Property prices: right diagnosis, wrong medicine
A commentator from the Policy Exchange in the UK is writing in the Financial Times about property prices, an emotive issue if ever there was one. Prices are too high, he says - and he is right:
"For a cash-strapped government the costs (of high property prices) should be obvious. Expensive houses mean bigger wage demands from public sector workers. They have also pushed up the housing benefit bill by £8bn since 1997, while blocking people from leaving social housing, doubling the waiting list and locking many families in dependency. Rising prices have also choked off a right-to-buy programme that used to generate billions in revenues.
For individuals the cost is less obvious, but no less real. Property prices are embodied in everything you consume. The sandwich you buy at lunchtime costs more if the person who made it has to pay higher rent. Furthermore, rising house prices transfer wealth from poor to rich, and from the young to the baby boomers."
Indeed. But then he veers off in completely the wrong direction. The answer, he says, is to liberalise housing laws so that people can build anything, anywhere, any time. (Well, he's a bit more circumspect than that, but not much.)
No, the biggest part of the answer lies here. And just think of all that lovely tax revenue that would come with it.
"For a cash-strapped government the costs (of high property prices) should be obvious. Expensive houses mean bigger wage demands from public sector workers. They have also pushed up the housing benefit bill by £8bn since 1997, while blocking people from leaving social housing, doubling the waiting list and locking many families in dependency. Rising prices have also choked off a right-to-buy programme that used to generate billions in revenues.
For individuals the cost is less obvious, but no less real. Property prices are embodied in everything you consume. The sandwich you buy at lunchtime costs more if the person who made it has to pay higher rent. Furthermore, rising house prices transfer wealth from poor to rich, and from the young to the baby boomers."
Indeed. But then he veers off in completely the wrong direction. The answer, he says, is to liberalise housing laws so that people can build anything, anywhere, any time. (Well, he's a bit more circumspect than that, but not much.)
No, the biggest part of the answer lies here. And just think of all that lovely tax revenue that would come with it.
posted by TJN at 1:11 am
2 Comments:
This crowd of 'new thinkers' are really frightening!
The old slums are still living memory. My mum lived in them as a child, as a young wife and mother, and then watched new slums being built, and then watched those slums come down just a few years later. I played in the old tenements, I watched the modern slums appear and disappear.
Every industrial city has suffered from slum housing. The authorities in Nairobi and Kigali are now in the process of razing their slums just as we did after the war and on through the 1960s, 1970s and 1980s.
Can't these people visit a library and do some research before waffling?
thank you
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