Housing shortage in the midst of plenty

It is not the right to buy that workers need, but the right to a home.

Proletarian writers

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Proletarian writers

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On 5 March, prime minister Theresa May launched proposed changes to the national planning policy framework (NPPF), the legislation that sets out government planning policies for land use development.

The changes are billed as an overhaul to the planning system aimed at ‘fixing the broken housing market’ through encouraging the construction of more houses, with an emphasis on converting planning permissions into built homes.

In essence, it is a call to local authorities to reduce red tape and objections to planning applications, and to make sure that development plans, once approved, are implemented in the shortest possible timeframe. A call that will be music to the ears of the country’s big construction conglomerates.

May outlined that the “government is rewriting the rules on planning … we’re giving councils and developers the backing they need to get more homes built more quickly”, and went on to highlight that “in much of the country, housing is so unaffordable that millions of people who would reasonably expect to buy their own home are unable to do so” and the “failure to match demand with supply really began to push prices upwards”, while “higher prices brought with them higher rents”.

Spotting that there is a housing crisis is one thing that even the Tories can manage. However, solving that crisis is something that neither Tories nor Labour are going to be capable of.

“Whoever declares that the capitalist mode of production, the ‘iron laws’ of present-day bourgeois society, are inviolable, and yet at the same time would like to abolish their unpleasant but necessary consequences, has no other recourse but to deliver moral sermons to the capitalists, moral sermons whose emotional effects immediately evaporate under the influence of private interests and, if necessary, of competition.” (Engels, The Housing Question, 1872, our emphasis)

In her speech on 5 March, May called upon the decency (!) of builders and developers to “step up and do their bit”, having pointed out that “the bonuses paid to the heads of some of our biggest developers are based not on the number of homes they build but on their profits or share price”. She continued: “In a market where lower supply equals higher prices, that creates a perverse incentive, one that does not encourage them to build the homes we need.”

Yet she still expects “developers to do their duty to Britain and build the homes our country needs”.

Duty without financial reward is not something that is associated with the economic laws of capitalism. When profits dictate production and people’s needs are left at the mercy of market anarchy, the idea that calling on developers to do their ‘duty to Britain’ is going to make a blind bit of difference to the housing problem is laughable.

Moreover, anyone driving around the country would find it hard to agree that there is a shortage of new houses being built. And Ms May, for all her tough-sounding words, most certainly knows this perfectly well.

The situation is quite the reverse: new estates are appearing at a frenetic rate, especially in and around those cities where speculation in housing is most feverish, such as London, Bristol, Manchester and Birmingham. And yet those are precisely the cities with the biggest homelessness and overcrowding problems. (See 300,000 people in Britain are now homeless, study reveals by Benjamin Kentish, Independent, 8 November 2017)

Housing bubbles a symptom of capitalist crisis

As the economic crisis of capitalism has deepened over the last ten years, the worldwide speculation in housing and land has become more and more fevered. Here in Britain, house prices have been rising fast, not as a result of the short supply of housing stock, but as a result of the need for the super-rich to find ways to invest their surplus capital.

Parking it in bricks and mortar is seen as a fairly safe bet, especially while the weight of speculation in property causes prices to rise and rise, creating profits far in excess of anything that can be got out of productive investment. And the more that big investors do this, the more demand they put into the housing market and the more the prices go up, initially on luxury and high-end properties, but then on properties at the next level down the chain, and so on, all the way to the bottom of the so-called ‘property ladder’.

This explains why it is that so many luxury properties are empty and there is so much competition at the bottom end of the market. Billionaire investors and hedge funds buy up the luxury homes at ever more exorbitant prices, and don’t even need to go to the bother of renting them out to make money out of their investment. The kind of people who used formerly to live in such luxury homes are priced out, and find themselves forced to lower their sights. In so doing, they price out the people on the next rung down … and so on all the way down the ladder.

This pattern is being constantly repeated, so that the idea of being able to buy a little one or two-bed flat as a young person, or a 3-bed flat or house for a young family, is increasingly out of reach of ordinary workers in need of a home, to whom social renting is no longer available and private renting as expensive as buying and even more insecure.

All this is driving demand for more and more developments of the shoddiest kind, plonked down without any thought to the environmental costs or to the needs of those who will live in or near them, badly built, cramped and sold for exorbitant prices to those who are ‘lucky’ enough to be allowed to take on the required level of debt.

Pretending to want to ‘solve’ this problem, the government previously introduced such schemes as ‘help to buy’, which, by helping first-time buyers borrow more, was nothing more than a thinly-veiled subsidy to developers, fuelling demand for small ‘starter homes’ and helping to keep their prices high. May’s latest proposals offer a further boon to developers, attempting to scrap some of the little requirement that remains for councils to ensure that development in their areas is carried out responsibly.

Requests from the prime minister aside, the changes to the NPPF, which if approved would become government legislation, will not result in any improvement to the housing problem in Britain. It is a classic example of doing the same thing and expecting different results: what Albert Einstein termed the definition of insanity.

The changes essentially misrepresent the problem, and then offer a solution to this fake issue: ie, that planners are not approving enough developments and developers are not doing enough building. They say nothing about who needs the homes, where and how these could most usefully be provided, and, most importantly, whether those that need them would be able to afford them.

Indeed, never mind that they don’t address the need for social housing if people are to be homed adequately no matter what their income level, the proposals do not even make any alteration to the level of what is laughably termed ‘affordable housing’, which developers are required to include on their estates.

Not that ‘affordable housing’ is actually affordable to those who need it (nor, very often, is it adequate for their needs), but it is the closest the ruling class and its spokespeople at present get to admitting that a society might try to take some responsibility for housing its people.

Terrie Alafat, chief executive of the Chartered Institute of Housing, commented that he found it “disappointing that the reforms fail to emphasise the importance of building more homes for social rent. To truly fix our broken housing market, we need to make sure we are building the right homes, in the right places, at the right prices.

“The solution must include more genuinely affordable homes, including homes at social rent, built by social landlords. The planning system has a vital role in delivering them, but an opportunity to put this centre stage has been missed.” (NPPF changes: LGA hits back over planning criticism by Nathaniel Barker, Inside Housing, 6 March 2018)

Is there a housing shortage?

While there is a requirement for new homes to be built, there are also huge numbers of houses and apartment blocks that are either standing vacant or are under-occupied. In short, the housing shortage is not due to the lack of bricks and mortar but to the lack of affordable housing available to those in need.

A recent study by Savills, an estate agent, found that in London, for example, there is a ‘demand’ for 37,000 affordable new homes and yet only 9,800 are being built. While affordable housing is not being planned for or built, London borough planning authorities have recently given “property developers planning permission to build more than 26,000 luxury flats priced at more than £1m each, despite fears that there are already too many half-empty ’posh ghost towers’ in the capital.” (Anger over glut of ‘posh ghost towers’ planned for London by Rupert Neate, The Observer, 4 February 2018)

“For many, the fear is of sleeping four to a room while the state pays housing benefits to ruthless landlords offering units smaller than prison cells to the desperate. London does not feel empty if you are fighting for a home. The creation of overpriced apartments for investors and part-time residents is a significant misuse of resources when the rest of the city is struggling, often desperately, to make ends meet.” (The rich get richer and the poor get homeless, London’s emptying towers by Rowland Atkinson, Le Monde Diplomatique, March 2018)

This, surely, is proof enough that focusing solely on numbers without giving any consideration to the price tag will never resolve the housing problem.

Meanwhile, the 2011 census showed that 3.9 percent of houses nationwide were vacant for more than six months. In new builds in the City of London this shot up to 25 percent, in Westminster it was 19 percent, and in Kensington and Chelsea, the borough responsible for Grenfell Tower, the number of vacant new-build properties was 14 percent.

Savills says that the number of long-term empty properties has been dropping, but still stands, according to them, at 200,145 across the country and 19,845 in London. (Quoted by Julian Harris in Labour leader Jeremy Corbyn is wrong – empty luxury flats are not causing the UK’s housing crisis, City AM, 1 February 2018)

Requisition houses to fix the problem

Just taking these figures as an example, we can see that if 37,000 affordable houses are needed, that demand could easily be met by requisitioning both the 19,845 houses currently standing empty and the 26,000 luxury flats being built, thus ensuring that homes are provided at reasonable rents to those that need them, not sold for a fortune to those who plan to use them as an investment or as a second, third or fourth home.

This is where Labour leader Jeremy Corbyn’s call for taking over empty properties sounds promising. Corbyn outlined that Labour “would give local authorities the power to take over deliberately kept empty properties, because there is something grossly insulting about the idea you would build some luxury block and deliberately keep it empty”.

While we can welcome this call, it must be noted that local authorities in England and Wales already have powers to issue empty dwelling management orders to take over certain qualifying properties that have been vacant for more than two years and let them out, yet few use them. Less than 20 orders a year are approved across the country.

Corbyn has said Labour would go further to enforce this, yet there is no indication as to how this enforcement would take place. It will have to be pretty radical to improve the lot from 20 orders a year to the thousands that would be required. It would also have to go against the fundamental principle of private ownership that is enshrined in capitalism.

What is missing from all of this discourse is the recognition that when Margaret Thatcher’s government initiated the great council housing sell-off in the mid 1980s, the right to a home was effectively abolished. In order to get back such a right, councils would once more have to be tasked with requisitioning or building – and maintaining – as much social housing as necessary to decently house every worker who is in need of a home, at low rents and with assured tenancies.

Moreover, ‘allowing’ workers to own their own homes is a long-established tactic for chaining them to the capitalist system and crushing their independence and militancy. In a note to the second German edition of his classic work on housing, Engels cited a letter from Eleanor Marx, written from Indianapolis on 28 November 1886: “In, or rather near, Kansas City we saw some miserable little wooden huts, containing about three rooms each, still in the wilds; the land cost 600 dollars and was just enough to put the little house on it; the latter cost a further 600 dollars, that is together about 4,800 marks [£240] for a miserable little thing, an hour away from the town, in a muddy desert.”

Engels went on to point out: “in this way the workers must shoulder heavy mortgage debts in order to obtain even these houses and thus they become completely the slaves of their employers; they are bound to their houses, they cannot go away, and they are compelled to put up with whatever working conditions are offered them”. (The Housing Question)

Under capitalism, housing is not a right, it is a privilege: a commodity to be bought or hired if you can afford it. The short period when things were different in Britain lasted less than 40 years. Now, once again, there is no incentive for the market to provide homes for those that need them if they cannot afford to pay the going rates.

And for precisely the same reason that supermarkets would rather throw away their surplus food than donate it to the hungry, developers and investors will do everything in their power to stop any government from undermining house prices and rents by requisitioning empty homes in order to accommodate the homeless.

Unlike in the days after the Great October Socialist Revolution in Russia, when private ownership of land was abolished and the requisitioning of large housing was one of the first measures carried out by the new socialist government, to be followed by decades of new house-building in order to provide really decent housing for all workers, a Labour government, even under the stewardship of Jeremy Corbyn, will not be in a position to go further than the capitalist ruling class will let it. It would still be managing the system in which private property rights reign supreme and where profit and the accumulation of capital are the motive force of all productive activity.

Our demands

We in the CPGB-ML make the following demands in regard to housing:

1. The immediate scrapping of the 2016-17 housing bill, which threatens hundreds of thousands with poverty and homelessness.

2. The end of the ‘right to buy’ and the scrapping of all other schemes that fuel prices, create shortages and offer subsidies to landlords and developers.

3. The return of housing association and ‘non-profit’ properties to council ownership, the abolition of housing charities and the reintroduction of the legal right to decent, secure housing for all; slums, overcrowding and homelessness are an indictment on capitalism and a crime against humanity.

4. The confiscation of all empty homes and unfinished developments and their transformation into council housing.

5. The provision of at least 300,000 new council houses per year to end the crisis.

6. Guaranteed, secure and well-maintained social housing for all who want it, close to people’s work and families, and the abolition of divisive allocation criteria.

7. The introduction of a rent cap at 20 percent of minimum wage for all privately rented accommodation, and the scrapping of housing benefit (a subsidy to landlords that has helped to fuel rent rises).

8. The establishment of residents’ management committees to oversee planning and maintenance and ensure that all workers have access to adequate space, necessary amenities and decent facilities, including having usable and pleasant outdoor spaces and community halls.

The CPGB-ML believes that the welfare of workers can only be safeguarded by a socialist system of economy, controlled and administered by the working people themselves. As Engels so aptly put it: “As long as the capitalist mode of production continues to exist, it is folly to hope for an isolated solution to the housing question or of any other social question affecting the fate of the workers. The solution lies in the abolition of the capitalist mode of production and the appropriation of all the means of life and labour by the working class itself.” (The Housing Question, op cit)

Let the capitalists’ ministers try and show us otherwise; let them start by meeting this list of simple demands.