Debate Magazine
The mainstream/Homey myth is that it is good if people buy their own homes, because that way they are not a burden on society in their old age. This is also often used as a KLN: "If we had LVT then people would never really own their own homes and so would be a burden on the state in their old age" It's never clear what they mean: a) Old people get their pensions, free health care, a share of public services etc etc anyway, whether they own or rent, so it can't be that. b) Do they mean a fair comparison between people devoting a chunk of their income to paying off a mortgage instead of putting it into savings/investments to be able to pay rent in retirement instead? No of course not. Homeys only do diagonal comparisons where the alternatives are pay off a mortgage or waste it all on flat screens and holidays. Clearly, spending money on flat screens and holidays is good for the economy but paying off a mortgage isn't, but let's gloss over that. c) Once they stop wriggling, they explain that what they mean is that because rents tend to go up, by and large over a lifetime, you pay out less if you take out a mortgage and pay it off. So they rig the market to make rents and house prices go up and use that as an argument for subsidising rents and house prices, i.e. a vicious circle and self-fulfilling prophecy. Therefore, on the irrelevant if not unfair assumption that tenants by definition will not have built up investments to see them through retirement (i.e. a larger pension fund), they conclude that tenants will all end up claiming Housing Benefit and/or living in council housing. d) Housing Benefit is money down the drain of course. But they also claim that council housing costs the government money. Well not in cold cash terms, because the annual running costs for a flat or small home suitable for a pensioner household are only £40 - £60 a week, most of which they would be paying in rent anyway. So that's still not a big burden on society in general or the taxpayer in specific. e) What they merrily overlook is that all occupation of land is a burden on the rest of society. There is a limited amount of areas where people want to live - if one person occupies one bit, he puts everybody else in a less favourable position. If they want to occupy some, they have to pay hard cash money in order to do so. The price which the otherwise excluded person is prepared to pay is precisely equal to the rental value of the site in question. It's like spaces in the lifeboat. The value to the person desperately treading water bears no relation to the cost of providing the lifeboat. The people in the lifeboat are placing a burden on those left behind who will drown. f) So, returning to the original myth, the point is that somebody in a family home on a plot with a rental value of £15,000 is placing a larger burden on society as a whole than somebody else in a small council flat with a site-rental value of £5,000. If the person in the £5,000 council flat is paying nearly that much in rent, then he is paying most of his dues and is placing a net tiny burden on society (a fraction of the cost of his old age pension, free health care etc). g) Now, returning to the KLN, if the household (of whatever age) on the £15,000 plot are paying £15,000 in LVT and the household on the £5,000 plot are paying £5,000 in rent/LVT, then honours are even and everybody has paid their dues and nobody is being a net burden on anybody else. That's how perverted and arse-about-face Homey propaganda is. They actually claim that people who place a bigger burden on society are not placing a burden on society and vice versa.
