Comment: Housing is an opportunity to combine economic efficiency with social justice

Building more affordable homes would not only reduce council housing waiting lists, but would stimulate the economy

Hardly a day seems to pass without yet more column inches being devoted to rising house prices or soaring rents. Yesterday the headlines were in response to new Office for National Statistics figures showing that homeownership among under-35s has almost halved in the last two decades.

The coalition has had five years to implement the policies needed to improve people’s housing prospects, but their lack of action indicates complacency and suggests the scale of the problem simply hasn’t registered.

When the sixth richest country in the world can’t provide something as basic as a home for its citizens, it’s clear something has gone badly wrong.

We are currently building fewer than half the homes this country needs to meet demand. The housing crisis is economics at its simplest: when demand outstrips supply, prices rise, which is exactly what’s happened under the coalition who have presided over the lowest levels of building since the 1920s.

The failure to build has contributed to a widening of the gap between house prices and wages; over the past 12 months average house prices have grown by 7.2 per cent – four times faster than wages. With increasing numbers of first-time-buyers priced out of the market, the homeownership rate has fallen to 64 per cent – a 25-year low.

The chronic shortage of social homes (worsened following a 60 per cent cut in grant funding for new social housing in the coalition’s 2010 comprehensive spending review) combined with first time buyers being locked out of home ownership has led to rapid growth of the unregulated and often expensive private rented sector.

As Ed Miliband has recognised, the private rented sector must be reformed to give tenants greater protection and security. At the moment, landlords only have to give a tenant two months’ notice to evict.

And there is no bigger driver of the Cost of Living Crisis than housing costs. With private tenants now spending 40 per cent of their income on rent, housing should be at the centre of Labour’s cost of living narrative.

The Tories have done nothing on private rented sector reform. In an Opposition Day motion in June they actually voted against extending tenants’ rights and prohibiting excessive rent rises.

So, private tenants continue to suffer from above-inflation rent rises. Meanwhile, the housing benefit bill continues to spiral, despite government attempts to reduce it.

With the election fast approaching, housing presents a golden opportunity for Labour to sharpen their messaging by showing that social justice can be combined with economic efficiency.

Building more affordable homes would not only reduce council housing waiting lists, but would also stimulate the economy. Every £1 of public investment in new housing generates £3.51 of economic output. Investing in new homes is economically sensible as well as socially necessary.

Reforming the private rented sector, including placing an upper ceiling on rent rises, is not only morally right; it would also help to reduce the housing benefit bill. The amount of taxpayers’ money handed to private landlords each year has doubled over the last decade to £9.5bn.

There is also an opportunity here for the party to speak to both security and aspiration. While the Tories have overseen a decline in homeownership that would dismay Lady Thatcher, Labour has spoken of a target for the number of first-time-buyers. This is something we need to hear about more often.

On housing, the choice in May is clear: another five years of inaction and complacency from the Tories, or a reformed private rented sector which gives tenants the protection and security they need.

Matthew Whittley is a recent graduate and Labour Party member and works as a researcher for a Midlands-based housing association. Follow him on Twitter

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16 Responses to “Comment: Housing is an opportunity to combine economic efficiency with social justice”

  1. swat

    Its not going to happen unless there is a seismic change in Planning. Take Planning out of Local Control and put it into the hands of a non-partizan and independent Inspectorate.

  2. Keith M

    Radical policies needed especially in London. Bring back rent controls.

  3. JoeDM

    Surely it should be democratically decided at the local level.

  4. damon

    Why aren’t houses being built then? If there’s a demand why not meet it?
    Is it planning and objections from existing residents who don’t fancy the fields near their houses being built on?
    Or even more people being squeezed into an existing borough? Where would benefit if you just increased the population density of an existing community? I can’t think of any London borough that could do with twenty thousand extra people for example.

  5. Guest

    Can’t let the houses be built near your mansions, after all.

  6. Leon Wolfeson

    Rent controls are part of the answer, but a different part to council house building, which is also needed. As is taxation on empty property and empty brownfield land, etc.

  7. Leon Wolfeson

    Thatcherite Ideology, pure and simple. Councils are not allowed to borrow to build – and Labour won’t change that, sadly.

    Also, the reality is that forcing people to move away from their communities is very expensive in the mid to long term, as they are then far more dependent on the state, Mid-rise communities with green space, shops, etc. have been shown to be successful…

  8. damon

    Leon, I like you. But your arguments don’t engage.
    Here’s an example of a London borough I know well. Croydon – population 372.000. In 1951 it was 300.000.
    To allow for growth and demand you might presume that that will need to rise by ten per cent.
    Fine, but where are you going to build the housing and what affect will that have on the place as it is?
    Building around the edges in the south where there are open spaces and green fields would just bring more traffic congestion and transport problems. So major building in the centre in blocks of flats might be the way to do it. But it’s generally not done like that. If you are to increase population densities around London, it should be close to existing centres and transportation hubs. But what we get instead is small developments spread out all over. In a borough where a lot of people own cars, that just increases traffic congestion.
    They’d also need some new schools and and infrastructure to go along with a higher population density.
    One problem with building high density social housing is that the place can turn into a sink estate.
    It happened many times before, which is why low density became more popular.

  9. Guest

    So you don’t like my basic views, but “like” me. Right.

    The problem with sink estates was we didn’t have a good idea what we were doing. High-rise stinks for long-term communities, you want mid-rise with integral corner shops, etc.

    The reality is that your plan of not building houses won’t work, either, it just leads to more overcrowding, rising rents, etc.

  10. damon

    I like you because I imagine you’re about 14 – but very earnist.
    I’m not against building more housing. I just don’t like the way we do it without proper forward thinking and planning. Just squeezing extra housing units into existing low density suburbs is not a way to do it imo.
    They have done some of that in Croydon that I’ve seen, and all that’s happened is that traffic congestion has gone up. Because everyone owns cars as there are only buses in many areas.
    So everyone drives to the local supermarkets, and drive their children to school. There are major traffic jams on the roads into central Croydon in the morning rush hours and then the trains from East Croydon station to Victoria are jam packed. Standing room only.
    So the idea that you can just raise the population by ten, or even twenty percent without doing a massive redesign of the infrastructure, is daft I think.
    But we don’t have that. What we have is little developments that just increase the density with no thinking about the consequences.

  11. Guest

    You make up stereotypical fantasies to suit your view of reality.

    As you say you’re not against housing and then completely oppose all house building, ignoring the fact that you’re arguing for overcrowding and homelessness. Moreover, most of the poor don’t have cars, way too expensive. And trains? Lol, priced off…

    How much are you trying to lower the British population by? How many must die on the streets because you refuse to allow house building despite 34 years of insufficient supply…as you completely oppose any kind of infrastructure investment…

  12. damon

    You should try harder Leon. You don’t add much to this site with your pettiness.

    I’m not against building many more homes for people. I just think it should be done with integrated planning. If we are to increase the population of south east England by about ten million – which looks like what is going to happen in the next couple of decades, then it has to be done properly.
    That means new train and underground lines. More trams and motorways and loads of new schools and hospitals and everything else. That’s what I think should be done, but it won’t be.
    What well get is just building bits here and there, at the convenience of commercial house builders.
    They should try to build some large tracts of housing that look like residential parts of Barcelona.
    Like you said, with shops and businesses at street level and flats above.
    But what we get are horrible Barratt Homes estates stuck out on the edge somewhere, or squeezed in to some existing place that do nothing for the local area. With gates and concierge people to keep out the non resident locals.

  13. Guest

    What a surprise, you lied when you said you “liked me”.

    And I should “try harder” to be a liar like you, as you call facts pointless, LB, and you frantically fight house building at all costs, demanding no houses be built unless you’re paid off, while in reality you cackle over poverty and overcrowding.

    Your communities are horrible, yes, and?
    (I’m not bothering with your excuses at this late date, you’re trying now to argue for the mid-rise I mentioned, of course, another completely obvious lie on your part).

  14. damon

    Leon, there are so many twats like you on these internet forums that it’s a real pity.
    Every one I’ve been on there are people like you. Mouthy teenagers I guess.
    There was one ”woman” called Sally who used to frequent Sunny Hundal’s site who used to keep using the insult of ” Briwnshirt” to anyone who disagreed with her silly views, which were kind of like yours.
    The Tories were brownshirts, I was one I think she said, and loads of other people – all ”Brownshirts”.
    Maybe you can see why that doesn’t help bring about meaningful discussion on internet sites like this.

    I said I don’t like the kind of house building we have. They did a project near to the house where I grew up, where the developers bought four houses that had big gardens, knocked them down and used their gardens to build three blocks of ten flats. Thirty units and car parking for cars for each flat.
    No one wanted the development. There were even petitions against it, so the developer kept resubmitting it with slight alterations till it went through.
    Now there is noise and light pollution in what were once a quite haven for wildlife. All the rain water doesn’t go into the ground but runs off the car parking area into drains, and the side road where they built the thing is now busier with traffic.
    The developer was only interested in building there for the money they made.
    The development has signs at the entrance saying ”private property” and warnings about wheel clamping for anyone not authorised to park there.
    It was built in a way that wasn’t in the interests of local people, but just commercial interest for the businesses involved.
    People got some homes to live in too of course. People who could afford the big price tags.
    Not anyone on average wages that means.

  15. Guest

    Ah yes, all the left are twats in your view, as you try and stereotype everyone outside your far right, as you frantically fight against debate, as you talk about your latest views of whatever, Mr. Brownshirt.

    You don’t like ghouse building, plain and simple, preferring rising rents and overcrowding. And you’re a NIMBY, unsurprisingly, right.

    Never mind I’m talking about mid-rise and not high-rise, etc, you oppose them all. Because, of course, your profits would be cut – and you make up fake concern (not to mention putting rats before people), talking nonsense about clamping (illegal), claiming major corruption in building (insufficient drainage), etc.

    Thanks, Lord Blagger, thanks a lot. And yes, you’re very concerned with those on your very unaveragely high earnings.

  16. damon

    Leon, I used that unfortunate word because of your aggressive internet forum etiquette.
    Anyone who makes an abstract point that might support the ideas of people on the right, is presumed by you to hold them views themselves.

    On increasing the population of London by a million or two. I think it’s perfectly reasonable for people to be opposed to that in principle if much of it is to come about through future immigration.
    Because people might not see the benefits of having twenty years of disruption and living with major construction projects to redesign the city to accommodate the growing population, when they don’t get much benefit for it themselves. You don’t seem to think it’s acceptable to take a different view to London mayor candidate David Lammy, who on the subject of growing population just makes blythe ”London can take it” kind of statements. He said:

    ”We must refuse to allow those with a political agenda to misuse the figures to support their anti-migrant rhetoric – the capital had the same number of people in 1939.”

    He might make some good points and he might make some that don’t stand up to scrutiny, but what you do Leon is make discussing them impossible, because any arguments against his, you would just call ”fascist” etc.
    So as this is a political blog which invites comments, the problem is actually you and your childish way of insulting people who take a different view.

    I don’t like a lot of the big developments in places like London’s SE1 district for example.
    They are not for the original inhabitants of the area, but are snapped up by wealthy foreigners and other richer people, and are tending to push working class people out to the edges of London.

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