Victorian values?

The Guardian published a very good article this week pointing out that investment in social housing was the solution to the present housing crisis, something the SHOUT campaign has long argued for.

This prompted one of our critics, Peter Hall, to tweet, “Translation: I have no new ideas, so may as well regurgitate the same old 19th century ‪#goldenage thinking…”. Our SHOUT colleague Alison Inman responded with a Life of Brian-ish,“What did the Victorians ever do for us?”

Well indeed. Peter’s tweet displays a fundamental misunderstanding not only of the 19th Century but of the way forward for housing. His view is typical of many in this sector who believe that the past has few lessons for us and that the helter-skelter rush towards commercialisation and “innovation”, in “partnership” with a hostile government, is the only game in town.

In fact, the 19th century has many relevant lessons for today. It was a time of unprecedented social and economic change. In 1801 the population of Britain was 9 million, by 1901 it was 41 million and an additional 15 million had emigrated. The proportion of people living in towns grew from 20 percent to over 70 percent. It is therefore unsurprising that poverty and squalor prevailed over much of the century, but far from being an era of unrestrained laissez-faire capitalism it was also a time of massive economic, social and political progresss. You could well ask, apart from our present network of railways, sewers and water supply, Factory Acts, Education Acts, Reform Acts, the repeal of the Corn Laws, town halls, public parks and libraries, what did the Victorians ever do for us? It was also a century dominated by some towering social reformers from Wilberforce to Octavia Hill, via Josephine Butler and the Earl of Shaftesbury. And at the very end of the century came two Housing Acts that paved the way for mass council house-building. The 1890 Housing of the Working Classes Act allowed London’s councils to buy land and build homes and the 1900 Housing of the Working Classes Act allowed councils outside London to do the same. By 1911, social housing accounted for 1 percent of all stock. By the 1970s this had increased to 30 percent (today it’s 17 percent). In 1968 we built 352,000 homes in England and 40 percent of them were council homes. Is it any co-incidence that house prices in the 70s were between two and three times average salaries? A golden age indeed!

So these Victorian pioneers realised two important things – first that the market on its own could not provide the decent, affordable homes that workers needed and second that philanthropy, via Peabody and other charitable providers, could not do it either. Only the state could do it. The parallels with today are obvious. Yet at a time when the worst Housing Bill ever seen is about to be enacted, and almost all public investment is being used to promote home ownership (which will boost house prices and builders’ profits rather than housing supply) few people seem to understand these self-evident truths.

Sadly, many in this sector seem intent on ignoring these lessons. They can recite dozens of management-guru soundbites yet have lost sight of some fundamental truths about housing in England. First, that the housing market is unlike any other market (and so business cliches are not always applicable) because land is finite, production is lengthy and assets appreciate rather than the converse. Second, that you cannot make a silk purse from a sow’s ear – pretending that increased commercialisation, mega-mergers and higher debt will somehow fund significant numbers of affordable homes and solve the problem is short-sighted, and are likely to increase the risk of privatisation in the longer-term. And beyond all this is the fact that social house-building has probably done more to create physically integrated communities than any other policy over the past century, something that is about to be unpicked with the onset of “vountary” right to buy and forced council house sales.

There are only two ways to solve the housing crisis. The first is to quadruple the amount of land that is made available for housing, including a massive release of green belt land, in order to create a genuine market in housing, boost supply and bring down rents and prices. Unlikely to happen. The other is to accept the SHOUT case, set out in the Capital Economics’ report, for public investment to provide decent, affordable homes, stimulate the economy and cut the welfare bill. There is no third way.

Many Victorians understood the limits of the free market. Their ideas are still relevant. Perhaps we could do with some 19th century thinking now.

(This blog first appeared on the Inside Housing website on 4th May 2016)

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