4 ms·

Rent controls don't work. It will just partition the price into over- and under-table parts. As I see it, there are three solutions, all of which should be don

by tormeh 12y ago

Rent controls don't work. It will just partition the price into over- and under-table parts. 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.

cpursley 12y ago
#2: Solving housing shortages is all about going up (and perhaps even down) when land economics are in play. That and zoning that allows for smaller units.
pjc50 12y ago
1) is doable but politically difficult - too much opposition to taxing the rich (see "mansion tax"). 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.
- sjtgraham 12y ago
  Re 4) At least one major government department is already adopting a policy of remote working and opening smaller regional satellite commuter offices with hot desk facilities.
- lmm 12y ago
  Double-decker trains only increase train capacity by ~33% (the stairwells and so on take up room), and on busy lines like those in central London they can actually reduce capacity because they increase dwell times at the platform. What's needed is Crossrail and Crossrail 2, and what's especially needed is to fund Crossrail 2 now, before the skilled Crossrail workforce goes to Malaysia or China because that's where the jobs are. But as always, political shortsightedness rules the day. 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.
Brakenshire 12y ago
And 4. Policies to allow other British cities to become alternative centres of gravity. Particularly connecting together Northern and Midlands cities (Liverpool Manchester Sheffield Leeds Derby Nottingham Coventry Birmingham into city regions), and decentralizing power to those cities from London.
- tomelders 12y ago
  This is a job for the Prime Minister. One step at a time eh? ;) Also, HYPERLOOP!
dreamweapon 12y ago
Enforcement requires some loss of privacy, but living in central London is not a human right. It is for those who already live there.
xamuel 12y ago
To add to #3, the UK needs sane public transportation prices. It costs more to take a 40 minute train ride from outside of London into London than it does to take a plane ride from Heathrow to the continent.
fab13n 12y ago
I would have said "tax whatever behavior you want to discourage": 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.
- tonyedgecombe 12y ago
  Business already has incentives to move away from the centre, commercial rents are much higher in London. The fact that they don't move clearly indicates they feel there are other benefits to staying. You could tax them more but then you risk loosing them completely rather than moving them out of the centre. 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.
easytiger 12y ago
> but living in central London is not a human right. I rarely swear on HN. But you are a fucking psychopath.
- jaredhansen 12y ago
  Would it make you feel better if "London" were smaller? Say, a lot smaller? What if it were the size of, and colocated with, the space currently known as "your living room"? 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.
  - easytiger 12y ago
    If it isn't a human right why are you desperately trying to find a way to make it cheaper to live there? Your logic only works if IT IS a human right and justifies imposing upon the personal freedoms of people who already live there in order to achieve for yourself cheap housing at no effort to yourself. 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.
design-of-homes 12y ago
"Rent controls don't work" 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.
- tomelders 12y ago
  You've articulated my thought better than I have. Housing is not just a business.

by tormeh 12y ago

cpursley 12y ago

#2: Solving housing shortages is all about going up (and perhaps even down) when land economics are in play. That and zoning that allows for smaller units.

pjc50 12y ago

1) is doable but politically difficult - too much opposition to taxing the rich (see "mansion tax"). 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.

sjtgraham 12y ago
Re 4) At least one major government department is already adopting a policy of remote working and opening smaller regional satellite commuter offices with hot desk facilities.
lmm 12y ago
Double-decker trains only increase train capacity by ~33% (the stairwells and so on take up room), and on busy lines like those in central London they can actually reduce capacity because they increase dwell times at the platform. What's needed is Crossrail and Crossrail 2, and what's especially needed is to fund Crossrail 2 now, before the skilled Crossrail workforce goes to Malaysia or China because that's where the jobs are. But as always, political shortsightedness rules the day. 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.

Brakenshire 12y ago

And 4. Policies to allow other British cities to become alternative centres of gravity. Particularly connecting together Northern and Midlands cities (Liverpool Manchester Sheffield Leeds Derby Nottingham Coventry Birmingham into city regions), and decentralizing power to those cities from London.

tomelders 12y ago
This is a job for the Prime Minister. One step at a time eh? ;) Also, HYPERLOOP!

dreamweapon 12y ago

Enforcement requires some loss of privacy, but living in central London is not a human right. It is for those who already live there.

xamuel 12y ago

To add to #3, the UK needs sane public transportation prices. It costs more to take a 40 minute train ride from outside of London into London than it does to take a plane ride from Heathrow to the continent.

fab13n 12y ago

I would have said "tax whatever behavior you want to discourage": 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.

tonyedgecombe 12y ago
Business already has incentives to move away from the centre, commercial rents are much higher in London. The fact that they don't move clearly indicates they feel there are other benefits to staying. You could tax them more but then you risk loosing them completely rather than moving them out of the centre. 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.

easytiger 12y ago

> but living in central London is not a human right. I rarely swear on HN. But you are a fucking psychopath.

jaredhansen 12y ago
Would it make you feel better if "London" were smaller? Say, a lot smaller? What if it were the size of, and colocated with, the space currently known as "your living room"? 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.
- easytiger 12y ago
  If it isn't a human right why are you desperately trying to find a way to make it cheaper to live there? Your logic only works if IT IS a human right and justifies imposing upon the personal freedoms of people who already live there in order to achieve for yourself cheap housing at no effort to yourself. 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.

design-of-homes 12y ago

"Rent controls don't work" 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.

tomelders 12y ago
You've articulated my thought better than I have. Housing is not just a business.