Ruth Davidson’s Call for More Housebuilding

Unherd

Planning law privileges those who already have property – disadvantaging the young and poor/.

We will need to be particularly bold when we see restrictive practices. Too much profit comes from tax avoidance, land speculation, financialisation and other unproductive economic activity, rather than through innovation and high performance.

Closing loopholes, increasing enforcement and overhauling regulatory frameworks can go some way to addressing the creeping cronyism that is making free market capitalism an unfree and anti-competitive capitalism, but this stick approach should only be one half of the story. Government also has the ability to set the tone and the direction of travel by using its vast array of levers and resource as a carrot, too. It should do so…

 

Similarly, policies of ‘help to build’ rather than ‘help to buy’ will do more to address the inability of young people to get on the housing ladder. The biggest ally we have in increasing housing supply is beauty – if new houses complement the local environment and avoid the disastrous design choices of the past we can help build sustainable local support for extra construction.

While Thomas Picketty’s claims of capital growing without bounds at the expense of workers has been disproved by – among others – the Brookings Institute in Washington DC, its analysis of net capital share shows that housing is the only area where capital income displacement of labour income is apparent….

In short, the multiple instabilities of insecure employment, opaque career progression, wage stagnation, high rental and commuting costs and growing financial barriers to home ownership clearly explain why Britain’s young adults don’t feel they have a personal stake in a system that doesn’t work for them….

It is not enough for government to facilitate a discussion about where next for Britain, it has to actually lead. The short-term, election cycle nimbyism of prohibitive planning laws needs to cease and there is no room for one-of-the-in-crowd Davos sycophancy either. At home and abroad we need to press the case for fairer markets.

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2 thoughts on “Ruth Davidson’s Call for More Housebuilding

  1. Planning law and NIMBYism do not make housing unaffordable. High (aggregate) land values are a very good thing as they reflect the totality of all spatial and economic externalities. They only make housing unaffordable when capitalised into selling prices and private rental incomes (instead of being equally shared and used at tax revenues), as they can then act as a pure transfer payment from one group in society to another. Causing affordability issues for some and excessive inequalities in our society.

    Of course those on the ideological Right prefer to blame State regulations by default, while preserving the perpetual free lunch enjoyed by today’s freeholders. It’s somewhat puzzling that those on the Left have swallow this narrative hook line and sinker.

  2. It comes down to a question of what is the purpose behind a programme of land value capture by the State (as well as other allied property taxation measures): is it aligned with an ambitious programme of house building and essential infrastructure building, or is it merely a redistributionist measure, not expanding the economic base. This is why Picketty is not the socialist some have labelled him to be; he’s a philanthropist. Value capture is being promoted as a way to subsidise a range of existing struggling public services or under-investment by industry. It is quite possible that the latter could be achieved without a step-change in housing delivery. Indeed the revenues to the State could be enhanced by maintaining careful control on housing supply (needs assessments) to boost sales values/rental yields.

    I am quite convinced that even if the state was to be given all the tax raising powers it asks for it will not plan for more more housing. Land value capture is an excuse for not planning. I’m quite prepared to be proved wrong. The Oxford-MK-Cambridge growth corridor may provide a good test of the government’s resolve.

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