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Why Britain doesn’t build

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Re: Why Britain doesn’t build

#71

Post by reducesuffering »

lll-o-lll wrote: post #49
ggm wrote: post #3

I find the economic reductionism in housing planning really irritating. It's not like other public utility functions, but it is damn close to a fundamental and is included in human rights declarations. What kind of state throws up it's hands and claims "it can't" fix housing when states can do precisely that? Thatcher's revolution in council housing is a cesspit of counterfactual outcomes. It made individual househol…

It’s the whole western world at the same time. The same policies, the same social outcomes. It makes me question whether there is any real democracy; did we all just happen to make the exact same decisions in lock step since the 70s by incredible coincidence? And it’s not as if the eventual negative outcomes of housing costs continually outstripping wage growth weren’t obvious and growing year on year. Who is actuall…

It seems to me much more about group incentives than some nefarious lockstep plan. Existing homeowners incentives are liking things as they are and increasing wealth on paper. What’s more interesting is what changed since the ~60s inflection, since before, things were built. People literally experienced NYC grow into a megalopolis. I’d say it’s more likely that more democracy was the problem in stifling things, when every environmental review and city council meeting blocked things and threw out city mayors that were pro building. China is totalitarian and they are the ones who manage to rapidly build cities and bullet trains out of nothing.

Re: Why Britain doesn’t build

#72

Post by nradov »

blakblakarak wrote: post #17
robertlagrant wrote: post #10

Earlier quoted context omitted.

Note: I originally said Britain built 30k houses last year, which commenters have corrected. Thank you! I don't really understand all this. Surely the main reason for a lack of housing is the difference between house demand (e.g. Britain took in 606k people in net immigration last year) compared to house supply (Britain built I think around 200k houses last year). The state shouldn't need to build houses (in fact it…

The state does need to make houses to provide for lower paid people who do critical jobs.

Which jobs are critical? What would happen if those people decided to take higher paid but less "critical" jobs?

Re: Why Britain doesn’t build

#73

Post by dumpsterdiver »

blitzar wrote: post #55
dumpsterdiver wrote: post #40

Earlier quoted context omitted.

To be fair, you can't "build" a dentist or a doctor like you can a home. First the homes come, then the residents move in. Those residents will have demands, such as health and dental care. Once those demands are heard, the doctors and dentists will finally build their offices.

> To be fair, you can't "build" a dentist or a doctor like you can a home. Sure you can. When you build an office block or a shopping mall do you put in toilets or do you wait till the shoppers start shopping then see if their demands include going to the bathroom?

You can build toilets just like you can homes. Toilets are standard in all homes and office buildings. You still can't build a doctor or a dentist. That takes a lot of hard work from someone who isn't you.

Re: Why Britain doesn’t build

#74

Post by nradov »

mavhc wrote: post #57
robertlagrant wrote: post #10

Earlier quoted context omitted.

Note: I originally said Britain built 30k houses last year, which commenters have corrected. Thank you! I don't really understand all this. Surely the main reason for a lack of housing is the difference between house demand (e.g. Britain took in 606k people in net immigration last year) compared to house supply (Britain built I think around 200k houses last year). The state shouldn't need to build houses (in fact it…

Also depends on the average number of people per house, and rate at which houses are destroyed. Why are we still building houses like it's 1800 though? Hand crafted houses built by local artisans are always going to be expensive

Construction costs are usually less then land acquisition costs. Housing developers are extremely efficient when they are allowed to build hundreds of identical units on a single large parcel. Most of the work can be done by unskilled laborers with artisans only doing the critical bits.

Re: Why Britain doesn’t build

#75

Post by tsukikage »

Jochim wrote: post #65
robertlagrant wrote: post #10

Earlier quoted context omitted.

Note: I originally said Britain built 30k houses last year, which commenters have corrected. Thank you! I don't really understand all this. Surely the main reason for a lack of housing is the difference between house demand (e.g. Britain took in 606k people in net immigration last year) compared to house supply (Britain built I think around 200k houses last year). The state shouldn't need to build houses (in fact it…

There's a limited amount of space and a non-negligible portion of society are unable to afford market rates. When the state doesn't build accommodation, citizens end up transferring ludicrous amounts to private landlords to house foster children, asylum seekers, the poor, or the disabled. The UK experimented with selling off it's social housing in the 70s. It was a colossal failure that has lead to the country having…

> There's a limited amount of space

So build denser, taller housing. We sprawl massively compared to developments on the continent.

> a non-negligible portion of society are unable to afford market rates

If we increase supply, market rates will fall. That's how markets work.

Therein lies the real problem, of course: real estate investors with existing holdings don't want the rates to fall, and they have influence over how much new stock gets built.

> It was a colossal failure

To be clear, the failure was not in the act of selling itself, but in the decision to not reinvest the proceeds into new housing stock. This is the part that made the housing problem worse instead of better.

Re: Why Britain doesn’t build

#76

Post by leoedin »

lll-o-lll wrote: post #49
ggm wrote: post #3

I find the economic reductionism in housing planning really irritating. It's not like other public utility functions, but it is damn close to a fundamental and is included in human rights declarations. What kind of state throws up it's hands and claims "it can't" fix housing when states can do precisely that? Thatcher's revolution in council housing is a cesspit of counterfactual outcomes. It made individual househol…

It’s the whole western world at the same time. The same policies, the same social outcomes. It makes me question whether there is any real democracy; did we all just happen to make the exact same decisions in lock step since the 70s by incredible coincidence? And it’s not as if the eventual negative outcomes of housing costs continually outstripping wage growth weren’t obvious and growing year on year. Who is actuall…

It's an interesting observation. I'm part of a few UK and Canadian regional subreddits, and the topics of conversation are often very similar. House prices are too high, we need to build more, the government is favouring boomers, the economy is stagnating, we need more manufacturing and less real estate speculation etc. What's particularly interesting is that often in the UK ones people paint Canada as being far better. The Canadian ones seem to idolise the US.

It's clearly a global structural issue. Low interest rates are a pan-national commonality - and they can take a lot of blame for part of the situation we're in now. But they don't explain housing shortages.

Population growth probably plays a big part - housing is always going to be lagging population growth. The various stories I've seen about Japan - with low rents, falling house prices and large numbers of abandoned houses - seem to map with the falling Japanese population. "Things were better in the 70s/80s/90s" probably partly just means that the ratio of houses to people was better. The population of most major western cities was falling or flat through much of the 70s and 80s - leading to the situation where my parent's generation all seem to have snapped up large, well located houses for not very much money.

I'm fully supportive of the idea that, with all things equal, if we build more houses then supply and demand will drop prices. But if you allow unchecked population growth (which in the UK and Canada seems to be primarily caused by immigration) then the amount of building required is effectively infinite.

I've visited the Toronto area from the UK more or less every year since I was a child, and the overwhelming story is one of huge development. The change in the suburbs of Toronto over the past 30 years has been vast and unlike anything I've seen in the UK. Yet that clearly hasn't been enough to stop house prices going crazy as well. The net effect, though, is that there's miles and miles of sprawl and 6 lane streets dominated by cars. The answer definitely isn't to build more of that. The population of Canada has grown by 40% in the last 30 years.

Population growth combined with an ageing population and the kind of rights purchasing a house gives you in the west create increasing inequality driven by land. That seems to be the underlying issue that's driving city house values up everywhere.

There are possibly some answers. In the UK in the 60s-80s we built entire new cities, with the land purchased by the government at agricultural value so that the entire uplift was captured by the developers rather than speculators.

Re: Why Britain doesn’t build

#77

Post by nradov »

lll-o-lll wrote: post #49
ggm wrote: post #3

I find the economic reductionism in housing planning really irritating. It's not like other public utility functions, but it is damn close to a fundamental and is included in human rights declarations. What kind of state throws up it's hands and claims "it can't" fix housing when states can do precisely that? Thatcher's revolution in council housing is a cesspit of counterfactual outcomes. It made individual househol…

It’s the whole western world at the same time. The same policies, the same social outcomes. It makes me question whether there is any real democracy; did we all just happen to make the exact same decisions in lock step since the 70s by incredible coincidence? And it’s not as if the eventual negative outcomes of housing costs continually outstripping wage growth weren’t obvious and growing year on year. Who is actuall…

Sure we can. But many of the younger people most negatively impacted by housing policy don't bother to vote at all. Or if they do vote they do so based on social issues. I've never seen housing availability come up as the #1 issue in any voter survey.

Re: Why Britain doesn’t build

#78

Post by dumpsterdiver »

jwestbury wrote: post #47
dumpsterdiver wrote: post #40

Earlier quoted context omitted.

To be fair, you can't "build" a dentist or a doctor like you can a home. First the homes come, then the residents move in. Those residents will have demands, such as health and dental care. Once those demands are heard, the doctors and dentists will finally build their offices.

Sure, this is true in a purely free-market world. But this is also why a purely free-market approach doesn't functionally work in many cases. This problem is solvable by government intervention.

> Sure, this is true in a purely free-market world.

The world we live in, yes.

> But this is also why a purely free-market approach doesn't functionally work in many cases. This problem is solvable by government intervention.

Sure, or we might end up growing the wrong crops per government order and experience massive starvation all across the country. I hope you like potatoes!

Re: Why Britain doesn’t build

#79

Post by Arnt »

robertlagrant wrote: post #10
ggm wrote: post #3

I find the economic reductionism in housing planning really irritating. It's not like other public utility functions, but it is damn close to a fundamental and is included in human rights declarations. What kind of state throws up it's hands and claims "it can't" fix housing when states can do precisely that? Thatcher's revolution in council housing is a cesspit of counterfactual outcomes. It made individual househol…

Note: I originally said Britain built 30k houses last year, which commenters have corrected. Thank you! I don't really understand all this. Surely the main reason for a lack of housing is the difference between house demand (e.g. Britain took in 606k people in net immigration last year) compared to house supply (Britain built I think around 200k houses last year). The state shouldn't need to build houses (in fact it…

I don't live in Britain and I don't know why too few houses are built there.

I know something about the place where I live, which I'll not name because I don't think it's that special. Specifically, that houses are built if that seems profitable, or at the very least if the bank thinks the builder can earn enough to pay back the loan.

The organisation that build/rebuilt/renovated the buildings across the street from me expected to earn that investment back in very roughly half a century. They considered it possible that they'd earn their investment back in 30 years, but unlikely. They managed to secure financing, though, and did the building. Not sure how they plan to pay the bank on time.

You'll not be surprised to hear that this place too suffers from a lack of newly built housing.

Re: Why Britain doesn’t build

#80

Post by robertlagrant »

dauertewigkeit wrote: post #58
pydry wrote: post #39

Earlier quoted context omitted.

The problem is land. Land is not a normal commodity. Nobody makes it - all land rights are derived ultimately through legal fiat and violence, not labor. Somebody who consumes a lot of high value land doesnt create the conditions for making more like somebody who, say, buys a lot of cars. They just create more profits for nearby land owners. Hoarding drives more hoarding and higher prices in a positive feedback loop…

Land is fixed, but only valuable because of the location it is situated in. And what happens as the location is not fixed. You cannot make more land, but you can alter the value of locations with incentives and taxes and government programs. Part of the solution could be governments shifting people and jobs around to secondary less popular cities.

Almost every company doesn't employ people in incredibly high price locations. They can't afford to. And some of the ones that can will sometimes move, but they'll do it for bottom up reasons, not for political, state-led ones.

Also, the big contributor is Zoom. If you can work from anywhere, as some jobs can because of Zoom, you can live anywhere.

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