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Comment by robertlagrant | Hacker News Reader

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 doesn't; it just uses your tax money to pay private companies to build houses). It should just make the building and zoning rules simple enough that it's possible to make money from building houses and selling them, and let people get on with it.

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> The state shouldn't need to build houses (in fact it doesn't; it just uses your tax money to pay private companies to build houses). It should just make the building and zoning rules simple enough that it's possible to make money from building houses and selling them, and let people get on with it.

This is the modern wisdom in the west - it's the approach taken by many governments since the Reagan era (not just in the UK) and it's demonstrably unsuccessful in almost every metric except one: votes. Which is the only reason it continues. It panders to those who already hold assets, while doing very little to move the dial for those who need shelter.

Migration is not a new phenomenon; citing it as an excuse for the utter failure of modern housing policy is disingenuous.

I cannot comment on other countries, but this is clearly not practiced in the US. The US has not simplified building and zoning rules or made them more permissive. The US follows the third option: do nothing and hope it fixes itself.

I'm confused... Are you arguing that zoning, red-tape, and generally anti-development politicians and voters aren't the fundamental problem here? How exactly do you envision a government housing program to side-step all of the above issues? Do you think voters who fight relentlessly to block development feel differently about public housing? How do you expect it to get funded even, when a single unit of "affordable housing" costs ~$1m to build in a place like San Francisco?

> Are you arguing that zoning, red-tape, and generally anti-development politicians and voters aren't the fundamental problem here?

Minus the leading language (as I presume these so-called "anti-development" politicians don't self-define as such), yes, this is what I'm arguing.

> Do you think voters who fight relentlessly to block development feel differently about public housing?

I believe the tales of such voters are highly overstated, a really common red-herring used by advocates of private developer subsidy to deflect criticism. Do NIMBYs exist? Of course. But their impact is overstated, and overconflated with genuine concerns: there are valid reasons to object to new developments, though these have a tendency to be lumped in with less valid objectors for political gain/expediency.

> How do you expect it to get funded even, when a single unit of "affordable housing" costs ~$1m to build in a place like San Francisco?

Have you ever stopped to think about why it costs $1m to build such a unit in SF in 2023? About what system of incentives lead to the current status quo? I can assure you it wasn't decades of publicly-run projects.

> I believe the tales of such voters are highly overstated, a really common red-herring used by advocates of private developer subsidy to deflect criticism.

I'm not familiar with Ireland or the UK, but for the US at least, this is absolutely false. I'm most familiar with San Francisco so let's look at that as an example. Why do you think it takes nearly 2 years to get permitting done for housing here? Why do you think you need to pay $100ks in fees just to break ground? Why do you think all of the housing built over the last 20 years has been located in one part of the city (SOMA)? Why do you think our Supervisors are so reluctant to adopt by-right zoning and ministerial review processes? Why was huge swaths of the city down-zoned in the 70s? Hell, why do you think California literally has an amendment to their constitution (article 34) prohibiting the construction of low-income housing without explicit approval from local residents? These aren't the demands of private developers, but the demands of influential neighborhood associations, unions (SEIU, CBTC, etc), and average homeowners who like their neighborhood as it is and don't want it to change.

> Have you ever stopped to think about why it costs $1m to build such a unit in SF in 2023? About what system of incentives lead to the current status quo? I can assure you it wasn't decades of publicly-run projects.

Absolutely. There are of course many factors, but a big one are the various road-blocks politicians put up, and the concessions (rents) they extract from projects for their preferred special interests. These are things that don't just go away once private developers are out of the mix.

Have you ever stopped to think why the market hasn't been able to produce the necessary supply of housing? It's not because they aren't interested in making money.

> Hell, why do you think California literally has an amendment to their constitution (article 34) prohibiting the construction of low-income housing without explicit approval from local residents? These aren't the demands of private developers, but the demands of influential neighborhood associations, unions (SEIU, CBTC, etc), and average homeowners who like their neighborhood as it is and don't want it to change.

I may get downvoted for this, but if I were to live in a nice neighborhood with a nice view I will be damned if I would say yes to any construction that I see it could ruin my neighborhood or take my view away. Yes, NIMBY attitude, but a lot of people desire to live in nice places.

I think the abstract point is that you bought something at a certain price and would like it to not be devalued, by whatever criteria you used to value it at that price in the first place.

> Migration is not a new phenomenon; citing it as an excuse for the utter failure of modern housing policy is disingenuous.

You say it's a failure but for those who own land or have tenants - including the average homeowner, it's a success. It's also a success for house builders, of course.

From [1]:

> In total 115 MPs across all parties are landlords, accounting for 18 per cent of the House of Commons. This compares to around three per cent of the UK adult population who are landlords.

It's in their interests.

On top of that, the supply is dwarfed by demand even before all that migration, which drives the "success" I outlined above, the high inward migration has kept wages low and reduced the need for the kind of large capital investment that would be needed to replace cheap labour.

Again, the kind of wealthy people who are landowners benefit from this, perhaps in this instance not the average homeowner, though there was that woman on Question Time who wondered where they'd find people to make her Pret coffee[2].

The real failures here are the failure to understand the interests of all the parties involved: those with land (high migration drives demand, increases wealth and suppresses outgoings like wages and R&D), and the interests of those without (stronger negotiating position in labour market, lower demand for housing). The average Joe should oppose large scale unskilled migration with all their might, if they want a home, enough doctors, better working conditions etc.

Strangely enough, the media, largely owned by very rich people or run by government aligned interests, seem to be against that. It's a mystery how so many people are called racists for being against migration levels unparalleled in history with so many deleterious effects. A total mystery.

[1] https://www.landlordtoday.co.uk/breaking-news/2021/7/reveale...

[2] https://www.huffingtonpost.co.uk/entry/bbc-question-time-pre...

> It's in their interests.

More complicated than that. You should try reading Isabel Hardman's book "Why we get the politicians we deserve".

Running for MP can bankrupt you if you haven't got a passive source of income.

> More complicated than that. You should try reading Isabel Hardman's book "Why we get the politicians we deserve".

I'm left thinking "why?"

The book covers what is necessary economically to run to be an MP.

> Running for MP can bankrupt you if you haven't got a passive source of income.

MPs become landlords for the passive income that is necessary given that running to be an MP can leave you destitute.

Landlords aren't (usually) becoming MPs in order to vote for more favourable conditions for landlords. Indeed, there have been many policies detrimental to landlords e.g. removal of mortgage interest income tax relief.

Landlords don't need to become MPs in order for MPs to become landlords or for their interests to emerge as it would with any other contingent with shared interests making up 18% of sitting MPs.

> Indeed, there have been many policies detrimental to landlords e.g. removal of mortgage interest income tax relief.

For all we know there would have been more legislation of this kind if they hadn't been there.

Aside from that, why is it that, since the majority of MPs are aligned with major parties and major parties pay for prospective MPs to run, and since MPs are remunerated well above average and have lavish expenses compared to the rest of us, that they would become bankrupt?

On top of that, they can earn big money if they get into cabinet[1], and they don't even lose that much when they leave[2]:

> For MPs defeated at the 2019 election, the average loss-of-office payment was £5,250 – equivalent to just under one month of their £84,000 salary.

The average UK salary for that year (2019):

> The Office of National Statistics has released its provisional update of the UK Average Salary 2019, showing that the average full-time salary is £36,611 and average part-time salary is £12,495.

[1] https://news.sky.com/story/mps-second-jobs-why-it-pays-to-le...

[2] https://www.independent.co.uk/news/uk/politics/mps-medals-pa...

[3] https://www.findcourses.co.uk/inspiration/average-salaries-u...

Migration at these levels is absolutely a new phenomenon.

Most men have the capability to build a house themselves and with help of friends. What is needed is the release of land, plain and simple. The landed gentry have enormous amounts of real estate and they want high prices to release any part - this is their retirement plan for them, their children, and children's children.

Let workers buy land cheap and you will have a lower base level of housing cost, bringing the cost for all other housing down. Why would I want the government to rob me to build a house, when I could have built it myself if I hadn't been robbed?

It's easy to just down-vote my post and move on. But stop for a moment and think about it: Why is the lifetime output of even a highly skilled professional worth just a tiny fraction of what a land owner in the same community is worth from doing nothing? The land owner can sell a tiny piece of his estate every 20 years and live his whole life without contributing anything. And on the opposite side, those who are not landed will have to work hard their whole life and usually with nothing to show for it.

Go talk to everyday people and ask what their dream is. Except for winning the lottery, the dream of everybody is to buy real estate and live of rent and price increases. Not having a career, not creating a big and successful business. Those are fools errand and a waste of your life, because laws and governance are now all-in on making every aspect of the economy having the purpose of transferring wealth to the landed gentry.

> Britain built I think around 30k houses last year

The latest house building statistics show that in the financial year ending March 2022 there were 204,530 dwellings completed in the UK.

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/...

When you consider there are decades of under supply to make up for, this is still a paltry figure.

Still doesn't excuse quoting a wrong figure. I for one appreciate the correction.

Oh - fair. I can't remember where I got that figure from. It might've been a quarterly average.

I'll amend, but noting the change.

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 unless arrested via a tax.

The elites can accomodate their market dysfunction by building public housing. They can neuter this market dysfunction by applying a steep land value tax (or by increasing property taxes).

Or they can sit back and profit, parasitically extracting ever higher land rents from the real economy.

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.

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 some of the worst housing stock in Europe, with renters paying more for less. Private landlords have been enriched at the expense of the wider society.

Without state intervention in housing regulation/supply we'd see shanty towns spring up fairly quickly, followed by violence. Refer to Champlain Towers, Grenfell Tower, or the collapsed luxury apartments in the Turkey earthquake to see what happens when the state does not do enough to ensure builders aren't building death traps.

> 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.

Space is limited by regulation and zoning. 90% of the UK is rural. Market rates are high because of the supply not matching the demand, or being allowed to match it. Asulym seekers make up a small amount (3%?) of the people who we take in - e.g. in 2022 we took in 606k people, but under 20k of them were asulum seekers.

> 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 some of the worst housing stock in Europe, with renters paying more for less.

The same number of people would need housing, regardless of whether the houses were privately owned or state owned.

> Without state intervention in housing regulation/supply we'd see shanty towns spring up fairly quickly, followed by violence. Refer to Champlain Towers, Grenfell Tower, or the collapsed luxury apartments in the Turkey earthquake to see what happens when the state does not do enough to ensure builders aren't building death traps.

I don't understand this. I didn't say no regulation. But there's a huge gap between that and making it incredibly difficult to build. Citing some basic anti-zero regulation argument in response to what I said is disheartening.

> Space is limited by regulation and zoning. 90% of the UK is rural. Market rates are high because of the supply not matching the demand, or being allowed to match it.

This does not square with the fact that private builders are leaving nearly half of approved developments unbuilt. It's almost like private builders are incentivised to squeeze the market rather than bring prices down.

> The same number of people would need housing, regardless of whether the houses were privately owned or state owned.

Publicly owned housing: The state makes an initial capital investment which it recoups through a low monthly rent payment. After 30 years the state only pays maintenance costs for the property, covered by the monthly rent. Any excess rent can be reinvested towards the cost of another unit.

Privately rented housing: The state pays market rate rents forever, burning the money. The private landlord pays off the mortgage and gets to pocket more of the money. There's no benefit to the state.

It's the same with social care. The government could build social care, instead we're paying up to £50k/week per child[0] towards some cunt's yacht.

And it's the same with the NHS. Nurses have a hard time and poor pay and some quit. The government then bring in an agency nurse, paying the agency 2-4x the salary of the NHS nurse that will have to babysit them because they aren't familiar with their ward and refusing to raise the rate of pay for their own nurses. The remaining nurses see this and some more quit, agency work pays more and you get to choose when you work. This spirals into a very avoidable staffing crisis.

> I don't understand this. I didn't say no regulation. But there's a huge gap between that and making it incredibly difficult to build. Citing some basic anti-zero regulation argument in response to what I said is disheartening.

I didn't claim you were arguing for no regulation, arguing that regulations should be made more lax in the face of those events is what's disheartening. Those disasters occurred because existing regulations were not sufficiently strict/enforced.

[0] https://www.theguardian.com/society/2022/apr/18/english-coun...

You highlight a bunch of examples where government policy/implementation has failed miserably in the backdrop of higher and higher demand from it. I wonder how far this needs to stretch before we realise that the problem isn't that the government doesn't behave correctly, but that the whole idea that a government is a good allocator of capital and resources is flawed.

> It's almost like private builders are incentivised to squeeze the market rather than bring prices down.

Yes - incentivised by government regulations to do so, and moreover too disincentivised to build. If you can't make money by building, it's better to wait. No builder wants to stop building - money now is much better than money in the future - but enough government and local intervention will cause this.

The housing thing you've gone on a while, but basically if you remember the context, two comments up, I was replying to something that you're not arguing for, as far as I can tell, which is that if the government hadn't sold some houses it would have enough houses. This is not the case, and I don't think you've said it is.

> I didn't claim you were arguing for no regulation, arguing that regulations should be made more lax in the face of those events is what's disheartening. Those disasters occurred because existing regulations were not sufficiently strict/enforced.

Companies not obeying regulations in specific instances doesn't mean all regulations are good. Regulations are not a tower, with fire retardation regulations being piled on the stupid ones, and so removing the stupid ones would cause the ones you want to fall.

My fundamental bewilderment with this and some other comments is you're complaining about government-caused things, and you blame the private sector for it, and want the government to be in charge of more things, despite the evidence of your own eyes of how well the government does with what it already has.

> No builder wants to stop building - money now is much better than money in the future

This is plainly false in every way. Firstly, buildijg is an expense - why would you build now if you can put off the expense? Seocndly, market manipulation is as old as markets themselves.

> This is plainly false in every way. Firstly, buildijg is an expense - why would you build now if you can put off the expense?

It might be worth considering how, if that were true, anything that has a capital investment required of it ever gets done. Building is not an expense to a building company. What do you think the company does to generate revenue, if it's not building?

If youre both managing a property portfolio as well as building on it, free capital gains for no work are a pretty good deal.

Sure, if you're a small builder you want to build ASAP for cash flow reasons. However over the past decade both the UK and Irish building markets have become dominated by REITs who do in fact benefit from increased land prices in the absence of building.

Yes, because of the regulatory and zoning environment. Of course they should do this - in an environment where it's more profitable to do nothing than to build, building companies should do nothing. The problem is the environment they exist in. Fix the environment, and they will build more.

> in an environment where it's more profitable to do nothing than to build, building companies should do nothing.

I mean, sortof. I get where you're coming from, but if a development has planning permission (i.e. it's allowed to be built) then it should be massively penalised if development doesn't begin pretty soon after this. As a society, it's problematic for a whole bunch of reasons to have companies sit on land that could provide housing when there's a shortage.

You don't fix government/zoning disincentives to do things with government disincentives to not do things.

It's just more time and money wasted on people to inspect and enforce and run appeals systems (what if they had a good reason for not starting?) and write and update rules (what do we count as a good reason?). All of this costs endless tax money that could've been spent on building or buying houses. Or, in 2023, just buying enough food.

Fix the underlying issues, and people will build.

> 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.

> the decision to not reinvest the proceeds into new housing stock

This wouldn't have mattered, I think. The houses were sold at a massive discount, IIRC.

> 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.

The kind of mass sell-off that occurred could only be considered a massive failure. Selling individual properties at market value when the intention is to reinvest that money is clearly without objection. But to this day, the government offers discounts of up to 70% on social housing. It is a direct transfer of public wealth into private ownership and it has invariably led to worse outcomes where it has occurred. Social housing, royal mail, and water infrastructure are the obvious examples but less obviously there's PFIs, energy, and the nhs.

water companies have build Zero new water reservoirs in the entire 50 years of their existance. In 10 yeats London will start running out of water and we will have to bail them out like we bailed out the banks.

> It is a direct transfer of public wealth into private ownership and it has invariably led to worse outcomes where it has occurred. Social housing, royal mail, and water infrastructure are the obvious examples but less obviously there's PFIs, energy, and the nhs.

This is too broad a category. You can't criticise people owning homes by using examples of private(ish) ownership of infrastructure.

> Private landlords have been enriched at the expense of the wider society.

We are literally subsidising the least productive "profession" in society, to the tune of billions. It's an absolute joke.

They aren't being subsidised. They're being paid to rent out their property.

And what would happen if the government passed a law saying that housing benefit could no longer be paid to private landlords? Looking over the instant wide spread homelessness, you would get a sharp spike in landlords either selling their houses or going bankrupt because their business model is no longer viable. Without that government money, they can’t pay their buy to let mortgages and the whole thing collapses - so they’re essentially getting property for free, paid for by the government, all because they managed to have enough capital to get in on the racket at the ground floor. Not to mention all the other less indirect ways the government passes laws to benefit landlords and property owners at the expense of renters.

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.

For comparison, Canada which has a population of 40M vs Britain's 86M built 286k homes in 2021. We took in 400K immigrants and 630K non-permanent residents in 2022. Not sure if those two numbers are additive, since I presume many non-permanent residents eventually become immigrants.

The average price of a house in Canada is CAD716K vs £285K (=CAD480K) in the UK.

you made a typo, Britain's population is 68M, not 86.

Agree about the supply/demand difference causing the difference but I think your numbers are off. The UK build around 200k new 'dwellings' last year (financial year ending March 2022) according to [1] but I don't know whether that accounts for demolitions.

[1] https://www.ons.gov.uk/peoplepopulationandcommunity/housing/...

Not really. It would also have to tax hoarding them to prevent driving rents higher. Which would hurt landlords sitting in the Parliament. All 100% of them.

> The state shouldn't need to build houses

What is the basis for this belief?

Every country that got people out of poverty, India, China and Singapore, has a massive state housing program. They work. We have results.

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.

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

Lower paid... critical jobs... State.

Hahaha. Can't we just ditch capitalism altogether? It can't even pay and provide housing to people who perform critical jobs.

Or are we discussing building barracks for slaves?

Yep, and people who don't do critical jobs or earn much at all tend to want somewhere to live too (and subsidising their private sector housing costs in areas with housing shortages usually costs more in the long run)

Not really discussing the slowdown of building and mass-selloff of council owned housing since 1979 is a curious omission from an otherwise detailed description of public policy on housing. Private sector housebuilders have different incentives from public authorities, and maximising the profit from a site need not mean maximising the number of available homes (especially not given Britons with purchasing power were the original suburbanites). Nor does it mean building on all the limited supply of local land suitable for development at once, when it can be released in tranches (homebuilders have several years worth of plots with planning permission for every home they build in a year)

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

NHS workers such as nurses and porters are the obvious example. Hospitals can't function without them, but they are paid very little.

If the UK is the same as the US then Agile shaman is mission critical.

That doesn't make sense: if your job is indeed "critical" you have enough leverage to negotiate higher pay, don't you?

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