It’s only a matter time before the government has no other option but to liberalise planning regulations so that more housing can be built. No amount of minor tinkering around the edges of the problem with policies such as ‘Help To Buy’ will solve the housing crisis. The problems of the UK housing market is not a consequence of foreign buyers or immigration. Even with both of these factors out of the equation there still wouldn’t have been enough housing. Housing is expensive because there is not enough of it. This problem is caused by pure government failure.
For too long, housing policy has been made on a false assumption that we are running out of green space when less than ten per cent of this country is developed, and that figure includes parks and gardens. Initially these regulations were designed to protect the countryside and prevent urban sprawl. The government failure of housing regulation was designed to prevent a future *possible* market failure. This is government regulation that was designed to stop something that hasn’t happened and may never have happened. Instead a real, acute government failure has occurred in the name of fending off an imagined market failure and a whole generation of Britons will suffer because of policy based on a misconception.
Contrary to popular misconception, the UK isn’t short on social housing. By European standards, the UK has a relatively high level of social housing. The problem arises from the fact that unprecedented demand for social housing is from middle and working class people who, a generation ago, would never have had to rely on social housing. A decline in home ownership will eventually have a knock on effect for economic growth as people won’t own homes to use as collateral to get business loans and are already saving and investing less in pension funds. Another adverse effect is that people won’t have a home to sell in order to pay for their care when they reach old age.
The human misery that results from pure policy failure in regards one of our most basic human needs, shelter, is incalculable. My grandfather paid the mortgage and fed and clothed a family of four on a single working class salary. What does it mean for families and relationships, when both parents have to work and commute long hours to afford a mortgage? Everyone in my generation now knows a couple who moved in together when they really shouldn’t have, but were tempted by rising housing costs to do so. This means there’s no choice for men and women who would prefer a traditional family. For children, this means being shuffled from child minder to babysitter and seeing their parents less.
Proponents of the Greenbelt say it is designed to ‘protect the environment,’ however, pushing commuters further into the countryside means more traffic and more emissions not to mention the inconvenience of having to commute for hours upon hours. I predict that eventually one government will be so inundated with the consequences of refusing to tackle the housing crisis, a large housing construction boom will occur all over the Greenbelt just like the post-WWII prefab building program. Building moderately on the Greenbelt now could mean saving it from development you like even less in the future. Although, prefabs are nicer these days.
In every other way, our lives are so much better than our parents, but because housing is such a fundamental need, the housing crisis has impeded our ability to enjoy our unprecedented consumer choice and freedom. Where would we be without government nobly stepping in to save us from the horrors of urban sprawl? If you’re in your late 20s and 30s, the answer is: ‘more likely to be living in a comfortable suburban home you own.
In this recent post by Ben Harris, he aptly describes a insidious culture in which after a problem is identified “something must done” regardless of what that something is. To object to what is being done is tantamount to sanctioning the existence of the problem or denying the problem exists. This is exactly the type of thinking that creates bad policy, and once that policy is enacted and the consequences of the policy are shown to be harmful, the policy persists rather than being repealed. Often the reason bad policy stays in place is because of an emotional attachment to what the policy ‘means’ rather than what the policy ‘does.’ This type of thinking has lead to some of the worst of British policy making and I wanted to highlight a few of the most entrenched examples.
Foreign Aid - There is almost nil empirical evidence of the effectiveness of Foreign Aid. There is a great swathe of evidence demonstrating its misuse. Yet still, it not only persists, but is a popular policy because to suggest removing it is tantamount to advocating the continuation of third world poverty. What this policy means is more important than what it actually does for the third world poor.
The NHS - Are there more effective health care systems? Yes, most of the developed European countries have a better health care system now. Furthermore, the other ‘Beveridge’ models in Europe, like the NHS, underperform the ‘Bismarckian’ models by a significant degree. Not only do ‘Bismarckian’ models provide better health care, they provide it in a universal sense. The NHS can be charitably described as a second rate health care system. Yet, in face of this empirical evidence, the NHS still maintains cult-like support. It is as though its supporters think that the only options are ‘the American system,’ or ‘wanting poor people to die’ (something that someone actually said to me) - this is not ignorance; it is denial.
Comprehensive Schools - Whenever some social commentator wants to highlight inequality in education, somewhat inevitably the focus is always on how to make private schools more like comprehensives. Shouldn’t it be the other way around? Private schools do exactly what the people paying for them e.g. the parents, want them to. Why get rid of the only part of the education system that is working exactly as it should for the people who pay for it? Comprehensives mean equality, so that trumps all objective measures of how they perform. The fact that they are largely inferior to private schools, and radically unequal owning to the fact that rich parents monopolise housing in good school catchment areas, becomes completely irrelevant. Damn the children who have to go to them, some policy maker somewhere means well.
The Greenbelt - The Greenbelt is one of the most appalling policies ever enacted. It is the reason for the housing crisis right now. Yet, despite a chronic undersupply of housing, and the fact that less than 10 per cent of England is ‘developed’ (some of that is gardens and parks), the Greenbelt is championed as an environmental necessity, else we all succumb to the dark satanic mills. Considering how little of England is developed, support for the Greenbelt is irrational. I would be horrified if they paved over the New Forest or Snowdonia National Park, but a field adjacent to the M25 is just not the same thing. It’s a policy based on a misconception rather than reality. How inhumane do you have to be to prefer that people go homeless rather than build on an ordinary green field? It’s actually barbaric but, hey, England’s green and pleasant lands…
Drug Prohibition – I don’t do drugs, I don’t like drugs, I don’t want anybody anywhere to be addicted to drugs. Yet, I still support the decriminalisation of drugs. I am so tired of people characterising my policy position as tantamount to an endorsement of people ruining their lives with drugs. Supporting drug prohibition means you disapprove of drugs. Good for you… The empirical evidence shows that drug prohibition makes it no harder to get drugs, but instead gives the whip hand of an entire market over to the drug traffickers and has serious knock on consequences for rule of law. This applies to most ‘sin taxes’ and ‘sindustry’ regulation, but, hey, ones moral disapproval is all that matters, right? Nope.
What all these policies have in common is a strong emotional appeal and a profound paucity of empirical evidence demonstrating their superiority or effectiveness. All these policies enjoy huge popularity for emotional rather than rational reasons, but as the effects of these policies show, meaning well is not quite the same as doing good. They are the perfect policies for a shallow, empty virtue-signalling culture in denial about the consequences of their actions. The reason I would get rid of all the aforementioned policies, as well as a great many more, is because I do care about the poor, the sick, the under-educated, the homeless, and the addicted, and I don’t care about how good your intentions are.
It’s only a matter time before one government or the next has no other option but liberalise planning regulations so that more housing can be built. The problems of the UK housing market is not a consequence of foreign buyers or immigration. Even with both of these factors there still wouldn’t have been enough housing. It is pure government failure.
For too long, housing policy has been made on a false assumption that we are running out of green space when only 2% of this country is built on. Initially these regulations were designed to protect the countryside and prevent urban sprawl. Instead the government has pushed commuters further into the countryside.
The government failure of housing regulation was designed to prevent a future *possible* market failure… Government regulation designed to stop something that may never have happened. Real government failure has occured in the name of fending off imagined market failure and a whole generation of Britons will suffer because of policy based on a misconception.