Tuesday 14 April 2015

Build more homes and then give them away

The Conservatives have announced an extension of the right to buy.  It is an important, populist idea, but it carries within it a serious flaw.  Enacted in the right way, it could be liberating.  Imagine the shift in power if this was applied to private tenants too.  Enacted in the wrong way, it will be inflationary, tyrannical and destructive.  

So, instead of dismissing the idea out of hand, let's think about how something along these lines might be achieved, as it should be.  Because the record of politicians over the past generation has left us a housing legacy so toxic (see Mark Jordan's television programme last night) that something demands to be done about it.

The Lib Dems alone have come out with at least three major policy announcements to help with the housing crisis, so the electorate might be forgiven for not remembering any of them.  Which is a pity because, so far, the commentators have missed what is an important and  innovative idea - and, for me, by far the most important proposal of the election so far.  The proposal for rent-to-own social housing.

I can't think of any area of public policy where we needed something generous and imaginative which cuts through the usual tired old stuff more than we do in housing.

Here is the division, and you have to put it in stark terms - because both big parties of government (I'm referring, perhaps for the last time, to Labour and Conservative) support both these untenable positions.

Position 1.  We need to extend home ownership.  We do, of course, but the political rhetoric ignores the fact that it is plummeting like a stone because successive generations of politicians have done nothing about rising house prices - or the too plentiful finance pouring into the property market and pushing up prices to ruinous levels.

As I explained in my book Broke: How to Survive the Middle Class Crisis, home ownership - even in London - is now below Romania or Bulgaria.  We are becoming dependent supplicants to the new landlord class, the rentiers which Keynes once told us deserved 'euthanasia'.

Position 2.  We need more social housing.  Again, we do.  But again, this is all political rhetoric and battling by number, aware that - in the past (for example under Harold Macmillan) - high target numbers meant low quality housing which would become slums themselves a decade or so later.

Worse, the political rhetoric stops there, so that social housing becomes an end in itself.  We trap poor people in ghettos, and leave them there, preventing their escape.  And we congratulate ourselves, as a society, because we are providing social housing for rent.  The quality of that housing for rent has been, certainly in my lifetime, deeply dehumanising high density places, where people are given little or no control over their environment.

That is the besetting sin of Labour housing policy.  In fact, the appalling housing Labour built in Scotland over two generations explains a great deal about their difficulties as a party north of the border. See Labour's hutches for the dependent poor pictured above.

I've come to believe, as a modern Distributist, that the way forward has to be building new homes and then giving them away - on three important conditions:
  • They do not go back onto the open market and fuel house price inflation (ownership need not imply the right to sell).
  • They stay at the same nominal price they were originally sold for, ratcheting down the rest of the market, perhaps for a generation or so.
  • They are built in sufficient numbers to satisfy demand.
Simply giving away social housing also works, but not if it fuels inflation and isn't replaced.  But if the social housing is replaced, giving it away seems to me a more Liberal solution, given that it  provides people with genuine independence.  I've got no time for the idea that, because people are poor, they must be forced to pay rent.

Which leaves us with the issue of how it can be affordable.  The Lib Dem solution suggests a model - rent-to-own, giving people progressive ownership rights thanks to the rent they pay.  I'm only sorry they are only promising a pathfinding 30,000.

I'm also sorry that the proposal appears, so far at least, to have got lost in the crossfire.  It is a policy of huge significance and it deserves to be heard.

Because unlike today's Conservative proposal, which involves the destruction of voluntary sector housing, it has some chance of happening.

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