Going from building half of new homes as social housing to subsidizing rents through housing benefit turned out to be horribly expensive. With many fewer new homes being built rents have increased and ever increasing subsidies are needed.
Interesting radio programme on this the other day: http://www.bbc.co.uk/programmes/b06bnbpx
More background: http://www.lrb.co.uk/v36/n01/james-meek/where-will-we-live
So things like: replacing transfer duties with land value taxation, relaxation of zoning regulations, removal of any unnecessary regulations on dwelling density/height etc.
Hell, they could probably achieve a pareto improvement (though probably a lower one) by completely separating government supply of additional housing stock and provision of rent subsidies. In other words, it would be better, relative to current social housing schemes, if the government just built and sold houses at market value while separately providing rent subsidies to the financially disadvantaged.
Y'know, I really do feel for poor folks, but I'd be just as glad if thieves, prostitutes and dysfunctional alcoholics would live somewhere else (financiers, escorts and functional alcoholics may be just as immoral, but at least they are discrete). It's nightmarish to have one's home turned into a disaster area.
We all want the thieves to live somewhere else, but the previous strategy we had for isolating them also involved segregating millions of low-income people and trapping them in neighborhoods without opportunity, child care, safe schools, or, in some cases, even grocery stores.
This way is better for everyone.
The greatest irony now is that traditionally undesirable areas like Oakland are being reclaimed, further marginalizing those low-income people who are unable to adjust to the increased cost of living.
It's true we all want thieves to live elsewhere, but at some point elsewhere runs out, and you're left with a class of people that are permanently enserfed as the underclass.
I'm not sure which way is better.
This sort of makes sense when you realize that people who don't make much money aren't a different species, and like many of the same benefits and services as rich people: parks, grocery stores, schools accountable to active and engaged (busybody) parents, &c.
For example, new apartment buildings in New York are required to include parking if they are taller than a certain height (I think 6 stories). That drives up the cost unnecessarily, in my opinion.
I don't have a solution, but I think a basic income would set better incentives.
The hard cut off for social housing benefits incentivizes keeping income below that threshold to maintain the benefit.
Basic income does nothing to increase housing supply, so urban rents would increase as a result.
My suspicion is this is by design because a certain level of unemployment is required to keep labour costs down - or so the theory goes.
I've met a lot of people who don't want to work, some because they're slackers and some because they'd have to get full time employment because anything casual they're likely to get wouldn't be worthwhile as it eats in to their welfare payments. So the system 'works' for some definition of the term 'works'. It probably also catches a lot of people unnecessarily too.