Today’s Camden housing strategy conference heard from LSE Professor of Economics Christine Whitehead, in a high-level and challenging, but very informative talk, which aimed, in her words, “to give an overview of the major tensions in the housing system and in housing policy” and “clarify why current policies are being put in place”. (She suggested it would be unpopular, but it was clear that what she was saying were observations of events, not views.)
She started by pointing out that everything in the end depended on macroeconomic conditions “but macroeconomists do not know what is going to happen and they do not even know how to analyse it”. But “the chances are that on the whole the future is like the past”.
It’s estimated there are now 1.5 million households across England who pre-crisis would by now have become owner-occupiers, but who are now renting, or living at home with parents. The government was “trying things”, in response to this she said. “If it doesn’t work, they’ll come out of it – it’s a variation of the traditional way of doing things, which was knowing what you want to do”.
The government’s main aims were to reduce welfare costs, target more, use existing assets more effectively, and using housing policy to support growth. It was seeking to move from “supply subsidies”, capital grants and lower rents, which help a narrow range of people and leave out many of those who are worse off, to providing income-related subsidies, more targeted and adjustable as household circumstances change – and which in some scenarios can be cheaper. The affordable rents model is a direct transfer from The Netherlands, but there there is better and more comprehensive social security, a better distribution of income and a stronger capital base.(There, rents of over 652 euros a month are market rents.)
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