Don’t bet the house on it: no turning back to housing boom and bust

By Joe Cox

An analysis of the dynamic of the market and society is at the heart at everything Compass does. Where are markets failing? Where are they are working? Where should they be restrained and where is competition needed? All these questions need to be debated as we move into a post-neoliberal world.

In our new report “don’t bet the house on it: no turning back to housing boom and bust” we explore one area of market failure – Housing.

As few as 75,000 new properties may be built in England this year – nowhere near the government’s target of 240,000; and Britain is far behind other European countries in terms of the size, design quality and environmental standards of new homes.

This report recognises the problem that the inflated bubble of the housing market created an artificial sense of wealth. That ethos allowed us to ignore the big distributional dilemmas in society; income at the top raced away, while people in the middle saw their incomes stagnate; debt filled the gap.

The report also discusses the solution drawing a number of conclusions including:

* A mixed economy in housebuilding, with Councils, Community Land Trusts, self builders and small firms joining the major housebuilders and housing associations.

* A balanced mix of tenures (ways of owning and renting), including social housing, real intermediate tenures, and an improved private rented sector.

LabourList has been asking for new ideas to rebuild the Labour movement and in this report we call on the government to replace regressive council tax and business rates with a modest land value tax. We think that this would ultimately create a far more comprehensive and stable housing system.

A Land value tax would also encourage sustainable communities, as investment in public infrastructure would be self-financing.

There would be no excuse not to build a good local school, reinvigorate a local park or a better train line. And it would encourage owners to bring vacant property into re-use and reinvigorate our town centres.

There will be 5 million people in need of social housing by 2010, so these ideas are not just for rebuilding our movement, but rebuilding our communities.

Read the full Compass report here.