Tim Worstall

Council Housing

An interesting argument here:

The initial calls for local councils to build and maintain homes arose
from the social movements that shook Britain at the beginning of the
last century.

Agreed, I also agree that it’s not a bad idea to have some part of the housing system subsidised so that those at the very bottom of the heap do indeed have somewhere to live.

There are nearly 3 million council tenants, and another 1.6 million on waiting lists.

Hhhm. Why so many waiting then?

But Kelly’s strategy for "helping [tenants] get on" is to see if she
can get away with scrapping lifelong secure tenancies and introducing
some sort of means test to force out working tenants.

Seems sensible enough. Sure, a helping hand when it’s needed, but why should one, say, 12 month period of needing such help then lead to a lifetime of taxpayer subsidy?

The main obstacle in the way is tenants with secure tenancies.

Again, seems sensible. Those 3 million in council housing would not all qualify to be so today. Those 1.6 million did, at least when they went on the waiting lists. Why shouldn’t this be a hand up not a hand out? Why shouldn’t those who need help get it at the expense of those who not longer do? After all, that’s the basis of our entire taxation system, isn’t it? That the rich take care of themselves and also pay for the poor?

But Hills pointedly insists he was not recommending the end of security
of tenure, or that tenants should lose their right to a home if they’re
lucky enough to improve their circumstances.

Seems sensible that they should. Why should people with money continue to have a public subsidy? 

In

12 responses

  1. Tim almond Avatar
    Tim almond

    You also have the problem of a lack of incentives to scale down or move out.
    In private sector housing, people who retire or have kids leaving home will scale down to a smaller home, or move out of their high price area of the country to a low price area of the country to release equity and save costs, releasing property.

    Reply
  2. Not Saussure Avatar
    Not Saussure

    Because incentives work and some might think that the prospect of losing your home if you get a job is a pretty powerful disincentive to finding one?
    If someone finds a job he loses his housing benefit and council tax benefits (or, if it’s a low-paid one, they’ve reduced pound for pound on earnings after tax), so I can quite imagine someone at the moment thinking there’s little point in taking a job that’ll leave him only ten or twenty pounds better off than he is not working. If taking a job will mean not only that he’s little better off but also that he’s got to find somewhere else to live, with all the associated inconveniences and expenses, then I’d have thought that’ll make the prospect of finding work considerably less enticing for an unemployed council tenant.
    Tim adds: Sure, but there must be a limit to the handouts.

    Reply
  3. Marcin Tustin Avatar
    Marcin Tustin

    So, what you’re saying is that we could solve this conundrum with a citizens’ basic income? And power in the state to build cheap housing, and let it out at (full) cost?

    Reply
  4. sanbikinoraion Avatar
    sanbikinoraion

    Ah, but redistribution of income is immoral!
    And thus the Worstall Cycle of Libertarian Doublethink is complete!*
    (*this may be harsh, but I do remember him asking whether redistribution is immoral, and I took it to mean “I think redistribution is immoral, prove me wrong”. This may not be the case)
    Tim adds: I’m not sure I’ve ever quite said that. I’ve often said that there should be a safety net (which is, after all redistribution) and I’m pretty sure that redistribution for the sake of jealousy would be immoral. However, I think the question you remember me asking is, what is the morally correct level of redistribution?

    Reply
  5. Bob B Avatar
    Bob B

    This on: Housing policy in a European perspective (1994), looks enlightening:
    http://www.jrf.org.uk/Knowledge/findings/housing/H129.asp
    Among the findings (as of 1994):
    “Britain’s housing market is much more polarised than other countries between a very large owner-occupied sector and the social rented sector. The private rented sector is by far the smallest in the six countries.”
    “This [social] sector varies very greatly in size from one country to another with no apparent relationship to economic conditions. It is extremely small, less than 2% of the stock, in Spain; 15 and 17% in Germany and France respectively, over 20% in Sweden and in England, over 30% in the Netherlands and largest of all in Scotland at 40%.”

    Reply
  6. Jim Avatar
    Jim

    “Why shouldn’t those who need help get it at the expense of those who not longer do?”
    You’re right, we should scrap the Right to Buy.
    Tim adds: Fair enough, why not?

    Reply
  7. Josh Avatar
    Josh

    Tim has been replaced by a Changeling! It is totally un-Timmy. Establishing a perverse incentive and even suggesting scrapping people’s rights to ear money and use that moeny to buy their own homes.

    Reply
  8. Jim Winfield Avatar
    Jim Winfield

    Instead of Right to Buy, why not more lump sum payments to persons who have enough income to buy but not enough savings to put up a deposit? People who had saved might complain, but it amounts to the same thing as a discount. And it frees up rented social housing at a fraction of the cost of building new property. I was the beneficiary of such a scheme, and I know the people who moved into our house were less well off than we were. Everyone gained.

    Reply
  9. Jim Winfield Avatar
    Jim Winfield

    Instead of Right to Buy, why not more lump sum payments to persons who have enough income to buy but not enough savings to put up a deposit? People who had saved might complain, but it amounts to the same thing as a discount. And it frees up rented social housing at a fraction of the cost of building new property. I was the beneficiary of such a scheme, and I know the people who moved into our house were less well off than we were. Everyone gained.

    Reply
  10. dearieme Avatar
    dearieme

    You could model things on the Clinton Social Security reforms. Everyone is entitled to up to 5 years of subsidised housing and then you’re out. We could start with No. 10.

    Reply
  11. Mark Wadsworth Avatar
    Mark Wadsworth

    I’ve sorted this problem out…
    http://www.citizensincome.org/filelibrary/doc/Housing%20Benefit%20Discussion%20paper.doc

    Reply
  12. john cramer Avatar
    john cramer

    Why do it all with money?
    Why ot give government housing only to those who get on with their neighbours.
    Any conflict and the villain is out. Suddenly harmony for the reasonable.
    No sink estates.
    All in high rise buildings.
    maybe prison for the rest.
    Who says -well I says.

    Reply

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