Thursday, June 14, 2007

Far be it from me to criticise our new housing policy...

... but I have just a couple of questions about what Ming announced today:

1) We appear to be calling for 1,000,000 new social houses to be built over the next decade. Nice round eye catching number, but where does it come from? Shelter are only calling for an increase in supply to 50,000 a year, when you are massively outbidding the lobby group maybe its time to check your maths.

2) How much will it all cost? well who knows, but at the current costs you are talking multiple billions a year! That ain't loose change.

3) Given we have a supply problem is putting in place a hugely bureaucratic process (community land auctions) that will slow the planning system down and probably result in less sites being brought forward for development really the most sensible solution? Or would deregulating rather than introducing more regulation be a more sensible solution?

4) What you going to do about the demand side of the equation? We can't build our way to better affordability at least in the medium term so we need to curb demand for new homes without damaging the economy, so what we going to do about it? (buggered if I know)

6 Comments:

Blogger Jock Coats said...

You put in a link to Shelter, but not to any story that says they want 50,000 homes. In fact, we are right in line with Shelter. Current plans for housing completions are for 190,000 per year. Shelter says that it ought to be up around the 230,000 mark and crucially, that the government will not pledge, that we need around 100,000 of them a year to be affordable - that's what our commitment is about.

On the cost, I think the money is supposed to come from the Community land Auctions. Which I don't think are bureaucratic at all. They are a market mechanism (a sort of a Dutch Auction) that addresses a market failure that currently, usually, leads to one or two landowners being able to hold communities to ransom. They will release more land because more landowners will be able to participate IMO. Have you seen the Lib Dem Voice piece I wrote on it?

10:04 pm  
Anonymous Tim Leunig said...

It currently costs about £70k in subsidy to build a social house, so 100k a year (up from say, 20k at the moment) means a £5.6bn a year.

But CLAs are not hugely bureaucratic, and do abolish all the S106 negotiations, and well as getting rid of the speculative applications that take so long and lead nowhere under the present system.

It really isn't that hard to build our way to better affordability - if we stabilise house prices for a decade, the house price to income ratio will fall from around 6.1 today, to 3.9 - not too far off its 1997 level.

Curbing demand is very, very hard, unless we are going to go for an illiberal "the state will allocate you housing of the right size" approach.

10:06 pm  
Blogger Niles said...

1,000,000 homes doesn't go all the way to meeting the needs of the 1,500,000 households in the queues for social housing.

12:09 am  
Blogger Bernard said...

Jock

Sorry I was being lazy on the Shelter link, but you shouldn't confuse "affordable" and "social" Homes. shelter are calling for 20K social units a year above current levels, given current levels are 30K a year that means in total they are asking for 50K.
And I did see the Lib Dem Voice piece (its what I linked to), and I still think my comments stand (not that the current system is perfect, far from any means).

8:04 am  
Blogger Jock Coats said...

Indeed - which is presumably why Ming said "affordable and social" and no doubt the detail of that split is in the Poverty and Inequality paper about to come out.

I can really only cite one situation I am very familiar with - the argument about where new housing should go around Oxford. CLAs would, I am sure, make that process much fairer to landowners and much more democratic for the decision makers, who would I am sure, be faced with many more options than they are at present thanks to the system of rent seeking that gives large landowners a huge advantage in lobbying for their land to be the chosen plot.

8:30 am  
Blogger Tristan said...

I don't see why the government should be involved in building houses at all.

Land owners should be able to what they like with their land, the fact that they cannot is at the root of the housing problems.

If a development adversely affects neighbors then compensations should be paid by the developer (and in a land tax environment it would lower the taxation).

If we want 'social housing' then why not let the private sector take care of it. If people need help affording housing then issue vouchers and get them into the usual rental market.

This all seems the most liberal course of action. Why must we insist on more government interference?

8:59 am  

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