New Paper from the Rethinking Housing Team 

Nick Gallent, Dan Durrant and Neil May have recently published a paper that questions the assumption that we can build our way out of the housing crisis. 

'Whose Housing Crisis?' by Nick Gallent, Professor of Housing and Planning and Head of the Bartlett School of Planning at UCL

The UK seems to be in the midst of a 'housing crisis': the deepest ever, centred on London.  Large parts of the population - 'generation rent' and others - are locked out of the 'market' and will remain locked out for the foreseeable future. Even regular incomes derived from good jobs will never catch up with soaring house prices. For government, this is a 'crisis of home-ownership': people are languishing in inferior tenures - renting in the private, public or third sectors. Its task is to unlock home ownership - to 'not stand idly by when people who want to get onto the housing ladder can't do so'. But for many already on that ladder this doesn't feel like much of a crisis. They sit back and watch the value of their property balloon, often 'earning' more from their homes than from working: good news if one forgets the social cost of all of this and the deepening inequality between those who own their homes and those who don't.

Housing in the UK is the classic 'wicked problem': the manifest outcome of an incredibly complex set of inputs and circumstances - ranging from basic issues of supply and demand, through questions of taxation, credit availability, investment motive and the flow of footloose global capital - which will not be eased through any single action.  The real crisis is perhaps the government's determination to boil the problem down into the simple need to build more houses, thereafter providing aspiring owners with savings schemes designed to pump more money into bricks and mortar.

In some places, additional housing needs to be built. There has to be a 'supply response'. But building new homes is just one part of a bigger puzzle. The housing crisis and its drivers need to be seen in a broader economic context. The emphasis on building more homes for ownership is as much about achieving economic goals - through supporting the construction sector and giving 'consumers' greater access to collateral for borrowing - as social ones. The supply focus has political expediency, allowing the government to scapegoat planners (and the 'red tape' that stands in the way of market salvation) and to tee-up easy answers (build more homes and give 'working households first dibs') that have political appeal. Powerful forces are arrayed behind the case to build houses.  But wicked problems are never tackled by single actions; supply is the relatively low-hanging fruit and other levers will be more difficult to pull now the UK economy is hooked on the housing drug.

We need to map a route out of this predicament that begins with a basic reappraisal of the purpose of housing; whether social justice - fair access to the homes that are needed - is achievable whilst housing remains the best investment product in the market for the few able to access it.  But how should we balance the need for housing with its economic function?  There are no easy answers - but none that have any chance of success will be solely concerned with supply.

Their commentary examines the need to tackle the demand side of the housing crisis. The current emphasis is on supply-side solutions to the housing crisis. Many commentators offer one 'obvious' solution to the housing crisis, build more new homes.  There has been a chronic undersupply of new housing, but the current discussion often downplays the significance demand-side pressures: housing is now an investment opportunity open to the international market and deregulation of mortgages and money creation have fuelled steep price increases.

The paper reflects on the need for an approach that balances an increase in house building, with responses that tackle the other factors that have driven house prices to unaffordable levels.

Housing supply, investment demand and money creation: A comment on the drivers of London's housing crisis was published on May 9, 2017 in Urban Studies