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Housing Petition to No 10 Downing Street.

A Community Housing Policy Fit for Purpose

Housing is the third most fundamental of human needs after water and food and it is therefore a matter of grave concern in a supposedly civilised democracy that there has been nothing resembling a responsible policy on this front for more than 30 years.

Such policy as there is, in combination with the self evident and profound failure of ongoing economic ideology, is central to substantial under-provision and un-affordability of housing. Of much greater importance in the broader context has been the permissive complicity of UK and other governments in the manipulation by the banks and financial sector in such way as to position property speculation at the epicentre of the near, and still threatened, collapse of the world economy.

Wilful complicity of successive governments in such regressive policies is undeniable, and fundamental reappraisal is necessary. The need for the development of policies fit for civilised society in the 21st century is inescapable, and any ideological reservations should be tempered by the social and fiscal benefits.

In immediate terms, it has been stated that the current under provision equates with an approximate outstanding need for 2 million homes for 5 million people. The profound social message of this is compounded by the fact that the cost of rental or purchase has spiralled out of control. The combination with long term economic downturn or depression and ‘regressive’ policies in respect of welfare legislation (2011) and security of tenure is resulting in intolerable strains upon the rental market in particular (reflected, for example, in recent housing policy issues in the Borough of Newham). Prices verge upon, and are breaking through, the barrier of un-affordability of both private and ‘social housing’ rentals, with mounting alarm in all relevant and concerned quarters and consequent upsurge of local activism.

Current ineffectual short term initiatives will do nothing of significance to address the a crisis born of the fundamental failure of extant economic ideology, and the ‘more of the same’ policy will simply fuel the unsustainable distortion of the housing market in the longer term.

Further emphasis of the projected escalation of these problems is provided by a study from the Cambridge Centre for Housing and Planning Research. In this is the prediction that, on the assumption that un-affordability driven by the current market model is unchanged, dependency upon rented accommodation may increase to affect something approaching of 40% of all households by 2025. Such rental housing will, on the basis of the current escalation of distorted market forces, be even more unaffordable than at present.

There is an absolute need for a plan to rectify the lack of social and economic viability of the current situation. A plan should be developed and administered in the spirit of localism that the current government has purported to espouse with recent legislation.

It is proposed that the government should embark upon a major project of new-build Community Housing, with particular emphasis upon ‘starter homes’. Such housing will be of highest quality, environmentally sound and socially integrated. The model should be independent of the inflationary potential of private sector finance, and have the aim of providing accommodation with rents which fall within income related affordability; tenure should be secure, within realistic constraints.

We suggest apportionment of something of the order of £20-30 billion a year as funding for new-build of approximately 200,000 new Community homes a year. This would provide one million new homes over five years and go some way to redress the current under provision of housing. This will begin to address the increasing demand for rental accommodation as an inevitable counterpoint to the un-affordability of owner occupancy.

Such a Community housing policy will be a first step, reflecting a tradition of truly affordable housing which is well established in other highly developed social economies, such as seen, with long term sustainability, in Germany. The policy in no way discourages owner occupation, but would be hoped to counter the speculative aspects and potential profiteering of the rental housing market.

We note that there are important additional issues such as long term vacant properties, estimated at 80,000 in London alone, and in excess of 700,000 for the country as a whole. There is a widely recognised and urgent need for an aggressive policy and adequate funding to ensure that all such housing and that in need of refurbishment is brought back into occupancy.

Another important concern is in respect of the regulation of the private rental sector. The matter which we would particularly emphasise is the socially unacceptable lack of security of tenure. We find the current legislation on this to be flawed and would urge the development of more socially compliant legislation to be informed by a constructive review under the auspices of a wide ranging public enquiry. This is also a matter of urgency.

It has been suggested that infrastructure projects could be funded through QE, although, when challenged about this in respect of Community housing, Sir Mervyn King dodged the question with the inappropriate response that it is a political question, whereas the question in fact concerns economic feasibility. Whatever the case, it is patently clear that despite £325 billion of QE the economy is in double dip recession, and QE has been little more than a bonus for the bailed out banking system, and something that should not, in principle, be supported.

We note the new variation upon this ‘more of the same’ policy, with the recent more adventurous initiative of approx. £100 billion underwritten ‘Loans for banks’ from the Bank of England at lower than market rates, with the absolute requirement that this money is directed to MSEs. While such policies show complicity with a system that is in manifest failure, if they are to be used, it would seem most appropriate that this should in part be for the initiative outlined here.

The short and medium term benefits for the economy will have the particular advantage of being largely predictable, in contrast to the nail hanging uncertainty intrinsic to the hope of a re-birth of the ‘confidence’ factor. The initiative will be in keeping with the increasing call for fiscal stimulation (post austerity measures), and may, with good fortune, act as a ‘kick start’. This will also bring major and sorely needed benefits for the severely depressed construction industry.

Alternatively, funding could be raised through 10, 20 or 30 year government bond issues, with inducements such as security against inflation. Yet another somewhat elusive source of funding might be found in outstanding tax revenues. In the longer term, the introduction of a well crafted scheme for land value taxation would not only levy revenue to support such ‘infrastructure’ initiatives, but would also contribute to the development of much needed policies of progressive taxation.

Funding would either be channelled directly to local authorities or via a designated organ of State.

The policy would be delivered through localism planning, and would involve the exploration of community land trusts and a variety of co-operative models, to develop the most effective ways of minimising the land price component of build cost. This could be most readily achieved in respect of public land, but it would also be important to develop a deleveraged model for private land (?controlled inflation linked ground rent). Rentals would service the debt.

It will be appropriate to encourage imaginative exploration of other models with the help of NGOs and other contributors in the field. Such models will embody the principle of true affordability and financial viability. In the longer term, while the exploratory development logistics will be challenging, the introduction of a formula to embrace the progressive fiscal benefits of a scheme of land value taxation would have the additional merit of a constructive socio-economic adjustment of land valuation.

We believe the general detail of policy expressed in this advisedly brief document to be suitably informed through sound principles of both economic and social pragmatism. The depth and breadth of associated practicalities should be informed through imaginative exploratory development. Occupy London and the Economics Working Group will hope to engage with this challenge and act as a conduit for additional progressive ideas to enhance the development of such a programme.

The social benefits and economic merits of such a programme are highly persuasive and would resonate with the needs of our social economy for a generation.

We are calling for the building of 200,000 Community homes a year at truly affordable rents, achieved with a fully imaginative programme fit for an advanced society in the 21st Century. These should be of high quality in the comprehensive spirit of social, environmental and sustainable design. This will result in the creation of 1 million new ‘units’ over five years.

Faced with an evolving crisis in housing, it is difficult to find any persuasive argument against such a programme. This not only gives the opportunity to begin to redress the profound failure of housing policies, but also guarantees predictable generation of internal economy activity when all else has failed.

The funding and land value issues of this project are not a matter of feasibility but of will, driven by social and fiscal responsibility.

This overall plan has natural echoes with many who have been greatly concerned with these issues, and some of the narrative inevitably reflects certain policy suggestions of others. We are grateful for the comments and advice we have received. This initiative from Occupy stems from the major concerns that we have encountered in the wider community, along with the undeniable need for a programme to reverse long term serial neglect and mismanagement and address both the social and profound economic implications of housing policy.

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