Wednesday, November 10, 2010

Slums and Slumps: Housing under Capitalism (2010)

From the November 2010 issue of the Socialist Standard

In 1942 the Beveridge Report identified five giant evils that government social policy should aim to overcome: Want, Disease, Ignorance, Idleness and Squalor. The last of these referred to housing, and more generally to town planning and the environment. The report was, by the standards of such documents, tremendously popular, selling thousands of copies. Newspapers in Nazi Germany were forbidden from mentioning it, on the grounds that it would represent an enormous propaganda victory for the enemy.

Beveridge effectively laid the foundation for the post-war welfare state and the introduction of, among other things, the National Health Service. On the fiftieth anniversary of the report, the academic Ben Pimlott assessed its success. Want and squalor still existed, he argued, with plenty of beggars and homeless people in central London: ‘for the majority, there is less hunger and disease than in the Forties, but for the millions in the minority, there is much more’ (Independent, 1 December 1992).

And despite the decades of legislation, the ‘housing problem’ indeed remains, although its precise nature varies somewhat over time. The overcrowding and unsanitary conditions that were rife in (say) the early twentieth century are largely, though not entirely, things of the past, but housing is one of the biggest failures of the efforts to slay Beveridge’s giants and so shows how reforms cannot banish capitalism’s problems.

In some cases, government policies have been a contributing factor to not just bad housing but loss of life and other disasters. The Housing Subsidy Act of 1956 gave local councils bigger subsidies the higher the tower blocks they built, on the basis that this meant more and cheaper homes in a particular area. In May 1968 the Ronan Point block in east London collapsed after a gas explosion, and four people died. The block had been built using pre-cast concrete panels, which had the ‘advantage’ of not requiring skilled construction workers. But this method of building was intended to be used for six storeys at most, and Ronan Point had twenty-two.

There are many ways of looking at the effect that the recent rise in house prices has had. Between 1959 and 2009, for example, real earnings rose by 169 percent but house prices rose by 273 percent, making houses less affordable than fifty years ago. For many years the average house price has been around three times the median wage, but by last year it was over six times as high. Many workers are forced to rely on the ‘Bank of Mum and Dad’ as a way of scraping together a mortgage and getting on the property ladder. Some take on mortgages that they will not pay off until well into their sixties, or put off starting a family because of worries about the affordability of housing. In the current recession, the lesser availability of mortgages means that more are forced to rent (though in no way are they ‘choosing’ to rent as is sometimes claimed).

The recession has also led to a dramatic rise in the number of repossessions, though in the UK not as yet to the levels seen in the 1990s. In 1991, for instance, 75,000 homes were repossessed, as against 46,000 last year. In the US, there were 92,000 repossessions in April this year alone, an all-time high. Behind each of these cases is a human tragedy of various degrees, from homelessness to far worse housing conditions, along with general financial melt-down. Landlords who went in for buy-to-let in the hopes of an easy return are turfing out tenants, sometimes changing the locks so that people are made homeless with just the clothes they are wearing (Guardian, 23 June).

In 2000 the government launched the Decent Homes programme to upgrade social housing, with the aim of this being completed by the end of this year. But deadlines slipped so that eventually 2018 was the target year. In the first quarter of this year, just sixty new local authority homes were completed, a figure which reflects among other things the impact of government policy which has emphasised and tried to promote home ownership at the expense of renting. The National Housing Federation recently warned that waiting lists for social housing are at record levels, and ‘an entire generation…would be left with little hope of ever being allocated a social home’. Recent cuts in housing benefit mean almost a million people will lose £12 a week, which is a lot for those on the lowest incomes. Some people, of course, have no trouble finding suitable homes. The W8 postcode in the Kensington area of London is the UK’s most expensive, with the average house costing £1.5million. But even that has desirable and somewhat less desirable areas, with Kensington Palace Gardens as the priciest street in the country, properties there averaging £18million.

It is often implied that there is something ‘natural’ about wishing to own your own house rather than being dependent on renting, but actual housing demand in fact varies widely across a person’s lifetime and, indeed, in different places. In many parts of continental Europe, for instance, home ownership is at much lower levels than in Britain, and far more people live in flats as opposed to houses, without this being seen as in any way unnatural.

The number of homes built goes up and down from year to year (425,000 in 1968 for instance, but just 156,000 in 2009) in a way that has nothing at all to do with people’s demands or needs for somewhere decent to live. Rather it has everything to do with the market, what property companies can make a profit from and what people can afford. According to one standard source, ‘the building industry exists to meet human needs’ (David Donnison and Clare Ungerson: Housing Policy, 1982). If only this were true! Like all industries under capitalism, it exists in fact to make a profit, which is why capitalism will never be able to provide secure and decent housing for all.

In fact it can sensibly be said that there is no ‘housing problem’ at all. People know how to build houses, there are plenty of people with the requisite skills and sufficient supplies of materials. But if you can’t afford the rent or mortgage, then you don’t really count as far as the profit system is concerned. So it’s a problem of poverty in truth, one that would not exist in a society that aimed at meeting human needs rather than making profits for the few.
Paul Bennett