…are politicians undermining the ‘hard working families’ and ‘big society’ that they claim to be acting in the interests of?
This applies nationwide – not just to Cambridge, although I’m writing this in the context of a Cambridge City Council meeting on our local plan – filmed by Richard Taylor here. Cambridge local plan documents are here.
Important as the local plans are, too many of the levers are held in The Treasury. Ministers over the past 15 years have chosen not to relinquish the powers they have to local councils to enable them to cope with the housing bubble. They also did not take action to nip the housing bubble in the bud – and for that the buck rests at the doors of both Gordon Brown and George Osborne.
“Who are the ultimate beneficiaries of high and rising house prices in the South East, and who are the losers both there and beyond?”
This is what I’ve been trying to get my head around. When you need two incomes to sustain a mortgage plus a lump-sum from family for the deposit, something’s wrong. When you have mortgages so out of sync with incomes, something is wrong. When there is a far greater demand for social housing, something is wrong. When so many people are living in sub-standard housing, something is wrong. When rents are so high that they take up a disproportionate chunk of people’s income, something is wrong.
So where does all this ‘surplus’ go? Who are the property owners and where does it all end up? In tax havens? (For those of you interested in economics, this paper makes for interesting reading). And what happens to it if it does end up in a tax haven?
Interesting given the various accusations (such as this) that have been thrown at him and his companies regarding ‘tax efficiencies’. We tried Victorian-style philanthropy in Victorian times to deal with poverty and inequalities, and it failed. Hence the welfare state and social security.
“But isn’t all investment good?”
For me, investment and speculation are not the same thing. Buying a UK property & waiting for the prices to rise is not investment. It’s speculation. Investment in my book (in a property sense) involves not just buying the property, but actually improving it – whether self-DIY or paying for someone else to do up the property in order for someone else to buy it and have people live in it later on.
The problem is that policy-makers – in particular politicians and those close to them – seem unable to come up with something that differentiates long term investment from shorter term speculation. The other thing is that by throwing money at a property bubble, it takes away investment that might be more productive elsewhere – where people, villages, towns and cities really need it. Hence this article in The Guardian by Aditya Chakrabortty about London being this vacuum cleaner sucking up all the money & investment.
“The wrong sort of housing? That’s a bit like the wrong sort of snow falling on the line! Doesn’t it provide construction jobs?”
Actually, it isn’t. With London and now surrounding areas of the UK now being a sort of ‘reserve currency’ for international finance types, too many properties are being built for the whims of that market rather than for the people that actually live here. You can actually buy your way to citizenship through the investor route these days – see here. I can’t help feel that this seems a little counter-productive. The amounts of money are tiny compared to the wealth that some in tinpot dictatorships have been able to squirrel away. And it’s not as if the super-rich are the sort of people that spend time in local communities face-to-face, working and building up strong relationships in our towns and cities – unless you call getting room service in a five-star hotel ‘community engagement’. Don’t the migrant workers on poverty pay contribute far more to local communities as human beings than ‘investors’ who buy properties waiting for prices to go up, spending maybe a few weeks a year in the UK staying either in an expensive hotel (owned by a multinational headquartered in a tax-haven) or an under-used luxury penthouse?
“So…what are you going to do about it then?”
This for me is why structures and connections between political institutions at a local-to-global level matter. One of my local councillors, Cllr George Owers (Labour) said the following at the Cambridge City Council local plan debate:
Instinctively, I’m in support. But the public policy type in me starts asking whether councils have legal powers to implement this. (As far as I’m aware, I don’t think they do – not to the extent it would burst an international speculative property bubble of the like that’s killing Cambridge).
I then look at the front bench teams in Parliament – the ones responsible for The Treasury. On both sides I don’t see the calibre of politicians able to deal policy-wise, lobbyist-wise or mainstream-media-firestorm-wise with the housing crisis. The super-wealthy have too much to lose. We’ve seen this with the recent flooding. Only when expensive homes by the Thames started flooding did the media and politicians start visiting everywhere in their droves. Hence it being sort of therapeutic to see mainstream politicians – in particular ministers – getting an absolute kicking from residents that have suffered in part because of the failures and decisions I referred to in my previous blogpost. For all the talk of ‘localism’, when it comes to civil contingencies it seems that there is a significant role for national public bodies.
The other thing not covered – not least because of the media’s fetish with UKIP personalities rather than policies – is the role of international co-operation in dealing with challenges that are clearly international in scale. International speculation is clearly one of them. Again, my principle is that if firm firms are multinational, the regulators need to be. And those regulators one way or another need to be democratically accountable. ***How*** you actually deliver that is a damn sight more complicated than what is otherwise for me quite a nice soundbite of a principle but a policy-wonk’s dream/nightmare [delete as appropriate].
“Killing Cambridge” – that’s a bit extreme isn’t it?
Probably. But my point is high housing costs and high costs of living mean that for too many people, Cambridge is now unaffordable – as the councillors said at the meeting. I gave up on the idea of having my own place ages ago – see here. I live with my family because as a freelancer (still trying to recover from my mental health crisis a couple of years ago – hence not able to work full time), my income is so low and volatile to the extent that I can’t afford to rent my own place. And I’m not the only one. From a personal perspective – especially compared to where I was say five-seven years ago, this has a ****huge**** impact on my self-esteem. This article about the ‘used to haves’ is one that resonated strongly with me – minus the ‘materialism’ aspect. I used to have a full time job that paid into a pension. I used to have my own place where I wasn’t living with family. I used to have a vibrant social life. I used to have better physical and mental health. I used to have a positive but realistic vision of where I wanted to get to in the future. I used to have hope.
But I don’t have that now.
Even worse, I can’t see how to get out of this situation beyond either a lottery win or a revolution in society. One of the reasons I do what I do locally is that it’s the only way I can make some sort of a positive difference in the hope that it will benefit those around me & also that it keeps me active on the assumption that my health will one day get better so that I can start applying for full-time work again. Because there are some really interesting posts that I would love to go for – especially in London (part of the problem I know) – but for which I simply do not have a good enough mental health to cope with – whether the commute or living & working down there.
As far as Cambridge goes, I remember a friend from school coining the phrase: “Why would you want to live in a town full of executives where you can’t find a plumber?” – and this was in the 1990s. Is that what Cambridge risks becoming? Will it become a place where around the railway station you’ll have a London commuter overspill bubble, surrounded by lots of buy-to-let accommodation for university and language-school students interspersed with residents who bought their homes decades ago along with pockets of ‘token’ social housing at a level that central government feels it’s compelled to have – but just enough to prevent serious unrest? Is it going to become somewhere where if you are a teacher, nurse or a bus driver you have to commute into the city from outside? Because the roads round here are ***really*** designed for mass local travel. Yeah, as if.
“Don’t the politicians care?”
It depends what level they are at. If you are a local councillor, chances are that you do – simply because of the workload you have combined with the abuse that seems to come with the territory in political debate all too often. Why would anyone put themselves through that?
At yah-boo-public-school-ninety-nine-a-hundred land that is Prime Minister’s Questions, the public don’t like the behaviour of the politicians they see on the telly – see here. It’s not helped by the fact that the mainstream news reports PMQs as real news. I wouldn’t go far as to say that all of the frontbench politicians don’t care. It’s more a case that too many of those with wealth, power and influence don’t live within the communities that most of the rest of the country live in. Hence they are blinkered from the day-to-day struggles that many people have to face. If your day-to-day rent and travel arrangements are all paid for, you don’t have to worry about whether you can go to an event that evening or not. Public transport considerations are less of an issue when your taxi fare is paid for and where you have a grace-and-favour-apartment nearby to crash at. When you get a ‘meals allowance’ you don’t have to worry about whether you can afford certain ingredients or not when you are at the food shop. Finally – as I have to pull myself up on sometimes, they take for-granted the knowledge and access they have when trying to solve problems.
“So…you got any housing policy solutions?”
While I’ve heard some interesting individual suggestions, Natalie Bennett got it spot on when she said the current housing market is out of control. It cannot be reined in by a single policy lever – whether legislative (passing laws) or fiscal (tax/spend). For a start, not enough of us know what all the inputs and factors that impact the housing market currently are, let alone have any idea of quantifying them. It’s like I have more questions than answers:
- Who owns which bits of land?
- What are the land values of the various bits of land?
- What are the current uses for the various bits of land?
- What are the current demands for the various bits of land?
- What are the current protections for the various bits of land?
- Which bits of land need more protection?
- Which bits of land are suitable for development?
- What is the spread of housing demand across the country?
- Who needs what types of housing in which parts of the country?
- What are the financial gaps between the types of housing people need and the types of housing they can afford, and how does this vary across the country?
- Who doesn’t have decent access to housing?
- Who has too much housing and is under-using it?
- What are the policies that can tackle under-use of housing and relieve excess pressure?
- How would those with the housing assets try to ‘game’ the system to ensure they kept all of their properties at the expense of everyone else?
- How does transport fit into all of this?
- How does resilience to/adaptation to climate change fit into all of this?
- What are the costs associated with improving the above-two points?
- What are the likely future trends with housing demand and supply?
- Which components cost what when building a house?
- Which specialist labour types cost what?
- Who do we need to be training in and in what levels in the future?
- Where is the investment going to come from?
- What are the international factors that impact the housing market?
- Is what people need and what people want the same thing? (How do you manage expectations?)
The above are just a handful of questions. See what I mean by housing policy being complicated? Yet it gives you an idea of the sorts of information you need in order to start creating some detailed, radical policies to deal with something that is screwing up the lives of too many people.