Comment by hackerlight | Hacker News Reader

Comment by hackerlight | Hacker News Reader

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(1), (3), (4) and (5) are all covert admissions that there's not enough available housing. For example, (1) says that net migration is outstripping housing, (3) usually comes down to the "land-banking" theory or this idea that heterogeneous developers are colluding to restrict housing, while (4) and (5) are about investors restricting housing for tenants.

In my experience, the people adopting these explanations are usually neutral or hostile to actual new housing, aside from their pet solution of punishing their chosen scapegoat.

The challenge is there's a grain of truth to all of these explanations. House prices and rents would go down if vacancies were outlawed. But these solutions that target scapegoats are probably insufficient to move the dial much. The vacancy rate in Ireland has gone down over the last decade while prices and rents have skyrocketed. AirBNBs are a small fraction of housing.

The two biggest things you can do to reduce prices and rents is to build a lot by removing obstacles (whether private or public housing), and reduce incentives (tax and otherwise) for investors to buy and hold land.

> (1), (3), (4) and (5) are all covert admissions that there's not enough available housing.

Well, (1) isn't. It says demand outstrips supply, as the birth rate on its own would be a shrinking population in the UK. The obvious, low cost answer is to reduce demand. An 'x' in a box, saying no to immigration. Instead we have yes, and then thousands of pounds buying land, building houses, co2 emissions, loss of countryside, environmental destruction, loss of arable land and so on.

We could reduce immigration to pre 1997 levels, when the economy grew at similar rates to now. The arguments for mass immigration in the UK are unproven simply because stopping immigration and seeing the result hasn't been tried. You could argue that with 10x 1997 levels we should have a measurable increase in annual GDP better than pre-1997. We don't. With a shrinking population, Japan's economy has stagnated and contracted a little. But nothing catastrophic. Perhaps the pursuit of 'GDP' is simply the wrong thing to be concerned about.

House builders are happy with the current situation. They're pretty much a cartel, as they're solely responsible for the supply of new houses. They don't want to lose money on sites they've paid over the odds for. They don't want to be told to deliver more houses, if they could, as more supply would be competitive and prices would potentially drop, as would profit. Which is why they donate huge amounts to the national political parties, as well as locally as well to keep the status quo.

Near me there's several fields of Grade 1 land owned by Bellway and Redrow for the last 2 decades. 20 years. The land has permission. They've not yet built on it. Can't think why.

(1) is as an admission of a lack of housing, because "demand is too high" is the same as "supply is too low". The interaction makes the price, and we can't say only one side causes the imbalance unless there's some hard structural reason why the other side can't adjust. People that promote (1) focus on the demand side of the equation because that gives them their desired policy outcome of restricting immigration, but that's a sneaky rhetorical device (begging the question) more than a useful analysis that honestly considers all the different factors that contribute to the housing crisis (investor demand for capital assets, zoning, materials and labor cost inflation, credit costs, rural to city urbanization migration, etc).

The problem is that we can't just wave a magic wand and increase supply instantly, or even with a year, or perhaps 5 years (lack of trades, materials, and so on), but we could, at the stroke of a pen, flatten demand right now.

The fact is that the UK is creaking at the seams and the elephant in the room is too many people. Yet, for the NHS it's 'Tory underinvestment' (despite never having more money, and the highest ever staffing levels), and for all the potholes it is again... Tory underinvestment, despite vastly more traffic and no new roads. Similarly with pretty much everything else. Demand is people using the NHS. Demand is people using the roads. And yet somehow we've not raised silly amounts of extra tax from the extra people to pay for any of the extra stuff.

But it's always fashionable to blame the Tories (as they're mostly in power), rather than apply a bit more critical thought to the problem. Next 5 years at least, will be Labour, but it will still be the Tories' fault. And I'll place a small wager than net immigration to the UK will still be 200k per annum, so another 1mm people, but that will be ignored in favour of 'Tory underinvestment'. Every government casts a shadow on the next one, some shadows are longer than others. This one started in 1990, and got worse in 1997.

> honestly considers all the different factors that contribute to the housing crisis

It's not really a 'crisis', it's just, well, business as usual. I remember the same topic covered in the late 80s and early 90s. 'We're not building enough', 'there's a housing crisis'.

Sadly the UK housing market is so entwined in the economy, it will be decades for a correction to happen. Homeowners won't sell below purchase price. House builders won't sell without making a profit. Lack of house sales paralyses the economy. No labour mobility, loss of stamp duty and so on.

We cannot force prices down without causing problems in the economy - tradesmen, solicitors, estate agents, investors, and so on. There needs to be a multi-decade plan from 'the Government' to somehow reduce house prices. But that seems to be well above the level of ability of our politicians and political system.

For the last 5 years we've had a 300k houses a year target. We're over half a million short on that number.

Stamp duty is terrible, it stops movement. Replacing with increased property tax (say at 1/10th of stamp duty per year) would be far more sensible. Or we could just tax the land -- good look offshoring that.

Unless I've been imagining it we have been desperately trying to reduce immigration since around 2016, it was what most of Brexit was about, after all. I literally can't turn on the news without some politician crowing about how they are stopping the boats, or sending 'them' all to Ruanda.

What has happened to house prices since 2016 for example?

(I actually don't agree that legal immigration is bad, if folks want to come from wherever to buy our houses, work in our cities and so on that's actually great for our economy. However we do need to build new housing in line with that, not just pretend it's not happening)

Stopping immigration will also stop housing construction, a large proportion of builders are immigrants. Official numbers that say 90% of builders are British are hilariously inaccurate - construction is notably a cash-in-hand informal industry in the UK, and neither employer nor employee has any incentive in reporting their relationship. Source: several unrelated friends in the industry.

By "stopping" do you mean reversing immigration? If so, then yes that could "stop" housing construction. Reducing net immigration by any amount wouldn't stop house building as those workers are already UK residents.

No, because those immigrant builders tend to return to their original country once they have made enough money. For example, there are ~30% fewer Poles in the UK now than in 2017, which has led to a big shortage of plumbers and builders. Anecdotally, my neighbour is a Romanian builder, and will go home once he can buy a nice house in the mountains.

(1) more than just a grain of truth, more like the elephant in the room; net migration into the UK is more than 4 times higher than France, and population density is currently almost 3 times higher, and rising.

But the ratio of workers:non-worker is reducing

Population of 18-65s and percent of total population

2008: 39.2m, 63.4%

2018: 40.9m, 61.6%

2028: 41.3m, 59.3%

2038: 41.3m, 57.2%

Given that tax relies heavily on taxing working people, and the number of working people, and that immigrants tend to be of working age, immigration is essential in stemming the retiree-centric population.

The other alternative would be to swing more of the economy to looking after non-workers (mainly the over 65s), but we won't tax those people despite the massive wealth they have.

Not sure how much immigration is really needed; due to improvements in healthcare, working conditions, and machinery, the length of time for which people are able to stay in active work and contribute positively to the economy is increasing at a comparable rate. France has a higher proportion of young people, and yet lower immigration. Why? Could it be that the decision to have children is correlated with population density?

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