The Case for Public Housing

When did property ownership become such a major aim in the life of ordinary people? When did living in council owned housing become a stigma? When did mortgages did multi-generation mortgages come to be considered? Who has benefitted? In the light of current levels poverty and homelessness, why did we all go along with it all?

Sarah Glynn’s article looks back at the change in housing over the last hundred years or so.

The Case for Public Housing

By Sarah Glynn, Occupy Times

A home is such a basic need that the provision of adequate and decent housing should be a fundamental requirement of a fair society. But what do we require of a home beyond sound and safe shelter that can accommodate our household in a reasonably convenient location? Security of tenure is a vital basis for secure lives, and affordability is crucial. We may also need the option to move without penalty as and when circumstances demand. And most of us enjoy the opportunity to personalise our home.

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These should be the major considerations behind any housing policy, but increasingly they have become subservient to a free market politics that views housing as a major source of wealth and investment. None of the basic requirements listed above are dependent on home ownership – in fact affordability and moving house can be easier if you are not a homeowner.

Politicians like to claim that homeownership is a ‘natural’ aspiration, but it has been deliberately cultivated and subsidised by our capitalist society. As successive politicians have argued, homeownership encourages people to identify with conservative ideas about private property, and workers tied to a home and a mortgage are less likely to risk taking part in strike action.

One hundred years ago, almost everyone in the UK rented their homes, but they rented them from private landlords who sought to extract maximum profits. For working-class people, that meant dreadful, overcrowded conditions, insecure tenancies, and extortionate rents. State-subsidised council housing was brought in after the First World War because the private system wasn’t working – and because the government feared the growth of revolutionary ideas if they weren’t seen to be doing something about it. By the end of the 1970s, one third of households in the UK – and over half in Scotland – lived in publicly-owned, state-subsidised rented housing, and living conditions had undergone a massive improvement. But these developments were not without problems. An emphasis on quantity over quality meant housing estates were often poorly designed, serviced and maintained; and problems were compounded by distant, bureaucratic management.

Meanwhile, homeownership grew even more significantly, becoming associated with higher social standing. Investment in private property took on a growing role in national and household economics. Home owners used their property wealth to climb the economic ladder, leaving renters behind in relative poverty. Three decades of neoliberal free market policies have sold off the best council homes, restricted funding for those that remain, and created a disastrous property bubble. Private renting is again on the rise, along with all the problems that made public housing necessary in the first place. Landlords are amassing easy money as tenants hand over ever higher proportions of their income in rent. Housing benefits only serve to subsidise the landlords.

It needn’t have been like this. Public housing can provide everything that we want from a home, and fiscal rules can be drawn up so that homeowners do not gain a financial advantage over those who rent. Well considered and resourced housing policies can make a substantial contribution to a fairer, more equal society. In 1960s Sweden, a combination of regulations and subsidies ensured that tenants were not penalised with respect to owner occupiers; in modern Helsinki, 80% of land is publicly owned and half of homes are subsidised rented houses, which are often indistinguishable from their privately owned neighbours; and even in the UK there have been successful experiments in tenant management.

Public housing in the UK has been given bad press because vested interests did not want it to be too successful. Inadequate funding and bad management ensured its second class status. Its increasingly “safety net” role has led to it being stigmatised as poor housing for poor people. And there have been some spectacular failures. However, despite all this, the majority of schemes provided good homes that made a real difference to working-class living standards. And if we learn from past mistakes, we could see public housing playing an even more significant role in the future. There is no reason why we couldn’t plan for good quality, well-subsidised public housing for all who want it. This might seem extravagant, but it would be an investment in better life chances and a more cohesive and equal society. This time we could construct a system of local management, incorporating tenant involvement. Public housing also offers the possibility of co-ordinated planning, taking account of all the other things that make a community, and making efficient use of green technologies.

Public housing satisfies urgent practical needs as well as offering opportunities for a much more holistic approach to creating fairer and more sustainable communities.

By Sarah Glynn | sarahglynn.net

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.
– See more at: http://theoccupiedtimes.org/?p=11971#sthash.1imXPAAp.dpuf

See also: Uniting the People – Houses for People, not Profiteers

7 thoughts on “The Case for Public Housing

  1. I don’t understand why tenants who want and can afford to do so buy their social housing home. This then makes a nice mixed neighbourhood not ghettos and the money raised HAS to be ring fenced to build more social housing for those who need it. Great idea yes? Makes jobs in building industry an added bonus! Why? Because rich private landlords don’t want it, corporations don’t want it and the lobbyists employed to bribe the MPs and Councillers don’t want it. So our wonderful elected democratic voice of the people don’t want it. So instead we have overinflated private houses, homelessness, depravity, bed and breakfasts, overflowing hostels makes you proud to be British doesn’t it.

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  2. You cannot solve the problems of public housing without solving the overall issue of housing supply and who wants to be a tenant and who wants to be a home owner. There’s not enough space here to deal with how to increase housing supply, but I will just say it needs targets and a minister with responsibility for reaching those targets, and a public national commitment to some of the new build to be social housing, publicly owned with accountability to local authorities rather than unaccountable housing associations.

    But we need to alter the present position wherein housing has become an investment for the well off and those who aspire to be well off.

    For decades the government of the day encouraged home ownership. The declared ambition was “a property-owning democracy”. The fact that not all people are suitable to be home-owners and not all want to be was pushed aside. The benefits of home ownership for those who thought themselves suitable and could afford it were self-evident – they needed no subsidies or government encouragement – that feeling of security, the ability to do one’s own thing to the property, the absence of rent rises and so on.

    Some of the subsidies have been removed. There was a time when mortgage interest received tax relief, even if you were the highest rate taxpayer (and I go back to very high tax rates indeed). Schedule A was a curious form of taxation on home owners which amounted to very little. And there was a complete freedom from capital gains tax on owner-occupied residences, so that the gain on the asset in the course of ownership went tax free regardless of how great a gain it was.

    Many invested all they could in a home because of these advantages which were massively amplified by the existence of mortgages which mean you buy on margin – something which was not possible for other investments like shares. Buying shares on margin was a factor in the Great Crash which preceded the Great Depression of the 1930s. If you buy a house for £100,000 (if only one could), and only put down £10,000 and borrowed the other £90,000, then even a £10,000 rise in that £100,000 value gives you a 200% increase in your capital invested. Properties have been known to rise by more than 10% in even one year, so every investment adviser rightly said that the long term trend in property prices was invariably upward so the first investment a saver should put their money into was bricks and mortar. When people buy houses not because in their hearts they want to own their own home but because it’s a sure fire rock solid investment, there is the risk of a bubble. And the bubble is with us now with insane property prices.

    So what’s to do.

    First, introduce the mansions tax on properties valued at over £2 million – a flat rate tax on every £1 over £1 million at a modest rate, levied annually, perhaps payable in monthly amounts by direct debit. Painless to pay, effortless to collect, and only open to dispute over the valuation.

    Second, remove the exemption from capital gains tax, again on disposals of over £1 million, with some form of indexation for the acquisition cost and improvements and an exemption if the resulting gain is below say £100,000. Again, ordinary people won’t be affected at first – until inflation of property values takes them into it.

    Third,, recast the Council Tax bands so that beyond Band H there are two or three more bands for values that outreach the current Band H. Let’s have a national revaluation – for the first time since 1993 – so we don’t keep going back to what the 1991 value was; and introduce an indexation so that the bands go up each year so new properties are not based on some notional historic band. I would couple that with there being no council tax support relief for properties in the top 3 or so bands. If someone is asset rich but income poor I don’t see why the bedroom tax should not apply to them as much as to the asset poor and income poor.

    Fourth, remove all subsidies given to those who buy to let. It’s an investment but I see no reason to subsidise the landlord (rather than the developer if any subsidy is required at all).

    Fifth, remove stigma from renting. How? By making tenure secure for those who want security, and short-term for those who want it short-term. To do this means balancing the interests of private landlords with those of their tenants. Assured shorthold is not, definitely not, the answer for all. The answer may be lifetime tenancies with indexation (CPI) applied to the base rent so the landlord has no incentive to end the tenancy; but with that security of income for the landlord there must be registration of landlords and a code of conduct on repairs and maintenance that is enforceable by removable from the register. There remains a place for short-term lets but this is not an alternative for those who need longer-term housing.

    Finally, what to do about public housing.

    We need to reintroduce the concept of accountability. Many local authorities have distancing mechanisms for their own housing stock (like Brent Housing Partnership in Brent), the effect of which is to distance local councillors from the housing stock and the tenants housed in them. I deplore this. But equally I deplore the them and us atmosphere generated by the absence of localism in local authority management. Officers and maintenance staff supporting public housing must be local to the area, locally based, and identifiable by name. Those who win the respect of tenants are treasured, and their pay should be commensurate. Those who don’t should be moved on. We need to find ways of achieving value for money without the leaden hand of compulsory competitive tendering for everything. All of us know of lift maintenance which is deplorable, grounds maintenance which mows lawns but doesn’t tend flowerbeds. It’s all down to contract specifications and monitoring how they are performed.

    In the article above Sarah Glynn states: “By the end of the 1970s, one third of households in the UK – and over half in Scotland – lived in publicly-owned, state-subsidised rented housing, and living conditions had undergone a massive improvement.” I would query that state-subsidy remark. Many new properties were still being paid for by the collective mass of the tenants of all the housing stock, but equally many of the older properties were long since paid for and the tenants’ rents were actually cross-subsidising the newer properties. To the extent that there was taxpayer subsidy of the interest charges on the capital used to build and improve council dwellings, it should be remembered that many tenants pay income tax too so statements about taxpayers subsidising public housing should be read with that in mind. And at the time there was taxpayer subsidy (some of which came from public housing tenants) for those getting mortgage tax relief aiding them to buy their own homes.

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