An interesting point about social housing

Let’s take all of these myths in turn. Britain’s social housing stock remains large, accounting for 18pc of all homes. True, this is down sharply from 32pc in 1981, with around 1.8m homes privatised under the Right to Buy policy. But the experience of other European countries shows that the Government doesn’t need to build and own homes itself to make sure that the needy have accommodation – it is far better to allow the private sector to build enough low-cost lodgings by getting the planning rules right, and for the Government to focus on directly helping those that require assistance. If there is a plentiful supply of property, and thus lower rents, the cost to the taxpayer need not escalate uncontrollably, as it has done in the UK.

ust 17pc of homes in Francois Hollande’s socialist France are social housing, less than in the UK. In Germany, it accounts for just 5pc of homes. Ditto in Italy. In Belgium, it’s 7pc; in Ireland, 8pc; and in Finland, 16pc. Even Sweden, the place where British Leftists used to go on pilgrimage before they pioneered for-profit free schools, only relies on social housing for 17pc of homes, also less than us. Almost wherever one looks in Europe – and the source for these figures is the Dutch ministry of the interior’s housing statistics in the European Union 2010 – one finds that social housing is much less important than it is in the UK.

Only three European economies rely more on social housing than we do: the Netherlands, where it accounts for 32pc of all homes, Austria at 23pc and Denmark at 19pc.

Most interesting, I hadn’t realised all of that.

61 thoughts on “An interesting point about social housing”

  1. It still boggles my mind how much housing is state-owned in the UK – it seems insane that there are countries that have even *more*.

  2. So, as long as we let the developers concrete over the greenbelt and try to cram even more people into the overcrowded areas around London, everything’ll be peachy?

    No. I don’t think so. We don’t want to increase social housing, we need to decrease the population that demands social housing.

  3. As ever, this rather presupposes that the aims of the Left are to solve poor peoples’ problems, when they are in fact to run everything and be able to tell everyone what to do.

    as long as we let the developers concrete over the greenbelt

    less than 8% of Britain is urban. In scotland it’s less than 2%. The problem is that we try to cram everything into the south east. I have no issues whatsoever with building over some more of britain (as long as its not the really stunning bits like the Lakes &c), just please not more of the already fucked south east.

    There are whole swathes of Britain that could happily absorb some more people.

  4. And even in Austria, there’s a right-to-buy your council flat.

    A lot of the stock in Vienna, though, is either from the 1920s or the immediate post-war.

    New mega-estates were built on the outskirts of the city “across the river” in the 1970s and 80s, but really, my dear, living up there is quite beyond the pale.

  5. JuliaM,

    Why don’t you practice what you preach?

    If you think there are too many souls living in the UK, why don’t you check into a Swiss or Dutch clinic and make more room?

    Who are you to consider the lives of people outside your immediate family as worthless?

    We definitely don’t need more benefit scoundrels, but hard-working people that want to adopt the British culture should be welcomed.

  6. I suspect Julia is talking about restricting immigration, and attempting to put a better checks on the reproduction of the underclass which is encouraged by welfare. I agree with her on both points.

    But, I also agree with the other commenters about land usage in Britain. There are vast areas that could be developed without destroying any endangered wildlife or beautiful countryside.

  7. Not sure the ownership of the houses is as important as who is paying for it. Plenty of people in social housing pay their own rent, plenty of people in privately-rented accommodation are benefit scum who get the government to force taxpayers at gunpoint to pay their rent (yes, this is said slightly but not entirely tongue-in-cheek). Isn’t that the number we are really interested in? How many benefit scum there are and how much they are costing the productive members of society, rather than how many houses the gubmint owns?

  8. Sam said

    There are whole swathes of Britain that could happily absorb some more people.

    True, but no bugger wants to live there.
    Middlesborough, anyone ?

  9. “I suspect Julia is talking about restricting immigration, and attempting to put a better checks on the reproduction of the underclass which is encouraged by welfare. I agree with her on both points.”
    IMHO We don’t actually need to restrict immigration. There are some immigrants (a minority) who come here for benefits a change in benefit policy would reduce the quantity and increase the quality of immigrants to the UK.

  10. Yes, Sam, there are areas of Britain that could absorb more people. The question is, do we want more people?

    I suspect Julia is talking about restricting immigration

    No, we don’t want more people. Yes, we probably do want more economic migrants; they tend to pay more tax, be better qualified and less likely to commit crime.

  11. @ ken,
    Moving the capital is not a solution – just look at Australia. They put the capital Canberra, a convenient mid-point between Sydney and Melbourne. Over a century later, Sydney and Melbourne haven’t exactly ended up as the Middlesborough of Australia.
    (Also compare Washington DC with New York City, Ottawa with Toronto or Montreal, Brasilia with São Paulo or Rio de Janeiro. Even the Germans never managed to make much of Bonn during the half-century that it was the capital of West Germany.)

  12. Julia M: “We don’t want to increase social housing, we need to decrease the population that demands social housing.”

    I like the use of “decrease” in a transitive sense. Readers of this blog favour sturdy self-reliance, but shooting people who find housing expensive may be too far even for them.

    Current: “I suspect Julia is talking about…..attempting to put a better checks on the reproduction of the underclass… I agree with her….”

    Would that be sterilisation or castration you have in mind?

    Faced with the alternative of mass slaughter and compulsory sterilisation, I’ll go for the namby pamby liberal option favoured by our host – relaxation of planning controls combined with private sector housebuilding.

  13. JollyGreenMan: “…hard-working people that want to adopt the British culture should be welcomed.”

    Feel free to welcome them into your spare room, Jolly, ol’ chum…

  14. Everyone seems to take ‘social housing’ to mean housing provided by the state, ie local government.
    In the Netherlands all the ‘social housing’ is provided by fairly autonomous ‘housing corporations’ that get some state subsidy – and in any big city there are a number of different housing corporations of varying sizes.
    Maybe that is a relevant distinction.
    Another difference is that the housing corporation charges fairly realistic rents to every tenant (so the government subsidy need not be huge), and the poorest tenants can claim a rebate from central government.

  15. Current is correct, I’m talking about both.

    And no need to indulge your frothing fantasies, Luke, a cut in benefits for producing more chavlets will do in place of sterilisation. Will it produce short- term hardship ‘for he chiiiildren!’..? Yes, probably.

    But better that than the alternative…

  16. Luke, this being an economics blog, largely, and what idiots would probably stereotype as right-wing into the bargain, we can probably think of ways to reduce the fecundity of the underclass without resorting to murder or eugenics. Those are usually the preserve of the left, after all.

  17. “Luke
    October 23, 2013 at 11:44 am

    Current: “I suspect Julia is talking about…..attempting to put a better checks on the reproduction of the underclass… I agree with her….”

    Would that be sterilisation or castration you have in mind?”
    Just stop paying people to have children would work.
    It seems to have done so in Spain and Italy.

  18. citizen’s income replacing today’s variety of benefits, reliefs and allowances
    abolish minimum wage
    social housing rent tied to a proportion of household income instead of an arbitrary cut off
    land value tax

  19. Interested, I don’t know what would happen with more/less/different benefits. Something, I agree. I’m not convinced that hardworking Conservative voters are being ruthlessly outbred by rabbit like workshy chavs. But I don’t have the figures.

    I’m more interested in your point about this being an economics blog and it being “right wing.” I’d say free market, but let’s not quibble.

    My point is this: Why are supposedly free market bods interested in economics so against building houses where people want them? I know Julia M is not in favour of mass slaughter. But she is against developers building houses where they want to, and where they could sell them.

    That’s not very free market. And one thing economists agree about is that the UK should build some more houses, where people actually want them. That means green belt, and it means South East. And it doesn’t need a penny of government money.

  20. @ John Barrett
    There are lots of nice bits of Middlesbrough, just not enough jobs. So lots more people would choose to live there if they could earn a living.

  21. “In the Netherlands all the ‘social housing’ is provided by fairly autonomous ‘housing corporations’ that get some state subsidy – and in any big city there are a number of different housing corporations of varying sizes.”
    Unfortunately, in the UK, the housing association movement is more a vehicle for social interference than supplying places to live.
    Couple examples:
    The largest London H/A, in it’s tenants magazine, was celebrating (doncha jus luv that word?) providing new lettings to ethnic minority tenants at about twice the percentage of their proportion in the local population.
    Regional housing manager told me there was an association policy to free up smaller properties – usually houses converted into 1x 1bed + 1x 2/3bed flats – by encouraging tenants to move into co-ownership schemes outside the London area. These smaller properties were being disposed of in favour of larger ones, suitable for large families.
    Worth looking at a list of London housing associations. There’s close to a hundred. Over a third can be identified as specifically serving minority groups, just by the name alone. In reality, it’s nearer half. The remainder are nominally open to all members of the community but their mission statements invariably include a commitment to prioritising minority groups.
    There’s been an active policy of removal of “indigenous” people from the Metropolitan area for decades. Started under the old GLC & continues with the GLA. The political complexion of the Mayor or Assembly representatives has long been irrelevant. The Left “own” social housing.

  22. Dear Tim,

    Thanks for pointing this out. It is interesting stuff!

    As you are always keen to point out, we can’t make any sensible policy decision unless we look at a problem holistically.

    I think much, much more importantly than the percentage of rented houses belonging to a particular category is the legal jurisdiction of the lease under which it is occupied. I think that there are quite some legal differences in the rights of tenants between countries.

    For example, in Germany long leases are common and under such leases, tenants have strong rights. The 5% in social “homes” (articles word) in Germany is probably achieved by reducing the rights and expectations of landlords through legislation. This is probably acceptable for cultural/social reasons there, but would likely not be accepted in England.

    Wishing you all the best,

    Paddy

  23. I agree with Julia, we need to stop paying the underclass so much to reproduce, and stop bumping them to the top of social housing lists when they do.

    I am also skeptical about importing the better sort of immigrant. If it happened it would be a good thing, but I don’t trust the government to make it happen. It would be better to have much stricter curbs on immigration and asylum.

    Other free market types should agree with me, a relatively free market can only come about if people vote for it. Poor immigrants will obviously vote for more welfare and more socialism. Historically immigrant populations have mostly voted Labour, even the richer ones.

    I agree with other posters about housing in the South East. Even in that region there are many places that are relatively empty. Has anyone lived in the Fens for example? I have, there are lots of small towns there that could become much larger without affecting the environment.

    As John77 points out there are plenty of nice parts of the North, I’m from one of them myself. But, businesses want to locate in the South. In my view that could be solved with a lower rate of corporation tax. The problem is that small and medium sized businesses have to be in particular areas to take advantage of network effects, such as large numbers of job candidates. Big businesses don’t have to do that so much, they can start branches in obscure places and often do. In Ireland where that tax is low there are branches of big businesses all over the place. These large companies generally don’t locate in Britain because of corporation tax. Such a reduction probably can’t politically happen though, so the second best is looser planning permission everywhere. Though that will probably lead to more houses in the South East.

  24. Luke – I didn’t say it was a right-wing blog, I said ‘idiots would probably stereotype’ it as such.

    I don’t think cutting bennies is the only answer – people had children in Auschwitz, after all. But it’s part of the answer – along with the culture, education and other factors.

    I suspect you know very well that lower socio-economic groups are having far more children than those higher up the scale.

    Re housing and free marketeers, I think you answer your own question with the word ‘supposedly’ (though I would contend that where the general market isn’t free housing can’t be, either).

    If the market really was free – then I suspect no-one would have any problem in developers wanting to build all over the south east. (I actually don’t anyway.)

    Currently there are houses going for £10k in Burnley which are identical to houses going for £1 million in Fulham. People don’t mind moving to the north if all else is equal – viz Manchester United and City – so the real question is not, ‘Why can’t we build in the south east?’ but ‘Why don’t people want to live in the north?’

    The answer there is pretty much all down to government.

  25. “bloke in spain
    October 23, 2013 at 1:40 pm

    “In the Netherlands all the ‘social housing’ is provided by fairly autonomous ‘housing corporations’ that get some state subsidy – and in any big city there are a number of different housing corporations of varying sizes.”
    Unfortunately, in the UK, the housing association movement is more a vehicle for social interference than supplying places to live.
    Couple examples:
    The largest London H/A, in it’s tenants magazine, was celebrating (doncha jus luv that word?) providing new lettings to ethnic minority tenants at about twice the percentage of their proportion in the local population.”
    Have you got a link for that?

  26. The more chavs, the merrier I say. Same goes for Somali jihadis and Albanian gangsters.

    Just think, 30 years ago you had to pay good money at the cinema to see Mad Max. In 30 years time you might enjoy the same experience just by looking out the porthole on your council-provided eco-yurt.

  27. Interested said “Currently there are houses going for £10k in Burnley”

    Are you sure? There are lots on Rightmove, but for everything at that price it’s an auction guide price, which tend to low-ball to attract bidders. The cheapest ones with an actual sale price seem to be £25k.

    OK, doesn’t invalidate your point; you could still get at least 30 of them for the price of one in Fulham.

  28. JuliaM wrote:

    “Luke, a cut in benefits for producing more chavlets will do in place of sterilisation. Will it produce short- term hardship ‘for he chiiiildren!’..? Yes, probably. ”

    Something that’s long bothered me is why we can’t amend child-related benefits in such a way that the changes only apply to those born today-plus-nine-months. That way, currently living children are unaffected, as are those on the way, but it sends a signal to those considering having more.

    Is it that old “No Parliament can bind a future parliament” thing, or is there more to it than that?

  29. Would that be sterilisation or castration you have in mind?”

    Cutting the automatic entitlement to more benefits and bigger houses is one solution, although people probably wouldn’t wear the resulting photostories of squalor.

    This is the problem, as better people have pointed out before me; the most important freedom, without which all others mean nowt, is the freedom to take the consequences.

    So if the taxpayer is subsidising your children that you had despite not being able to provide for them yourself, then I have no particular moral problem with the taxpayer, through their elected representatives, telling you how many you can have before they will stop so doing. There are always going to be different preferred options for how this is done. Libertarians will lean towards stopping the payments. Authoritarians might favour sterilisation. And everyone can decide for themselves whether they prefer the idea of people being sterilised / children being taken into care / children starving.

    one might have thought that one of the benefits of easily (indeed freely) accessible contraception would have been the end of children being born to people who couldn’t afford to provide for them. Apparently not.

  30. Moving the capital would help. It would remove all the MPs, their staff, all the ministries and ancillary industries (lobbying, PFI etc). It would dent the single focus that London has become of UK economic activity. It would be good for the governance of the country as well. Obviously we don’t expect moving the capital to alter London’s primacy, but it would make the Uk less unipolar.

  31. “3/4 of the cost of housing is state parasitism.”

    Ain’t that the truth.

    I looked at the accounts of a local Housing Association – staffed largely by the dross from the old district council (and still sucking their council pension scheme btw) – headed up by a bunch of monumentally overpaid self regarding nonentities and overseen by a cozy cabal of well expensed local nabobs with political connections.

    IIRC they have over 300 homes on the books at an *averaged value* of £8000 each and are now proceeding to build “affordable homes” at a cash cost of £200K each (land donated by local council – so effectively they’re £300K each) – festooned with photovoltaic solar panels and all the other daft shit like power plugs half way up the walls etcetera.

    Peculation doesn’t really seem to be an adequate word especially if the rumors about abuses in the maintenance contracts have any truth at all in them.

    .

  32. Richard, sold prices on Zoopla. Cheapest is £11k, lots between that and £20k.

    But you take the point anyway.

    I don’t know why someone doesn’t buy up a few streets of these, make them crim proof (gated, patrolled) and create retirement villages for folks with no families.

    I’d rather live in a Burnley house that looked like the houses of my youth, and was in a street full of folks of my age, than on the 10th floor of a tower block in Rotherhithe full of young Somalians, Yardies and Albanians.

  33. Tim’s posts are often along the lines of facilitating better quality of life – I’d say that’s a theme of the blog. But there are regular commenters who talk in terms of penalties instead.

  34. @Alex B ‘Is it that old “No Parliament can bind a future parliament” thing, or is there more to it than that?’

    You’re making the mistake of thinking they (pols and bureaucrats) want to abolish benefits, Alex.

    Why on earth would they do that?

    Bribing voters with other people’s money, it’s the greatest racket ever.

  35. @Interested
    “I’d rather live in a Burnley house that looked like the houses of my youth, and was in a street full of folks of my age, than on the 10th floor of a tower block in Rotherhithe full of young Somalians, Yardies and Albanians.”
    I’d be fascinated how you’re going to write a tenants application form that’d restrict to “folks of my age” that aren’t “Somalians, Yardies and Albanians” Because if you can’t exclude the Ss,Ys & As or -(pick the ethnicity of your choice) you can forget about your age qualification. It’s that culture thing you see. The integrity of the extended family. Means it’s expected Somali granny will need to have a couple of younger members of the family under her roof, Plus offspring, of course. And next door.

  36. I wouldn’t exclude Somalis, Yardies or Albanians, but there are rules which allow for age restrictions, and there aren’t too many 70-year-old Somalis, Yardies or Albanians knocking about (yet).

    There’s a few Jamaicans, but old school Jamaicans are no different from old school east enders, apart from their skin colour. I suspect they’d get along fine.

  37. Interested: ” so the real question is not, ‘Why can’t we build in the south east?’ but ‘Why don’t people want to live in the north?’ ”

    Not very Hayekian. Surely developers observe that they can sell houses in the South East, and we let them get on with building and selling them.

  38. From the website of Rotterdam council. (Google translation):

    About two-thirds of the Rotterdam homes are rental properties. These homes are rented by the Rotterdam housing associations and private landlords. Rotterdam has four large housing associations (Havensteder, Vestia, Woonbron and Woonstad) and several smaller housing associations. The municipality of Rotterdam does not rent properties.

    I’m pretty sure that there are far more housing-association tenants than private tenants (because I’ve never come across anybody in the second category).
    So it seems that at least half the population of this large city live in housing-association homes. With such a large number of people paying something that is only slightly below a genuine market rent, is that really ‘social housing’, in the same sense as ‘social housing’ in Britain and other countries?

  39. Luke,

    Surely developers observe that they can sell houses in the South East, and we let them get on with building and selling them.

    I’m not sure there we aren’t letting them get on with it. Some of them are operating landbanks – they don’t have to develop land to make money from it.

  40. @Interested
    You do need to get real on this. Not everyone plays the rules like you’d hope. Take the supposedly “senior citizens” flat I remember in Harringay. Officially let to one of those “old school” West Indians you’re talking about. Except the old girl herself was very much absent but one of the younger female members of the family were “”mindin’ it.” And said girl’s kid, of course. And whichever boyfriend was sleeping with her. And his bros droopin’ by to chill..
    So there’s grounds for eviction? Ah! But that’d make bint & kid homeless, wouldn’t it? And opens a whole rehousing issue. And Gran’s only on an extended visit back to the island for a year or two. The kulcher, innit? Can’t mess wiv de kulcher, can we? So we’ll all quietly ignore the place being used as yet another of the extended family’s copious London property portfolio until a nice apartment becomes available. And then we can start all over again with another of Gran’s innumerable nieces. Or maybe the same young mum with a different name.

  41. When I lived in NL, the woningcorporatie price was not far under the “free” market price, and there were somewhat tight income limits.

  42. I grew up in social housing, as did many of my generation. Social housing is synonymous with social mobility: you did whatever it took to get out.

  43. I don’t have figures for France but the mush of public-private and so on make me think the real figure for France may be underestimated. There are whole quartiers (Villiers-le-Bel) which make the tower blocks between Elephant and Castle and Peckham look like a quaint little village.

    Bureaucrats are wedded to a notion of economy of scale in building, when in fact it’s the last industry to mass produce.

    The problem comes when you have an ENTIRE “village” dependent on benefits.

  44. I’m guessing that the appeal (or otherwise) of the north in general depends largely on jobs.

    I live in what is the border between east midlands and the n.w. in a place where a cheap house on the “rough” estate is about £90k, while a nice big victorian townhouse is about £200k.

    I work in engineering – and I’m fairly sure if my current employer goes down the pan I’ll have no great trauma finding another suitable job within a 30mile or so radius (i.e. a commute of less than an hour).

    I’m not quite sure the same would apply if I was to be in a different profession – software or media for example. There aren’t many software engineers or software companies round here, in a kind of chicken and egg sort of way – companies won’t move here because there is no potential staff, while “staff” won’t move without companies.

    Maybe employers NI should be inversely proportional to the distance between the employees normal work location and Tower Bridge… that might get companies headed north fairly rapidly!

    Incidentally there is more to it than just jobs – when I bought my house I did consider a town within 30 miles of where I actually bought – and with habitable house prices starting at about £25k. It was tempting, but I basically decided the risk of getting stabbed/burgled/being woken up by the coppers doing drug busts next door etc simply wasn’t worth it…

  45. BIS, it’s not a policy announcement by the government, just a comment on a blog. But that said, I suspect the chances of too many teenage Jamaicans wanting to relocate to a gated street in Burnley to live alongside lots of 70 year olds is minimal. Those that did could be controlled by strict tenancy agreements re sub-letting, loud music, anti social behaviour etc. Relax, anyway, it’s not going to happen.

  46. @interested
    Quite right. Burnley isn’t exactly Jamaican turf, is it? Know who’s it is though. But, at least with Jamaicans they’d be content with just the one flat & wouldn’t want to take over the entire development.
    Like I said above, social housing isn’t only about housing. .

  47. But hang about – yesterday you were worried about Somalians.

    Now it’s (I assume) Pakistanis?

    I repeat, in case you didn’t read it earlier: it is absolutely legally permissible to restrict tenancy to older people by age.

    The combination of that and properly enforced rules re numbers of occupants and sub-letting etc would remove the opportunity for extended families to move in and cause mayhem.

    And – and maybe this is just me – given the choice (as an elderly Brit) between a flat in Camberwell with 20-year-old crackheads on either side and a house with 70-year-old retired Pakistani shopkeepers on either side, I know which I’d go for.

  48. By the way, re my earlier comment:

    ‘BIS, it’s not a policy announcement by the government, just a comment on a blog. But that said, I suspect the chances of too many teenage Jamaicans wanting to relocate to a gated street in Burnley to live alongside lots of 70 year olds is minimal. Those that did could be controlled by strict tenancy agreements re sub-letting, loud music, anti social behaviour etc. Relax, anyway, it’s not going to happen.’

    This is badly worded. What I meant was:

    ‘…I suspect the chances of too many teenage Jamaicans wanting to relocate to a gated street in Burnley to live alongside lots of 70 year olds is minimal. Those that did could be excluded by tenancy being reserved to the elderly, and put off by strict tenancy agreements re sub-letting, loud music, anti social behaviour etc.’

  49. @Interested
    Like most things, follow the money.
    Gated development in Burnley. 100 units @ £75k per. £7.5m
    Rent per unit say £300pm. Income stream per annum £360k.
    And you’re going to put those assets & money flow into the hands of a bunch of politically desirable chancers from the quasi public sector?
    It’s the essential problem with ‘social housing’. Enormously valuable & desirable assets put in the hands of people with very little accountability. Then wonder why the entire system’s totally corrupt.

  50. Firstly, they’d be cheaper than £75k a unit, even with renovation costs. They’re basically giving them away.

    Secondly, who said anything about politically desirable chancers from the quasi public sector?

    I’m not talking about social housing, I’m talking about an entrepreneurial landlord operating standard rental property.

  51. @interested
    The £75k per unit cost was pulled out from a costing I’m doing on HMO projects for the NW. And they’re ‘practically giving away’ those properties as well. By SE standards, anyway.
    The ‘social housing’ involvement presumption was because the projects are not in fact being done, now. There’s plenty of private financed elderly persons housing underway in the SE. South coast towns are favourite. Thanks to family reasons I’ve files full of them. But that’s where people want to live. So, to do the same in Burnley implies some attraction other than can be given from low initial property cost.

  52. Then may I humbly suggest you redo your costings? You can buy sound houses in Burnley (which, actually, is only one example). We know this, because people are doing it. See the Land Legistry.

    It does not cost a further £65,000 to renovate a two-up two-down – especially given the economies of scale involved in doing up 20 of them. Unless you involve all sorts of ‘beak-dippers’.

    Not everyone wants to live on the south coast.

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