by Kam Sandhu – @KamBass
There are around 5 million people on social housing waiting lists. 48,000 people are homeless. In 2012/13, house building rates were at their lowest for 100 years. Rents have increased 35% in the last five years and 1 million homes lie empty in the UK. So why is the government not doing anything about the housing crisis?
The ‘bubble’ of growth taking place in the UK is a FIRE bubble – built on Finance, Insurance and Real Estate.
It is not being created by jobs, widespread spending or increase in trade.
The bubble is instead, for it’s meagre count and vast ineffect on a majority of the country, built largely on rich people buying expensive houses in London. It is unsustainable and does not mean growth for anyone but the already well off, as the have-nots are priced out of housing, either as mortgages or rent.
Any growth is not good growth
We are lead to believe that growth is in and of itself ‘good’ but the factors that are making up a sorry blip in change is actually increasing the wealth gap, increasing poverty and driving further division. It is also wildly unstable and cannot be sustained.
Overseas in America, the same thing is happening, and stock brokers who predicted the 2008 crash, including Warren Buffet are preparing for a plummet in prices.
“We are in a gigantic financial asset bubble,” warns Swiss adviser and fund manager Marc Faber. “It could burst any day.”
Moneynews, June 2014
Growth like this is not helping most people. But the government are keen to keep things as they are.
We are less than 12 months from a General Election, cue the end of ‘tough’ decision announcements and the beginning of blanket rejoice in the late, inadequate and entirely over-estimated change in the economy.
“We are pointing at a patient on a life support machine and claiming that he is physically well and able. Which as far as I know isn’t something that economists do. It’s something that only ATOS do.
“But that is what we are doing when we call this a recovery.”
The government would like us to believe they have fixed the economy in the lead up to the national election. And ‘fixed,’ it is.
A ‘fixed’ economy – The strangleholds
More than maintaining things as they are, government actions are increasing the effects of the housing crisis. Here’s how:
Low Building Rates
Building rates last year were the lowest for 100 years, and while the speed of building has picked up in 2014, we are running far behind the required need.
Around a quarter of a million new houses are needed every year, and we struggle to meet even half that.
To add to this, the amount spent on housing benefit has doubled in the last decade to around £24bn as a shortage of council owned property forces social housing tenants to use private landlords who are continuing to push up rent.
Figures released last week, show that 93% of new housing benefit claimants are in work, demonstrating the pressure on wages as rents still soar.
It would be a win-win to create more social housing, giving councils more assets and power to control rents. However, local councils have a tight borrowing cap that should be lifted in favour of creating desperately needed housing as Owen Jones explained in an article for the Independent in 2013:
“Local authorities currently have a tight borrowing cap on them imposed by the Treasury. It urgently needs to be lifted, allowing them to build a new generation of high-quality homes that families can afford to live in. It’s not like borrowing for, say, housing benefit or cutting taxes: it pays for itself as councils gain a new income stream from rents. Indeed, just by falling into line with the borrowing rules of other Western nations, Britain would have an extra £20bn to throw at housing.”
Denial of the cost of living crisis
Let me repeat an important figure. 93% of NEW housing benefit claimants are in work. The recovery is not happening if an increasing number of people in work cannot afford to live.
During the recession, the government have repeatedly denied the extent of the cost of living crisis, in ways ranging from Michael Gove’s suggestion that food banks are used because poor people don’t know how to manage their money, to the government report to the UN stating welfare reforms were helping the poorest children out of poverty. In fact, it is estimated that 5 million children are being sentenced to a life of poverty as a result of welfare reforms.
Affordability is not affordable
Boris Johnson said the rate of affordability in London is 70-80% of market rent. In a bloated housing crisis, a figure like this which has NOTHING to do with median income, results in affordability meaning little in the way of affordable.
But it does allow politicians to use the term ‘affordable’ in public to look like they are doing something.
This further dilutes argument of the crisis. The meagre minimum affordable housing rates the government promise are not affordable. And they are also, not the minimum, as we saw with the regeneration of the Heygate estate. Southwark council insist on a minimum of 35% affordable housing units in new builds, but when Lend Lease completed the Heygate re-build, their lowest price unit was a one bed flat at £310,000. Instead, they told Southwark Council to build elsewhere:
“None of these 284 homes, currently priced between £350,000 and £1.1m, will be offered at a discount. Instead, Lend Lease has given Southwark £3.5m to spend on social housing elsewhere and will contribute to a new leisure centre.
A report by council officers said Lend Lease baulked at providing social units as this would require a second lobby and lift shaft to separate the two types of resident, adding: “Not doing so would have significant implications on the values of the private residential properties.”
Ian Steadman, November 2013, New Statesman
Help To Buy
Could there be a better way to push along a housing crisis than by using the same tactics that lost us all our social housing?
Help to Buy is helping people onto the property ladder in a time of need, but it is temporary and the effect of increased interest rates is yet to be seen as they remain frozen for the time being. But they must go up eventually and now that there is some ‘growth’ that time is coming ever nearer.
Still, ‘Help To Buy’ is conducive to getting a few more votes in the pot before election time from new home owners. But this will do nothing for their children and younger siblings when they want to enter the market.
The Consequences – division, disassociation, displacement
The current maintenance of unsustainable and unstable growth is increasing the wealth gap between rich and poor, increasing rents far quicker than wage increases and as highlighted by Lend Lease themselves, furthering a system of social cleansing which forces out the poor from their areas (as they couldn’t possible share a lift with the new upmarket inhabitants). And the Heygate estate is just one example of the type of cushty sounding ‘regeneration’ taking place all over London and some other parts of the UK.
People are becoming disassociated from themselves as a result of the fierce denial by government of the cost of living crisis and the aggressive nature of their ‘scrounger’ rhetoric.
Aditya Chakrabortty noted in his investigation into the housing crisis that people felt they needed to justify or validate themselves for a being in a position that is not their fault, and was tantamount to the strength of the rhetoric which has become part of the public language:
“We met a woman who lives in a flat, one of the old council flats [Wood Berry Downs Estate], and her walls are completely decorated in black mould. She works two jobs, so it was very difficult to pin her down. One of the first things she says upon meeting is “I’m not on Benefits Street. I don’t claim any benefits”…..The pensioner said “I don’t claim any benefits.” She’s on pensions and disabled benefits but that’s it….Turkish guy [we met, said] “I’m not an illegal immigrant. I pay taxes. I work.”
“This regeneration fits into an entire backdrop of these people feeling as though they’ve been dispossessed from their own lives. And not just in terms of their own housing, but in terms of who they are. Who they’re allowed to be when they walk down the street. They MUST either be the victims, or they MUST be the villains. They can’t be anything else.”
Another example of this experience is explained in this Vice article about Britain’s Hidden Homeless:
“Homeless people live on the street, beg for small change at cash points and try to flog you a copy of the Big Issue you didn’t want. That’s what I thought before last June, when I became homeless myself, as my family and I got chucked out of our home.
“I don’t fit the stereotype, striding into work every morning with my fur coat, red lipstick and sassitude. I’d also like to think I don’t fit in at the dull, stale hostel I wake up in and walk out of every morning. When I strut into work I’m one person and when I fall asleep in the same bed as my 14-year-old sister every night, I’m an entirely different one. Hidden homelessness is a strange struggle between wanting to seem normal on the outside and dealing with the daily anxieties of living without a home on the inside.”
Daisy May Hudson, May 2014, Vice
As austerity and cuts deepen and extend into the lives and finances of a growing number of people, who may at once have been able to get by or survive, the denial of the cost of living crisis as well as the suggestion that poverty is some personal failure rather than quite rigorous engineering in policy, more people are facing homelessness and poverty that wouldn’t once ‘fit the bill’. As the government continue to deny this crisis is happening and tell us that we are out of the recession, these people increasingly don’t know where to put themselves physically and mentally, and the government are making no provisions to help. The good times are here for political discourse until the election whether you like it or not.
Uprooting communities and dispersing them to other places across the UK can be severely damaging to people’s health, particularly when you note that the long-term unemployed, the old and the disabled make up a huge part of these communities. As we saw with the bedroom tax, this is often most costly to the most vulnerable.
Mental health problems will soar as well as increases in isolation and withdrawal. Forcing people already on the fringes of society, to leave the places they know, where their families reside and where they have built a routine and contacts is a dangerous and under-reported problem that continues as we speak.
A fierce maintenance of public face and PR means that the housing crisis is deepening, and will continue to do so at peril, as the unsustainable housing boom gets free reign in the run up to the General Election 2015.
We are now even seeing desperate attempts to suggest that the people desperately in need of homes as a result of this, don’t exist.
New policies to remove people from social housing waiting lists don’t stop them needing homes. And anti-homeless spikes don’t stop people being homeless. But image is greater than need to a government in the run up to the election. Despite how fatal this is for our housing needs.