fallout from the terrible fire at a tower block in North Kensington continues, it may still be months before we know the precise details of what went wrong. The broader context, however, is already clear. That context is the housing market, which has taken a universal human need and turned it into a financial investment that ever fewer people can afford.
This picture is clearly painted in a new report that shows how older people have stacked up £2.3 trillion in the past two decades through gains in a housing market from which most young people are excluded. It reminds us that buying a home, unlike a conventional purchase, transforms a person's relationship with the money system. From wanting prices to be low, to make a home affordable, they now want them to be as high as possible, both to maximise the value of their asset and and to reduce the proportion of it that they owe to their lender.
That, at least, is the working assumption of which the politics of housing is based. It is a story of winners and losers in which winners have houses (appreciating assets) while losers rent (handing over money that they will never get back). Since everyone wants to be a winner we are encouraged to think of home ownership as an aspirational norm. Meanwhile, a report from Shelter suggests that more that a million private renters could be homeless by 2020 - the ultimate losers in this divisive system.
If home ownership is the "norm", it is easy to see how landlords - including the owners of social housing - may view the accommodation they provide as "temporary", and therefore not needing to meet "permanent" standards. It explains why, according to this report, one in three private rented properties in England does not meet the minimum standards for a decent home. If renters are merely perched on a stepping stone to home-ownership, why does the condition of their home matter? And if they're stuck with renting for the long term it must be because they're too poor, too disorganised or insufficiently motivated to achieve the market participation that society expects.
In reality, however, the ownership we're talking about here is not of housing, but of land. Building land is hugely valuable; it represents a high proportion of a home's market value. Government, both centrally and locally, controls the supply of that land through the planning system. It also owns a lot of it, and it used to own far, far more. The sale of public land assets, either directly or via the privatisation of public service companies, has been unrelenting since the 1980s.
From council housing, railway land, sorting offices, army housing, court buildings, police stations, hospitals, playing fields and car parks to other large acreages of the public realm, cash-strapped government departments and local authorities have sought to maximise the short-term value of their land assets. Whether it is true that the cladding at Grenfell Tower was added to make it look more attractive to residents of other, higher value, developments, it certainly rings true. For many local authorities, the supply of so-called affordable housing is contingent upon the returns they can make on high-end property built on formerly public land.
Now, however, the long term consequences of this short term market opportunism are becoming painfully clear. Land values are such that more and more families have to be housed at least partly at public expense. Through housing benefit, subsidies to developers and homebuyers and grants to housing associations for land purchases, government is paying handsomely for the land value frenzy of the past thirty years. Not to mention the costs that arise in the wider economy when housing takes such a large part of people's incomes.
When you're in a hole, stop digging. If asset-stripping the public realm for short-term gain is making matters worse, it's time to try different approach. What if, instead of milking it for profit, the government made housing land available at zero cost? Houses would be sold for the value of their bricks and mortar only, on condition that they are only ever re-sold on that basis. The savings in housing benefit and other subsidies from this new stream of ultra-affordable housing would soon outweigh any short term bonanza.
Over time, this secondary market in zero land cost housing would bring down prices on the open market too. Provided this effect was slow, and managed, would that really be such a bad thing?
Picture credit: ChiralJon (https://flickr.com/photos/69057297@N04/35353492476) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
Sunday, 25 June 2017
Sunday, 11 June 2017
For the millions supporting Corbyn's Labour, that message could be hard to hear. After all, with only a handful more seats Corbyn could now be installed in Downing Street, framing a minority government programme that the other "progressive" parties would find hard to vote down.
Enticing as that sounds, however, its is likely that such an outcome would have ended in tears, and not only because coalitions thrown up by the UK's dodgy electoral system are inherently shaky. Even with a majority, Labour would still be obliged to operate within the neo-liberal economic system. That system would blunt its effectiveness, or even destroy its programme, risking disillusionment particularly among the newly-engaged young voters with whom Corbyn is so popular.
If you doubt that, think back to 1997 and the return, with a massive majority, of a Labour government that was going to rebuild the social and industrial fabric destroyed by Thatcher. Blair embraced the market in his attempt to achieve this, and in the process gave us an independent Bank of England (concerned only with monetary policy and not social consequences); eye-wateringly expensive Private Finance Initiatives, an increasingly privatised NHS and a rise in the wealth and influence of the "filthy rich".
Corbyn may not embrace the neo-liberal market system with Blair's fervour, but he still knows it's there. So his policies, with their cautious costings, are primarily focused on relieving its unfairer aspects rather than changing it at source. This is not to say that he, and particularly his ally John McDonnell, do not want to change the system. It's just that they don't (yet) have a project to do so.
The ideas are all there. Academics, think tanks and campaigning groups have been working for decades to develop new models for corporate governance, banking, money-creation, fair trade, land ownership and wealth distribution, as well as the crucial question of how wealth is measured. Progressive parties have picked up on bits and pieces of these - the Universal Basic Income featured in the Green Party manifesto and Labour have a working group looking at the idea - but no one is weaving them together into a coherent political and economic programme.
Since the crash ten years ago the existing economic system is widely acknowledged to be broken, yet conventional political wisdom says we're stuck with it. The idea that wealth is created through capital investment and asset appreciation rather than the work of people's brains, hearts and hands is so firmly ingrained that no threat to the owners of that capital - whether murky offshore funds, big corporate rentiers or merely home-owners basking in the glow of rising house prices - can safely be contemplated.
If we want things to change, therefore, the primary and essential task is to shift that conventional political wisdom, and not just in parties or among activists or in the progressive "echo-chamber" but in the collective mindset of ordinary people who rarely think about such things. This means framing new, collaborative economic and political ideas not in working papers and policy documents but in the instinctual, emotional, personal and familial terms in which most people do their politics.
Looked at rationally, high house prices are not good for our collective or individual wealth or wellbeing, but how do you convince a homeowner of that? A Basic Income will free people up to create real wealth for themselves, their families and communities, but won't people think they're just sponging off the state? Fair trade, social enterprise and community banking will tackle poverty and social exclusion while keeping wealth in local communities, but to many it may seem inefficient and unrealistic. These are feelings, not arguments, so they cannot be countered directly. Instead, new forms and pictures must be shaped, to help change the landscape from which those feelings are drawn.
I don't know how to do that, but I mean to spend time in the next year or so trying to find out. While the Tories are making a hash of Brexit the task of true progressives is to crack this puzzle and thus change the central premise on which the next election is fought. Only if we do that can the passion and enthusiasm that Corbyn has tapped into find its full, meaningful expression as a driver of profound, sustainable, political and economic change.
Picture credit: Sophie Brown (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons