Housing – pressure groups
We list some of the major housing-related pressure groups below (please suggest any others we should add).
These groups all realise that something is deeply wrong but they are merely scratching the surface when it comes to the underlying cause. They do not even appear to understand the policies the UK had for most of 20th century (and which many countries still have) which kept rents and house prices down and enabled a huge increase in owner-occupation rates.
Judged by today’s standards, there was significant state interference in the housing market. For example, the UK government did not officially cap selling prices but building society regulations and lending limits capped mortgages, which in turn kept a lid on prices. These policies led to the desired results, even though these policies might well have been driven by the underlying goal of implementing “anything but LVT!”.
These groups’ proposals are thus largely sticking plasters and tackling symptoms rather than causes or offering effective solutions.
Some groups call for more new construction on the simplistic assumption that more supply and constant demand would lead to lower prices. This is seldom observed in real life as supply creates its own demand. There is a long historic trend towards urbanisation. People don’t just want to buy or rent a physical home – they want to live where other people live. Businesses want to set up where there are plenty of potential employees, suppliers and customers. This leads to more specialisation, more jobs, more spending and more leisure opportunities, more economic and social activity. The OECD estimates that productivity (and profits and wages) increase by 5% if the population of a conurbation doubles.
Some call for better tenant protection and rent caps. A rent cap acts like a tax on the landlord, but instead of the tax being centrally collected and pooled, the benefit goes only to the sitting tenant and leads to misallocation of land and housing, thus subtly pushing up rents and prices for “everybody else”.
Some call for a return to mass construction of social housing. This is a timid step towards Georgism. Social rents can be split into a payment for the bricks and mortar and the payment for the location value, so instead of collecting LVT from privately owned land, the council banks it directly. Social rents are usually set below market rents and that rent saving is a kind of Citizen’s Dividend for social tenants.
Some call for policies which would exacerbate the situation, such as calling for higher Housing Benefit payments to private landlords or government assistance for first time buyers.
Finally, some are focussed on the immediate issue of homelessness, which is not necessarily a housing issue. It is the inevitable result of the lack of social housing and an economic system and welfare system which allow too many to fall through the cracks