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Demand more than supply

Demand more than supply

Thomas Neumark /   June 29, 2015 at 8:32 PM 1,106 views

In the UK discussion on housing policy is often on how to increase the number of houses built each year. There is very little discussion of whether the existing houses should be distributed in a different way. Housing policy is usually about growing the pie, not how we share it The fact is that not enough homes are being built in the UK. People are living longer, often in single person households. This means more homes will be needed. In response to this problem right-wing commentators tend to argue for a reduced role for the planning system, while left-wing commentators tend to call for more state funded house building. This is a long term problem. As of right now, there are more homes in England and Wales than there are households. chart_2 (6) There are more homes in London than there are households. chart_2 (7) There are more homes in the Borough of Camden than there are households. chart_2 (8) And yet, there are people homeless in England and Wales. Over 2000 people sleeping on the streets in one count last year. And 3% of households are overcrowded. A sizeable number of people are spending more than half of their income on housing. The same is true in Washington DC. chart_4 (3) Why? Mostly because there are lots of empty homes. They are empty for a number of reasons (including, but not mainly, households owning more than one home). There are just under a million vacant properties in England and Wales. From this way of looking at things, many pressing problems with the UK housing market are a question of distribution of existing resources as much as they are a question of increasing supply *** What do policies to address these distributional questions look like? Lets start with the easy ones. 1. Bringing vacant homes back to use There are a number of people who do this and the current government have made it a bit of a priority. The latch project in Leeds is a good example of how you can do this is a way that buildings skills and community. 2. Taxes on empty and second homes Camden is one of a number of areas introducing increased taxes on both empty and second homes. The idea being that these taxes will mean it makes less economic sense to leave properties empty. 3. Supportive approaches to ‘underoccupying’ Underoccupying (the term for when there are spare bedrooms in a property) is a very controversial topic. When people have been in a property for a long time it becomes far more than a housing unit. It becomes a home. If people feel like they are being forced out of their home they will of course be highly distressed. There are lots of schemes that offer people money to move out. More could be done with this. More daringly, Government could pro-actively support approaches such as those used by Shared Lives, where people with adult social care needs are supported to live in communities of their choice, rather than in institutions. Equally, the Government could dramatically build upon current policies aimed to encourage people to take in lodgers. 4. Regional development Lots of empty houses are empty because no one wants to live in them. Perhaps there are no jobs nearby, or its a neighbourhood with lots of crime, or poor schools, the list of potential reasons goes on. There are not easy solutions to these type of problems. Various governments have struggled, with various degrees of success, with the question of how to promote economic development, especially in areas that have been negatively impacted by the decline of manufacturing jobs. But while there are no easy solutions the current UK government seems to have completely thrown in the towel. We have a tiny ‘Regional Growth Fund’ to give grants to businesses, we have business led partnerships with almost no money or power called ‘LEPs” and we have a lot of talk and little action about directly elected mayors. For all their talk of ‘rebalancing’ the economy, their actions seem to suggest they are mostly going to trust the free market to sort everything out. The problem with this approach is that the free market is not so hot at sorting out any problems which relate to the unfair distribution of goods. *** This brings us back to where we started. There is a lot of scope for policy makers and politicians to consider the ways in which the housing we currently have is distributed and not just focus on increasing the supply of new housing (as important as that is). Courtesy of Tom Neumark via Dream Housing

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