How to profit from the housing crisis, Tory style

We'll pay them London premium wages to cover their travel costs/time if they are in the public sector and essential. The cost of this will be insignificant compared to the level of housing benefit we pay to people who live in central london.

Only essential mind you. Councils will be slimmed down and most staff moved to cheaper locations. Not sure what theatre staff have to do with it? They are private sector and get government grants in any case so they can sort themselves out. Ditto restaurants. If your business can't cut it without hidden government subsidy, then it's time to move location.

 

No hang on a minute - so it's workers leave town and then Tescos put their wages up to pay for their commute.
So Tesco put the prices up.
But we don't like that :dismay:
So we don't shop at Tesco's we shop somewhere else that doesn't have the wages problem
So Tescos go bust...and no hang on....
I've got it!
They go bust and their stores get converted into Flats! :sign15:
The workers can move back in...arty2:

Oh, but they got no jobs now.:doom:

This is difficult.

 

A natural level of wages & housing will be found without interferrence. It's not all all or nothing situation, but I think you knew that.

 

You are correct that it's a complex sequence of events with numerous external factors, but Tescos won't go bust - they'll just have fewer stores and won't operate in the locations that only work because government is subsidising their wages.

 

The banana made me chuckle by the way.

 

So why did Lowry paint kids with nowt on their feet?

 

He had a shoe fetish. Painted one and that was it. Look closely you'll see that one shoe.

 

Tell me when it was in history that a 'natural level of wages and housing' was to be found though.

 

The Market will give the bare minimum to those with the least and those at the top will continue making more and more. The equilibrium jumbolina speaks of is my where everyone is happy, but where the poorest can scrape by without resorting to criminality etc, assuming you don't want that.

The idea that shelf stackers will be paid enough to live in London at market rates seems a mad, alien thing to me. Does this happen? Surely it's easy to demonstrate that this doesn't happen. If you're a shelf stacker on minimum wage pls London weighting, can you afford to live in a flat or house that costs the average price in rent or just house value? What if you have a family etc? If there is an example where a minimum wage is paid to someone and they are living without being at least close to impoverished without any additional funding, savings, govt help, cheaper housing than the market rent, etc, if love to see it.

When do we get to this equilibrium?

I honestly think that if you believe such an equilibrium will be found you are a utopian.

Housing is not an area of expertise, probably mainly because I find it too depressing to think about (I am a long term temp worker who moved to Liverpool as I could not afford to move out in or around Watford/London unless I wanted to love in relative squalor), and so I apologise if this is a bit convoluted.

 

The idea that the market provides is pure fantasy and yet it's the left that is seen as 'Utopian'.

 

I tend to agree with much of what you have said. I don't think housing rents would necessarily find a suitable equilibrium to suit everyone - in a place like London. But that is partly because the situation is already skewed through intervention with arbitary taxation, regulation and benefits. Quite often these are in place because of the moaning classes, the politically correct brigade, jealousy and envy from some, and greed from others in positions of power (and some landlords). Taxes/Regulation/Benefits just cannot be set at perfect levels to suit all the scenarios. A very simple example is that a minimum hourly rate may well suit a wife who is a 2nd earner, but it wouldn't be sufficient for the main breadwinner, yet regulation decides what the minimum wage should be, not natural forces. That lack of flexibility prevents employers from, perhaps, dividing the cost of employment in a different way, maybe providing extra money towards housing.

The tax system is a hindrance. It does not make any sense that the tax rate should double over a certain arbitary, but politically acceptable level of around £38K, then go up again by 10% at £150k. That has no economic benefit, it serves only to pacify the envious and the jealous. There should be one tax rate, starting at a far higher level, IMO, somewhere around £16k to £20k and should be at around 25%. The lower earners will pay lower tax, if any, and the higher earners will still pay more tax, and there will not be the same incentives to avoid paying tax - and less opportunity in a simpler system, through obtuse bonuses and creative accounting. It would create more entrepreneurs whose enterprise over the years has meant that around 75% of the workforce has jobs through the businesses they create. There would then be a truer jobs "free market" where the better employees can aim to work for the better employers - for example, those that want to subsidize housing for their people where required.

Now that would be a sort of Utopia! It would never happen, of course as the moaners, the jealous and the envious, are the noisiest.

 

I think you are too quick to blame 'the envious' as a sort of disaffected group that has a disproportionate influence over politics. You mention people being envious when they say that certain people should pay more tax, etc etc. quite often.

I think we come at things from different angles. I know what you mean about different expectations (you mentioned this a few posts ago) and how a method of giving out housing in some respect (rather than allowing prices and thus the ability to live where one wishes or simply the ability to live in relative comfort) might not work. However, I think this is oversimplifying to massive extent. We are not talking about giving everyone a 10x 15 plot and saying 'that's yours, live with it', we're talking about a safety net and a recognition of communities and roots. We're talking about people being able to live off of full time hours in the place where they've worked full time hours all their life and always were able to afford.

Tied to The Market is this overarching ideology of choice. This notion that we are all better off if there are lots of independent and in many respects disparate entities that control some industry or area or other that we may choose to go with or reject and thus drive everyone to be better (better priced, better equipped, and so on) I think is all well and good in some areas. It does not create any particular great injustices in my book when we are talking about competition for who can build the best car and sell the most (again, oversimplifying), as the worst you're going to get is a car that doesn't do what it says it does or is vastly overpriced without you knowing it and so on.

There are some things though where choice and The Market are not the best answer. In my opinion housing is one of those things. Your desire for a practical solution or capital-A Answer will no doubt be articulated in response to this if I don't give at least a weak or poorly thought out example of how I think this might work better, so I will get to that, I promise. Very shortly in fact because I don't want to write a million words here. But stay with me, I really don't think I need to outline a fair system to maker any sort of good point, I want to point out why things are not good the way they are and why The Market does not hold the answers.

So as it stands there's this idea that The Market will give you your balance, and people will just move if The Market demands it and they will just have to. This utter neglect for any other element of modern human life than how much money one has is damaging and sad. I don't think it's asking a lot to suggest that things like community are big factors in areas of life as housing. We live in an increasingly atomised world, I'd argue, and community is an important part of life that is neglected by the big systems that govern modern life - namely The Market.

I don't know, I feel like I'm straying from the point rather than returning back to it, so I'll try to wrap this up until the next post.

When we are talking about housing, and increasing rents (there is no such thing as decreasing rents or house prices these days in London in particular), it is not alright to simply say 'tough luck'. It is a symptom of a wider problem, where there is no value given to anything but capital. Wellbeing, happiness, health, these all come from essentials such as a decent place to live or the ability to stay living where you've lived for your entire life. It is a sad situation where we have an old lady and many families who don't want to move but have to because of the whims of The Market. These people may have made what you decide are the wrong decisions, whether that's through not buying when they could or not getting a job that pays a higher wage etc etc, but this in my opinion is engaging with the debate on the wrong level. Besides, they very well may have never had the genuine opportunity to buy or get a better-paid job. I know I can't do either right now. I'm capable of doing a job that pays better, I'm sure of it, but that's not how the world works.

The system that governs what essentials people are afforded (remember, i'm talking about essentials here, and I suppose the debate could shift to what essentials actually are) does not involve any consultation with anything other than capital as far as I can see. The Market is not the solution, and I am meandering and find myself returning to the same point over and over.

Perhaps I'll come up with a simpler and more well rounded argument soon. Sorry I didn't get to your example zz.

 

If wages rise enough to make London rent prices affordable for shelf stackers, you'd just get a lot of out of town competition from those who want to commute in to shelf stack at comparatively silly wages.

 

We can't reach equilibrium until subsidies cease. And it is indeed utopian because there are too many votes in keeping the status quo unfortunately

 

The market doesn't recognise that each unit of population has emotions other than desire.

 

'Moaning classes...politically correct brigade...jealous...envious..'

There's one person guaranteed to never stop moaning and that's you ZZ. Let's not get you started on benefits, social housing, immigration, rap music, the pound coin....

Lordy.

 

352, I will respond to what you have written, but just not now, as I am off out. We have different views, but at least you try and back up your opinions with some detail rather than just make cheap and stupid political points like some others, and I respect that. For the moment, suffice to say, that if you read my first few posts on this thread I also said that think it would be wrong to price a long standing community member away from their community. I also say that the market wouldn't work satisfactorily in places like London. So we aren't so far apart in the outcomes we would like, we just disagree fundamentally on the best way to get there.

 

At last, a Moose post with a little bit of substance.

 

Not far at all from what I was getting at in my last post in about 5% of the word count. I often wonder if I should stick to reading this forum when things like this come up because I invariably go on and don't conclude. It's too easy because it's a football forum, not an academic paper.

If I could click a like button I would.

 

And so the wages will fall slightly, and more workers will move out to commute in and free up housing in central London, lowering the rent.

That's the whole principle, it's like ebay. Suuply and demand is a very adaptive process.

 

Do you think that emotion doesn't come into house buying decisions once the basic need is met by a roof overt their head?

I think it does, and that affects the market.

 

London News article just on. London Ambulance projecting shortfall of 600 paramedics by year end citing cost of accommodation as main factor. Presume these are just more choosy and sentimental workers who expect the rest of us to subsidise their s****y Hackney lifestyles.

 

If LAS can't find 600 suitable applicants from the 000's of unemployed that already live in London then they will have to supply dedicated subsidised accommodation in the same way that the police do. As they are an essential service, that would be a legitimate use of taxpayers funds, in my view. But they should also withdraw the right to strike, like the police have, and like the fire service should do.

 

Robots

Robots are the future

 

You've missed the point of what I was saying.

 

:jumping1:

 

Sounds like we need to offer more money for the positions then.

 

Sorry, what were you saying then?

 

So you free marketeers have now come full circle and demand ever bigger subsidies for keyworkers in order to line the pockets of private landlords.

How inefficient is this solution? In order to meet private rental costs you will need to increase wages from anything from 50% upwards leading to further rent inflation. I'm all for higher wages at the bottom end, but this is a farce.

Stop the selling off of public housing and provide at cost with the need for minimal HB or other subsidy. Without question a cheaper option. Once it's built it's an asset for ever. Look at who gets it and for how long sure, but don't make us pay more to satisfy your flimsy and resentful thinking.

 

The selling off of public housing isn't the problem. The houses still exist, it hasn't affected the numbers or the availability. They're just privately owned now.
There are more people wanting accommodation than before. Supply has not increased at the same rate as demand. Provide more houses and all the problems are solved. THe only thing driving the prices is the lack of available accommodation.

 

How is that more inneficient? It gives more freedom, and with higher wages people will have a choice of living centrally or further out and commuting in and paying. I would rather be paid more and have the choice to live where I want then be restricted to subsidised housing which will have restricted access.

What if they want to own their house? Do you suggest we subsidise housing rather than paying more and therefore prevent any low paid workers from ever owning a house?

Will it deifnately increase rent inflation? If there are 10 essential workers and 90 workers who could do their jobs elsewhere living in 100 subsidised flats, and we get rid of subsidised housing, there is now more available housing in total for essential workers. The exact balance is hard to predict, It could cause an increase, it could cause a reduction. neither of us are analysts and so to speculate will just be a bias estimate.

 

But it means you cannot control the resource. Hence we can no longer prioritise key workers effectively. We have to spend more for the same thing. You cannot argue that the market provides as cheaply as social housing. The example in the OP demonstrates why.

Jealous and ideological sums up the position.

 

You could. If you are including the subsidies that are paid in housing benefit by the taxpayer that could be used to reduce tax on low paid people, or the value that could be gained from selling of the houses which could be used to reduce tax or increase low wages.

I don't know these numbers, but if I did i'm sure it would be a complicated thing to work out.

 

It's not a biased estimate. Private sector rents are so huge, £1500 pm typically in Hackney because of the cost of purchasing the property and making a profit. Public sector housing is either already there, or can be built for cost on land available to the Govt or LA's. Rents are more like 600-700 and the subsidy is probably no more than 20%.

The paramedic on the news last night was paying 1500 out of 1900 take home, obv shared with partner. He could afford to live in social housing without any rent subsidy or increase in weighting at all. He could be charged more.

 

Built for cost? that cost will include the profit of all the contractors and designers it takes to build a house, and will require high salaried project managers mplyed by the government.

If it's already there, it could be sold off at the "high cost of purchasing a property". If done privately there will often be some profit for the company added on, but thats not always the case, often it will make a loss if they can't sell it as high as they want or someone else is selling cheaper. Annd if they do make a profit, that money will be invested into more housing or somewhere else in the economy.

Your arguement is all based on the idea that the govermnment are capable of building houses much cheaper than anyone else could.