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The political parties are at sea on how to solve the housing crisis


Housing policy needs integrated thinking, not ersatz silver bullets, writes Paul Finch

This magazine’s ‘More Homes, Better Homes’ campaign is alive, well and continuing in this election year. Highly appropriate, since most of the political parties appear to be at sea over what needs to be done in respect of shortage, and in some places glut.

If the Labour Party thinks the ‘mansion tax’ is a smart answer to anything, it has a problem. Ditto the Greens, whose key housing proposal appears to be expelling the monarch from Buckingham Palace. They make the National Union of Students look mature.

Sad to say, the coalition government, while strong on homes rhetoric, is short on numbers. So too the Mayor of London. In general, the more politicians talk about what they are going to do about a problem, the less they are actually achieving. A good example of this was all the stuff about community, mouthed by MPs and ministers of all persuasions, even as successive governments closed down and/or sold the local library, swimming pool, police station and playing field – all the while failing to build homes that allow people to continue living in the areas where they were brought up.

In short, local communities were broken up rather than reinforced, a process exacerbated by endless boundary/postcode/telephone/constituency changes almost designed to undermine a sense of identity.

More and more speeches on housing have been accompanied by fewer numbers for real citizens. The blame game has been in full flow: It’s the planning system. It’s housebuilders. It’s local authorities. It’s banks. It’s anyone, in fact, except leading local and national politicians over the past three decades, who have been in denial, possibly wilful, about what is going on.

The pitifully low number of homes being built for actual Londoners, as opposed to absentee investors from home and abroad, is always disguised by the gross figures being announced with a flourish, in the vain hope that we are suffering from amnesia.

There are plenty of phoney nostrums under these circumstances. Splattering housebuilders’ shoddy all over green belt is one. Putting levies on housebuilders who dare to actually build is another. But you will notice that the cash raised by these levies is never used for housing. Instead the housebuilders get wacked again, having to provide ‘affordable’ homes. This abuse of language is a sure sign that we are in a mess, since it implies that large numbers of ‘unaffordable’ homes are being built, and that, somehow, ‘affordable’ means affordable by ordinary folk.

In reality very little of it is affordable, even with two salaries coming in. Hence the other cynical magic bullet: the private rented sector.  This comprises an invitation from people who own homes to people who could clearly afford mortgages, given the rents they are being asked to pay.  They can’t because of market failure in the home loans business.  That is why the City is so interested – it can usually smell victims.

The ongoing refusal to seek evidence from history as to how we might build enough homes for our people suggests that politicians would rather fail than be embarrassed.  This might explain consecutive downgradings of the minister for housing in the government pecking order – how foolish to imagine that such a minor issue should merit a Cabinet place.

Can we build ourselves out of our current predicament? I believe we can, especially since we have done so in the past. Next week I will suggest how integrated thinking about construction, land and finance might get us to a position in which housing is about delivery, a technical matter, rather than a deflated political football.


Readers' comments (3)

  • In an article purporting to critique the parties housing proposals, why mention the mansion tax, which is about mansions, rather than tax, instead of Labour's pledge to build 200,000 homes a year, with reforms to funding, planning etc to do so?

    You must surely have heard about it - to ignore it just looks overtly partisan.

    And I know you always imply that developer contributions for S106 and affordable housing come out of developer profits rather than the land value, but that really is a rather niche understanding of the matter.

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  • Ben Derbyshire

    Paul Finch is right to say that we won't make progress on this until we have a Minister for Housing and Planning around the cabinet table, and politicians in Central and Local Government brave enough to plan for the housing numbers we need. We have nothing that resembles a plan at present - instead, a plethora of initiatives that are often in conflict. How, for example, does it work to call on Local Authorities to plan the delivery of more homes, when the Secretary of State for the Environment is emasculating resources in their Planning Departments?
    But while I'm at it, here are 15 things The Housing Forum suggests a Housing Cabinet Minister should do for 2015 to deliver on the housing rhetoric:
    1) Commit to the return of capital subsidy
    2) Lift the borrowing cap from local authorities
    3) Empower local authorities as long term patient investors
    4) Give greater freedom to housing associations to set rents
    5) Set up more Development Corporations
    6) Set up a National Housing Investment Bank
    7) Remove public investment in low cost housing from the PSBR
    8) Tap into sector strength through on-lending
    9) Enable Social Housing Government Guarantees
    10) Allow local tax & spend of Stamp Duty and capital gains
    11) Tax breaks for companies to provide workforce housing
    12) Tax incentives to bring forward land
    13) Broadening the definition and Introducing a new planning class
    14) Release of more land for housing
    15) Invest in and subsidise off-site manufacturing
    Ben Derbyshire
    Managing Partner HTA Design LLP
    Chair, The Housing Forum.

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  • One thing that is never going to supply enough 'affordable' homes is to use planning policy to force developers to build unprofitable ones without subsidy. Also planners mysteriously failed to spot London's increase in population and are now busy enforcing against living in garden sheds. The last Census revealed the inconvenient truth: 'affordable' housing policies have not worked well enough since their introduction in the early Noughties. What won't work either, when we do finally find a way to build enough homes, is to let local authorities repeat the mistakes of the past and build thousands more council houses on their own balance sheets. That's too symbiotic a political link between homes and votes. We need subsidised new housing, but to overtax the market retards supply. Subsidised development in join ventures between public and private sector and better policing of quality, might be a more productive answer. Also past experience tells us we need to maintain tight fiscal control over incontinent local authority budgets.
    Lee Mallett, Urbik

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