Comment: Housing policy can’t be fixed until we treat houses as homes and not as stores of wealth

— 21.12.15

by Simon Spode

In his first article, Stewart Smyth outlined recent developments in Social Housing policy up to the Comprehensive Spending Review. In a follow-up article, again on the London School of Economics’ (LSE) Politics and Policy blog, he looks to the future, arguing that lack of access, not lack of housing itself, is a crucial problem. He further highlights how the issue runs deeper still; until houses are treated as homes, and not as stores of wealth, the contradictions in housing policy cannot be solved.

Housing policy, no less than any other policy area, is full of tensions and contradictions. Some of these exist in the realm of political hyperbole: when the Chancellor promises the biggest house building programme since the 1970s, he omits that those levels were only achieved because of the contribution by local authorities. And his policy has no budget or role for council house building. Another contradiction is shown with the dramatic reduction in upfront capital grants for housing association new builds and the introduction of affordable rents: this apparent saving comes at a cost of increasing the housing benefit bill.

The Comprehensive Spending Review reported that house price increases have moderated down to an expected 6.2 per cent in 2015, from 9.9 per cent in 2014. Yet it also included a prediction from the Office for Budget Responsibility that average earnings will increase yearly by only 3.5 per cent, up to 2020. So addressing the housing crisis in a piecemeal manner will create winners and losers as one side of a contradiction is preferred for a period of time.

But the house price/wages increase contradiction hints at a deeper issue – what is the nature of the housing crisis? This seems like an odd question, as the common sense answer is that we are not building enough new homes. Certainly, in the dominant policy discourse this would appear to be the sole issue. For example, the Lyons Review takes as given that:

For decades we have failed to build enough homes to meet demand. We need to build at least 243,000 homes a year to keep up with the number of new households being formed.

Earlier this year, the Department for Communities and Local Government estimated household formation in England at 220,000 per year up to 2020. The Conservative government (appear to) accept the need to build more houses and have preferenced first-time buyers with their policies since the election.

However, when you dig beneath this consensus the issue starts to metamorphosize. In his 2014 book, ‘All that is Solid’, Danny Dorling convincingly shows that we have never had as much sheltered space available in Britain; the issue is one of inequalities in terms of access to that space. And Dorling is not alone.

Read the full article on the LSE Politics and Policy blog.

Read the first article Social Housing policy up to the Comprehensive Spending Review.


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