I skimmed the article, but I missed the actual meat of the proposal. Did anyone catch how landlords are supposed to be abolished? Would they just… ban charging rent and leave it up to judges to define “rent”?
It doesn’t say, which is a little weird. This article explains it better.
Basically as I understand it, before the 1980s, the government owned a lot of the housing and rented it to people at fixed prices. This meant that renting your property out purely for profit was tough, and a lot of landlords actually sold their property to the government as council housing. That changed under Thatcher, who enabled private sales of the council housing, which originally sounded like a good idea (you can own the home you’re already living in instead of renting it from the government), but increased privatization led to rent for profit led to inflation of monthly rent led to oh no.
The simple fix I suspect, is for the government to start buying up properties again for rent-at-reasonable-prices to tenants, competing with private landlords and poking a hole in the bubble of ever-increasing rents (with popping the bubble giving a lot of extra leverage of societal benefit as compared with the amount of money they’re actually putting into the system.)
That changed under Thatcher
Reagan and Thatcher engineered the hell we live in (in these two countries, anyway).
Sounds a lot like what municipalities in Finland are doing. A lot of the cities have city owned rental properties and actively develop land as part of city planning.
Early on:
Rent controls, secure tenancies and high interest rates
were how landlords were put out of business the first time. Not regulation, but economic levers that made renting out property unprofitable.
Presumably, these levers still exist and can be pulled. It’s mentioned right after that the Thatcher administration worked to undo these effects, but the article moved on without further discussing how in detail.
Rent controls for private rents can be tricky. Sometimes it leads to money paid under the counter on top of rent, which is of course undesirable in a few ways. But having publicly owned (municipal etc) rental properties are an easier way to push rents down. But that also has a lot of trickiness in it.
One oversight by the article: changes in household size.
[Edit: I deleted an incorrect paragraph about population trends in the United States; I had misremembered a regional trend as a national one.]
For example, even if the housing supply and population in an area stay constant, if fewer people are living in each housing unit you’ll get a shortage. Yet nowhere in the article’s numerical analysis is there mention of this additional factor.
This is not to say that landlords aren’t a problem, but the entire premise of the article is that based on population and housing supply trends the supply “crisis” does not exist, which without incorporating changes in household size into their calculations is simply not a conclusion you can make.
Where are you getting this? To me it looks like household size dropped precipitously between 1947 and 1990, and then stabilized around 2.6 in 1990, and now it’s around 2.5. I think rent has gone up a little more than 4% since 1990 though.
I actually would guess that you’re probably right about an increase in single people or couples or empty nesters as compared with big families, but that it’s been offset by a rise in young or semi-young adults living with roommates. That’s just me guessing though.
You’re correct, I’ve amended my comment accordingly (I had mixed up demographic trends in California with national tends). However given that the article spends a lot of time comparing now and the 1970s, when there was a statistically significant difference in household size in the US, I feel that my point still stands, that we should know if there has also been a similar decrease in household size in the UK over the last half-century.
The yimby argument has always seemed flimsy. Its strange logic is that speculative developers would build homes in order to devalue them: that they would somehow act against their own interests by producing enough surplus homes to bring down the average price of land and housing. That would be surprisingly philanthropic behaviour.
It’s trickle-down economics applied to housing…
YIMBYism works - Tokyo housing is incredibly affordable not because of subsidies but because they just never stopped building more housing.
The problem with American housing is that it’s too easy to block.
Unless I’m mistaken the revenue source for property developers is selling the property. They don’t give a single fuck about how valuable it is after they’ve offloaded it.
People like to point to Tokyo as an example of YIMBYism fixing housing affordability, but I am skeptical of this explanation because 1) it fails to explain Japan’s spectular property bubble of the 1980s which happened in spite of its government loosening housing policy, and 2) housing prices in Japan are also currently rising and hitting all time highs.
Indeed, it was noted that loose housing policy during the 1980s bubble instead seemed to contribute to higher land and house prices, as developers prioritised office and retail space which had higher margins, at the expense of housing.
Instead, some economists attribute Japan’s relative affordability to their general fear in the property market that was leftover from the bubble bursting.
Also, property developers care very much about how valuable it is after they’ve sold it. This is because the more valuable property is, the higher their margins for future projects.
Why Tokyo’s record property prices are not just another real estate bubble - https://www.ft.com/content/40ce3cdc-5bc3-486f-b9e9-700af1087a65
Power from the Ground Up: Japan’s Land Bubble - https://hbr.org/1990/05/power-from-the-ground-up-japans-land-bubble
Property Finance in Japan: Expansion and Collapse of the Bubble Economy - https://journals.sagepub.com/doi/epdf/10.1068/a260199
Oh hey can you guys do the US next?
