The great housing disaster: time to get radical?

Danny Dorling’s All that is Solid: the great housing disaster is a great attack on inequality, seen through the prism of housing. But although the analysis is left-wing, it provides little ammunition for today’s post-Thatcher Labour Party. I imagine that many of Dorling’s arguments (minus the rhetoric, which sometimes undermines them) would be more immediately attractive to Churchill or Macmillan, were they alive today, than to Tony Blair or Gordon Brown. CPRE has members from across the political spectrum, from the Green Party to UKIP. But I think there are seven propositions from Dorling’s book with which most would broadly agree, or which support the argument that solving Britain’s housing crisis will take more than just building lots more houses.

  • Housing should not be seen principally as an investment

“We must again work towards separating housing from wealth.” (p. 28) This echoes CPRE’s 2026 Vision, which looks forward to a time when “property is no longer seen principally as an investment. Homes are places to live.” One of Dorling’s solutions is a land tax: “Housing prices in the UK rose sixfold from 1983 to 2007, but land prices increased sixteenfold. Similar patterns are always found whenever and wherever people are allowed to hoard land, untaxed, and housing is allowed to be accrued as an asset rather than being used primarily for shelter.” (p.92)

  • We need stable – or falling – house prices

“Almost no mainstream politicians are suggesting that it would be good if prices and rents were to fall. All they can suggest is that it would be helpful if they were not to rise further.” (p. 223) This is a little kind: as far as I can tell all the main parties want house prices to rise more than inflation. Dorling acknowledges the difficulty of mapping out how to get to a situation where “we again see housing as a shelter, as the buildings around which communities, not as retirement nest eggs”. But “the alternative of future staggeringly unaffordable housing is frightening enough to make the effort worthwhile”. (p. 265)

  • Building alone will not solve the housing crisis

“Simply building new housing in isolation did not alleviate the housing crisis of the 1920s and 1930s; more and more people had to come to be able to afford to buy that housing…. Housing cannot be viewed in isolation from other social trends, and it could be quickly improved in the past and become more affordable because society as a whole was then becoming more equitable.” (pp. 33-35) Since the early ‘80s, society has become more unequal and the new housing built has been less fairly shared out. “We cannot build our way out of the disaster of our current housing system. We first have to deal with growing inequality.” (p. 202).

  • Lots of land, weak planning, lots of building – lots of problems!

“It is remarkable that Spain, Ireland and Iceland are so little discussed in Britain, when they are nearby models of the chaos that can so easily come to housing markets.” (p. 78) In these countries, almost unrestricted house building resulted not in steadily falling house price inflation, but a big rise in prices followed by a big bust.

  • The big builders will not solve the housing crisis

“By waiting for land prices and hence the apparent value of homes to rise further, the builders themselves are helping to shore up demand and to create further inflation in both land and housing prices. This is their job. They are private builders. Their job is to make as great a profit as they can. It is not primarily to build homes. If it were, they would build more.” (p. 95) So, to draw out the lesson, the state should not simply assume that the big house builders will meet ambitious housing targets if more land is released. We see this now. They cherry-pick the most profitable sites, generally greenfield sites, without greatly increasing their output.

  • “The perceived ‘national’ housing shortage is, in fact, a regional shortage, part of the growing north/south divide.”

“If measures were taken to move economic activity, government administration, university student places and much more towards areas with surplus housing, and if underoccupation was discouraged by revised property taxation, everyone in Britain could be adequately housed within the existing stock…. I am not saying that more homes being built would not help; I am saying that more homes alone are not the answer.” (p. 100) Dorling points out repeatedly that “although house-building is at an historic low… the supply of dwellings and especially rooms per person has never been higher”. (p. 139) “We have more housing in Britain – more homes and more rooms in those homes – than we have ever had before. This is not just in absolute terms, but per family, per person.” (p. 191) There is more property, but it is more unequally shared out. We focus economic development in areas where there is full employment but a shortage of housing – 80,000 new jobs planned for Oxfordshire, for instance – while resigning ourselves to the economic decline of poorer areas, generally in the north.

  • Use brownfield land

There is plenty of brownfield land that could be used for housing, particularly “in the north, where the hill-walking is better and the air cleaner too”. As our work tends to require less space, more space is freed up for housing. So “why are we becoming more and more crammed into the south-east of England? Why are the new Rachman landlords not demonized? Why can we not fix housing as we fixed it before? Is it because we need collective action, but have lost the will to act collectively during recent decades, decades in which individual ‘aspiration’ has triumphed?” (p. 301)

Danny Dorling’s book is full of interest. Judging from the fringe meetings I attended at the Labour and Conservative conferences, the big rethink he advocates – “housing in Britain is unlikely to be greatly improved by incremental adjustments to existing policies” – is simply not on the political agenda. That is a pity. You can buy the book here or, better still, from a bookshop.

7 Responses to “The great housing disaster: time to get radical?”

  1. 1 andrew needham October 4, 2014 at 8:20 am

    ‘A plan to provide about 3.5m new homes in England by allowing up to 40 towns and cities to double in size and become garden cities has been unveiled.

    The scheme was announced as the winner of the £250,000 Wolfson Prize, the second biggest economic prize in the world after the Nobel Prize.
    The Wolfson Prize for how to deliver a new garden city, was won by David Rudlin, who manages the urban design consultancy URBED. He argued that the best way to achieve growth was to allow existing towns and cities to expand, saying this could be achieved by taking a “bite” out of the Green Belt while still protecting the overwhelming majority of it.

    He proposed about 86,000 new homes for about 150,000 people in up to 40 towns and cities. These include Oxford, Cambridge, Reading, Guildford, Canterbury, Ashford in Kent, Rochester, Colchester, Chelmsford, Ipswich, Norwich, Northampton, Bedford, Peterborough, Rugby, Stratford-on-Avon, Worcester, Cheltenham, Stroud, Bath, Salisbury, Winchester, Poole, Taunton, Exeter, Shrewsbury, Stafford, Chester, Preston, Blackburn, Harrogate, York, Harrogate, Lincoln, Durham and Carlisle.’

    Housing and planning minister Brandon Lewis has poured cold water on this, but things may change after the election – whoever wins.

  2. 2 Alex Hills October 4, 2014 at 3:36 pm

    well done for posting this Shaun I hope it sparks some useful debate.
    The article shows that we really should be pushing for rent controls and a punitive yearly tax on dwellings left empty. I think the time has come for CPRE to be putting other solutions forward other than the brownfield land first which can only be a short to medium term position. A lot of the big house price increases have been from buy to let investors and in London from overseas investors who keep leaving properties empty. Cool the buy to let market and it will help make housing more affordable.
    To be relevant to the public we must show that we understand generation rent. This means being active in campaigning for higher living standards in rented properties. Through my job I heard about some appalling conditions people are living in due to rogue landlords. landlords should not be able to get away with not providing decent living conditions for people.

  3. 3 Jon Reeds October 6, 2014 at 12:54 pm

    The book sounds like a good read, and opportune, given all the myths about housing that politicians and those with a vested interest seek to perpetrate.
    One of the worst is that building more homes would make them more affordable. A decade ago, after the Barker Reviews (correctly) argued the ups and downs of the British housing market adversely affect the wider economy, the Government began undermining brownfield-first and commissioned research to find out how many homes needed to be built to benefit affordability.
    The research’s conclusion was that, however large the number of homes you build, it would have no effect on house prices for at least a decade, and only thereafter a very minor one. Even building vast numbers of homes, well beyond the capacity of builders to build or the environment to accommodate, would add only a tiny proportion to the overall stock, so the effect is almost indiscernible.
    Not surprisingly, the Government never published this and the Treasury has continued to undermine sustainable planning ever since.
    There are so many myths around housing, you probably did well to stop at just seven.
    Plainly regional policy is now vital, whatever your opinion of the last government’s regional strategies. Why are we building thousands of homes in areas where there is high unemployment and housing markets are close to collapse? They need jobs, not more homes.
    I can see why helping young families buy their own home is a political imperative, but it’s been allowed to cloud this whole debate. If you look at the government’s household growth projections, the real need is among single people and, most especially, among the elderly. 79% of the new households expected to form will be headed by an over-55.
    And building market homes takes no account of the needs of those who cannot and probably never would be able to buy. There is a crying need for more affordable housing.
    If the Government were really serious about increasing the ability of young people to buy their own homes, it would be hitting the private rental sector fiscally, so releasing more homes for purchase.
    So many myths, you were wise to stop at seven.

  4. 4 CPRE Local Supporter October 18, 2014 at 11:28 pm

    The book is clearly useful; though many of the statements quoted have been made in similar form before by a variety of writers and specialists – and by CPRE and other campaigning bodies in the past. Most of what is said is not new.
    What Dorling does appear to highlight and is not usually said (second bullet point) is that no one wants house prices to actually fall – because so many people depend on an increase in real values over time as part of their own income. It is therefore impossible for politicians to support house price falls, so one just waits for economic conditions to cause this. It happened in both the 1990-93 recession and the more serious 2008-2011 downturn.
    Shaun Spiers states “I think there are seven propositions from Dorling’s book with which most would broadly agree, or which support the argument that solving Britain’s housing crisis will take more than just building lots more houses”. This is a welcome turnaround from a statement made by Mr Spiers earlier in 2014 that ‘we need many, many more houses’. (Not just ‘many’, but ‘many, many’.) That was not in line with most CPRE Members’ views, so it is good that he seems to have rowed back from that position by now quoting and supporting Dorling.

    • 5 sspiers October 19, 2014 at 6:48 am

      Solving the housing crisis will take more than building lots more houses; building many more houses (or even many, many more) is a necessary part of the solution, but not sufficient,
      Shaun Spiers

  5. 6 Tom Chance March 12, 2015 at 9:47 am

    A very useful summary, Shaun, thank you.

    I’m the Green Party’s housing spokesperson, and can tell you that the party almost completely agrees with Dorling’s analysis, and is going into this General Election proposing many of his solutions: a land value tax, tackling buy-to-let and easy credit, steps to break up the big builder cartel including more custom build on public land, and a return to providing 100,000 new social rented homes per year with new construction and bringing empty homes into use.

    We can be certain about one thing: more of the same isn’t going to work – just hoping that weakened controls over big builders will deliver a huge amount of supply, which will in turn address our affordability problems hasn’t worked for 30 years so we should do something different.

  6. 7 Kristian Niemietz March 12, 2015 at 11:34 am

    I hate to spoil the party (ah, who am I kidding; I RELISH spoiling the party) but Dorling is completely and utterly wrong (as he usually is). And here’s why:

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