Housing

In the years following the 2008 global financial crisis, the “big three” housebuilders that dominate the new-build market in Britain have been able to increase their profits without significantly increasing the number of homes they build. This has happened despite political pressure to increase UK housing supply.

They were able to do this, we argue, because they have built up significant structural power: they can use their control of housing land and housebuilding to secure state support for initiatives that benefit their shareholders by pushing up their share prices and profitability.

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We argue this state support via planning liberalisation has given volume housebuilders what’s called monopsonistic market power in local land markets. In other words, it’s created a buyer-dominated market. This has kept the cost of their land relatively flat while UK house prices continued to rise. 

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When market power in local land markets was combined with structural power over the state, we believe volume housebuilders were able to increase their profit margins rather than ramp up delivery to help the government meet its target of 300,000 new homes per year in England. Our research shows it was in the interests of the volume housebuilders not to rapidly increase their housing supply for two main reasons.

Key arguments;

• Post-GFC, the big three successfully adopted a “margins over volume” strategy, allowing them to generate large amounts of cash, most of which has been returned to their shareholders.
• The state played a crucial role in increasing their profit margins, through two main interventions, both of which benefitted larger housebuilders over smaller housebuilders;
  • Mortgage market support schemes which (likely) inflated their sales prices, and allowed them to wind-down their own shared equity schemes.
  • Renegotiation of section 106 agreements and the subsequent liberalisation of the planning system.
• The state’s prioritisation of large sites in the planning system also provided the big-three with (monopsonistic) market power, keeping down the input cost of their land.
• The state shaped the land and housing market in this way because it perceived itself as a necessarily passive actor in the production of housing, reliant on the structural power of the largest housebuilders.

We conclude that in order to expand housing supply in a way that aligns with social and environmental needs, the state needs to recognise its own structural power, and assume a larger and more active role in the housebuilding and land market.

In Scotland, people who meet a broad definition of homelessness get immediate access to short-term shelter and then put on a list for permanent housing, which is usually heavily discounted. Healthcare, a leading cause of debt in the United States, is largely free for everyone in the United Kingdom, as is treatment for the mental health and substance abuse issues that can exacerbate homelessness.

Few people here sleep on the street — about 30 in Glasgow and 40 in Edinburgh on a given night, according to Simon Community Scotland, a leading charity that deploys outreach teams and offers services in both cities. That’s up from recent years when the numbers could often be counted on one or two hands, but still a manageable figure for a pair of cities with a combined population of about 1.2 million people.

The city of Los Angeles, just over three times as populous, estimates that 46,260 people sleep on its streets on a given night.

The problem is not that the owners of multi-million-dollar homes, or those like the landed gentry of the Regency period who are deriving their income from investment properties, still believe that they are humble members of the middle class. It’s how this warped self-image is wielded, in ways that impact everyone—notably, the one in three Canadians who rent. This is most obvious in the inclination of owners to rent on Airbnb rather than long term; in North Vancouver, one Airbnb host complained to North Shore News that “people don’t want to deal with [long-term] tenants” who are less profitable and harder to evict. But it’s also evident in the way that homeowners frequently oppose new developments that encroach on their neighbourhoods, fighting—often successfully—against change and exacerbating unaffordability and insufficient housing supply in the process. This opposition frames apartment dwellers not as prospective neighbours but as interlopers; when BC’s NDP government introduced new legislation to end restrictive zoning in communities with more than 5,000 people on November 1, Vancouver Sun columnist Vaughn Palmer described it as the latest escalation in a “war on single-family neighbourhoods.” 

London mayor Sadiq Khan signalled a move away from demolition not backed by residents in 2018, declaring that estate regeneration schemes need to obtain support through mandatory ballots. Since then, high profile plans to demolish architecturally acclaimed estates Cressingham Gardens and Central Hill have been "paused" by Lambeth Council after an independent review by the late crossbench peer Bob Kerslake recommended a "fundamental reset" to the council's handling of the redevelopments.

Sentiment is also moving sharply against what is known as the "cross-subsidy" approach to regeneration that has dominated in the past two decades, in which council estates are demolished to make way for expensive for-sale properties that in turn fund building a proportion of more affordable homes. The model was declared "bust" by housing association leaders as far back as 2019, before the economic downturn left thousands of apartments unsold across developments in London.

While plans for demolition come under scrutiny, more emphasis is being placed on infill development, such as Camden's rejuvenation of the post-war Kiln Place social housing estate. Working with the London Borough of Camden, Peter Barber Architects upgraded the whole estate and increased its density without demolishing any existing homes.

High-priced houses do not create wealth; they redistribute it. And it’s meaningless because we can’t use the wealth to buy anything else – a yacht or a fast car. We can only buy other expensive houses: sell your house and you have to buy another one, cheaper if you’re downsizing, more expensive if you’re still growing a family. At the end of your life, your children get to use your housing wealth for their own housing, except that we’re all living so much longer these days it’s usually too late to be useful. And much of this housing wealth is concentrated in Sydney, where the median house value is $1.1m, double that of Perth and regional Australia.

It’s destructive because of the inequality that results: with so much wealth concentrated in the home, it stays with those who already own a house and within their families. For someone with little or no family housing equity behind them, it’s virtually impossible to break out of the cycle and build new wealth.

It will be impossible to return the price of housing to something less destructive – preferably to what it was when my parents and I bought our first houses – without purging the idea that housing is a means to create wealth as opposed to simply a place to live.

As the number of homeless people rises, there are mounting calls for empty buildings around Halifax to be repurposed for affordable housing.

The Heritage Trust of Nova Scotia added its voice this week, with a statement calling Halifax Regional Municipality "negligent" for leaving the old Halifax Memorial Library on Spring Garden Road empty for nearly a decade.

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An untold number of other Nova Scotians are also looking at empty buildings as potential housing.

For the past two years, people have been dropping virtual pins on a provincial map to create a crowdsourced database called This Should Be Housing. Each pin represents an empty building or piece of land that the contributor thinks should be housing. 

Most of the pins are in Halifax. Some of the properties are publicly owned and some are owned privately.

Deanna Steele says she has never seen as many condo and vacation homes for sale in Kelowna, B.C. as she has this month.

The founder of Keys to Kelowna Properties Inc., a luxury vacation rental management agency, said the lake-front city's real estate market is "saturated'' by properties zoned for short-term rental use. Some of the sellers are people who bought not that long ago and are already trying to get out.

"They thought they were going to make a mint because they saw what was happening in the gold rush. And now they're realizing, 'Oh, big mistake,'" said Steele.

That gold rush — investing in short-term rentals in Kelowna and many other Canadian cities — could potentially slow to a trickle in the wake of new legislation to regulate short-term rentals introduced by the B.C. government in mid-October.

On 20 September 2023, the Victorian Government released its Housing Statement – a major package of government investment and reforms in housing.

Part of the plan is to demolish significant public housing estates across the state, including all 44 public housing towers across Melbourne by 2051. According to The Age, the 10,000 public housing residents were informed of the decision by Homes Victoria via leaflets the day after the announcement.

At this stage it is intended that the public housing towers in Carlton, North Melbourne and Flemington will be replaced with 30,000 new dwellings, of which only 11,000 will be earmarked for social housing. The remaining 19,000 dwellings will be private housing.

According to the State Government, the towers are ‘no longer fit for modern living’ and are unable to be retrofitted and therefore need to be demolished. However, leading experts from the RMIT Centre for Urban Research argue that there is no publicly available evidence to support this proposition and that demolishing the towers will in fact likely add further to the current shortage of public housing. Demolition will displace the closely-linked refugee and migrant communities that have called these estates home for years. 

Australia is in the grip of a “bankocracy”, in which four banks control our access to money. Their profits, and therefore the salaries of their executives, depend on both the volume and the value of their assets growing.

The volume of their assets (that is, the number of loans) increases because Australians believe the only way to increase their wealth is to borrow 80 per cent to 100 per cent of the value of one or more houses. And the value grows because the banks’ customers compete with each other to buy the houses and push up their prices and therefore the size of their loans.

The more house prices rise, the greater the banks’ profits. As US investment guru Charlie Munger says: “Show me the incentive and I’ll show you the outcome.”

The way real estate works in Australia is that the federal government and banks encourage demand for it while state and local governments restrict the supply of it.