Jason OMahony - Irish political blogger, Irish politics, EU politics
 

Housing: time for socialism?

Posted by Jason O on Dec 22, 2015 in Irish Politics |

Repost: Despite being on the centre-right on most issues, I’m not an ideologue. There are issues where the left are right, and one of those issues, I believe, is housing.

We have, and not just in Ireland, a fundamental problem with providing housing, and it’s this:

There are two types of housing. The first is the simple provision of a home, something which must surely be close to a human right in the modern age. Everybody needs a roof over their heads. The problem is that the supply and demand of that form of housing is being perverted by the second form of housing. That is, the use of a dwelling as a store of wealth and appreciable asset.

That’s the problem right there. Now, before readers get upset, let me be clear about what I’m not saying. I’m not against private property ownership nor the right to speculate on the value of that property.

However, I do believe that they are a separate activity from the provision of a home, and should be treated as such.

The truth is that we cannot rely on the market to provide enough high quality supply of housing if the end goals of wealth storage and housing provision are intertwined. The former is making the latter unaffordable by dragging prices up. We see in New York, San Francisco and London formerly affordable working class districts becoming no-go zones to all but the very wealthy.

This is not good, and undermines confidence in the capitalist system. There is a near endless supply of capital available to price the great majority of the population out of formerly affordable parts of our cities, because that capital is seeking a different objective than those pursuing mere housing on a limited budget.

So what’s my proposed solution? Rent control? No. It doesn’t work, and ultimately leads to a reduction in available rental property.

One possible solution is the “middle-classisation” of public housing. That is, the provision, by the taxpayer, of huge amounts of high quality and affordable housing to all classes based on a percentage of income. We need to firmly declare, as a society, that public housing provision is not just for the low income sectors in our society but for anyone who wishes to have it.

It will mean, of course, that society will have to deal with the disgraceful neglect that exists in current public housing provision, and in particular the failure to address anti-social behaviour by neighbours. It means anti-social behaviour contracts that will allow the speedy removal by force of anti-social neighbours. It will mean each housing cluster having a full-time live-in US style supervisor with the ability to enforce the social orders, with security support if necessary. It’ll also probably mean higher public spending and therefore taxes to pay for it.

It doesn’t mean, by the way, that there would be no room for private sector involvement. Whilst the housing stock would be owned by the taxpayer, there’s no reason why its management shouldn’t be regularly tendered out to competitive private bids. In fact, a rental holding on this scale would almost certainly attract professional landlord companies into the Irish market, as opposed to the thousands of tiny amateurs currently in place. Large private rental unit holders may even be willing to be bound by the state rental agencies rules (and prices) and could probably participate too.

The overall objective would be to allow citizens the widest possible choice. Those who wish to own private property could still do so, in a free market made up of solely of others who share their goals, and let the market decide.

But more importantly, those who wish merely to have a home will find that goal decided by a housing supply driven purely by a desire for housing as opposed to investing in an asset, and that is essentially a good thing, surely?

1 Comment

Keith
Jan 2, 2015 at 4:24 pm

Singapore has a system like this, I believe.


 

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