that we should build more homes for those who need them and that in doing so we benefit everyone, there will not be the significant change we need.
And at the moment no policy seminars, round-tables, lobbying meetings, think-tank pamphlets show signs of recognising or achieving this.
Could there be a different way forward?
Could the various housing bodies re-orientate their campaigning away from government and policy towards changing minds in communities where new homes could be built? Could the housing charities employ community organisers to run local campaigns and in the process find out what type of development and on what terms people will accept? Could housing associations join them – and perhaps rather than spending quite so much trying to influence political parties, try to influence local communities where they want to build homes?
It would be great to see in the next housing pamphlet produced by a think tank a serious piece of research about how to overcome public opinion against new homes.
The Labour Party too has an important role in doing this.
I read recently that in rural Essex in 1946 the Labour Party conducted a successful campaign among local farmers, labourers and aristocratic landowners convincing them of the advantages of thousands of new homes in a brand new town. Without any legal challenge, a Development Corporation compulsorily purchased 2,588 hectares of Essex countryside and Harlow now houses 80,000 people*.
It can’t be impossible.
*Though it could still do with a good few extra homes to house them all well.
I watched the two programmes on the Great British Property Scandal last night.
Jon Snow was gunning again for the Landlords from Hell – and rightly so. I hope he comes back to how unbelievably weak the government’s housing strategy is on the private rented sector.
The Government is committed to supporting growth and innovation by avoiding unnecessary regulatory burdens on landlords. But we are also looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes.
Shapps as usual shifted 100% of the blame onto councils.
The second programme I found more problematic. George Clarke explored the scandal of empty homes with passion and anger. More empty homes should be brought into use if they can be – I agree.
But the empty homes debate obscures the real one – the need for more new homes. This is a fox that Shelter has tried to shoot before by showing that bringing empty homes back into use can only be a very small part of solving the crisis we have.
In his written piece in the Telegraph, he’s highly equivocal about the need for new homes. “I’m not against new development at all” he says and even “ I don’t have a problem with building on certain areas of green belt”, but as long as “there is a massive demand and the local area are quite happy for them to be built.”
What constitutes massive demand? How many more people living in the conditions Jon Snow highlighted before we build more homes? And even then, people who are well housed get a veto over whether they are built or not.
He argues for the densification of our cities, transforming their character to that of Hong Kong or New York – but will the people of British cities support that anymore than those in rural or suburban areas whose veto on new development he wants to strengthen? He’d also have to bulldoze a hell of a lot of those terrace houses he values so much to turn London, Birmingham and Manchester into Hong Kong.
This to me sounds like architects’ folly. Many of Britain’s current tower blocks and failed estates were the result of architectural ideology* being imposed on people regardless of their preferences.
We need to take seriously where people want to live. That may not be in Hong Kong-style skyscapers nor in small Victorian terraces in parts of Britain where there are few jobs or opportunities. Then we need to build more of those homes.
We don’t need another property programme, even one shot through with moral outrage, that obscures rather than highlights the key problem.
* Une maison est une machine-à-habiter. (A house is a machine for living in)