Baby Boomer Myths - old people are horrid and have stolen our future

Text for today is this Tweet:



I'm guessing that it's some sort of 'subtweet' - directed to one or other 'boomer' on social media but not bravely enough to actually identify them. As one of those 'baby boomers', I find this sort of myth-making fascinating, especially given none of us spend our time fantasising about fighting in WWII.

The first observation in the Tweet does rather miss the point (and, of course, grants were means tested with the result that I got a full grant and my brother didn't) since in 1970 only 6% of school leavers went to university - nearly all of them male. Most of the 'middle class baby boomers' being complained about didn't go any where near a university education, they left school at 16 or 18 and went to work. Today approaching 40% of school leavers go to university despite those terrible loans (and well over 50% of those heading to university are women). So baby boomers can't remember getting a grant for a university education they didn't receive!

The next comment is about housing affordability. It's true that housing, especially in London, is less affordable now, but we should also remember that back in 1970 something like 45% of people lived in council houses. A fair load of the people our tweeter is dismissing as 'middle class baby boomers' were born and raised in council houses. It was only the glorious initiative of right-to-buy that gave loads of boomers the chance to own.

There's folk out there who want to lay the blame at the door of sixty-somethings rather than respond to the actual problem. For sure, the 'green belt' is second only to the NHS as a national sacred cow and the boomers (or at least the ones in the south) have done very nicely out of the house price gains. But this is no excuse for the sort of nonsensical 'old people are horrid and have stolen our future' comments this tweet illustrates.

....

Sell it off cheaply? More desperation in depopulating villages

We've seen a variety of creative approaches used by villages and small towns in Italy (plus Switzerland and Germany) to try and stem decline and abandonment. From 'recruiting' immigrants through cash incentives for families local authorities have sought to stem depopulation. In the end, this is about money and access - how cheaply (even negative rents) can we make living in a place that's far removed from the places where the jobs, social activities and culture live. Here, from Sardinia, is a pretty blunt approach:

On the Mediterranean island of Sardinia, the old village of Ollolai is at risk of turning into a ghost town.

Over the past half-century, the town's population has declined from 2,250 people to just 1,300. And now, there are hundreds of abandoned homes.

In an effort to lure new residents, Ollolai's government is selling 200 of these homes for $1.25 each.

That's one Euro for a house (although you'll need to spend some money refurbishing that house) which is great if you can run your life and business from what can only be described as the 'back of beyond' - Ollolai is bang in the centre of Sardinia, off the main road, with the nearest airport at least an hour away. And this is the problem with these offers, for all that we look at a delightful stone cottage in an ancient hill top village, we shortly after ask questions about schools, hospitals, airports, ferries, theatres, trains, supermarkets and shopping malls. With the result that, despite the financial offer and its appeal, we opt for a more expensive place that means we can reach some or all of that list with some ease.

....

Regeneration without new land for suburbs created the problem of Haringey

If you restrict the availability of land for housing, poorer parts of town get gentrified - "regenerated" as we like to say in England. And, because we've restricted land for housing the poor people who live in those gentrifying areas lose out:

And that displays the flaw behind the creative class theory up to now. The idea itself is excellent–creative class professionals enhance urban cultures and economies, and should be welcomed. But cities that have embraced them so far, such as San Francisco and Austin, have not anticipated for this by allowing the necessary new housing. And the results are predictable: wealthier professionals are fighting with poorer service-class workers over the same set neighborhoods and housing stocks–and the latter group is losing.

Right now - as Claire Kober has discovered - the political consequences of this trend are problematic. Not because the people opposing gentrification have got any better proposals than the gentrifiers and regenerators but because a bunch of left wing agitators are riding to power on the back of promising a better world without really explaining how. And doing it violently. It's not just Momentum agitators in Haringey but a trend seen in Barcelona, Seattle, Berlin, San Francisco and Sydney. In every case existing residents are promised new homes, protected rents and the benefits of a delightfully shiny regeneration and, in every case, those residents see wealthy incomers changing their world.

As it happens, I think that local leaders like Claire Kober deserve credit for their efforts - it's not their fault that we've had four decades of urban containment in London - but they should also be saying to people like London's mayor and whoever is in the revolving door as housing minister this week that the city needs space to grow. Central London has pretty close to the world's highest rents (Manhattan and Hong Kong are worse but they're islands so have an excuse) yet nobody is prepared to say that it is wrong-headed planning policies that are to blame not foreigners, property developers, landlords or local council leaders.

.....

London's property market - are the vultures circling yet?

My wife owns a share in an apartment on the Costa del Sol and it's lovely. But as successful investments go, it isn't one. The area between Estepona and San Pedro is littered with the marked out roads, pavements and street lights for what would have been thousands of villas and apartments. Even some of the completed developments are ghosts, mothballed by the developer or the bank against some possible - even mythical - future recovery in the housing market. Don't get me wrong here, there are also thousands of completed developments filled with happy people from all over Europe, it's just that the enthusiasm of developers, the gung ho (and sometimes corrupt) approach of local councils to development and an international property investment industry focused on flipping off-plan rather than housing people resulted in a vast oversupply of development opportunities.

For all that the Costa del Sol is great, the supply of people who want to go and live there is limited especially given the competition from other sunny, cheap and welcoming places like Bulgaria, Malta, Cyprus, assorted Greek Islands, Turkey and Portugal. Not to mention the rest of Spain's Mediterranean coast. I know that 'living there' covers a multitude of options from full time residency through spending winter on the beach to what amounts to extended tourism. But such opportunities limit the demand for such property, even in a world where a two-bed apartment will cost as little as £100-150k.

Imagine then how limited the market must be for two-bed flats that are selling at £2-3m!

There are an extra 14,000 unsold apartments on the market for between £1,000-£1,500 per sq ft. The average price per sq ft across the UK is £211.

Molior says it would take at least three years to sell the glut of ultra-luxury flats if sales continue at their current rate and if no further new-builds are started.

However, ambitious property developers have a further 420 residential towers (each at least 20 storeys high) in the pipeline, says New London Architecture and GL Hearn.

So we already have 14,000 empties and plan on building about 40,000 further properties to go onto this market? Do we not see that this is going to do nothing at all to resolve London's housing problems, will probably bankrupt a couple of developers and will result in a lot of wealthy Londoners stuck in negative equity. Regardless of any Brexit effect, the simple truth the we learned on the Costa del Sol applies here - there aren't enough people who have the cash to buy these apartments and who want to own property in London.

...hundreds of Asian investors who had bought London developments off-plan in 2015-16 in the hope of making a quick profit by selling apartments on closer to completion have instead lost hundreds of thousands of pounds. “They intended to flip [buy and sell on] the apartments and make big profits, but it hasn’t worked out like that, and now they are trying to get out at the smallest possible loss.”

A lot of folk who lounged on Spanish beaches back in 2004 or 2005 will be very familiar with this pitch - it was what the salesmen said back then: "the market's booming, everyone's investing, you only need to put down a deposit, you can't lose!" A loads of people took the punt, sticking down options on, as yet unbuilt, apartments and villas expecting to "flip them". It didn't happen. Most ended up owning an apartment they hadn't expected to own that was worth a lot less than the mortgage. For some it was a financial mess, even a disaster.

In London and for the New London Architecture "shiny city of millionaires" sort of developers, the prospects look pretty grim right now. Not because of Brexit (although that probably hasn't helped) but because if your development strategy is based on there being an increasing supply of people who can pay more than £2m for two-bed flat, then - outwith Venezuelan-style inflation - your strategy is going to crash. London's centralise and densify policies are creating this situation. Indeed, I'm sure the vultures that feed apon unsuccessful capitalists' vanity are circling already.

The problem is that, in every way (not just housing) London is too expensive, not family-friendly and lacking in the essential community that makes places work. Without revisiting the "build it ever higher" strategy - densify, densify, densify - London faces a second property crisis; one of empty mothballed homes owned by anonymous finance houses, crashed property developers, a frantic secondary market of short term lets, and an ever-wondering public asking why the city built things for international investors to 'flip' rather than homes that people might want to live in?

I recall a conversation with a Yorkshire developer about a conversion and new-build scheme in Saltaire. He ended up rescuing the development by creating a rental business for the flats he couldn't sell. Speaking to me he said: "Six months earlier I'd have been pricing up yachts, six months later I'd have been bankrupt." Right now London's 'build it and they will come' development market is looking pretty ropey and it's hard not to conclude that, as ever, avarice and vanity have meant that property developers have ignored the lessons of the Costa del Sol.

Yes, you've got benign local (and national) government keen for you to build. For sure, there are banks from all over ready to throw money at the schemes. But are there actually enough real customers for the things you're building? If there isn't, you need to think again about the strategy. In the case of London, we've maybe reached the point where there isn't.

....

No Sadiq, upzoning and densification don't resolve housing costs

You need 'urbanized area expansion' too:

The idea that the Bay Area might build more housing on greenfield sites – single or multifamily – isn’t even contemplated. Nor does the piece cite examples of where large scale infill densification actually rendered housing affordable in the absence of new greenfield construction. I’m not aware of any such cases.

That’s not to say that upzoning or densification are a bad things. I would support upzoning and building more infill in nodes proximate to transit stations. (I also think we should be honest that our intent in this is in fact to change the character of the neighborhood). But if you’re taking urbanized area expansion off the table, don’t ever expect to bring housing prices down materially.

No new building land, no fall in house prices relative to earnings.

...

The London Plan - building a playground for the elite

Today, the Mayor of London published his "London Plan", a strategic look at development in the world's greatest city (except for Bradford, of course, but we hide our light under a bushel and don't call ourselves a city any more despite being one):

It's a strategic plan which shapes how London evolves and develops. All planning decisions should follow London Plan policies, and it sets a policy framework for local plans across London.

Exciting. And there will be some good analyses of the plan from assorted consultants, lobby groups and academics over the next few months as its consultation plays out. The Mayor - as these sort of people are wont to do - is bigging up the Plan:

“I am using all of the powers at my disposal to tackle the housing crisis head on, removing ineffective constraints on homebuilders so we make the most of precious land in our capital,”

I gather the Mayor went on to talk about "tearing up" planning rules that prevent housing development (while proposing new rules to stop people opening businesses in case children might get tubby). There's going to be 650,000 new homes rammed into an already crowded city, piled up on top of railway stations, stuffed into gardens, perched on top of shopping parades. Densification is the order of the day - London, in housing terms becomes Mr Creosote. After all, even the Campaign for the Protection of Rural England - NIMBY central - think the plan is ace. CRPE tweeted:

We're pleased to see a commitment to protecting and enhancing the Green Belt from @SadiqKhan in his draft London Plan. A protected and thriving Green Belt is just as important for our cities as our countryside.

OK, so they tweeted this with an attached photograph of a view across Windermere - about as far from London as it's possible to be and stay in England - but the CPRE are clearly happy.

The thing is that this is the problem. London isn't so much overheating as burning to a cinder, at least in housing terms. Yet the Mayor smiles saying, 'we won't touch the Green Belt, heavens no, that might cost me votes'. And the result of this is what geographers, Joel Kotkin and Wendell Cox call a "playground for elites":

Once exemplars of middle-class advancement, most major American cities are now typified by a “barbell economy,” divided between well-paid professionals and lower-paid service workers. As early as the 1970s, notes the Brookings Institution, middle-income neighborhoods began to shrink more dramatically in inner cities than anywhere else—and the phenomenon has continued. Today, in virtually all U.S. metro areas, the inner cores are more unequal than their corresponding suburbs, observes geographer Daniel Herz.

For London, the sort of middle income places I was brought up in (Addiscombe between Beckenham and Croydon) aren't really middle income places these days. The cramped - for a family of six large and loud people - three-bed semi we lived in would now sell for £400,000 or more, way beyond the means of the sort of people doing a middling sort of job in an insurance company like my Dad did back in the 1960s. These days, couples like my Mum and Dad aren't having families in London because they can't afford it.

What London's Mayor doesn't understand (something he shares with his left of centre mayoral colleagues in Barcelona, New York and San Francisco) is that the policies he thinks, to use a Blairite term, triangulate between the need for housing and the NIMBYs are the very policies that create the rising prices and rising rents, that make for that "barbell economy", and that make a place like London increasingly dysfunctional. Urban containment - zoning restrictions, densification, focus on what the Yanks call transit loci - is the problem not the solution. It's sustained by the fact that those childless younger people having fun in the city can't understand that their loud, brash and busy lives are a fin de siècle.

The suburbs, consigned to the dustbin of history by many urban boosters, have rebounded from the Great Recession. Demographer Jed Kolko, analyzing the most recent census numbers, suggests that most big cities’ population growth now lags their suburbs, which have accounted for over 80 percent of metropolitan expansion since 2011. Even where the urban-core renaissance has been strongest, ominous signs abound.

For London, those suburbs are no longer Grove Park, Eltham or Chiswick but Milton Keynes, Ashford, Basingstoke and Reading. And:

Nearly 80 percent of all job growth since 2010 has occurred in suburbs and exurbs (see chart, page 45). Most tech growth takes place not in the urban core, as widely suggested, but in dispersed urban environments, from Silicon Valley to Austin to Raleigh. Despite the much-ballyhooed shift in small executive headquarters to some core cities, the most rapid expansion of professional business-service employment continues to happen largely in low-density metropolitan areas...

Put simply, failing to grasp the urban containment nettle will be fine for London short to medium term - it has the advantage of being the world's top financial centre and having the UK government (sort of New York and Washington combined) - but not facing up to this problem will do just what Kotkin and Cox describe in New York, Seattle and San Francisco, create a playground for the rich elite serviced by a low paid population living in a city they can't afford.

...

Would you come and live here if we give you fifty grand?

I mean who wouldn't want to live with your family in an idyllic Swiss village - even though it lacks things that might be useful, like a school, for example:

The Swiss town of Albinen, located in the scenic canton of Valais, wants to pay people 25,000 Swiss francs (£18,900) each to move there.

The council will soon be voting on the new initiative, which aims to repopulate a community that has dwindled to just 240 residents, reports The Local.

Under the scheme, each new adult resident will be paid the fee, with an additional 10,000 Swiss francs (£7,600) per child. For a family of four, that’s more than £53,000.

So you've to build or buy a house and commit to living there for ten years but (and I do hope they've thought this through and have half-way decent broadband) if you're in a business where remote working is easy and are fed up with the hustle and bustle of the big city, why wouldn't you?

This offer masks a bigger issue with Europe's countryside and small towns - people are leaving them unless they're close enough to the city for people to be able to commute. And they're leaving because there's no work, no decent amenities and everything is more expensive. Perhaps the coming world of driverless vehicles, drone deliveries and robots will change things and make it appealing to live in a remote village, but right now it isn't and paying people to become residents is the only way to keep the population levels.

...

Yay for suburbia (and let's build more of it, fast)

I'm a suburban boy, it's in my bones - the semi-detached house with a garden, one of thousands just the same. It is, for some, the veritable definition of Malvina Reynolds' song "Little Boxes".

"And they're all made out of ticky-tacky and they all look just the same."

As children - perhaps prompted by a father who was something of a folk music fan - we even referred to the estate at Orchard Avenue in Shirley as the 'ticky-tacky houses'. This was a world of trains to work - Reggie Perrin's soliloquy of a walk to the station from his semi in a London suburb - of buses to school, of hobbies and pastimes, sheds and allotments.

It became popular to deride suburbia - its design, its housing, its values - and to draw a negative parallel with either the racy, youthful and exciting life of the big city or else the bucolic, laid-back pleasures of the distant country. To be suburban became the acme of shallowness, a selfish existence, uncaring and dull - an insult used by historian, Simon Schama to put down polemical columnist, Rod Liddle:

‘Go back to your journalistic hackery… and turn your suburban face away from the plight of the miserable,’

Yet most of us - even Simon Schama - are the products of suburbia, living in those semi-detached houses, going to the same sort of state school and having our values set by life in these work-a-day, middle-class places. When I think of my childhood, I think of suburbia, of its space, its variety and the security it afforded us. And I know that my core values - community, neighbourliness, decency, politeness, respect - come from that suburbia.

So why is it that we have such a problematic relationship with suburbia? How did a suburban boy like Simon Schama come to use 'suburban' as an insult, as a way to dismiss someone he disagreed with and felt, in some way, beneath his attention? And when did we start the fetish of the city - the dirty, crowded, unsafe, unfriendly, child-free city? A fetish that, frankly, is something we (perhaps secretly) despise - what we hanker for is suburbia. There is no better place to raise a family - near enough to town for work and pleasure but far enough away that you can take Mr Pooter's advice about home:

"After my work in the City, I like to be at home," as he put in his Diary of a Nobody. "What's the good of a home, if you are never in it? 'Home, Sweet Home', that's my motto ... there is always something to be done: a tin-tack here, a venetian blind to put straight, a fan to nail up, or part of a carpet to nail down."

The truth is that, despite all the efforts of planners to force us into over-dense, anti-family urban cramp, we're still headed for suburbia if we get the chance:

Much of this has been driven by migration patterns. In 2016, core counties lost roughly over 300,000 net domestic migrants while outlying areas gained roughly 250,000. Increasingly, millennials seek out single-family homes; rather than the predicted glut of such homes, there’s a severe shortage. Geographer Ali Modarres notes that minorities, the primary drivers of American population growth in the new century, now live in suburbs. The immigrant-rich San Gabriel Valley, the Inland Empire, Orange County and their analogues elsewhere, Modarres suggests, now represents “the quintessential urban form” for the 21st century.

This is California, famously unfriendly towards sprawl, a place with some of the world's most vicious urban containment policies, and a place with some of the world's most over-priced housing. Imagine how much better it would be if we recognised that people want to live in one of those 'ticky-tacky houses' - three bedrooms, front and back garden, garage. A place that combines comfort and affordability with room to grow.

And it makes economic sense too:

Overall, what suburbia dominates is the geography of the middle class. All but four of top 20 large counties with the highest percentage of households earning over $75,000 annually are suburban, according to research by Chapman University’s Erika Nicole Orejola. One reason: Most job growth takes place in the periphery. Even with the higher job density of downtowns, the urban core and its adjacent areas account for less than one-fifth of all jobs, and since 2010 this pattern has persisted.

It's a myth that the only places where jobs get created is in the urban core or grand cities - 80% of jobs are elsewhere and, you've guessed it, most of those jobs are in and around suburbia.

So suburbs are nicer places to live (really they are) with better amenities than either the city or the country. Suburbs are cleaner, friendlier, safer and less stressful that the city. And more accessible with better schools, healthcare and activity than the countryside. Plus people want to live in them.

Perhaps then, we should ignore all the pompous city living snobs who sneer at suburbs (often while dreaming of a nice posh pile in some village that's really an exurb) and get on with building what most folk want - more suburbs.

....

Quote of the day - why council housing isn't the answer

Worth remembering this:

The underlying problem has often been misdiagnosed by politicians who yearn for an uncontroversial and immediate solution. A lack of public housing is emphatically not the cause of our plight. About a fifth of all homes are owned by councils or housing associations, placing us towards the very top of the European league table. This amounts to about four times as much social housing as they have in Germany and is considerably higher than in France, Denmark or Sweden. If the quantum of state housing were the key driver of housing affordability, the UK would be one of the cheapest places to live in the western world.

We've spent the best part of four decades not building enough housing (for London and the South East it's about six homes built for every ten new households) and this is why we have a crisis. Not funding. Not state investment. Not tax incentives. Just urban containment.
....

Densification is not the answer - suburbia is the answer

This can't be said too often, as loudly as we can. Here's urban geographer Wendell Cox reviewing some research, Paying for Dirt, by Issi Romen at housebuilding specialist, Buildzoom:

"Stemming sprawl" while maintaining housing affordability through higher densities is a time-worn theory. The record seems to indicate that it is more likely Santa will come down the chimney than density will solve the problem. There are no virtually examples of housing markets (metropolitan areas) where increasing densities has restored affordability. This is not to suggest there is no value to increased density, but rather that it is an all too convenient diversion from solutions that have a chance of working.

The key to all this is, as Cox points out:

...to restore the competitive market for land, so that houses on comparatively small lots, such as one-quarter or one-fifth of an acre can be built at the historic land costs (including necessary infrastructure).

And as Romen concludes this isn't just about the economics of housing but about social justice:

"The disparity between the appearance of homes and their price tags is more than a home buyer’s gripe: it is a telltale indication of restricted housing supply. Such restrictions – rules governing land use, installed by incumbent residents or their predecessors – are exclusionary by nature and amount to the gating of access to opportunity. Hopefully, this study has helped identify where gates must be opened."

....

Not sure this is about Brexit

Although we can rest assured that people will say that it is:

Realtors who thought that London’s luxury-home market would be kick started by the pound’s fall after the Brexit referendum are being left disappointed.

Sales of houses and apartments in the U.K. capital’s best districts rose less than 0.5 percent in the three months through September from a year earlier, according to data compiled by researcher Lonres. That’s based on transactions for existing homes and new properties being sold on by speculators.

This is a report about the top end of the housing market - homes on the market at £5m or more. Seems to me that if you're a footloose Anywhere Man or Woman then you've quite a choice as to where you spend the £5m or so you've got for a house. From Shanghai and Tokyo to Dubai or Singapore those Asian billionaires have a growing choice and there's also the US options or even places in Europe. And this is before we consider country piles or Tuscan villas.

.....

No we don't need land reform, we need planning reform

Hardly a week passes without someone trying to pretend that housing markets are somehow immune to the rules of supply and demand. Many of these are just politicians and pundits trying to pretend that black is white but some lay claim to some sort of intelligent analysis - a bit like this from Laurie Macfarlane at Open Democracy:

How did we get here? A popular explanation is ‘we’re not building enough homes’. While this is part of the answer, it is far from the whole story. At the root of the problem lies something that has for a long time been overlooked: the role of land in the economy.

Now before we start on why this argument is problematic, I'll say that for the last couple of hundred years land has become - with each passing year - less important as a part of the economy except where its supply has been barred from a given market (ie housing). Yet people write long articles explaining why this isn't so and how, if only we reformed how we see (or tax, or buy and sell) land, then all these problems would be over.

The article that quote comes from is pretty typical of the genre, interesting and informed but still churning a set of misunderstandings. We can start with this one:

Land first began to be treated as tradable, private property in the 16th century, triggering the birth of modern capitalism. But this transformation gave rise to a tension. On the one hand, landed property empowered people by providing physical and economic security, including collateral to leverage credit, which helped drive economic growth and technological advancement. But at the same time, private property in land was inherently exclusionary: by its very nature, granting some people exclusive rights over what was previously a common resource involves taking away the rights of others.

There are lots of examples that show this argument is false - from Roman law through the edicts of Charlemagne to the Magna Carta - but let's just stick with the last one and Steven Gastowitz QC on the subject:



So, back in the 14th century land (and earlier) was a tradeable private property. Moreover, the fact that property rights - and the desire to have government defend and protect those rights - go back into ancient times tells us that saying their existence triggered "the birth of modern capitalism" is also false.

The whole (and this is pretty crucial) point about the modern market economy is that is is not based on land and the ownership of land. It is possible to be a billionaire and not own a square inch of land (unlikely I'll grant but possible). Business, in its modern identity, is based as much on intellectual property and brand equity as it is on the supposedly 'underlying' value or availability of land. Indeed a great deal of the real estate business isn't buying and selling land but rather the rights associated with land.

The problem is spotted by Macfarlane:

But the price of a property is made up of two distinct components: the price of the building itself, and the price of the land that the structure is built upon. We don’t know the exact breakdown between these two components (bizarrely, there is currently no reliable public dataset on the land market in the UK) but the available data implies that land under homes is currently worth around £3.7 trillion – nearly 70% of the total value of the housing stock. This makes residential land the UK’s most valuable asset, even in today’s high-tech economy.

Now we can talk about financial markets and that 'land values increase natually over time' but the main reason why residential development land is so expensive is because there is so little of it in the places where people might actually want to live (there's plenty - millions of acres - of developable land unrestrained by planning rules at rock bottom prices in places people don't want to live). The result is that government either cheats by giving itself the power to buy land at lower values than could be achieved in an open market - a cheat that Macfarlane notes got clobbered by the courts - or else throws out lots of subsidies. Macfarlane (wrongly but that's a different story) blames Margaret Thatcher:

With the arrival of Margaret Thatcher, the government withdrew from large scale house building, and councils were forced to sell their housing stock through ‘Right to Buy’, and prevented from building more. There was a shift away from supply side subsidies of ‘bricks and mortar’ towards demand-side subsidies of paying housing benefit to boost households’ incomes to enable them to access accommodation. Whereas in 1975 more than 80% of housing subsidies were supply-side subsidies intended to promote the construction of social homes, by 2000 more than 85% of housing subsidies were on the demand side aimed at helping individual tenants pay the required rent.

Although Macfarlane has mentioned the 1947 Town & Country Planning Act ("kept land in private hands, but nationalised the right to develop it") we've arrived at 2000 without asking whether the decisions made under that Act and its assorted successors has any role in driving the lack of residential development land? The problem gets hinted at when Macfarlane talks about financial liberalisation:

An ever increasing supply of credit interacted with a fixed supply of land, fuelling a house price boom. In turn, households were forced to take out ever larger mortgage loans to get on the housing ladder. Thus, a feedback loop emerged between mortgage lending, house prices and ever increasing levels of household debt.

The myth that land reform folk want to push is that this fixed supply of land is a simple fact driven by that old agage - 'buy land they aren't making any more of it'. Yet, at the same time, we're reminded that England uses only 10% of its land for towns and cities - not just the houses but all rest of that urban infrastructure. And, at the same time, significantly less than 1% of England's remaining land is earmarked for housing development. If you wanted to make a big difference the best way would be to double the amount of development land - something that could be done at a (very long, very painful) stroke of the proverbial pen.

Yet Macfarlane and the land reform folk still can't see the simplicity of such a solution preferring instead a government-driven and bureaucratic approach:

Compulsory purchase laws should be changed to enable public authorities to purchase land at agricultural prices, enabling the planning and development uplift to be captured for public benefit once again. A new National Land Bank should be established and made responsible for developing and leasing land, acquiring idle and vacant land for resale, and developing more New Towns. Planning authorities should be given more resources and stronger powers of plan making or zoning so that planning can be a ‘market maker’ rather than a market stifler.

Everything about this approach is wrong. Most of all giving local councils more ability to 'zone' as 'market makers' simply invites the worst sort of rent-seeking. Decisions about what is built, where it gets built and who builds it are no longer determined in a market but instead are the gifts of local council and planning power brokers. By seeking to "level the playing field between tenures" we recreate the world of council housing that so many came to hate and which right-to-buy ended.

Yes land is scarce. But it's not so scarce that we are incapable of allowing a mature market in development to build homes - for sale or rent but mostly the former - for those people who want to buy them in the places where they want to live. But in all of Macfarlane's article - and for all I know the book it derives from - there's no recognition that, in a large part, the unaffordability of housing is a consequence of deliberately limiting the land available for housing. Yet that is precisely what our planning system does.

....

Young people are neoliberals - they just don't realise it yet so let's help them.

It seems to me that the real issue young people have is feeling excluded from the benefits of our capitalist, neoliberal society not that capitalist, neoliberal society itself. And this seems a reasonable gripe to me. Here's a tweet from lefty journalist John Elledge:




This - perhaps not all that considered - comment tells us a great deal. Mostly that the real irritation of the emerging graduate generation is that they feel unable to afford investment assets like houses. For me this is one of the essential failures of UK government over the last thirty years - the idea of a property owning democracy was ignored as we got ever more excited about the seemingly endless rise in house prices.

Some people want to blame all this on my generation - the boomers - who took advantage of cheap asset prices in the 1970s and 1980s and rode the bubble to the point where the house my Dad bought for £3,250 in 1963 in now 'worth' over £400,000 (Dad sold the house in 1975 for about £14,000). I am absolutely with all those people who feel that they're outside this bubblicious world - not just the young or poor but a whole load of people from 'Up North' who've not seen anything like the gains those 'Down South' have seen.

Add to this that we told young people that the way to get into this bubble world was to get a good degree (in fact any old degree as Blair's enthusiasm for book-learning led to the numbers going to university getting up towards half of 18 and 19 year olds). And because these degrees were the gateway to a world of wealth and power, we told young people they could have a load of (cheap) borrowing that they'd spend half their life paying off so as to get the degree.

Young people don't want to be socialists, they want the entrance fee to our neoliberal world of valuable assets, to that property-owning democracy we were all promised. And this is why they've dumped the capitalists, the people who they think are stopping them from joining the glorious free market rat race. "Have free university tuition". "Here's a subsidised mortgage". "How about a big pay rise". "Or a higher minimum wage". "Free child care". "Discounted rail travel"...

It doesn't matter how much others ask where all this cash is coming from, people aren't listening. Or rather they see those telephone number house prices and say, "y'all can afford to pay for this stuff, get on with it". And Labour offered them everything they were asking for and some things they weren't - no questions asked. Is it any surprise that folk who are outside that wealth bubble flocked to this banner?

Young people - and plenty of the not-so-young - want to know when it's their turn to play the free market, asset-owning, property-speculating game. They don't want socialism, they want what their parents and grandparents had - the chance to have a real cash stake in their society, the thing that Margaret Thatcher promised to my generation (and largely delivered). This isn't about nationalisation for all that people tell you the government should run stuff (they always have done by the way even at the height of Maggie's pomp). No, it's about us renewing the promise we made to the post-war generation and to late boomers like me - play your part, work hard, be a good citizen and we'll make sure you can have that real cash stake in Britain.

Right now we're still telling people to play their part, to work hard, to borrow to fund education and to be a good citizen but government has reneged on its side of the bargain, that cash stake in Britain. And the single-minded focus of any new government should be to renew that offer and make it work. Those young people really aren't baby ideologues desperate for some sort of socialist New Jerusalem. They're just like you and I were 30, 40, 50 or 60 years ago - bothered about our own futures, the things we care about, in that thing Adam Smith saw as the driver of a better, richer society: self-interest.

So let's start offering people that chance. Let's free up the planning system so more houses get built were people want to live. Let's revisit the idea of tax relief or other support that backs individual, personal investment in our society. Let's liberate the innovative instincts of property and finance people to meet the aspirations of today's ambitious young people - 21st century capitalists, budding neoliberals every one. And let's do this knowing that the alternative, Labour's market-fixing, price-controlling, 'magic money tree' programme carries in it the seeds of disaster, the crash that socialism always brings.

I'm with you if you want to bash at those folk farming grants and corporate welfare. I'm on your side if you want to try and stop well-funded lobbyists getting government to fix a market or a system to suit their clients. I'm right there if what you want is to stop rent-seekers freeloading on free health, welfare and education. And I agree with you when you say people should pay the taxes they owe - on the nail not just after a long-winded and expensive investigation.

But this isn't about socialism just about getting a free market that works for all of us. It's about setting economic liberty - the idea that, more than anything else, is responsible for the health and wealth nearly all of us enjoy today (even if we can't afford a house) - at the heart of government policy. The more we try to control the market the less liberty we have and the more power we hand to the commissioners, the lobbyists and the corporations protected by the government fix.

What we all want is a real stake in the nation we're a part of - not just a vague notion of citizenship but a real sense of being a part of the place, of having roots. And that means renewing that promise made by Harold MacMillan in the 1950s, by Ted Heath in 1970 and by Margaret Thatcher in 1983 - Britain isn't just land and institutions but its people, all of them. And all of them should have the chance to take a real, solid, tangible stake in their nation.

....

Instant housing experts. Where have you been all these years?

I sit on the board of a housing association. We have thirty or so high rise properties and the issues relating to these properties have been foremost in our minds for some long while. Not just the sorts of problem that led to the terrible fire in North Kensington (although we've had a problem with cladding being dislodged during stormy weather) but a more fundamental issue - not only are these properties unpopular with tenants they're also expensive to manage. It's an oversimplification but we'd really rather we didn't have them but we've  a thousand or so mostly pretty poor people living in them. It seems that managing high rises is going to stay right on the top of our agenda for the foreseeable future.

Right now I'm not going to say what should or shouldn't be the right regulatory response from central government - whether it's different cladding systems, sprinklers, alarm systems or more intensive housing management. It could be all of these things with the result that properties that are, at best, marginal to the business plan become utterly uneconomic. And before you all go off shouting about commercialising affordable housing bear in mind that we've over 20,000 former council homes and the business plan is about keeping all those homes up to a decent standard as well as finding ways to build a few hundred new homes for rent or sale. All set against a declining revenue (resulting from a central government instruction to reduce our rents by 1% per year) and rising construction costs.

My fellow board members will take all this very seriously. This board has overseen a massive investment in the homes we provide and will continue to do its best to hold the management of our business to account and to ensure that, within the limits of our resources, we provide the best we can for our tenants. Then I read, in the media or most often in ill-informed social media rants, of how organisations like the one whose board I sit on are somehow rapacious and greedy capitalists filled with board members only interested in cash or preferment - mostly from people who've done next to damn all to make their communities better places (unless you count going on marches or selling newspapers outside student unions as some sort of contribution).

I look at my fellow board members and I don't see the caricature painted by the leftist media. Instead I see some tenants, people who work for other social housing organisations, a couple of councillors, some folk from the supply end of the business, and some with financial or legal know how. All either doing it - like me and the tenant representatives - for nothing or else getting paid a small allowance and expenses. Up and down the country there are thousands of such people sitting on housing association boards and I'm prepared to make two comments about them - they really do care, enough to actually give up some time to help direct these businesses, and on June 8th this year most of them will have voted Labour.

The way we run social housing - whether through local council housing revenue accounts or through not-for-profit (or 'profit for a purpose' if you prefer a realistic definition) social housing businesses - may not be perfect but let's not start out by attacking the people who sit on the boards. If there's a problem it's one of accountability and understanding rather than greed or selfishness on behalf of management or boards. Tenant management organisations like the one responsible for Grenfell Tower are a great idea in theory - handing over power and control to the people who live in social housing is surely straight out of the Corbyn play book, socialism in action? But as we've seen the capacity of organisations like this to get stuff wrong is just as high as that of dreadful capitalist for-profit organisations - perhaps, given the lack of professional skills among the board members, even higher.

There are many questions here but central to all this is how we manage social rented property. Some of this is about regulations on how things are built, how we protect against fire risk and how we undertake housing management. Other questions speak to the very nature of high rise residential blocks - is this really how we want families to live? Among all this we need to ask something else - something about governance. Can tenants manage the property in which they live without ownership (collective or otherwise)? Are boards structured well enough with sufficient independent expertise to manage risks?

None of this is about the good men and women who serve on these boards. The eight tenant directors on KCTMO will be utterly shocked and shattered by what has happened, just as would be the hundreds of similar folk who serve on the boards of 'arms length management companies', housing associations, tenant management groups and other housing organisations. But in the end, just as with any governance, we have to take the expertise of those who advise a board with a degree of faith - that's why we have external risk assessments, inspections, annual certification. It's why us board members pay attention to things like having fire certificates and up-to-date gas certification.

So to all the people -journalists, pundits, writers, political activists, folk shouting on Twitter - who've appointed themselves instant experts on all matters to do with housing safety. Where have you been all these years? Are you volunteering your time to serve on housing association boards? Have you helped tenants action groups engage better? Trust me, if your expertise is a fraction of what you claim it to be, those organisations would welcome your help.

....

Brownfield Green Belt: A glimpse of the stupidity of England's planning system

Those of you who watched the Tour de Yorkshire might have caught a glimpse of Denholme as the cyclists swished through the little South Pennine village. It's not going to win any prizes for prettiness but nevertheless its a great little community. Now what you won't have spotted is this:



This, you'll agree, is a bit of an eyesore. A few years ago is was a stone mill owned an operated under the name Denholme Velvets but that business finished and the mill has gone - another footnote in the decline of traditional manufacturing employment up here in the South Pennine hills. Here's what it looked like.



The reason the site was cleared was because its owners had applied for and obtained planning permission for housing. This permission wasn't obtained in the teeth of NIMBY opposition but was welcomed as a good use of a site that wasn't going back to being a textile mill any time soon. One other thing - the mill (and subsequently the cleared site) are wholly in Bradford's precious 'Green Belt'. The problem is that Bradford's sluggish development market, the location and the site's size meant that the housing permission didn't get developed. Like a lot of undeveloped planning permissions in these sorts of place, this is about viability and demand rather than the evils of 'landbanking'.

Zooming forwards in time we get to the stage where a developer is now interested in the site to build forty or so affordable homes for rent and shared ownership. Just the sort of development that we're told we desperately need in a place where there isn't (unless I'm very mistaken) going to be any but the mildest of local objection. But there's a problem. The planning permission has expired and the now cleared site is in that precious 'Green Belt'. So the initial planning response goes like this:

The site is previously developed land; however the existing development is a cleared site (albeit with some relic structures including a hardstanding and parts of walls). Now that the old mill has been demolished any new houses on the site would have a greater impact on the openness of the Green Belt and the purpose of including land within it than the existing development.

I'm not criticising the planner who wrote this - he is just presenting what the rules say. As a cleared site in the 'Green Belt' you can't build on it without very special circumstances - but:

Very special circumstances’ will not exist unless the potential harm to the Green Belt by reason of inappropriateness, and any other harm, is clearly outweighed by other considerations. This is a very high bar to pass and it does not seem plausible that it could be passed in relation to the proposed development/ site.

We've a housing shortage (or so we're told all the time). We're urged to use previously-developed ('brownfield') sites rather than undeveloped ('greenfield') sites. And we hold a special love for affordable housing. Yet an unloved, unattractive site on the main A629 from Keighley to Denholme can't be developed despite ten years ago having a huge stone mill on it.

This may all get sorted out (we get to occult planning things like 'five year land supply' and 'SHLAA' considerations as well as the emerging local plan 'Allocations Development Plan Document') but it does remind us that our planning system is, at times, utterly and completely stupid.

....

Why we probably won't be moving to Kensington

So Kathryn and I are window shopping in South Kensington and, since this is the nature of high streets, we're peering through the glass at property for sale. Unlike most normal places, there aren't any actual houses for sale, just what seem to be identikit flats - some studio, some one-bed, some two-bed. All with white walls, wood (or wood-a-like) flooring, glass dining tables, uncomfortable looking sofas, and, if you're lucky, some singularly naff art. Plus a price tag north of £2 million quid.

What struck us (other than that stratospheric price tag) was the sameness, the lack of soul, the impression that no-one actually lived in any of these flats. But this isn't new build, these are apartments hacked out from a beautiful Georgian town house in a leafy London square. We meandered from estate agent to estate agent seeking out some property that looked like it was a little bit loved - perhaps with a rug to break up the monotony of wood-effect flooring (whatever happened to carpet), maybe something wooden like a coffee table or an antique chair.

Perhaps this sort of uninspired, bland and plain decor is what passes for style these days down in South Kensington. Maybe people are too busy doing all the other exciting things London offers (or else working all hours god sends to pay the mortgage on the £3 million pad off Queensgate). Or maybe this is what estate agents think sells flats - hard edges, pushed back furniture, minimal colour and devoid of life. None of those things we'd expect elsewhere - a peep of greenery, a bookcase (with books on), a mish-mash of art on the wall, things that show off or feature the age of the property.

Or maybe the sort of besuited, hard-nosed, driven men who work in South Kensington's estate agencies know their market and that anything looking like life, community and continuity will put off the sort of international whizz-kids who've got the brass to buy that South Kensington flat.

Had we a few million spare, we'd certainly consider a bolthole in London - it's a fantastic city. But I'm not sure that what we see in Kensington - and it's probably little different anywhere in Zone One - is inspiring, interesting or presented in a way that appeals. The housing is gorgeous - London's Georgian terraces are among the wonders of the world - but the flats hacked out of those gorgeous buildings seem to have killed the sense of age, heritage and tradition preferring instead a boring, pale, hard image that owes more to the international hotel than a real London living style.

....

Embracing disruption - why our approach to housing and transport regulation has to change

On the face of it, it's a good news story. Clever architects in Alabama have reimagined the house so it can be built for just $20,000. They're only small, not really so very different from that icon of American living space, the trailer, but these houses do represent some sort of progress.

Until of course you speak to a city planner, a banker, an insurance company. Then there's a problem:

"The most daunting problems aren't brick and mortar problems, they're these network and system problems that are threaded together and all intersect in the built environment," he says. "We're able to attack all these problems simultaneously—when we see a lever over here and wiggle it, we can very clearly see the implication it has on other systems down the road."

The barrier to, in this case, housing affordability isn't the prosaic task of building a home but rather the collection of systems, regulations, controls and vested interests that have grown up in our sophisticated societies. All of those systems of control exist for a good reason - in the case of housing they make sure that what's built is safe, doesn't harm neighbours, protects heritage and has regard to the environment. Looking at building codes (or regulations as us Brits calls them - for once using a longer word than US bureaucrats) each element, whether it's about wiring, pipes or the depth of foundations was purposive, put there to ensure safety or quality. The problem is that these codes are (because to work they have to be) inflexible - if it says something has to be 3-5mm then it has to be 3-5mm even if technology now means it only has to be 1-1.5mm.

"They're built more like airplanes than houses, which allows us to have them far exceed structural requirements. ... We're using material much more efficiently. But the problem is your local code official doesn't understand that. They look at the documents, and the house is immediately denied a permit simply because the code officials didn't understand it."

The issue here - and it's a significant one given the current rate of technological change, much of it disruptive - is that regulatory reform is a slow and painful process filled with all sorts of obstacles. It took the UK government three years to conduct a review of housing standards that didn't even touch the core of building regulations (although it did prevent local councils dreaming up their own 'tougher' regulations especially around environmental standards).

None of this is to suggest that regulation isn't a good idea but rather to recognise that technological change moves faster than regulatory reform and that often the barriers to that reform are as much about protecting the current systems (and those who profit from them) as they are about ensuring safety and environmental protection. Although I've been talking about housebuilding, the same issues apply to other targets of technological disruption such as taxis, hotels and retail distribution - the regulatory environment is captured by the business and their public sector 'clients'.

Here's an example from Barcelona:

Like other big tourist destinations around the world (for example Berlin and San Francisco), Barcelona is struggling to cope with the influx of millions of tourists each year, many of them staying in short-term rental accommodation, which the local authorities say causes community strife, encourages speculation, and prices locals out of the city by driving up housing costs and limiting the supply of homes for rent.

Pretty straightforward - the city government in the Catalan capital is acting to prevent that community strive and guard against unaffordability. It isn't anything to do with collecting taxes or protecting the interests of existing providers. After all there's a housing shortage in Barcelona?

Barcelona has 283,155 vacant homes, 11% of the total, and 311,653 rented homes, 17.8%, while the defaults on leases have grown by 22.7% compared to the previous study, to stand at an average of 12,897 euros.

So, while rents in Barcelona are sky high and they're clamping down on Airbnb, there are quarter of a million empty homes. This isn't to have a go at Barcelona but rather to illustrate how protecting systems (precisely what that city's left wing mayor says she isn't doing) results in protection of existing interests - in this case hotel owners and landlords of high-priced city centre property.

Our problem is that what we already have in place - in its widest sense, infrastructure - is either vulnerable to digital disruption or else prevents that disruption taking place. And because the regulatory systems track that infrastructure and are difficult to change, other places without such constraints (or with autocratic governments) are able to move more quickly. Worse still, and this is very evident in housing and transport, those profiting from the existing system - or persuaded by politicians that its loss will harm them as we've seen in Barcelona - agitate for extending regulations to capture or prevent disruptive technology.

The new technologies - all that disruptive digital stuff especially - will eventually succeed because they meet consumer demand for things such as cheaper travel and accommodation. What's missing from our regulatory response is a preference for embracing that disruption. Instead, we seek out reasons not to allow a $20,000 house, a cheaper and safer form of taxi or a flexible low-cost means to stay in otherwise unaffordable places. And, as those empty homes in expensive Barcelona attest, our housing markets are crying out for disruption. All our zoning, building codes and planning rules act to prevent this change - making the land, the materials and the labour more expensive and forcing us to spend further billions in incentives and subsidy to stop the whole thing falling over again.

In Bradford we've acres of inner city 'development' land that's mostly just sitting there mouldering. We know there's demand - one local organisation had over 200 enquiries for a handful of new build properties for sale (but no buyers as once you've paid for the land and built the house the price is too high) - but the way we build and the cost of land makes it uneconomic. New approaches such as that $20,000 Alabama house or the prospect of 3D printed homes could work on this land if we purchased it and cleared it - perhaps that would be a better use of Community Infrastructure Levy and affordable housing commuted sums that sticking it into the existing system of housing development.

To make this work - and to make future transport systems work too - we need to design flexibility into regulatory systems allowing greater discretion for individual regulators. We also need to stop doubling-down on failed systems whether it's Barcelona's approach to holiday lets or Palo Alto's crazy planning system. The first question should be 'does this make most people's lives better' not 'can I find someone who doesn't like it' and to create regulations to match when the answer to that first question is 'yes'.

....

The North-South (Housing) Divide - a lesson

So I'm at a seminar in North Yorkshire and a question is asked about housing and house-building. The person answering - a senior councillor from 'down south' - responds by asking a question:

"How many of you own your own house?"

Nearly the whole room - consisting mostly of councillors aged 50 or more - raises their hand. One group, all professional staff up from London, don't raise their hands. These twenty- and thirty-somethings in good jobs are all renting. And some are having to share just to make that renting possible.

The senior councillor asks another question:

"How many of you have children who aren't able to buy a house?"

The expectation was that a forest of hands would rise demonstrating how housing is unaffordable and inaccessible. That's what would happen in London.

Not a single hand was raised. All of the twenty- and thirty-something children of these Northern councillors, whether from Teeside, Bradford or leafy North Yorkshire, have got onto the housing ladder.

That senior councillor from 'down south' was a little surprised. Later he told me "I knew you were all rich in the North".

Because of the extent to which London''s economic success has created jobs, the south has struggled to meet the demand for housing. Even were there an adequate level of new housing development (and, as that same senior councillor observed, people want a house not a pokey little flat), London would have faced problems given the difference between the number of people looking for a home and the number of homes available - across all tenures - at any given time.

This is not true for the North. Our slower growth and balanced population (with modest outward migration in some places) means that young people who get a halfway decent job and save a bit can buy a house. There are some parts - Manchester, North Leeds, Ilkley, Harrogate - where some of that London-style overheating is happening but most of the North does not have a housing crisis, is not short of housing supply to meet current market demand, and presents the chance to manage future housing supply without huge government bungs or running roughshod over the green belt.

The problem is that national policy is determined by London's genuine housing crisis, not the North's more balanced and inclusive economy. Maybe those of us 'up here' should both be grateful for this and also careful about what we wish for?

....

You can call them what you like but London needs new suburbs

I appreciate that some folk want me to believe - against all the evidence - that the supply of housing for purchase is not connected to high rents and high property values. Thing is that, however hard you try with this, I still don't think that the essential truths of supply and demand are not applicable to the sale and purchase of houses.

Tragedy struck one of those artist residences last week when 36 people died after a fire ripped through the illegally converted Ghost Ship warehouse in Fruitvale during a concert.

The horrific event could lead city officials to go after illegally converted warehouses across Oakland, especially as evidence mounts that building inspectors knew of numerous problems with the Ghost Ship property but didn’t take action.

This is in one of the world's richest cities where illegal conversion, overcrowding and ridiculous rental values contribute to an almost wholly unnecessary housing crisis. Here's Scott Beyer:

The more pertinent point, at least for housing, is whether metros respond to such changes, or just sit on their hands…as the Bay Area has done. Between 2010 and 2015, the metro population grew by 100,000 people per year, but added only 20,000 units per year. Bay Area median home prices have thus predictably skyrocketed since December 2010 from $515,000 to $825,000.

So at any point in the last five or six years there have been at least 100,000 people looking for somewhere to live in and around San Francisco and only 20,000 homes plus the relatively few additional as a result of outward migration. The result is what we saw at Ghost Ship - overcrowding, exploitation and death.

And don't think that the UK's overheating cities - especially London - are any different. I've been reading Ben Reeve-Lewis's blog on Landlord Law for some while and some of his stories about exploitative, dangerous and overcrowded housing in our capital beggar belief. The problem is that, for all the shouting and rhetoric, we've our fingers in our ears on this issue, continuing to pretend that the housing can be put somewhere else - words like 'brownfield' or 'regeneration' are popular here - rather than where people actually need to live so they can get to the jobs our economy is providing.

Some time in the next week or so (right now we're told probably 16 January) the UK government will publish a 'White Paper' on housing. The content of this paper remains a matter of speculation but it has been strongly hinted that the need to build homes will trump the desire to protect open countryside on the fringes of towns and cities. To understand how the reaction from some MPs might run, we can look at the Neighbourhood Planning Bill currently before parliament:

In a Tory split over a planning bill, 15 backbenchers have tabled amendments which seek to protect land around cities and to increase the powers of local people to stop new development.

Conservatives rebelling on the Neighbourhood Planning Bill included Andrew Mitchell MP, who told HuffPostUK “I shall be questioning the Government’s commitment to the greenbelt in forceful terms” in the chamber.

Heavy-weight backbenchers Crispin Blunt, Nick Herbert and Nicholas Soames also opposed the Government’s plans. Soames tweeted on Monday that the “unspeakable behaviour of housebuilders” needed to be “dealt with”.

Now I know that these MPs mean well. They face considerable pressures from well-organised local groups largely opposed to any further development in the semi-rural exurbs they represent. But when the consequence of these actions is the sort of overcrowding that led to those deaths in Oakland, we perhaps need to start asking quite where we want to put our priorities. I've no particular desire to defend housebuilders but I don't consider them unspeakable - someone has to build the homes people need.

OK so you're asking how it is that the housing needs of relatively poor, often immigrant communities in central London can be met by building houses outside Crawley or at Sutton Coldfield? The answer lies in a hidden challenge facing our big cities - a generation of younger people wanting to do what folk do and get married, raise a family. Right now they can't do that - check out the sort of rented accommodation in central London and then ask whether you think is sensible or even possible to raise a family in such places? The result is that people don't get married and don't have families - here's the world's starkest example, the Bay Area of California:





Over 70% of households in San Francisco are childless. The situation in London is nearly as stark - about 64% of Inner London households are child free. As we move into suburbia - Outer London - the pattern changes with 27% of households consisting of couples with children. The problem is that the outer London suburbs are, as the children brought up in these plces soon find out, increasingly unaffordable.

Just as with San Francisco, there is a big difference between the growth in housing demand in London (about 60,000 per year) and the delivery of new housing (currently about 25,000). This would be fine if the housing need was being met elsewhere (i.e. in the South East beyond the Greater London boundary) but it seems not:

The 30 fastest-growing non-London local authority areas in percentage terms are almost all in the South-East (Table 3). Of those, 21 were below the national average in terms of their housing supply measured against household growth, and only five supplied enough homes to keep up with long-term need. These were Uttlesford, Dartford, Ashford, Aylesbury Vale and Slough. Collectively, London plus these next 30 areas expect to experience 38 per cent of England’s household growth over the next 25 years, yet they contributed just 26 per cent of last year’s housing supply.

This is the context for the Nick Soames complaint. He represents one of those places - Mid Sussex - that has, in part, to meet the pressure on housing need generated by the economic success of London and all the yelling about housebuilders won't change this fact. What MPs should be doing is discussing the nature of this new demand and considering how new suburbs can be built to house England's future families. There are lots of possible answers but nearly all of them, for these places in London's exurbia, require the use of land that is currently designated as 'green belt'.

The question for me isn't whether Nick Soames and others can stop all this terrible housebuilding (at a terrible cost to those future families) but whether they're actually doing their jobs. Have they met with the 'unspeakable' housebuilders? Sat down and talked to local planners about the issues and challenges? Discussed different options for meeting local housing need? Or are they just grandstanding in parliament to sweep up a few votes (that given Soames' majority he probably doesn't need)?





Right across England we need a more mature debate about housing development. Not the polemical ASI "scrap the green belt" debate but rather one with local communities about how much extra housing they'd be happy with and where it might go. After all most of those people have families, they know how expensive housing is these days and they want their children and grandchildren to have the joys of home ownership. Instead the dumb voices of the CPRE and assorted BANANA groups are allowed the space to say that all the housing need can somehow be met on brownfield and regeneration sites in the big cities.

What we need isn't new skyscrapers in London (or for that matter in Manchester, Leeds or Birmingham) but new suburbs - you can call them garden cities if that floats your boat - where families can come to live, grow and thrive just as did their parents and grandparents.

....

Wrong, stupid and unsustainable - old people and the funding of care

Much of the discussion following the Autumn Statement concerned Brexit and the forecasts. Plus of course the prediction from the Institute for Fiscal Studies that we're not going to see "real incomes" rise until after 2021 (or something along those lines). I don't plan on making any comments about these forecasts except to say, as Chris Snowden at the IEA points out, even the much-heralded and 'independent' IFS isn't infallible when making predictions.

Instead let's talk about old people. The Local Government Association made great play of there being no mention - or extra money - for social care. It seems to me that, as Jeremy Warner observes, nearly all of the financial challenges facing government can be traced back to the inconvenient fact that us Baby Boomers (who have all the assets, or so we're told) are going to live a long time yet.

There are two reasons why people living a lot longer is a problem for government. The first of these is the impact on revenue budgets of looking after older people. Not just the very expensive end-of-life care but also the everyday costs of catering for people with declining mobility, poorer eyesight, incipient deafness and a collection of chronic but manageable health conditions.

The second is that, while we are busy not dying, the wealth we've accumulated stays safely tucked up in housing and other assets. And because we're living longer the circulation of that wealth within society is slowed down. It might be true that the explosion of home ownership post-WWII (culminating in Margaret Thatcher's brilliant right-to-buy legislation) represented the biggest transfer of wealth away from the elite in our history but right now us Boomers are sitting pretty atop all that wealth.

The proportion of the population that is over-65 is set to grow further. The ONS predicts (I know forecasts, pah) something like this:


This increase (and the corresponding stagnation in the numbers of young people) completely alters the balance of our demography. From a position where 'youth culture' dominates we are moving gradually to a sort of gerontocracy where the needs, expectations and preferences of the old vastly outweigh those of the young. It's notable that, after a time when political leaders seemed to get younger (Major, Blair, Cameron, Clinton), we now have a slew of older leaders. The two main UK political parities are led by a 60 year old and a 67 year old. Over in the USA the presidential election was fought out between a 69 year old and a 70 year old - with the 70 year old winning. If the current indications are right, France will get a 63 year old as President and Germany will keep its over-60 Chancellor.

It's also interesting to note that the question of age (as opposed to the matter of health) is never raised. When Ronald Reagan was elected his age was seen as a problem, yet no-one (so far as I can see) is challenging Trump on the basis that he ought to be getting comfy in the armchair with slippers and a pipe. This change just reflects the fact that there are millions of fit, healthy, active and involved folk in this age category. When your Dad is walking Munroes at 75 or your Mum riding at 81 then no-one's fussed about a Prime Minister who is 60 or a President of 70.

The difficulty is that our public finances (and to a considerable degree our economy) start with the assumption that people retire in their 60s and die in their 70s. When the NHS was founded its planners believed that the costs would diminish (OK they were batty) rather than increase as universal access improved overall population health. What we've seen instead is that, as health has improved, people have lived longer with the result that more and more of NHS resource gets directed to the health of old people. Today around 75% of NHS spending goes on the over-65s.

We can add the pressures on social care to these numbers - adult social care used to be an important but relative minor element in local government spending. Today it represents perhaps a third of spending with this proportion set to rise (under the current model at least) as the numbers of frail elderly increase in line with the numbers of people over 80. The current arrangement where local government contracting dominates the market for care provision results in downward pressures on costs that are simply unsustainable given rises in minimum wages and expectations in terms of service quality.

The third major element creating pressures in the simple fact of the old age pension (made more problematic by the so-called 'triple lock'). Of the current welfare budget over 40% goes on paying old age pensions and once we add in other payments such as mobility allowances, carer allowances, free TV licences and fuel discounts, nearly half of the money we spend on welfare goes to those receiving an old age pension. By way of comparison, just 1% of that welfare budget is spent on unemployment benefit.

In a world where there are fewer people working to pay the taxes to provide these benefits, it's pretty hard to see how such public largess - in health, care and benefits - can be sustained. Something has to give especially when it is clear that wealth is increasingly retained by the older generation, primarily in the form of those housing assets obtained during the great home ownership boom from the 1960s to the 1990s.

I don't believe that the answer to all this is the sort of anti-Boomer rhetoric of the Resolution Foundation where the fact of those assets (and the fortune of the increases in those assets' value) is seen as some sort of selfishness on the part of people aged over-55. Nor do I think that the answer lies in inventing a new tax so as to carry on with the market-fixing methods that result too often in expensive and poor quality social care. What is needed is an apology, some honesty and a better market.

First the apology. Aneurin Bevin lied to you and every subsequent government regardless of its political stripe has repeated and compounded that lie. National Insurance, for all the trappings of an insurance scheme, is just an income tax. So when people say, "I'm entitled, I paid my stamp all those years" they are merely repeating Bevin's lie. The government should stand up and apologise for this lie.

Next some honesty. People aren't stupid and can deal with facts so perhaps we should give them some. Starting with the one where we say that we can't go on with above inflation increases to the NHS, to social care and in old age pensions. That means we've either less money for other things that matter like policing, defence, firemen, roads and schools, or else your sons and daughters (the one's you're helping out because they struggle to buy the school uniform) will have to pay higher taxes. So old people with lots of money tied up with high value property assets need to start thinking about how they use those assets to provide the care and health support they'll need as they get older and more frail. This means no more "family house" nonsense and no more assumption that the Council will pay so you can leave those housing assets to your children.

And the market. Markets are very good at providing the things that people want. This isn't about ownership it's about how prices are set. Right now the UK's health and care system is (see above) unsustainable. Getting wealthy people to realise they are responsible for their own life is a start but, if we do this, we've got to have a market where they can purchase the care and health support they need.

None of this is about Boomers being selfish. After all part of the problem is that the Boomers' kids are anticipating the glorious day when that South London semi turns into £750,000 cash and some don't want any rapacious care homes, stair lift companies or walk-in shower fitters spoiling the prospect of this lovely lolly. A few weeks ago I was told by a housing officer how equity release schemes to improve home warmth were often blocked by families who saw this as eating into the inheritable asset. It's shocking but true that people will leave granny cold with no handrail on the front steps so as to keep ten or twenty grand on the inheritable value of granny's house.

At the core of all this is changing our presumption that care is some sort of absolute entitlement rather than something that's a matter of personal responsibility. When I sit in Bradford's Health & Wellbeing Board meetings is hear about the idea of 'self-care' - essentially people taking responsibility for their own health. Often this is little different from good old nannying fussbucketry -don't smoke, change your diet, cut out the booze, do more exercise - but it has within it the idea that we are, as individuals with agency, responsible for our own lives. And this means paying for stuff. The long term implication of self-care for an informed public taking decisions that reduce health harms and, recognising that some support in inevitable at some point, being prepared to pay others to help deliver that self-care.

In a nation obsessed with the idea of a "free" National Health Service, it's going to prove difficult to deliver the changes to our attitude to health necessary if longevity isn't going to turn almost all of government into a health care provider. And the core of all this is to recognise (or rather rediscover some we once knew but has lost sight of) that the assets we accumulate during our lives - houses, pension funds, cash savings and so forth - are there to be run down during our old age not something to which our descendants have any sort of entitlement. Getting the government to tax relatively poor people so you don't have to use your assets has always been wrong. Now it's wrong, stupid and unsustainable.

....