Less socialism is the solution to our housing crisis

Tom Spencer

July 28, 2021

If anything shows that socialism just doesn’t work, it’s our housing market. Yet, despite being the biggest victims of the housing crisis, young people remain wedded to the failed ideology.

A new poll by the Institute of Economics Affairs found that 78 per cent of young people blame capitalism for Britain’s housing crisis. Anyone with a rudimentary understanding of the origins of the housing shortage will know the opposite is true. In fact, the problem is rooted in legislation introduced by Clement Attlee’s socialist government after the Second World War. The idea was that a local authority would create a 15 year development plan and every proposal that met the plan would be provided planning permission. The vision was that local authorities would build the majority of houses, meaning that they could assess the merits of each application objectively.

Like all mass socialist interventions in the free market, the plan failed. The government had massively underestimated the need for housing—German air raids had destroyed 218,000 houses and rendered another 250,000 uninhabitable. Economic historian Alan Holman estimated that the shortage at the time amounted to 2,000,000 homes, and local governments simply weren’t able to forecast or meet these substantial demands. This meant that, between 1948 and 1951, just 180,000 homes were built annually—less than half of what was built each year in the inter-war period – at this point an affordability crisis was inevitable.

The  scrapping of development charges and building licenses allowed a weakened private housebuilding sector to re-emerge in turn enabling the subsequent Conservative government to claim to have solved the housebuilding crisis and boast over 300,000 houses built each year throughout the 1950s. Although these figures sound good, especially compared to the pitiful 170,000 we achieve today, they fell short of demand at the time. And what’s even more worrying?  The core of this system is almost identical to the system we have today.

Like the system designed by socialists, if one wants to develop on their own land they need to obtain planning permission. This is subject to a development plan as well as local democratic pressure by people who tend to have a vested interest in maintaining a housing shortage. The impact of this is that it remains extremely difficult for private suppliers to build enough houses to meet demand resulting in prices rising.

The solution to this is simple – and the opposite of what most young people claim to want – more capitalism. Excessive barriers over what one does with their own house is the principal cause of our shortage. By relieving those barriers we can get more houses built.

However, to do that we shouldn’t move to a system of unchecked property rights where one should be able to immediately construct ugly, brutalist developments in areas of outstanding natural beauty. We need a compromise that simultaneously creates rules complimentary to housebuilding without unnecessarily stepping on the rights of others to live undisturbed amongst beauty. Street voting appears to be the best policy to do that.

This would allow each street to vote on a design code detailing how they want new developments in their neighbourhood to look. This would allow a much simpler system than the current one, as developers will finally be able to provide a plan meeting the rules, resulting in more homes. This may not be the perfect system, but it will result in more houses being built that respect the areas they will be built within. Indeed, a similar idea orchestrated in Tel Aviv accounted for 35 per cent of new homes in 2020.

If we’re ever to solve our housing crisis, it will need to be done by ignoring the majority of young people who blame capitalism. Socialism has got us into this crisis, and it’s only by ending it that we will finally build enough homes. Unbridled capitalism may be electorally impossible, but by embracing street votes we can ensure we don’t take a step backwards and instead help to finally make housing affordable again.

Author

Written by Tom Spencer

Tom Spencer is the Chief Organiser of the London Neoliberals and a Young Voices UK contributor.

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