Conservative Home’s Harry Phibbs writes about empty council houses pointing out that there are currently 30,600 long term empty council homes. Phibbs wants councils to sell these homes (estimating they are worth £3.8 billion) but doesn’t ask why the homes are, in the jargon, long-term voids. Sloppy housing management and the fact that some properties are hard to let will be factors here but the most common reason for long term voids in social housing is redevelopment. Put simply, if a council decides to redevelop an estate (an example is the Carpenters Estate in Stratford) normal housing management practice is not to relet homes that come vacant – would be crazy to let a home and then decant the new tenant a few months later. And those thirty thousand empty council houses represent less that 2% of the council housing stock.
It is a common argument – there’s even a far-left campaign group, Action on Empty Homes – that there are lots of homes sitting empty and unused that could be used to solve the housing crisis. That campaign group says there are 238,000 homes that have been empty for six month or longer (and then adds in every other currently empty home, second homes and holiday lets, to magic up a figure of one million). Even if we accept all of this, there aren’t enough empty homes to fix the crisis and, as we see from the council houses, it is impossible to eliminate voids even when your regulator treats void levels as a key performance indicator.
Britain has very low levels of empty property – the Netherlands, for example, has as many empty homes as England despite having a population a third the size. And, as Centre for Cities has observed, empty properties are good for housing affordability and the smooth operation of housing markets. Tom Forth who runs Datacities, set out why more voids are good for housing affordability:
When people in England get on a bus or a train, they are happy to see a seat empty.
When people in England go to the shop to buy milk, they are happy to see an unsold bottle rather than an empty shelf.
But when it comes to homes, many people in England think about things differently. Empty homes, they say, are a bad thing, to be reduced by policy, and to be filled before any new homes should be permitted.
Largely because of this, England has the lowest rate of empty homes in the developed world
So, not only are there not remotely enough empty homes to sort out the housing crisis, trying to use them as an excuse for not building more new homes is entirely the wrong approach. Forth points out that planners in Greater Paris want the void rate for all homes to be 8% or higher because they believe this will help maintain housing affordability and assist the housing market. By contrast the all-housing void rate in Greater London is 0.7%.
All of this points to a central issue in urban development - Barcelona’s left-wing mayor has failed to deliver on housing affordability preferring to blame tourism and AirBnB while the more conservative areas surrounding the city resist new development. The same is true for London, San Francisco, Auckland, and Sydney – indeed for a hundred other cities across the globe where an insistence on urban containment and growth limits results in housing problems.
Attacks on AirBnB and holiday lets now feature strongly in the campaigns of groups like Action on Empty Homes. We’ve seen tourist hotspots like Whitby and St Ives adopt planning policies designed to prevent new housing being sold for holiday lets or second homes, and cities like York are considering how to reduce what they see as a problem with AirBnb.
The problem is that these policies are all designed to avoid confronting the real problem – there aren’t enough houses. When the LSE looked at the St Ives second home ban, they found that the impact of the ban was to reduce the price of new build property, so developers simply opted to develop elsewhere. Housing affordability worsened – when the St Ives ban came in prices were already 14 times median earnings for Cornwall, they are now pushing 20 times those earnings.
Second homes and tourist rentals inevitably compete with general needs housing, as does commercial, retail, and social development. But simply banning some of these developments doesn’t, as the experience of St Ives shows, will make the problem worse. The Barcelona experience – rent controls, eviction bans, fines, and urban containment – demonstrates how not to resolve the problem. As one local agent put it:
“I see a very worrying trend…the slow, but constant movement of properties away from the rental market to the sale market. At the same time, we see a massive reduction in the purchase of new homes by small buy-to-let investors. All together this is causing the opposite of what we need to happen: A reduction in the number of homes for rent…”
Barcelona’s mayor is now threatening to seize empty homes (like London, the Catalan capital has very few of these) rather than accelerate to the development of new homes. None of these actions will resolve the problem and the mayor’s ambitious social housing plans have so far seen just one block developed – indeed opposition to this development (locals saw it as gentrification) means the city has downgraded future plans.
Housing supply is the problem not how much of the housing stock is vacant at any one time. The comparison of London, Barcelona and Paris demonstrates that you can have pro-housing policies and that higher void rates – more empty homes – are an important part of such policies. After all, if the landlords are chasing tenants, chances are the offer will be better and cheaper, than if tenants are chasing landlords!
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