Wednesday, 25 March 2015

REVIEW: Defining and tackling the great housing disaster

Andrew Fisher reviews Danny Dorling's 'All that is Solid (How the great housing disaster defines our times, and what we can do about it)', published in paperback by Penguin.

This book is an important and powerful contribution to our understanding of the housing crisis - and like all good books it also offers solutions to the problems it identifies.

The central contention is that the housing crisis is about the misallocation of resources: if Dorling had to summarise the reasons for "the great housing disaster" in one word, I suspect that word would be 'inequality'.

And this is where All that is Solid is different. It says this is a structural problem, not just a problem of undersupply to which the obvious solution is 'build more'. While "an enhanced home-building programme" is one of the ten recommendations Dorling outlines at the end of the book, it is just that: one of ten policy proposals.

Throughout the book, Dorling is keen to point out that there is not a crisis of supply, but a crisis of distribution. We have more homes (and there are 737,500 empty residential properties), with more bedrooms than ever spare in the homes that are occupied, and yet there is a housing crisis. Those unoccupied bedrooms are not mostly to be found in the bedroom-taxed social sector but in owner-occupied properties.

As you'd expect from a professor of human geography, All that is Solid is well-researched, and Dorling integrates numerous statistics to support his case - such as the fact that there is planning permission already to build 400,000 more homes or Britain has the highest proportion (18%) of OECD countries receiving cash allowances to support rent (housing benefit, as we call it).

The housing experiences in countries including the US, Australia, Ireland, Iceland and Spain are also used to illustrate his points. Britain's history also reminds us that for the majority of the 20th century rent regulation was a fact, and that a generation ago nearly a third of people lived in council housing compared to only 10% today.

Dorling is scathing about the policies of the coalition government, especially help-to-buy: "its aim is obvious: simply to hold up and possibly further increase prices; it is not designed to boost supply". So far, the evidence bears out Dorling's analysis.

A housing crash cannot be far off concludes Dorling and the need to get policies in place to protect people when that happens - including the right to sell and stay (something I suggested in relation to Northern Rock repossessions in 2008) - is vital. This book is therefore vital reading for anyone who wants to get ahead of the curve and to understand the coming crash, its origins and the necessary solutions.

As with so many issues the solution is "long-term planning and political courage, qualities that currently appear to be in short supply", as Dorling puts it. A statement that is true not only in a housing context. We must be that courage, and Dorling emboldens us.

1 comment:

Anonymous said...

This is an important book. I saw Danny Dorling talk about it last summer and he said some very interesting things.
1. The worst thing that can happen for the Tories is falling house prices. The last time this happened was during John Major’s government in the early 1990s.

2. For 99% of the population, inequality has narrowed. But factor in the top 1% and it has grown enormously. One chilling statistic is that the number of families – not individuals - privately renting is up from 10% to 25% in the last ten years.

3. His solutions ranged from more council tax bands to allowing mortgagees facing eviction carry on as tenants – the “right to sell” – and a tax on empty properties. We should build more, end the bedroom tax, raise benefits, have rent controls and decriminalise squatting, end “help to buy” and landlord tax relief.
4. We want to get to a situation where the decision to rent or to buy should not be based on financial considerations, where property is not seen as an investment. It’s a myth, he said, that we need to build a lot more – think of all the elderly people in family sized houses who would like to downsize but daren’t because of a lack of secure tenancies or fixed rents. If we could fix this, it would free up a lot of property.
Mike Phipps