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George Monbiot: Home Ground

Britain’s housing crisis won’t end until we face some uncomfortable truths

21st October 2015

When you lend rooms to the homeless, expect cheers of approbation. When you explain why they are homeless, expect howls of execration.

This is not to diss [what Gary Neville and Ryan Giggs have done http://www.theguardian.com/uk-news/2015/oct/20/giggs-and-neville-work-with-squatters-to-make-occupied-hotel-safe] – far from it. Allowing homeless squatters to stay in the building they are turning into a luxury hotel is a true act of kindness, in a sector characterised by cruelty.

So extreme has the housing crisis become that scarcely anyone would claim to be unmoved by the condition of those at the bottom. The 40% rise in homelessness over the past five years, the 2,500 families trapped in bed and breakfast lodgings, the slim chances for most of those who are young today of ever buying a home, and the ridiculous rents they must pay – these outcomes are lamented almost everywhere. But when you start to discuss the underlying reasons, sympathy soon gives way to anger and denial.

We are prepared to discuss certain aspects of the problem. The continued sale of council houses and the government’s broken promise to replace them rightly ignite public fury. So does the recent deal with housing associations, which further reduces the homes available to the poor. So do empty homes and the general failure to build, exacerbated by land hoarding on the part of speculators.

But the major cause of the housing crisis? We just don’t want to know, and it’s not hard to see why. The major cause is a spectacular failure to tax those who own property.

Britain’s problem is not a shortage of housing. We have a surplus of housing, more per head than we have ever had before. But its distribution is terrible. Government figures released last year reveal that 5% of homes in England and Wales meet the official definition of overcrowded]. But 69% meet the official definition of underoccupied (possessing at least one spare bedroom). Of these, half (8.1 million) had two or more spare bedrooms.

This is, in theory, a free country, and I’m not proposing that those who have more than they need should be forced to move. But in the midst of an acute housing crisis, you would expect fiscal policies to help match supply to demand. Current taxes do the opposite.

The exemption from capital gains tax for main residences, inheritance tax breaks, a grossly unfair and regressive banding of council tax: all create powerful incentives to pour your money into a bigger house than you need, and then hold onto it. These incentives also drive up prices, by ensuring that all the gain accrues to the owner. The results include unaffordability, unsustainable levels of debt and speculative bubbles.

It’s absurd that the only windfall tax on house prices is stamp duty (and even more absurd that it’s the buyer who pays). When a higher turnover of stock is required, so that houses are better matched to need, the last thing you want is a tax on transactions. Surely the logical response is a tax on hoarding, calibrated to the rate of occupancy? A variable council tax is the simplest way of doing it: the more spare bedrooms you possess, the more you pay. This would help families to obtain family-sized homes, and encourage the division of very large houses.

You say these things at your peril. When I first proposed such measures, in 2011, they were greeted with fury. In the Telegraph idea was pronounced “far closer to fascism than the ethno-centric populism of the European radical Right”. Curiously, when the government proposed a similar measure, the bedroom tax, aimed not, as I proposed, at property owners, but at the poorest households (tenants on housing benefit), the same people were delighted.

In a recent debate in the Guardian, Joan Bakewell, who is almost the transcendental form of English liberalism, and whose own house, she says, is “worth millions”, argued that it would be “mean-spirited” to encourage “old people living alone in big houses … to sell up and make room for young and aspiring families.” I would argue that holding onto such houses while families are homeless is, in aggregate, far meaner.

But she has a solution: “Let them build more houses.” The phrasing has unfortunate resonances, but it perfectly captures the prevailing narrative. Let’s not look back at the profligate use of the space we already possess. Let’s not change the policies that encourage it. Let’s just keep building. It’s like dumping half our food in landfill then demanding that food production rises. And we would never do that, er, would we?

I agree, as it happens, that more building is needed, and I support Labour’s proposal for 100,000 new social homes a year. But the idea that building alone will solve the problem is pure fantasy. There are 26.7 million households in the UK. In 2014, 1,219,000 homes were traded. So even if the government were to achieve its aim of building 200,000 homes a year, which some housebuilding experts consider impossible, it would add less than 1% a year to the total stock, and increase the volume of transactions by only one sixth. In other words, unless we want to wreck vast tracts of countryside, we cannot build our way out of this crisis. If we really want to solve it, the greatest contribution must come from the redistribution of existing stock.

But not even Jeremy Corbyn’s Labour party will champion such obvious solutions, for fear of alienating people who bemoan the problem but don’t really want it solved. His speech to the party conference was marked by the contrast between the strength of his feelings and the weakness of his proposals. In an act of gobsmacking capitulation, Labour has appointed the chief executive of the housebuilding firm Taylor Wimpey to “set out the ideas needed for a wide new debate”. Perhaps it could also ask Bashar al-Assad to lead its human rights review.

So we all play Marie Antoinette, proposing only to “let them build more”, while stoutly ignoring the injustice that underlies this crisis. Other people, and the countryside, must pay for our peculiar fixation with the property-based, rent-based economy.

Let’s applaud Neville and Giggs for their kindness, but let’s stop pretending that we are mere spectators. Many sympathetic people are complicit in the problem these heroes are trying to address.

©www.monbiot.com

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