As the debate over how to build more new homes intensifies, a new report on the politics of housing commissioned by the National Housing Federation takes a long look back over nearly 100 years of housing policy. It seeks to answer the questions: which governments successfully addressed housing supply issues and what factors explain their relative success/lack of success in doing so?
Starting from the premise that recent governments, over the last 35 years, have been remarkable less successful at building new homes than previous ones, the analysis offers a variety of possible explanations.
The authors argue that political debate is driven by voter concerns, and the typical voter is now more likely to be well-housed and to own their own home, to have less interest in the supply of housing for others, and to be more interested in house price growth. They fear that new housing will reduce the value and amenity of existing houses: home owners are more likely to be hostile to new development than existing renters.
In consequence, they argue, the debate has shifted away from housing supply as such to focus more narrowly on the level of home ownership and the concerns of existing and aspirant home owners. As the public has become more apathetic about housing, seen increasingly as a minority or individual problem, so the political parties have reduced their emphasis on anything other than promoting home ownership.
Over the same period the hardening of attitudes towards ‘welfare’ has impacted on social housing, so that ‘housing need’ as a concept has also come to be viewed more negatively. The trend away from subsidising bricks and mortar to subsidising housing costs through benefits has reinforced this change in attitudes, making the income stream on which investment depends vulnerable to general ‘welfare’ policy as well as housing policy.
The housing shortage is less visible than it was in some past times, for example after WW1, with the ‘Homes Fit for Heroes’, and after WW2 when there was an urgent need to respond to the destruction of nearly half a million homes – and the people had very high expectations of what the state should deliver for them. The post-WW2 ‘numbers game’, during which the parties competed vigorously over housebuilding promises during elections, was ended partly by a feeling that housing quantity issues were being resolved but mainly, in my view, by the financial pressures after 1976 followed by the ideological policies of the Thatcher government.
Non housing factors have had a major influence, especially as the expansion of housebuilding has normally been used as an effective way to help the economy out of recession – until 2010 that is.
There has also been a general ideological shift, affecting all parties, towards market solutions and away from state solutions. Compare, for example, current attitudes to private landlordism following deregulation with those of the 1960s and 1970s, when, following the Rachman and other scandals, the predominant view was that the sector should wither away.
Inevitably the report looks at planning regulation, which it argues has become more complex with a wider range of objectives competing with the housing supply objective and the growing influence of objectors. The authors see the planning system as including perverse incentives to hoard land and discuss the role that land taxation might play.
The authors make the point that uneven regional growth has become more pronounced, making it harder to introduce effective national housing policies that are appropriate everywhere. Although it is covered, I think they underplay the importance of the removal of local authorities as housing developers in the Thatcher era and the failure of the policy that housing associations should fill the gap. There has never been a period of strong housebuilding provision without councils taking a leading role.
Any report with such an ambitious aim is likely to have holes and gaps and to come to conclusions about events that could be interpreted very differently. That is the case here. I think they underestimate the importance of the ideological battles that take place within and around the parties, seeking to lead rather than respond to public opinion. In progressive times, I would point to the influence of John Wheatley after WW1 and Aneurin Bevan after WW2 who not only helpe create the public mood of the times but also showed great personal leadership in driving policies through. They also have little to say about the influence of the media, which I think has been very strong – for example in promoting the ‘ideal’ of home ownership and diminishing social housing. But it is a fascinating and provoking read and an interesting piece of work for the NHF to have commissioned.
I found the section on the implications for current policy a little weak, although I accept that this was not the report’s primary purpose. I would have liked to see more analysis of the era we have entered – are we on the cusp of another major change in public attitudes towards housebuilding as home ownership declines and a tenure that has much less public approval becomes the dominant force in the housing market? They do make an interesting point that, in previous times, shortage was highly visible whereas much of the current debate is about shortages that might arise in the future if we fail to build now – a more nebulous concept.
The report is written by the Social Market Foundation and can also be found on their website, where they also have an interesting animation of housing policy from 1918-2012.