Who ‘Needs’ Housing – On the Policy Justification of Different Types of Housing

Of course we need more housing of all types, we need more affordable housing. If you deny that then go over to one of those vax denier style evidenced blogs by the like of .. well you know who.

However a really bad argument I hear against building housing which by international standards is poky, small and badly built, but very expensive, is that ‘we dont need that kind of housing’ , ‘what we really need is social housing’.

This is a misuse of the term ‘need’ of course those purchasing it, or those renting it from those who purchased it, need it, else they would mortgage or rent themselves up to the hilt to get it. It is a matter or priorities not need.

Consider identical families whose only difference is income, currently both living in the same number of bedrooms. How can you say one family is more in need of housing than the other? Housing is a human right equally applying to both. If the main blockage to being housed is income then the need id for more income not housing. There would only be a public policy justification for prioritising one family over another for housing if their were additional factors, such as special needs or overcrowding. The policy issue then is of what prioritisation rule to apply, a bottom of the stack rule, prioritising those with least income, or a top of the tack rule prioritising those just falling short of being able to afford a mortgage.

Here the issue becomes one of unintended consequences of policy. If you subsidise incomes then it pushes land prices up. If you subsidise mortgages or deposits it pushes land prices up.

The greater the shortage of homes the greater these dilemmas get. In current circumstances where there is very limited capital programmes for direct social housing building then you have to build much more to get more affordable housing of any kind.

The only sensible policy rule is to apply an affordable housing policy that maximises overall completions and then apply affordable mix policies which meet the full spectrum of housing need. If certain families or individuals have exceptional needs then that should be a matter of housing policy not planning policy.

If there are those on the spectrum of housing needs who can save for capital then that capital should be used as part of the overall pool of expanding house building not inflating rentier windfalls. This could be done for example by giving householders a share in development long term returns. Similarly such shares could also be granted in part to all householders in a development, enabling them to trade them for rent to buy purchases. These could all be funded through land value capture. One such mechanism would be to sperate tenure of land from tenure of housing on land, with housing on land being purchased and land being shared equally by residents and non tradable. There are examples of this internationally such as in the Canberra Capital Territory, and it has tamed house price boom and bust.

Currently the discussions over home ownership and planning are deeply divisive. As if homeowners were a different class with needs over and above others which needed to be fulfilled even at others expense. Rather an approach which saw housing as a service for everyone, like education and health, and every household being given a stake in the massive needed expansion of housing would not trade the interests of one group off against the others.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s