Housing

Capitalism relies on maintaining an artificial scarcity of essential goods and services (like housing, healthcare, transport, etc), through processes of enclosure and commodification. We know that enclosure enables monopolists to raise prices and maximize their profits (consider the rental market, the US healthcare system, or the British rail system). But it also has another effect. When essential goods are privatized and expensive, people need more income than they would otherwise require to access them. To get it they are compelled to increase their labour in capitalist markets, working to produce new things that may not be needed (with increased energy use, resource use, and ecological pressure) simply to access things that clearly are needed, and which are quite often already there.

Take housing, for example. If your rent goes up, you suddenly have to work more just to keep the same roof over your head.  At an economy-wide level, this dynamic means we need more aggregate production — more growth — in order to meet basic needs.  From the perspective of capital, this ensures a steady flow of labour for private firms, and maintains downward pressure on wages to facilitate capital accumulation. For the rest of us it means needless exploitation, insecurity, and ecological damage. Artificial scarcity also creates growth dependencies: because survival is mediated by prices and wages, when productivity improvements and recessions lead to unemployment people suffer loss of access to essential goods — even when the output of those goods is not affected — and growth is needed to create new jobs and resolve the social crisis.

There is a way out of this trap: by decommodifying essential goods and services, we can eliminate artificial scarcity and ensure public abundance, de-link human well-being from growth, and reduce growthist pressures.

On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.

“Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?

“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”

RealPage software is used to set rental prices on 4.5 million housing units in the U.S. A series of lawsuits allege that a group of landlords are sharing sensitive data with RealPage, which then artificially inflates rents. The complaints surface as housing supply in the U.S. lags behind demand. Some of the defendant landlords report high occupancy within their buildings, alongside strong jobs growth in their operating regions and slow home construction.

A controversy in planning concerns the degree that upzoning can increase affordability.

I reviewed this issue two years ago in Planetizen columns, The Housing Supply Debate: Evaluating the Evidence, and A Critical Review of 'Sick City: Disease, Race, Inequality and Urban Land', and in a Governing Magazine article, The Housing Affordability Recipe. Recent studies support the conclusion that broadly-applied upzoning that allows more compact housing types (townhouses, multiplexes, and multi-family) in multimodal neighborhoods, with complementary policies such as reducing parking minimums, can increase housing supply, drive down prices, and increase overall affordability.

This research has not prevented skeptics from arguing the opposite; that upzoning increases rather than reduces housing prices and reduces affordability. Such skepticism is understandable: housing prices tend to be higher in dense urban areas and a parcel's value tends to increase if it is upzoned. However, upzoning a large urban area has very different effect: it creates a competitive market for land prezoned for higher density housing which minimizes lane value increases, as discussed in UCLA Professor Shane Phillips' report, Building Up the "Zoning Buffer": Using Broad Upzones to Increase Housing Capacity Without Increasing Land Values.

The success of the program has other Canadian cities looking to emulate it and generated international attention for its boldness.

But without taking anything away from the grand ambitions of the Calgary plan, or the initial success it's seen (it isn't easy to convert one empty office block into apartments, let alone six million square feet worth), there are a few questions that need to be asked on behalf of the future residents of the 2,300-plus new homes about to be built. For example: What are they going to do there?

[…] 

Paul Fairie, the principal co-ordinator of the Downtown Core Neighbourhood Association, also thinks something needs to be done about the big, empty east-west avenues, particularly on the weekends.

"You wind up walking one or two blocks in a row with literally nothing. You're just walking in this ambiguous, empty space," Fairie said.

But as a downtown resident for 14 years, he says the items at the top of his wish list are what he calls "the boring things."

Things like grocery stores, inexpensive restaurants and coffee shops that stay open after 6 p.m.

"A big misconception is, they think, you live downtown, you're living this sort of glamorous, exotic, party-oriented lifestyle. No. I'm just living in an apartment. It's a relatively normal life and the more we can do to facilitate that, I think, the better," he said.

England has more than twice as many long-term empty homes this Christmas as there are children living in temporary accommodation, the Liberal Democrats have said, calling this a stark indication of a “broken” housing market.

The numbers of families without a permanent home and in short-term housing, whether hotels and B&Bs or temporary rental properties, has hit a record high this year, with the latest statistics showing it now affects 121,327 children, according to data collated by the House of Commons library.

Other figures, also compiled by the library, show that councils across England have 261,189 homes that are classed as long-term vacant, meaning they have been empty for six months or more.

Council housing, once the bedrock of the housing system — providing secure and cheap tenure — is in shockingly short supply. According to the National Housing Federation, 1.6 million households are languishing on the waiting list — more than the number of households in the North-East — while all of England only managed to deliver a pitiful 8,900 council homes in 2021-22. Only 2,500 of these were for social rent, the traditional rent level for social housing, with the remainder at higher-cost tenures.

In the same period, the UK also sold off or demolished around 20,000 social homes, with 14,000 council homes sold off under the Right to Buy scheme. Over the years, Right to Buy has led to some 3 million homes being lost from the social housing stock. With millions in need of secure and affordable homes, rebuilding the council stock is a vital step — perhaps the most vital — in confronting the housing emergency. Council housing offers secure, lifelong tenancies and rent levels far below that of the private sector and most Housing Association properties, with the homes remaining in public hands, owned by us.

Amid this backdrop of depleted social housing, Sadiq Khan unveiled his ‘Right to Buy Back’ scheme in 2021, which has subsidised London councils to purchase homes from the private sector for use as council housing. This has allowed for former private sector homes to be added to the council housing stock, so long as the homes meet or are brought up to the Decent Homes Standard. In its first year, the scheme managed to facilitate the purchase of 1500 homes — a long way from what is needed to meet the city’s social housing needs, but almost as many council homes as were built across the rest of England last year.

Although “supply skeptics” claim that new housing supply does not slow growth in rents, we show that rigorous recent studies demonstrate that: 1) Increases in housing supply slow the growth in rents in the region; 2) In some circumstances, new construction also reduces rents or rent growth in the surrounding area; 3) The chains of moves sparked by new construction free up apartments that are then rented (or retained) by households across the income spectrum; 4) While new supply is associated with gentrification, it has not been shown to cause significant displacement of lower income households; and 5) Easing land use restrictions, at least on a broad scale and in ways that change binding constraints on development, generally leads to more new housing over time, but only a fraction of the new capacity created because many other factors constrain the pace of new development.

In an interview, Been said new housing development tends to have two effects, pulling in opposite directions. Increasing the supply of housing tends to lower its cost or slow the rate of cost increase, but new development often also brings new amenities to a neighborhood – restaurants, shops, better maintained parks – that push prices upward.

“Which of those two things is going to predominate is the critical question,” she said. “Under what circumstances would the amenity effect swamp the supply effect?”

It can differ depending on the particular circumstances, she said, while adding that across the breadth of studies that have been conducted, “the supply effect seems to be predominating.”

Because housing growth tends to come in places experiencing high demand and upward pressure on prices, Been said it’s not unusual to see rent increases in an area along with a development boom.

“You don’t know what the counterfactual is,” she said, referring to what would have happened to rents in the area had the development not taken place. One study cited in her report found that the average new apartment building lowers nearby rents by 5 percent to 7 percent “relative to the trend rent growth otherwise would have followed,” a change that the authors said translated to savings of $100 to $159 per month.

Since the 1980s, Finnish governments had been trying to reduce homelessness. Short-term shelters were built. However, long-term homeless people were still left out. There were too few emergency shelters and many affected people did not manage to get out of homelessness: They couldn’t find jobs – without a housing address. And without any job, they couldn’t find a flat. It was a vicious circle. Furthermore, they had problems applying for social benefits. All in all, homeless people found themselves trapped.

But in 2008 the Finnish government introduced a new policy for the homeless: It started implementing the “Housing First” concept. Since then the number of people affected has fallen sharply.

And the country is successful: It is the only EU-country where the number of homeless people is declining.