My life in London's houseboat slums (2014)
theguardian.com
theguardian.com
Point 2: We, as a society, really dislike the idea of telling people where they can and cannot live. "Your papers, please" is a punchline, not a blueprint.
Point 3: Britain, in specific, is very leary about development. Not without reason, but even though it would be absurdly profitable to build a fuckton of cheap, efficient, high rise apartments, it is and will remain illegal. (Which is fine; build the apartments and then you have traffic issues, etc. My point is that you can't do this, not that you should.)
Combine these three points, and you'll get high rents and frustrated people. But unless you have a suggestion on how to change one of those points, it's not going to change, is it? (Well, I guess you could say the high cost of housing is changing point 1 by making London less desirable, but clearly, it's not happening quickly.)
Seriously though, it feels like the article is missing a conclusion. "Here's a thing that sucks, but let's not think about why it exists or how it might be fixed."
(But maybe I'm just being grumpy, I dunno.)
...which makes sense, given that housing prices have been rising.
Source: http://www.londonspovertyprofile.org.uk/indicators/1_3.gif
For example, there's a road in London called Bishops Avenue. The Saudi royal family owns about 1/3 of the houses on that road. ONE THIRD. Those houses are completely empty, they are just being used as investment by the Saudi elite (who can apparently amass as much money as they can because the US protects their kingdom against any democratic struggle). You can tax these houses (the Saudis have no objection paying property taxes in the US and they won't have an objection paying it in the UK) and use the tax money to build cheaper houses for people who need them.
Get these Arabs, Indians, Russians who are hoarding London property to pay a tidy sum for being allowed in London. What you've got left is enough of London that Londoners can share. It is about time society realizes that the right to life and shelter is more important than property rights for foreigners.
People looking to rent by the room aren't necessarily worse off from the investment bubble if families are priced into the Home Counties and ordinary four-bedroom houses tend instead to be owned by absentee landlords anticipating far too much in the way of capital gains to be worried about maximizing rental yields (but not quite enough to consider leaving the properties empty)
Don't get me wrong, I'm in favour of ratcheting capital gains tax on properties owned by parties not tax-resident in the UK up to >90%, but the dynamics of how it'll all play out in the housing market aren't straightforward and euthanising the rentiers might actually make low-end rentals harder to come buy - social housing is really the only solution to that.
The separation between the rental-by-the-room and the market to buy freeholds is well illustrated by the tendency of an influx of property speculators to increase supply in the former at the same time as they unambiguously decrease it in the latter.
Of course you're kidding, and you realize that she'd probably share it with 4 friends and borrow only £2M, right?
Quite simply, the current situation for renters and first time buyers in London is unfair and needs to be addressed in a way that restores the balance between those that live and work in London, and those that just own property here.
Although it costs £10k to run, because that's the type of democracy we have here in the UK apparently.
UPDATE: I've not outlined a single policy - and I'm already being told I'm wrong.
Maybe I will give it a shot. At the very least it force the candidates to address rent control as an issue.
I doubt it will force anyone to do anything, least of all the candidates.
As a bonus, crowd-funding your candidacy would give you early validation. And, as a comment below says, you should be able to convince enough people to scrape together £10k, if you expect to run. Fail fast, and all that.
You certainly have my donation, and my vote if I can still afford to live in London by election-time!
This is a good thing, despite how it seems on the surface.
If it were free you'd probably have 10,000 candidates. If it were £50, you'd probably have 500. Nobody benefits. The city has to spend lots of money and resources handling large volumes of useless candidates and voters do have any idea of who to pay attention to besides one or two huge names and a mass of idiots.
If you can't get 1000 people to give you £10, you don't have any business running anyway.
A large entry fee does a great job weeding out wonks, crazies, and jokers. Real candidates will spend a lot more than 10k through the process anyway.
In the US I voted during the last election to increase the filing fee from $20 to $500 for mayor of Minneapolis. Obviously a much smaller city but the idea is the same.
If you're looking for a leftist answer that would alleviate some of this, I would suggest running with the platform of subsidized rent. In the US, it's called Section 8, after the section of the 1937 Housing Act that created it. Basically, if you earn less than a certain amount of money, the government will pay for a certain amount of your rent (ranging from a small portion to almost all of it). In turn, landlords are guaranteed tenants and funding as long as they adhere to certain building requirements and responsibilities.
Section 8 ends up getting a whole bunch of criticism, as it drives housing prices up further and dicks over the middle class, (if you don't qualify for assistance, you're going to have problems) but if you want to make it a priority to have working-class / poor people live in London, that's probably the way to go. You have to pay for it with increased taxes, though.
What we used to have was a national programme of building social housing. This had some high-profile social failures (qv US "housing projects") and the government embarked on a programme of selling it off at a great discount to the current occupiers while demolishing some of the worst tower blocks.
What we now have is a massive failure of planning policy. The symbol of this is the derelict for 30 years Battersea power station. It's a huge, useless, architectural treasure that's occupying a lot of land in Zone 1 because nobody can agree what to do with it.
In NYC's case, it also leads to 1.5-2 million people being able to live in the city who otherwise (at market rates) simply would not be able to, period. To flatly assert that it "simply leads" to a shortage in stock (with no other significant effects) -- or that unregulated housing markets don't also have crippling shortages -- is just... weird.
After all - why would you build apartments or rent out existing rooms if you're not going to make money off of it?
This is, of course, completely illogical: just because some apartments are rent-stabilized, that doesn't mean that all of them are, or even a majority of them are. And of course owners will still rent their stabilized apartments -- they may forego some of the niceties of higher-end maintenance, but they'll still rent them.
And in any case, the reality is that while developers in NYC are occasionally forced to build a small portion "affordable" units[1], it doesn't ding their profit margins very much, and they're falling over each other to create new stock, just the same. (Hint: city planners have long been aware that there's an incentive tradeoff that comes with requiring a certain proportion affordable units to be built; that's why they keep this proportion very low, so as to not impact the developer's incentives, very much).
[1] Most of which generally aren't actually affordable to actual low-income residents (due to on some quirks about how "mean income" is defined), but that's another matter.
As I see it, there are three solutions, all of which should be done simultaneously:
1. Requiring occupants to live in their housing for a significant portion of the year's days (a third, for example). Enforcement requires some loss of privacy, but living in central London is not a human right.
2. Expanding the city vertically. Encourage high-rise apartment complexes.
3. Higher speed trains to the suburbs to shorten the time distance.
2) is already happening with new build, but requires demolishing existing buildings to really make a difference. This changes the appearance of London quite dramatically and encounters architectural preservation resistance.
3) Nowhere to put extra train lines without demolishing some very expensive property. HS2 is demonstrating this for just a single line. The existing lines are running at capacity. What might be feasible is going to double-decker trains in places, which merely requires rebuilding all the bridges and tunnels.
I would add (4) encourage movement of jobs to other parts of the UK. There are bits of this happening such as moving the BBC to Manchester. But the way London works is most of the high-paid jobs are basically standing around with buckets trying to catch money dripping off the mega-wealthy, and the associated trickle down around this.
Perhaps plan to move the civil service to Birmingham once HS2 is finished, giving a Brussels/Strasbourg dynamic to the place.
The US is very fortunate that the seat of government, the financial center, the commodity wealth center, the media center, and the tech center are in different cities.
You've got to remember that London doesn't just compete with Birmingham; many of the people and companies moving into London are world citizens who would otherwise go to Frankfurt / New York / Zurich / etc. Make London worse and they simply go to another country, which is worse for the entire UK, Birmingham included.
It would be great if we could build Manchester or Birmingham up to be the equal of London, to the point where international companies want to put their headquarters there, but that's going to take decades. And at the end of those decades, you're going to have a city that has all the same problems London is currently facing.
Also, HYPERLOOP!
It is for those who already live there.
1. tax unoccupied houses as punishingly as you'd tax pot or alcohol; in touristic places, such as Tahiti and Thailand, they went even further and outlawed land ownership for non-citizens; otherwise, they'd be covered with ultra-luxury villas occupied one month per year.
2. tax resale profits heavily as well: you do not want the competition of investors who might not even bother to rent their investment.
3. if you want people to own their place, tax landlord benefits aggressively enough, so that they'd rather invest on other financial products. But I don't think you want that: there are many useful jobs which don't pay enough to buy a house in a capital city.
4. raise interest rates. Or more realistically, introduce fiscal measures which simulate higher interest rates on mortgages, instead of simulating lower ones through tax breaks. Beyond a certain number of years, a mortgage doesn't make sense anymore, as you pay back interests only during additional years, no principal. This "certain number of years" is determined by the effective interest rate. Encouraging longer mortgages is encouraging higher prices.
5. review the welfare housing system. In many places, and I seem to believe London is one of them, you have market housing for wealthy people, council housing for poor people, and nothing in between for middle classes. There's no interest in building a city with only super-rich and super-poor people.
6. create tax incentives to encourage companies to move their HQ at least 25km out of center city, so that their employees will consider moving in the suburbs. Try to encourage the first movers to move to a couple of concerted locations, so that new centers reach a critical level of attractiveness, to carry shops and services with them.
There are still quite a few things that could be done around planning, I was reading a piece in the Economist this weekend that said there are large areas on the boundaries of some boroughs that haven't been developed because they need some collaboration between the boroughs.
We should probably be prepared to replace some of the older stock as well, converting many family homes into flats doesn't really make a lot of sense.
I rarely swear on HN. But you are a fucking psychopath.
The argument isn't that "living" isn't a human right; it's that living in a particular place at a particular time isn't a human right. And indeed, if it were a human right, how would you even decide among the various claimants if all 7B people suddenly decided to exercise that right?
The fact that there is a fixed amount of space in the rough location known as "London" isn't due to some Evil Capitalist Conspiracy. Scarcity is real, and we have to address it in some way. Markets are one way, and maybe you prefer some other way -- but calling somebody a psychopath for stating the obvious is a bit over the top imho.
London already has over 35% of its population living in social rent homes. Its not the petty tiny amount you people make it out to be.
> Scarcity is real, and we have to address it in some way
We have. If the current housing is at 99% occupancy then the market is working fine. London has the lowest vacancy stats in the UK. If it were not there wouldn't be such complete occupancy.
What you want is a London in which you get something for less than others have paid for it, begrudgingly or otherwise. Yet there is no issue in filling the properties at present so if there needs to be a market correction, tell people to stop paying for homes.
I live in the UK and I look at a country like Germany that has much stricter rental laws than the UK (including rent control policies) and I see a superior system. It seems that tenants in Germany enjoy much better security of tenure as well as protection against rapid or unfair rent rises. So it seems that rent controls can work.
What's partly happening in London is that the housing market is overun by buy-to-let landlords and "property investors". They are often chasing the same properties as first-time buyers, adding to the rise in house prices. If buy-to-let activity was curtailed (for example by removing certain tax advantages), it might dampen some of the pressure on house prices. (However, it's highly unlikely to be regulated more tightly given that many of our MPs have second or third properties).
Strong rental laws (including rent control) might actually help deter the worst type of property investor or buy-to-let owner: put off by the responsibility to comply with such laws. It doesn't mean that someone can't make money from property if that's want they want to pursue. But rent control laws send out an important message to wider society: that housing can't be treated as just a pure profit-making exercise. It has a social component that simply cannot be ignored.
So you want to create a world in which people who need to come and work in London in growth areas cannot because a chosen few are occupying the properties they'd prefer to live in with no economic way to regulate or control. You simply create an unfairness of another kind.
Then you are in the same boat (pun intended) of many professional politicians.
I lived in London for a while a few years ago, and not only it was crazy expensive (and from my understanding now it is even worse), it was hard finding a a free room in a shared house in the first place.
The first is to take the pricing system used on London buses (£1.40 per trip, wherever you're going), and apply it nationally (probably a £1) to re-nationalised railways. This would require huge subsidies, though I believe it to be worthwhile. I'd like to see counter arguments though.
Secondly I'd probably look at large increases in stamp duty on non-primary homes, and changes to make renting a property less attractive through lending rules/regulation and taxation. The ability to finance rented properties at 90% leverage requires too little capital, and lending rules are too generous to landlords compared to tenants. If rental properties required 50% equity by landlords (as a plucked from the air example) you'd see a rather fewer leveraged to the hilt property "moguls" and less competition.
Obviously more building would help, but I think it's only part of the problem.
In all seriousness though - very low prices on public transport should incentivise people out of cars. Weekend/day trips around the UK away become significantly more attractive. And above all it moves some of the money out of London.
The obvious downside is higher passenger numbers, more capacity required, and no money to fund it. It'd take someone with far more domain specific knowledge to appreciate the complexities - for now it's my go to "one policy to change the country" when asked :)
The railway network doesn't have the capacity for the number of people who would use it at those prices. The reason a Virgin ticket from London to Birmingham costs 40 quid and has to be booked months in advance isn't just because beardy Branson likes money, it's also because there are a lot of people who want to travel quickly between London and Birmingham.
So unless you want Soviet Union style decade-long waiting lists for season tickets, you'd have to build dozens of new mainlines. Look at how much fuss, public enquiries and so on there have been around HS2 - and that's a single line, being built to relieve what everyone knows is the busiest line in the UK. In China they just build the high-speed lines and citizens know better than to complain, but you'd never get away with that here.
And if you were somehow able to make it work, you might make London more attractive to live in, not less. For young people who like to go out in the evening, nothing compares to living in London - the trains are pretty good for commuting to your job, but less so for coming back from a night out (for solid engineering reasons that are hard to overcome, the railway needs a bit of "downtime" once a day or certainly once a week). So you might end up with people who work in e.g. Guildford preferring to live in London and commute out.
> Secondly I'd probably look at large increases in stamp duty on non-primary homes, and changes to make renting a property less attractive through lending rules/regulation and taxation. The ability to finance rented properties at 90% leverage requires too little capital, and lending rules are too generous to landlords compared to tenants. If rental properties required 50% equity by landlords (as a plucked from the air example) you'd see a rather fewer leveraged to the hilt property "moguls" and less competition.
London contains the world's finest exploiters of financial regulations; you're going to struggle to make assets un-leverable when there are willing buyers and sellers on each side. Most likely you'd end up with a layer of either legal avoidance or outright corruption, with e.g. poor tenants forced to become the "owner of record" of the house they live in, under a contract where the financial benefits still accrue to the rentier.
What would help, I think, is to tax income from increased property values exactly like any other income. It's not going to be a popular policy with voters (temporarily embarrassed millionaires), and there would be costs to assessing property values fairly, but it would eliminate a lot of market distortion if you had to pay the same taxes on your housing investments as you do on your stocks or ordinary income. Eliminating tax breaks for charitable foundations would also eliminate a huge class of exploits, but again good luck getting that one past the voters.
They can charge more on lines which are popular, using cost as a form of rationing. That's completely contrary to "public" transport as I see it. I agree, there aren't enough trains. There isn't the capacity. And I can be certain that of the extra expense of the line Branson is only getting a cut (because he paid more for the right to operate that route).
I can't speak to increasing capacity because I know so little about the technicalities. I certainly don't imagine it's easy. I note at least one comment invoked the double decker carriages (which we don't do) as an example - but God knows what that would look like to implement.
I can totally understand someone not wanting Guildford though, and support any policy that helps them.
London contains the world's finest exploiters of financial regulations
I agree, but disagree that this is an argument for anything - I was merely stating a concept not anything that could be used as a basis for law. The obvious solution is to use business debt to cover the excess lever, thereby avoiding the problem. The fact is that as a first time buyer I cannot get a mortgage with monthly payments at 70% of my current rent. Yet if I rented it out for that rental income the maths changes and I can. There is a fundamental flaw somewhere and I don't believe that I should have easier finance - I think rental properties need to have harder terms.
Unrelated, sometimes I think the reason we get in such a mess is because people ostensibly like me become ministers, and with sod all depth of understanding proceed to fiddle with things for a few years and then move on...
It turns out it's more expensive to lease a train from any of the ROSCO's than it would be to buy one. But the train operators aren't allowed to buy them. They're basically an oligopoly. Every time the government looks at them, they conclude that they're uncompetitive and in need to regulating. However, as with most things related to government and huge sums of private cash, the regulation never happens.
The ROSCO's are unregulated and free to charge what they want. The train operators are forced to use them. This is one of the main reasons that train fares are so expensive.
They are also the reason that our rail networks capacity can't be increased. They basically hold the rail network to ransom. They should be dissolved and their rolling stock should be seized since they basically stole it from the tax payer in the first place.
It would seem grossly authoritarian to prevent people from lending money to each other on freely agreed terms. So I think you have to go after the causes of this. Why are the banks more willing to lend to buy-to-let folks? Is it because they can recover more in a foreclosure? Is it because people who buy-to-let are already wealthy so the banks know they'll get their money back?
On the subject of the landlords mortgage. There's a couple of things at play here. Most of them bought property at significantly lower prices. My previous landlord bought the property i lived in for £270k in the early naughties. It's now worth over £800k. So not only does he have more than £500k profit in the house, he gets to charge "fair" rent which is orders of magnitude greater than his mortgage payments.
My landlord has 50 properties.
Another trend I'm seeing is landlords with the capital buying properties with short leases. Basically, if the lease on the property is less than 70 years, you can't get a mortgage. So there are houses out there on sale for basically half their market value, that first time buyers can't get to. Despite the fact that the cost of increasing the lease is nominal when compared to the actual value of the property.
Everything is stacked against the renters and first time buyers, while private landlords are afforded all kinds of opportunities.
> My previous landlord bought the property i lived in for £270k in the early naughties. It's now worth over £800k. So not only does he have more than £500k profit in the house, he gets to charge "fair" rent which is orders of magnitude greater than his mortgage payments.
There's no double-dipping. He's made the 500k profit fairly (well, ish), he took the investment risk and could've lost money if he'd bet wrong, he now has 800k-worth, he can charge a rent that's appropriate for something that's 800k-worth just as if he'd bought it for 800k today.
> Basically, if the lease on the property is less than 70 years, you can't get a mortgage. So there are houses out there on sale for basically half their market value, that first time buyers can't get to. Despite the fact that the cost of increasing the lease is nominal when compared to the actual value of the property.
Sounds like a business opportunity for a bank willing to offer mortgages on those.
The rules change for "Buy to let" properties, since now the landlord simply has to demonstrate a business plan of being able to rent out for more than the mortgage payments (with some leeway).
This resulted in people being advised (by brokers) to get the "mortgage to let" fully intending not to actually let it and live there themselves. This loophole has been closed.
I don't even know if you can regulate it - but it is hugely distorting to the property market
Edit: "The policy would cost £27bn, she said, which would be partly funded by removing tax relief on mortgage interest for private landlords." interesting to see the greens attacking the buy to let model, and how they're going about it.
[1] When Eric Schmidt is having trouble finding something in the £50M[3] bracket, that's got to be insane, right?
[2] http://www.rightmove.co.uk/property-for-sale/property-507206...
or take your pick from the bargains to be found at:
http://www.rightmove.co.uk/property-for-sale/map.html?locati...
[3] http://www.theguardian.com/business/2013/sep/20/london-prope...
Sure you did - rent control. That's the name of a very specific policy. You might have meant "doing something about rent prices", but then you chose an unfortunate way of expressing it, I must say.
In reality, I don't have an outline. I've got an idea that "something needs to be done". I don't even want the job but the frustration and despair of renting and buying in London under the current conditions just might be enough for me to put my life on hold for four years. It's clear that no one in the current political class has any real appetite for this issue.
Yep, and forcing people to charge less than a resource is worth really doesn't work. The only real way to get the cost down is to increase the availability of the resource. Everything else is just causing stress on the system and stress leads to no further investments, fraud, and/or spending money on routing around the law.
1. Either the wages for those workers will rise to attract them back into the city or there just won't be those workers any more because they won't be able to afford to live there.
2. The workers will all move out of the city, but commute back into the city to work... just like millions of people every day, adding to the already ridiculous London congestion
3. Those jobs just won't exist any more meaning that the city is no longer desirable for people to live there.
The funny thing about a free market economy is that it largely regulates itself. People make emotive reasons for being where they want to be - until they don't want to be there any more.
Hyper aggressive rent control isn't the solution. More appealing alternatives to living in London for those in lower wage brackets is a solution. If people in that wage bracket no longer want to be in London, the wages in London will have to go up to compensate... or the rich people who live in London will have to do the work themselves... and I don't see that happening.
As long as there are people who are willing to put up with the situation - and there are clearly many that put up with it, much as it's shit and much as they hate it, they let it propagate by paying for it, using excuses like "I have no choice", the situation will continue. (I say using excuses, I do understand that many of them are in a position where they genuinely feel they have no choice)
"Every time you spend money, you're casting a vote for the kind of world you want." - Anna Lappe
Let that sink in for a minute, because every time you get your wallet out, you should be asking yourself - is this contributing to a world that I want to live in?
That maybe true, but we're not dealing with free market economics. In hundreds of ways, some small, some big, the status quo is maintained by weak-kneed politicians giving into belligerent property developers and land owners who love spending tax-payers money but hate sticking to the deals they signed up to (hence all the ways they avoid building social and affordable housing).
Hacker news is place of thinking new, can we please try that? Admittably not all ideas are going to be good, but can we please do something new?
There are (finally) skyscrapers being built in London, but even now they are limited to a few specific areas. Views of St Paul's and Westminster are especially protected. Which is fine, and understandable!
But you're asking, I think, "why doesn't London become a bit more like Beijing or Tokyo", and the answer is "because London really doesn't want to become like them". Building a bunch of small apartments would absolutely solve the issue (and cause others; a lot of London infrastructure is close to capacity), but it's a solution which is politically impossible.
Interesting article on the subject here: http://www.economist.com/news/britain/21596539-capitals-skyl...
There will be a lot of people who are alright with this - and there is such housing available to those people. But generally, people who are done with education and are "working professionals" would rather not live in a frat house anymore.
Also I didn't intent for that to be a shared kitchen but a kitchen you ordered from and had others cook your food - it simply makes little sense for me to have every household spend time every single day to make food for themselves.
Graduate the tax and put it on owners for several effects:
* Diminishing or negative returns on increasing rent price * Reduced ROI for top priced real estate lowering demand for investment ownership and price * Increased relative ROI for improving lower quality properties & cheap places to live unaffected
Is this a joke?
I know some people who live on Barges in London and they are no where near as shit as those in the article.
Yes apart from those.
https://you.38degrees.org.uk/petitions/boats-are-homes-preve...
The Canal & River Trust is an underfunded charity whose aims are to preserve and maintain Britain's historic waterway network.
They are not funded to provide affordable housing for people. That is, and should be, the role of local and central Government.
When you buy a boat in the UK (on CRT waterways), there are clear rules, in force since 1992, that you must either have a permanent mooring for it or undertake to move on to a different place every 14 days ("continuously cruising"). Numerous people have tried to avoid the expense of a permanent mooring by declaring themselves to be "continuously cruising" but actually staying in the same place. That is what this petition is seeking to legalise.
If it were accepted, CRT would lose out two-fold: it would have greater costs in providing facilities and maintaining the waterways as more people bought boats simply to use as cheap houses, and it would have significantly lower income as people learned that they can get away without paying for a permanent mooring. Yet even now, CRT doesn't have enough money to maintain its 2,500 miles of waterways to a safe, reliable standard - just look at the recent breach on the Trent & Mersey Canal as an example.
I feel for the people who can't afford to live in London and have alighted on boats as a cheap way to do so. I believe the city would be better as a vibrant, varied community rather than a rich ghetto. But expecting an underfunded heritage charity to fix London's housing problem is unfair and unrealistic. Target Whitehall and City Hall, not CRT.
Unfortunately, I'm sure French civil services would fail to enforce it, and we'd end up with the kind of floating shacks described in the article. Actually, we already have many of them, and they're already powerless to get rid of them.
Apparently not.
But my point is that perhaps you cant afford to live there so go somewhere cheaper. I'm not in a position to live everywhere I want to so I live somewhere I can afford. There are places much cheaper than London.
(i wish hn would provide competition for custom frontpage algorithms)
This is market economy and is there any reason real-estate shouldn't follow this model in a market economy?