The end of landlords: the surprisingly simple solution to the UK housing crisis

> The yimby argument has always seemed flimsy. Its strange logic is that speculative developers would build homes in order to devalue them: that they would somehow act against their own interests by producing enough surplus homes to bring down the average price of land and housing. That would be surprisingly philanthropic behaviour.

This is probably the dumbest thing I've ever read in my life. The real argument against yimby is that if the conditions for hold property is cheap, then landlords can afford to not be elastic with pricing thereby creating an inefficient market. The obvious solution is to increase property tax to force the hand of landlords. Another more radical way is to create legislation that gives the right to renters and/or gov to buy property at a certain price.

Article suggests there’s a 1:1 relationship between population size and number of housing units needed. A unit could have 1 person living there or 10. So you can very much have a housing shortage without changing the population size.

The United Kingdom household sized dropped to 2.36 in 2022, that’s the core issue here.

By comparison the US is at 2.67 vs 3.51 in 1950, 4.34 in 1920, and 5.55 in 1850. https://www.studycountry.com/wiki/what-was-the-average-famil...

The UK does indeed have plenty of housing.

Unfortunately, it's mostly in places where people don't want to live, because there's no jobs in those areas.

The places with the jobs have severe housing shortages. Some of those shortages can be resolved by building more homes, but there are also places which look great right up until you realise they're on a flood plain.

But even the places where you can build more houses, if you just do that without also improving the surrounding infrastructure, you'll end up with horrible congestion… and if you're building infrastructure anyway, you should put that infrastructure in the places that already have houses so that businesses will want to start up there.

Unfortunately, the UK government keeps cancelling the bits of infrastructure that would help: https://en.wikipedia.org/wiki/High_Speed_2

Much like the frequently vilified HF trader, the value that landlording adds to the economy is liquidity. What do these managed housing schemes provide when, for example, a household breaks up? Or two households want to merge? Or even when a household wants to move across town to be closer to work? If you have ~100% utilized housing, the only way this gets addressed is with elaborate queuing. The liquidity that an open rental market offers comes at a cost, and it's very worthwhile to interrogate that cost and seek to mitigate it because it mostly translates into homelessness. But the managed housing market / absolute rent control approach doesn't seem to have an answer to the liquidity problem, which also demands interrogation.

I observe that my parents still live in a five bedroom home they purchased in the 1980s. This is not uncommon where I live. As the next generation moved out, they couldn’t find housing because their parents never left. In areas like where I grew up, it’s a ghost town of under-occupied monster homes and shuttered schools.

Time to roll out some tax policies designed to incentivize the old to move along and free up space for the young.

Not directly related but I'll take any opportunity to rant about property investment in commonwealth countries.

Something I have observed about Commonwealth countries is the obsession with property as a vehicle for investment. Speaking from my experiences growing up in New Zealand and living in Australia, I find the culture infuriating.

Every single financial planner I have spoken to has recommended that I invest heavily/exclusively in property. The tax incentives and welfare given to property investors are so generous that they renders all other investment vehicles irrational.

Why buy stocks, start a restaurant, or do anything other than buy property and sit on it? It's such a parasitic industry perpetuated by policies designed to deepen, or at the very least maintain, the current status quo.

It has resulted in an environment where investors have no incentive to increase housing stock (particularly in terms of density) or improve living conditions for tenants.

For instance, adding thermal insulation to a property is an expense with no advantage to the investor (they don't need to be competitive) and the disincentive towards higher density contributes towards sprawl which strains public transit resources.

As a young professional trying to be smart with my hard earned, slowly accumulating nest egg - I'm deeply saddened by this environment.

/rant

Advertise a house to rent in Cornwall and you will get 30+ enquiries in 48 hours and have to suspend the listing before getting overwhelmed. A third of them will have always dreamed of moving to Cornwall. A desperate third want to overfill the house with adults to share costs and be able to just afford it. A sixth are "interesting". The remaining sixth of reasonable locals who can afford the rent will still leave you five times oversubscribed. The market is fundamentally broken here. You can't check a reference with an agent because they are all swamped. I don't know the answer. Possibly train and support a skilled building industry? But the rental yields on current house prices are 1-2%. Costs are rising. It's not getting better.

I'm sceptical that there are enough houses.

Their claim is that they have enough because the number of houses is about the same as in the Netherlands, Hungary, and Canada. I have no idea about Hungary, but there are terrible housing crises in the Netherlands and Canada.

Yes, let's do everything apart from increasing supply, surely this time that will work. There's some sanity in the comments of the article which explain the silliness of the articles thesis.

"Adam Smith and Karl Marx found common ground was in the idea that everyone’s interests are aligned against landlords: they are an economic deadweight."

They provide benefits: capital investment/capital risk, maintenance obligations, and most importantly-- mobility to renters.

In the country I live in, there are myriad tax breaks for landlording over owning. Perhaps removing those should be the first attempt to fix things?

Another housing shortage article, another extremely contrived piece trying to convince us that housing is the only thing that isn't subject to supply and demand.

If there are more houses, houses will cost less than otherwise. Stop with the weird strategies to ban, tax, mandate, subsidize etc... Build.