D’ye mean people queue for below market price items?
Isn’t this a shock to everything we know about human nature?
In a speech on June 29, delivered before he won the Labour leadership unopposed, Burnham connected the loss of 1.5 million council homes with the increase, to a similar number, of families on the waiting list for social housing. Many, he said, had waited more than 10 years for a home.
A council house is substantially cheaper - to the tenant - than any other form of housing. People are willing to queue for 10 years to gain something below market price, are they? Isn’t that a shock to everything we know about humans. They’ll be predicting queues at the start of the New Year sales next.
History shows that mass state house building programmes can come with rows, incompetence and corruption, putting enormous power in the hands of those who decide what gets built, how and who should be the beneficiaries…..Last year, Newham council disclosed that an investigation had been opened into a housing officer who had allegedly assigned 35 properties to people who weren’t eligible for them…..Earlier this year, a police investigation in Barking and Dagenham warned that “hundreds” of council homes might have been fraudulently allocated to people by “corrupt housing officers for personal gain”.
It depends upon the size and location of course but a council tenancy - lifelong and with the possibility of being inherited too - can be worth up to £1 million to the tenant. Assets worth a lifetime’s money allocated at the flick of a bureaucrat’s pen can lead to the corruption of the bureaucrats? We really are having our assumptions about the human species challenged, aren’t we?
We have a solution to this and it doesn’t - not wholly - stem from liverish dyspepsia. Simply abolish the entire system. Give current council housing to the current tenants. Give, not sell. Just hand over. As Coase pointed out we’ll very rapidly gain an efficient allocation of those scarce resources whoever it is that owned it at the initial allocation. That some will make out like bandits, well, society will benefit overall. All future subsidy of housing - for there will indeed be that - to be done through Housing Benefit. That is, time limited and limited to only when finances make it necessary. Thereby doing away with issues like Frank Dobson’s gaining of a nice three bedroom flat at around the time he became chair of Camden’s Housing Committee. A nice 3 bed flat he kept all the way to his membership of the cabinet and beyond.
Yes, the HB bill would soar - and we’d all be staring in the face the vast, immense, costs of our current planning and building system. Possibly even incentivising us into doing something about it. You know, abolish the Town and Country Planning Act 1947 and successors - proper, kablooie, abolish - and get on with paving the Green Belt. If all housing is cheap then the required subsidy bill will be lower, see?
At the very least we need to grasp that building council houses is not, in fact, an investment. We’d not swear to these numbers but we’ve been told that it’s £200k or so to build one and the rent is perhaps £5k a year. That doesn’t even cover the 5% the government pays to borrow let alone any management or maintenance costs. Building something worth less than the cost of its building is not investment that’s putting a torch to the wealth of the nation.
OK, so it is liverish dyspepsia then. But it would also work which is the interesting thing.
Tim Worstall