You get two reports for the price of one. Alexander Hilton’s ‘comprehensive plan’ is balanced by a counterpoint from Kristian Niemietz of the Institute of Economic Affairs. Whilst some may enjoy the partisan irony of the CWU funding a publication that includes a chapter written by the IEA, for me that is irrelevant. By including the counterpoint it clarifies the many elements that both these writers can agree on and as a result it produces a think piece of substance. Not that that will be succour to any landlord who reads the report.
Both agree that we have a housing crisis. Not enough homes to meet demand and the resulting living cost inflation undermining the nation’s economic and social fabric. The crisis manifests itself in the rising housing benefit bill, homelessness, living costs rising faster than incomes, falling home ownership, some appalling living conditions in the private rent sector etc etc.
Both also recognise that the cost of the housing crisis and proposed solutions need to be viewed not just through a prism of housing but the wider impact it has. Individuals who are renters or home owners also live in and want to enjoy their communities. They pay tax, are employees and consumers. In short we are all multi-faceted individuals and when taken in the round the benefits outweigh the costs. By way of example, Kristian cites the protection of the green belt as a cause of higher land prices which feed into higher property costs which feed into higher consumer prices. The public if fixated on no development in their back yard miss that (due to a shortage of land) their food costs 20% more than comparable economics. We need our policy makers to see things in the round and be prepared to be bold and be prepared to intervene.
So whilst boldness is defined differently by the two writers (rent control v planning freedoms) the very fact that our Governments have failed to solve the housing crisis must surely demonstrate that policy has been fearful of overcoming the weight and drag of some sacred cows. Alex cites the minimum wage, originally demonised by many but now accepted as an effective way to reduce in-work benefits without creating economic harm. He believes and then attempts to demonstrate, despite conventional wisdom, that controlling rents in the private rental market (PRS) could have the same impact on the housing benefit bill.
The report also looks at the case for implementing compensation to tenants asked to leave without a breach of agreement, a national tenancy register, housing standards and a new form of intermediate tenure the ‘cost price house’ where the houses are exchanged at cost not market price. The intention being to eradicate lifetime capital gain to wean Britain off its love of rising house prices.
So does Alex succeed? Possibly. He puts forward reasoned arguments for the state to look again at intervention in the PRS. However he is open to more challenge and for his thinking to develop. This implies he recognises that this piece is perhaps not the finished article.