Property Rationing

[PaulJRobinson]

A radical one which I don't think we've yet discussed. I recognise I haven't thought this through properly, but I'm keen for your thoughts.

[timcowlishaw]

I've been lurking and haven't contributed anything for a while, but just thought I'd pop up again to give this a 👍 - The details would need careful consideration (eg corporate ownership - does this apply to only residential property?) but this is an interesting (and hopefully tractable) solution to a dire problem.

[timcowlishaw]

Happy to contribute further of course, although am a bit pressed for time at present.

[PaulJRobinson]

Welcome back @timcowlishaw :-)

I think corporate ownership of residential property should be prevented entirely (and I think I recall the Chancellor introducing measures to tackle this during last Budget/Autumn Statement). But yes this would only apply to residential property. I'm open to different ideas as to what the limit should be: I suggested just 2 (in addition to main residence) but perhaps 3 or 4 would be fairer? [although of course a married/unmarried couple would have two allowances to play with]. But I think the principle of rationing such a limited, valued, and utterly essential, commodity is important.

[philipjohn]

While I understand the desire here, I think there are some fundamental reasons why this isn't a sensible policy;

1. It assumes that individuals owning many homes and renting them out is a bad thing
2. It assumes that renting/not buying is a bad thing
3. It doesn't address the cause of the housing crisis (lack of supply) but instead deals with a symptom of it
4. It forces people to relinquish property which they have a right to own and rent out, possibly depriving them of their livelihood in the process. Fundamentally, that is an erosion of individual liberties.

I'm also very concerned about the suggestion that "earned income" is somehow more desirable. If someone accumulates assets, such as property, (through whatever legitimate means) they have a right to use them in whatever way they see fit (so long as they obey the law and don't infringe the rights of others) and that includes to generate an income.

Suggesting that private landlords generate "unearned income" is, I think, an unfair demonisation of private landlords. It may well be "easier" than "normal" jobs (I wouldn't know) but that doesn't mean they don't deserve to earn an income from their own assets.

Big 👎 from me at this point, therefore, I'm afraid.

[philipjohn]

P.s. @timcowlishaw join us more often :)

[PaulJRobinson]

@philipjohn some valid points, and a few I disagree with. But for now I'll just address the "ease of unearned landlord income" one.

My issue with landlord income is that unlike earned income:

1. It can be inherited. From many generation past. If you're against the monarchy and inherited power why would you be in favour of inherited wealth?
2. It continues to provide income regardless of work/effort/time put in. Ive been a landlord. Take it from me.
3. it perpetuates social immobility. This is related to Pont 1. Why would we want to go back to a 19th society of aristocratic landed wealth? Or that encourages people to aim for such a thing?

I'm sure there are other ones. Let me have a think.

[philipjohn]

1. Monarchy is a political issue - that wealth and power is granted to them, and upheld, by the state, and they receive a huge amount of public money. That's wrong. Inheriting assets is entirely different. If my parents pass away and leave me the house and I decide to rent it out, that is my right. If I then decide I'm quite a good landlord and want to do it more of it I might re-mortgage and use the cash to buy two more properties which I rent out. Why shouldn't I be able to? Am I not enabling people who might not be able to afford to buy in the area the ability to live there? Am I not providing people with a service they want?

I personally don't ever want to buy a house - I don't see any benefit in owning over renting, so this policy would probably make it a) harder for me to find rental property and b) harder for me to afford to rent (lower supply of rental housing = demand for rental property isn't met = prices go up). I may be forced to buy because I can no longer afford to rent, which just reverses the issue. I'll have to find about £5-10k just to try and buy a property (which may fall through, potentially leaving me unable to afford the fees to buy but unable to afford the higher rents and therefore without a home) which then leaves me tied down to a location and dependent on many many factors outside of my control for mine and my family's financial well being.

2. So?

3. This isn't a choice between a home-owning paradise and C19th fiefdom. No-one is encouraging that either (unless you can demonstrate otherwise?). What this policy would do is force people into home ownership, whether they want to or not - that's not fair. It demonises private landlords - that's not fair.

I can't see what problem this solves. All it does it deny basic rights and force people into the burden of home ownership.

Here's a couple of scenarios I can see playing out under this policy;

1. A retired couple have a few properties that they rent out, as was their plan - the property is their pension (that might not be wise, but it was their choice and one they have the personal freedom to make). This policy comes in and they are forced to sell all but their own home and one other property (perhaps they sell that too). Given that thousands of other properties are also going up for sale because of this policy there is a massive influx of supply. Prices plummet. The couple were earning a modest income. If they're lucky enough to sell their properties, they're left with a pot of money that is a small proportion of the rental value those properties would have delivered over the rest of their lifetime. They just don't have enough money anymore.

2. A single mother of two rents her house and works full time earning £35k. She has no savings and the father of the children has never been around. Her parents are deceased. She has a modest 3-bed house, her finances are good, she saves a little bit each month but not a huge amount and has enough to spend on small days out with the kids. This policy comes in and her landlord is forced to sell the property so she has to move out. She looks for other places to rent nearby but there is hardly anything because so many landlords are selling, and the homes aren't being rented anymore. She doesn't have the money for a deposit and the fees to buy a place herself, and because there are so few places to rent the prices have gone up. She simply cannot afford to live in the area anymore. If she can find somewhere else to live she's faced with the prospect of having to commute to work, an extra expense which reduces her disposable income on top of the increased rental cost and might need to move her children to a different school. She may find a house she can just about afford (perhaps with an extra loan) but this leaves her in a worse financial position, with less disposable income and/or less able to save and so less secure.

Both those situations, while hypothetical are, I think, entirely feasible and put both those people into unnecessary hardship for no benefit to either them nor wider society.

If you can outline how this would benefit society as a whole, that'd be helpful, but I can't see any benefit.

[PaulJRobinson]

​Those are two valid scenarios. I did say I had yet to properly think
through the idea! But that's why I think it's good to kick around radical
policies like this. Thanks for the useful feedback.​

with kind regards,
Paul Robinson

about.me/pauljrobinson

On 1 May 2014 22:38, philipjohn notifications@github.com wrote:

1. Monarchy is a political issue - that wealth and power is granted to
   them, and upheld, by the state, and they receive a huge amount of public
   money. That's wrong. Inheriting assets is entirely different. If my parents
   pass away and leave me the house and I decide to rent it out, that is my
   right. If I then decide I'm quite a good landlord and want to do it more of
   it I might re-mortgage and use the cash to buy two more properties which I
   rent out. Why shouldn't I be able to? Am I not enabling people who might
   not be able to afford to buy in the area the ability to live there? Am I
   not providing people with a service they want?

I personally don't ever want to buy a house - I don't see any benefit in
owning over renting, so this policy would probably make it a) harder for me
to find rental property and b) harder for me to afford to rent (lower
supply of rental housing = demand for rental property isn't met = prices go
up). I may be forced to buy because I can no longer afford to rent,
which just reverses the issue. I'll have to find about £5-10k just to try
and buy a property (which may fall through, potentially leaving me unable
to afford the fees to buy but unable to afford the higher rents and
therefore without a home) which then leaves me tied down to a location and
dependent on many many factors outside of my control for mine and my
family's financial well being.

So?
2.

This isn't a choice between a home-owning paradise and C19th fiefdom.
No-one is encouraging that either (unless you can demonstrate otherwise?).
What this policy would do is force people into home ownership, whether they
want to or not - that's not fair. It demonises private landlords - that's
not fair.

I can't see what problem this solves. All it does it deny basic rights and
force people into the burden of home ownership.

Here's a couple of scenarios I can see playing out under this policy;

1. A retired couple have a few properties that they rent out, as was their
   plan - the property is their pension (that might not be wise, but it was
   their choice and one they have the personal freedom to make). This policy
   comes in and they are forced to sell all but their own home and one other
   property (perhaps they sell that too). Given that thousands of other
   properties are also going up for sale because of this policy there is a
   massive influx of supply. Prices plummet. The couple were earning a modest
   income. If they're lucky enough to sell their properties, they're left with
   a pot of money that is a small proportion of the rental value those
   properties would have delivered over the rest of their lifetime. They just
   don't have enough money anymore.
2. A single mother of two rents her house and works full time earning
   £35k. She has no savings and the father of the children has never been
   around. Her parents are deceased. She has a modest 3-bed house, her
   finances are good, she saves a little bit each month but not a huge amount
   and has enough to spend on small days out with the kids. This policy comes
   in and her landlord is forced to sell the property so she has to move out.
   She looks for other places to rent nearby but there is hardly anything
   because so many landlords are selling, and the homes aren't being rented
   anymore. She doesn't have the money for a deposit and the fees to buy a
   place herself, and because there are so few places to rent the prices have
   gone up. She simply cannot afford to live in the area anymore. _If_she can find somewhere else to live she's faced with the prospect of having
   to commute to work, an extra expense which reduces her disposable income on
   top of the increased rental cost and might need to move her children to a
   different school. She may find a house she can just about afford (perhaps
   with an extra loan) but this leaves her in a worse financial position, with
   less disposable income and/or less able to save and so less secure.

Both those situations, while hypothetical are, I think, entirely feasible
and put both those people into unnecessary hardship for no benefit to
either them nor wider society.

If you can outline how this would benefit society as a whole, that'd be
helpful, but I can't see any benefit.

—
Reply to this email directly or view it on GitHubhttps://github.com//pull/181#issuecomment-41959989
.

[philipjohn]

Cool. Sorry if I seemed at all... 'militant' (to quote everyone's favourite
baroness) on this one. Blog post on it's way (Saturday, I think) about the
wider issue I think that surrounds policy on housing which I hope will show
why I'm so passionate about this.

On Fri, May 2, 2014 at 10:15 AM, Paul Robinson notifications@github.comwrote:

Those are two valid scenarios. I did say I had yet to properly think
through the idea! But that's why I think it's good to kick around radical
policies like this. Thanks for the useful feedback.

with kind regards,
Paul Robinson

about.me/pauljrobinson

On 1 May 2014 22:38, philipjohn notifications@github.com wrote:

1. Monarchy is a political issue - that wealth and power is granted to
   them, and upheld, by the state, and they receive a huge amount of public
   money. That's wrong. Inheriting assets is entirely different. If my
   parents
   pass away and leave me the house and I decide to rent it out, that is my
   right. If I then decide I'm quite a good landlord and want to do it more
   of
   it I might re-mortgage and use the cash to buy two more properties which
   I
   rent out. Why shouldn't I be able to? Am I not enabling people who might
   not be able to afford to buy in the area the ability to live there? Am I
   not providing people with a service they want?

I personally don't ever want to buy a house - I don't see any benefit in
owning over renting, so this policy would probably make it a) harder for
me
to find rental property and b) harder for me to afford to rent (lower
supply of rental housing = demand for rental property isn't met = prices
go
up). I may be forced to buy because I can no longer afford to rent,
which just reverses the issue. I'll have to find about £5-10k just to
try
and buy a property (which may fall through, potentially leaving me
unable
to afford the fees to buy but unable to afford the higher rents and
therefore without a home) which then leaves me tied down to a location
and
dependent on many many factors outside of my control for mine and my
family's financial well being.

So?
2.

This isn't a choice between a home-owning paradise and C19th fiefdom.
No-one is encouraging that either (unless you can demonstrate
otherwise?).
What this policy would do is force people into home ownership, whether
they
want to or not - that's not fair. It demonises private landlords -
that's
not fair.

I can't see what problem this solves. All it does it deny basic rights
and
force people into the burden of home ownership.

Here's a couple of scenarios I can see playing out under this policy;

1. A retired couple have a few properties that they rent out, as was
   their
   plan - the property is their pension (that might not be wise, but it was
   their choice and one they have the personal freedom to make). This
   policy
   comes in and they are forced to sell all but their own home and one
   other
   property (perhaps they sell that too). Given that thousands of other
   properties are also going up for sale because of this policy there is a
   massive influx of supply. Prices plummet. The couple were earning a
   modest
   income. If they're lucky enough to sell their properties, they're left
   with
   a pot of money that is a small proportion of the rental value those
   properties would have delivered over the rest of their lifetime. They
   just
   don't have enough money anymore.
2. A single mother of two rents her house and works full time earning
   £35k. She has no savings and the father of the children has never been
   around. Her parents are deceased. She has a modest 3-bed house, her
   finances are good, she saves a little bit each month but not a huge
   amount
   and has enough to spend on small days out with the kids. This policy
   comes
   in and her landlord is forced to sell the property so she has to move
   out.
   She looks for other places to rent nearby but there is hardly anything
   because so many landlords are selling, and the homes aren't being rented
   anymore. She doesn't have the money for a deposit and the fees to buy a
   place herself, and because there are so few places to rent the prices
   have
   gone up. She simply cannot afford to live in the area anymore. _If_she
   can find somewhere else to live she's faced with the prospect of having
   to commute to work, an extra expense which reduces her disposable income
   on
   top of the increased rental cost and might need to move her children to
   a
   different school. She may find a house she can just about afford
   (perhaps
   with an extra loan) but this leaves her in a worse financial position,
   with
   less disposable income and/or less able to save and so less secure.

Both those situations, while hypothetical are, I think, entirely
feasible
and put both those people into unnecessary hardship for no benefit to
either them nor wider society.

If you can outline how this would benefit society as a whole, that'd be
helpful, but I can't see any benefit.

Reply to this email directly or view it on GitHub<
https://github.com/openpolitics/manifesto/pull/181#issuecomment-41959989>
.

Reply to this email directly or view it on GitHubhttps://github.com//pull/181#issuecomment-42007265
.

[Floppy]

Pretty sure this is dead and gone.

[Floppy]

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