I support building new homes and I'm not attached to golf courses or the so-called greenbelt, but if the aim is to make housing more affordable where is the evidence that it will? You accuse others of intellectual laziness, but then repeat the mantra of 'supply and demand' as if they are perfectly aligned and there are no other means available to affect prices. If these houses are built, and London property is no more affordable, will your response be that it would have been even less affordable otherwise, or that we still haven't built enough, or is it possible that there are other mechanisms at play? It is correct that rent controls can create perverse incentives and unintended outcomes, but there are plenty of ways to reduce the appeal and value of housing as a profitable asset class, and thus restrain and reduce housing costs that way
I think basically, my argument would be that for any other mechanisms etc about the use of housing as an asset class, sure I can buy that they would make a difference – they wouldn't solve the fundamental problem that there are many fewer homes than people who want or need to live in London – and Britain has persistently been below its housing targets.
Unfortunately, I really do think this comes down to a pure supply and demand problem - as I wrote here:
Thanks for your reply. Yes I enjoy the show and am broadly in a similar camp on most issues, but I am allergic to (what I see as) a kneejerk reliance on supply and demand to address problems in the housing market. I couldn't see in the piece you wrote any demonstration that building more houses would reduce prices, only that it sounds like it should? For one, supply can even induce demand. My own radicalisation was reading Nick Bano's book 'Against Landlords'- I don't know if you've ever engaged with the arguments in that?
While capital investments rate of return outstrips wages and growth we will have inequality. Building more houses and enforcing rent control are both needed to contain inflation the rate of return from capital investments in housing that drives up the cost of both housing and increases the return on rent to crippling levels ….. that’s a poor version of Piketty’s argument but it’s palpable in reality when you look at rent returns on properties reaching 10% plus of the market value per annum, making housing costs an extreme burden and the rules of supply and demand collapse as it’s not a full choice open market - people have to live somewhere! But workforce crisis in high cost areas is one symptom of these pressures.
I support building new homes and I'm not attached to golf courses or the so-called greenbelt, but if the aim is to make housing more affordable where is the evidence that it will? You accuse others of intellectual laziness, but then repeat the mantra of 'supply and demand' as if they are perfectly aligned and there are no other means available to affect prices. If these houses are built, and London property is no more affordable, will your response be that it would have been even less affordable otherwise, or that we still haven't built enough, or is it possible that there are other mechanisms at play? It is correct that rent controls can create perverse incentives and unintended outcomes, but there are plenty of ways to reduce the appeal and value of housing as a profitable asset class, and thus restrain and reduce housing costs that way
Thanks for listening to the show!
I think basically, my argument would be that for any other mechanisms etc about the use of housing as an asset class, sure I can buy that they would make a difference – they wouldn't solve the fundamental problem that there are many fewer homes than people who want or need to live in London – and Britain has persistently been below its housing targets.
Unfortunately, I really do think this comes down to a pure supply and demand problem - as I wrote here:
https://takes.jamesomalley.co.uk/p/yimby?utm_source=publication-search
Thanks for your reply. Yes I enjoy the show and am broadly in a similar camp on most issues, but I am allergic to (what I see as) a kneejerk reliance on supply and demand to address problems in the housing market. I couldn't see in the piece you wrote any demonstration that building more houses would reduce prices, only that it sounds like it should? For one, supply can even induce demand. My own radicalisation was reading Nick Bano's book 'Against Landlords'- I don't know if you've ever engaged with the arguments in that?
While capital investments rate of return outstrips wages and growth we will have inequality. Building more houses and enforcing rent control are both needed to contain inflation the rate of return from capital investments in housing that drives up the cost of both housing and increases the return on rent to crippling levels ….. that’s a poor version of Piketty’s argument but it’s palpable in reality when you look at rent returns on properties reaching 10% plus of the market value per annum, making housing costs an extreme burden and the rules of supply and demand collapse as it’s not a full choice open market - people have to live somewhere! But workforce crisis in high cost areas is one symptom of these pressures.