Debate Magazine

They [want To] Own Land! Give Them Money!

Posted on the 22 October 2018 by Markwadsworth @Mark_Wadsworth

They're at it again, says Lola who emailed in this from The Times:
Cash handouts for Nimbys would remove obstacle to housebuilding - Mark Littlewood
The eye-watering costs of buying a property have gone untackled for so long that an entire generation of young workers is finding it impossible to get a foothold on the housing ladder, particularly in London and the southeast...

It appears that he is one of the supply siders who subscribe to the "lack of supply" myth. They miserably fails to distinguish between the supply of physical housing and the supply of 'good' locations (primarily high wage areas).
We've plenty of physical housing, and plenty of it is easily affordable, selling for less than or little more than original construction costs. But wages are much lower in those areas, so no real benefit if you buy there (unless you've retired). What we don't have is enough 'good' locations (by definition).
I managed to get a supply sider to address this, of course he side stepped the issue and just said we need more homes in 'good' areas. That doesn't increase the number of 'good' locations, it just makes better use of them! Once you take agglomeration effects into account, the 'good' locations will become even better (and the 'bad' locations even worse), thus cancelling out any downward pressure from additional supply in 'good' areas and leading to higher prices overall.
The Adam Smith Institute have come out with some similar garbage:
* Social tenants eligible for the Right to Buy should be given a Flexible Right to Buy, entitling them to buy a new home, using the value of their Right to Buy discount.
* The tenant’s previous home would then be sold, funding the discount and raising additional revenue.
* A conservative estimate of the impact would see 21,000 tenants take advantage of the scheme with £2 billion of discounts on £9 billion of stock and net receipts of £7 billion.
* An ambitious estimate of the impact would see 197,000 tenants benefit, with £83 billion of stock and £21 billion of discounts and net receipts of £62 billion.
* Housing stock would be better matched to people’s circumstances, with a cooling effect on overheated local markets.
* Some friction would be removed from labor markets, resulting in improved productivity and wages.

Words fail.


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