Matthew Taylor is something of a dingbat

The housing crisis is because Heinz Kiosk:

But a strategy can’t just be for government. As part of a more general change in the way we think about social change, we need to encourage, cajole and shame all the key housing stakeholders, from major developers to homeless charities, into working together on an approach and then being accountable for providing their part of an agreed strategy. There is a major collective action problem which the government should use its democratic legitimacy to break though.

And, of course, we as citizens also have to enable change. We can point to the manifold failings of our leaders, but many of the underlying causes of our current position lie in our own decisions and aspirations.

We are all guilty!

Which is dingbat. Housing in the UK is very simple indeed. The planning process produces an artificial limitation on the number of chittys, the number of permissions to build housing. Things with artificial limitations tend to be expensive. The land for a house in the South of England is worth perhaps £1,000 as agricultural land. The house might cost £120-£150 k to build. It then sells for £600k and up: that £449k being the value of the artificially scarce chitty.

So, what’s our answer here?

Well, rather than what some dingbat at the Royal Society of Arts thinks, why not ask someone with a modicum of economic knowledge?

“Mr. Worstall, what is the solution here?”

“Issue more fucking planning permissions you incredible fucking dingbat”.

Next week our invited expert will discuss whether water is wet.

21 thoughts on “Matthew Taylor is something of a dingbat”

  1. “we need to encourage, cajole and shame all the key housing stakeholders, from major developers to homeless charities, into working together on an approach and then being accountable for providing their part of an agreed strategy.”

    Of course, yes. Sounds very simple.

    But what strategy? Agreed by whom? What happens when interests are opposed to each other? Who decides who wins? How does his process fix the planning system? If it doesn’t, how does he decide how much a house costs?

    Plus, of course, “organisations working together” tend to produce results which our misty-eyed seer probably doesn’t want. They work together for their own interests, not ours.

    Anyway, what has this got to do with the ‘Arts’?

  2. Anyway, what has this got to do with the ‘Arts’?

    About as much as the Royal Society of Arts ever does:

    Our mission is 21st century enlightenment: enriching society through ideas and action.

  3. Of course the increasing number of uninvited immigrants into our communities in no way upset the growth calculations for homes based on the last census. To even think that would be racist and neo-liberal sophistry.

  4. Of course the increasing number of uninvited immigrants into our communities in no way upset the growth calculations for homes based on the last census.

    Do builders decide how many homes to build by using “growth calculations for homes based on the last census”?

  5. Yes and no. The chitties as you call them do indeed cost a fortune to get, but that is no longer just free money to the developer (and landowner) once the chitty is issued. The system has now evolved so that the local authorities now extract the majority of the profit from the development via section 106 agreements (I think this is changing to become a thing called CIL – Community Infrastructure Levy, but its the same thing really, a tax on development that goes to pay for local stuff).

    Thus the cost of housing has now been ossified by the State – the regulations on everything they demand, plus the taxes they levy on the development means that there’s very little profit in the process for there to be step changes in the price of houses. Yes the landowners get a windfall, and yes the developers make profits, but that has got to happen to entice landowners to sell, and developers to continue to operate. In the old days you got planning, the LA got nothing, and developer and landowner made out like bandits. This no longer happens.

    So I am now of the opinion that you could issue as many chitties as you like, the cost of actually getting the houses out of the ground is now mainly fixed by other costs and the price of houses would not fall much. If it did fall too far, development would no longer be profitable, and thus not occur. You can see the effect that the fall in house prices after the Crash had on development – Prices only fell by about 20% in the Crash, and that was enough to bring the development process to a halt.

    You can’t reduce house prices by more than 10-15% without the whole thing stopping, the way its set up today.

  6. Matthew Taylor pioneered the idea of paying tax for its own sake, as a public token of goodness regardless of the use to which it was put. Enough said.

    Separately, I see he now sits on a quango having previously been a wonk. In other words, a leading example of Never Done A Real Job, flitting from beano to boondoggle untroubled by footling concerns like reality. Not that as a lawyer I fancy myself the white heat of productivity, but at least people can choose whether to use my services.

  7. I’m reminded of our fine, fine President Jimmy Carter. Government creates shortage, then Jimmah tells us, “Only government can manage shortage fairly.”

    In 1980, Ronald Reagen comes along and says, “Screw that! We’re America! We’ll just make more.” Ending the shortages.

  8. I’m starting to think that “40% of RTB properties are now BTL” is this season’s “19% gender pay gap” bullshit stat.

    I think this because a) it’s not correct (it’s 40 of rtb flats, not all properties) and b) it’s disingenuous used (ONS says that it’s a 65:35 ration of owned:rented in this country)

  9. Do builders decide how many homes to build by using “growth calculations for homes based on the last census”?

    No, but you’re not considering the second and third order effects.

    Councils decide how many chitties to issue based on their local plan, which is based, in large part, on census data.

    Also, councils will generally only issue chitties if there is sufficient infrastructure- schools, GPs, etc even (around here) roads. With all bar the last provided, very much, on census data.

  10. In its infinite wisdom, the German government has recently introduced rent caps as the government solution to the government-caused problem. Apparently minimum build costs to current insane Passivhaus ecospecs are €3000 per square meter, and that’s if you build lots of storeys. And the effective maximum rents are not at a level that will finance that (the regs already mean that building in most rural areas is essentially the same as having a bonfire of all your money). To get around that problem, new-build housing is exempt from capping. Guesses as to what Germany’s housing stock will look like in 20 years time if this policy lasts much longer.

  11. Jim, thanks for your comment. As I drive around the UK, I’m struck by the poor quality of the infrastructure (as compared with Germany, Japan and France).
    So Is it fair to say that, given the high level of UK local government corruption, CIL fees are used for purposes other than infrastructure?

  12. “So Is it fair to say that, given the high level of UK local government corruption, CIL fees are used for purposes other than infrastructure?”

    Its not so much out and out corruption in the ‘Brown paper envelope’ sense, rather that any money paid over to the State to build a local primary school for example, will be subject to the usual problems that occur when the State spends money. By and large the housing developers don’t want to build schools and other community infrastructure, they are house builders after all. So they just negotiate the price and pay the money to the local council to do it. Who promptly waste the money with their usual abandon – whatever is the nostrum du jour will be incorporated into the design (anything ‘green’ is de rigeur at the moment) usually at vast expense, and to zero benefit.

  13. Paul>

    “To even think that would be racist”

    Yes, because it’s obvious to anyone with more than two or three firing neurons and no monomania to blind them that in fact immigration hasn’t made a bit of difference. It’s a drop in the ocean. The UK’s housing supply problem only exists in the SE, and it exists there because of all the migrants from within the UK over the last few decades. Even if none of those darkies who worry you so much had ever set foot in the country, we’d have the same problem.

  14. Dave,

    Whether or not they “upset the growth calculations for homes”, it is a stretch to imagine that increased prices (from excess demand) have not been signficantly influenced by the effects of ‘net migration’ over the last 10 to 15 years.

    And which we know our politicians (by their own admission, unless they were lying) did not anticipate in any meaningful way.

    Not what you said, I accept, but very relevant to prices (in the south east).

  15. and just to clarify, when I say ‘net migration’, I don’t mean ‘within’ the UK – however valid that may or may not be, as there has always been net migration within the UK.

  16. Further to Jim’s point; a neighbour of mine happens to be very fine and successful author and scriptwriter. He is smarter and far better read than me. There are many topics on which I could sit and listen to him and learn. Microeconomics and public choice economics do not count amongst them

    Writing recently on a lefty log he describes “neoliberal housing pokicy” as being “don’t let houses be built because that would ‘interfere with the market'”.

    I really do not know where to start.

  17. Rusty
    Start with the definition of liberal from Johnson to OED and wikipedia.
    Goes up and down like a yo-yo.
    I’m waiting for the appearance of neo-wicked. Shouldn’t take long.

  18. Tim, if you accept Jim’s point then your answer should be:
    “Issue more fucking planning permissions and don’t let the local council pinch the CIL fees you incredible fucking dingbat”.

  19. If Councils did not control planning permission (one of Cameron’s few good ideas – let the local residents decide on home extensions and the like – whichattacked by vested interests on one side and NIMBYs on the other) then (i) there wouldn’t be a shortage of building land and (ii) they couldn’t extort money for doing so.

  20. All this modern stuff has the wrong attitude.
    Use the tactics used in WW2 and after.
    Billet the homeless , the migrants and other on existing houses. This was how we got a roof over our head in 1945 but more importantly – it has a nice marxist ring about it.
    It might even stop the publice from being so ‘reasonable’ and tolerant.
    .

  21. “Billet the homeless , the migrants and other on existing houses. This was how we got a roof over our head in 1945 but more importantly – it has a nice marxist ring about it.”

    In Labour constituencies.

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