So there’s a ton of countries that I’ve heard have had truly unaffordable housing for decades, like:
- The UK
- Ireland
- The Netherlands
And I’ve heard of a ton of countries where the cost of houses was until recently quite affordable where it’s also started getting worse:
- Germany
- Poland
- Czechia
- Hungary
- The US
- Australia
- Canada
- And I’m sure plenty others
- It seems to be a pan-Western bloc thing. Is the cause in all these countries the same?
- We’ve heard of success stories in cities like Vienna where much of the housing stock is municipally owned – but those cities have had it that way for decades. Would their system alleviate the current crisis if established in the aforementioned countries?
- What specific policies should I be demanding of our politicians to make housing affordable again? Is there any silver bullet? Has any country demonstrably managed to reverse this crisis yet?
Finland only has approximately 1000 willfully homeless people. I’d call that solving the crisis.
That’s good to hear, although it’s kinda beyond the scope of my question. I’m asking more about how to stop prices rising when they’ve suddenly started quickly rising and people don’t know why.
What specific policies should I be demanding of our politicians to make housing affordable again?
The answer is Georgism combined with no zoning, but people aren’t ready to hear about that yet.
By Georgism I mean a very high tax (80+%) on the unimproved value of land. It prevents land speculation and returns the value of the land to the public. Houses would be incredibly cheap, because you couldn’t make money by merely owning land. The only reason to own a house would be to live in it, or to provide a true service for people who would actually prefer to rent.
This guy sees the cat
I was impressed with Singapore when i was there a while back: https://en.wikipedia.org/wiki/Housing_and_Development_Board
Fascinating. I didn’t expect a country known for neoliberalism like Singapore to have fully nationalised land ownership (haven’t read the whole wiki article admittedly)
I suppose it depends on how you’d define “solved”. If we’re talking about basically eliminating homelessness, Cuba has done immense work in that regard. Say what you will about the Cuban government, but Cuba has a near-zero homeless population because the government has built a ton of housing and caps rent at 10% of individual income in that state-owned housing. Cuba is also a country with a tradition of multi-generational extended family homes, so there’s a greater chance that you’d be able to move in with a family member if you fell on hard times. Home ownership rate is around 85% compared to 65% in the US. All of this is nothing new, though, so it’s hard to say if it’s the answer to current issues of housing that’s largely driven by corporate greed, but it certainly sounds like it couldn’t hurt. Granted, I’ve seen people give examples of homes that are rather small and spartan, where the walls are made of bare cinderblock and generally aren’t very pretty, but that’s way better than being homeless even if some of the housing isn’t as nice as others. I’ve also examples of state-owned housing lived in by the same kinds of people, but are really quite nice as well. Whether the US government would ever do this, though, seems unlikely. Not at the scale we’d need and not for so cheap, anyway, especially not with Trump coming to office. I can’t really speak for the governments of other countries, however, and I’m no expert on Cuba either, so I could have gotten some things wrong. The US embargo to Cuba since the 90s also means that Cuba has had a more difficult time procuring building materials for the low-cost housing that’s helped so many, which has led to an increase in size and number for those extended family homes over the years.
I live in the United States, and as I understand it the housing crisis is caused by several factors.
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The lowest level of zoning is typically residential single family. This means small scale owners and developers cannot increase supply by taking a house and adding to it. Either by adding extensions, subletting, or even building a mini-apartment building. To add to this, US regulations require apartment units to have access to 2 staircases, in the event of a fire. This is good for safety, but greatly restricts style of apartments to hotel styles, and increases costs, so smaller apartments don’t make as much sense. This requirement should be able to be waved in the case of fire resistant building materials.
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Speculative land owning. Some property owners simply sit on properties in developing areas, waiting for its price to increase, and since tax is based on the value of the total property (land+building), a decaying building reduces the cost of owning that land. To fix this, we should be taxing the value of the land instead, punishing speculators, while incentivising people to improve their land (by building housing).
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Overuse of cars. Even when places want to expand housing, the complete and utter reliance on cars as transportation in the US leads to backlash for increasing housing, as the perception is that it will increase traffic. To combat this cities need to rethink their transportation strategies to radically increase things like bus and bike lanes. Even when cities do have buses, the strategy funded by the federal government is abysmal. For example instead of running buses that can hold 15 passengers and run every 15 mins, cities will instead run buses that can hold 50 people every hour, and so these buses run mostly empty with 2-3 passengers.
The main policy changes that we need are less restrictive zoning, tax speculators, and diversify urban transport. But resistance is heavy, many politicians themselves are land holders and do not want to implement these changes, or to anger those that do. Landholders generally have more political voice, power, and wealth.
By “resistance” you mean “rich people and their money, along with the laws that have kept them rich”
While yes, the rich are the main problem, the bulk of resistance is the middle class. They don’t want to see the value of their property go down, or see increased traffic. Even though the suggested policy changes would help them too! The brainwashing is strong among people, not just the rich.
It’s also hard, because to make meaningful changes, you need progress in at least 2 of these areas at the same time, which means you need to get people and politicians to agree on how to fix the problem!
I see many people blaming corporate ownership as a problem, and in our current system is it is. But implementing my proposed changes would make it unpalatable for exploitive corporations, without needing to explicitly ban them!
Agreed, most of us are idiots who don’t want to create change if it means even the tiniest amount of momentary inconvenience.
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Crises are going to continue being crises as long as the wealth inequality of people worldwide continues increasing.
Think of it like this. There’s a finite amount of money in the world. Right?
The wealth of billionaires has doubled in the last few years. That money came from somewhere. Still with me?
Ok, so… if the wealth of the wealthiest people has doubled, that amount of money they gained was previously held by the less wealthy, but it has now been consolidated into the wealthier people’s bank accounts.
So. How do we solve the housing crisis (or any crisis)? Step 1 has to be to undo the consolidation of wealth. Solving crises without addressing the consolidation of wealth is a pipe dream.
Feel free to hunt for legal mechanisms for achieving that. But I think you’ll find there are institutions and propaganda preventing those mechanisms from being effective.
How Britain (Almost) Solved the Housing Crisis https://www.youtube.com/watch?v=jZpLiJdIGbs so we didn’t and then we did and then we didn’t
Ooh I watched this when it was released. So essentially vast municipal ownership. Definitely something I can get behind but it takes decades.
Society doesn’t change overnight
China also has a massive homelessness problem, so it’s definitely not a “pan-Western bloc” thing. This is despite China executing every landlord and building enough homes, turns out people get assigned to a home in a region where they don’t actually live or work…
I’ve always read that Japan seems to always be ahead of this issue due to its laws.
It’s mostly supply and demand. In Tokyo and Osaka / satellite cities, prices are going up, everywhere else they are dirt cheap.
However, in urban areas prices still aren’t as crazy unaffordable as you may think, because Japan has a very narrow wage gap (everyone in Japan thinks they are middle class, and their not wrong compared to other countries).
Another thing that makes Japan different to other housing markets, and is affected by the laws, is earthquake concerns. What other countries would call ‘established’ dwellings, they call ‘second hand’. Laws are updated every ten years or so that mean newer dwellings are much safer than older ones. Knockdown/rebuild is so common that there is competitive prices, as there’s plenty of builders to choose from. The builders are also very efficient, and apart from safety law, regulations are low (you can build whatever you like, so long as it’s robust), so labour costs are much lower compared to other countries.
If you go on Suumo.jp you’ll find plenty of very affordable houses, even in good areas/good rail links, but it’s because they don’t expect anyone will live in the house as-is - the buyer will most likely “reform” it (massive rennovation) or replace.
The state of the Japanese housing market is due mostly to cultural/economic/low immigration. If you want a policy solution other high-income countries can use to solve housing issues, the state-capitalism solution of the Singapore HDB is the best model I’ve come across. Second would probably be Vienna’s focus on social housing.
Thank you kind stranger, that was a nice and interesting review!
China has essentially zero homeless iirc. Most people own their homes
So do most people here in Czechia. We have had capitalism for 35 years and for the first 30 house prices were stable and affordable (with no large municipal sector). Something has happened within the last 5 years and I’d like to know if it’s the same cause as in the other countries and how it can be reversed.
Such is the path of decommunization. Most post-soviet countries have or will experience something similar as capitalists take the housing for profit.
I definitely do fear something like that happening. Still, how would you explain the 30 years under capitalism when it was working fine? Why didn’t the capitalists swoop in in year 1 (or 15)?
Capitalism hadn’t advanced towards late stage yet.
Your ideal time was always a transitory period. This end result is inevitable.
Even if you pass reforms now… that is only kicking the can into your children’s or grandchildren faces.
