Time to step in to build the homes we need
This article was first published on the Guardian Housing Network on Friday 2 November here: http://www.guardian.co.uk/housing-network/2012/nov/02/james-murray-labour-build-more-homes
A free market only meets the housing needs of the wealthy. We need government action to create sustainable communities
Who said "the core housing challenge we face is supply"? In my latest paper, published this week by the Centre for Labour and Social Studies (Class), I attribute this quote to Boris Johnson's deputy mayor for housing, Richard Blakeway. But it's not hard to imagine this statement being credibly made by a range of people on the left and right, so broad is the agreement that Britain needs more homes.
Yet this apparent consensus quickly breaks down over questions of how we get the homes built, and crucially what kind of homes we build and where.
A bare focus on supply at any cost defines the government's current response, with a belief that if only supply could rise unfettered, the market would resolve problems of scarcity and affordability. Other measures to improve access to housing are tacked on to an attempted solution that relies ever-more heavily on the free market.
The government's cuts to investment in new affordable housing have been accompanied by an implicit belief that market signals work in housing. Thus their policies allowing "affordable rents" to rise to near-market levels, letting developers build with no affordable housing and dismissing measures to stabilise the private rented sector in case they hamper new supply.
I argue that this approach will not get the homes we need built; we must argue forcefully for government to step in to deal with our country's housing crisis.
For starters, the government ignores the endemic market failure in housing. The historic record shows that private house building alone cannot be relied upon. Look, for instance, how the number of homes built by private house builders has been surprisingly consistent since the war: the substantial fall in total house building in recent years has been down to the near-disappearance of new council housing.
An entirely hands off approach won't build the sort of homes we need in the places we need to meet our country's complex housing crisis. A free market in housing may offer decent, secure, and affordable homes for people with wealth but it won't meet the local needs of communities across the country.
This is particularly clear in inner London, an area with jobs that pay the broad spectrum of wages and that needs a genuine mix of housing to function socially and economically. Talk of letting supply rise to meet demand is not a meaningful answer. It matters what we build, where we build, and how we keep the homes we build affordable.
To tackle London's many housing problems – from low income households forced to move far from central London's jobs to private renters stuck in a spiral of rising rents – expensive private homes alone won't help. We need a range of answers, including new social housing across the city and limits on rent increases as is the norm in countries such as Germany.
With a gathering crises, the call for a radical response from government is growing. I argue that to be successful, government cannot step back and hope in vain that the housing market will right itself.
With the need for housing so evident and often desperate, there can be a tendency to accept supply of any sort is worth aiming for. This alone this will not solve our housing problems.
Yes we need more homes – but if we want to get the right homes built in the right places, it is time to step in.
You can read James's Think Piece for Class here: http://classonline.org.uk/pubs/item/time-to-step-in