Monday, September 20, 2021

Expropriate the house hoarders

North & South has an in-depth piece on the origins of the housing crisis, and like so much else wrong with Aotearoa, the blame can be laid firmly at the feet of the NeoLiberal regimes of the 80's and 90's, who sold state houses, slashed benefits while imposing market rents, and implemented a landlord subsidy - sorry, "accommodation supplement" - in the bizarre belief that higher rents somehow improved "choice" for people in desperate financial need. The predictable result being that the subsidy went straight onto rents, and therefore onto the expected return from landlordism, and therefore onto house prices. And while some of this has now been undone - state houses now have income-related rents again, and we almost have as many as we did in 1990, when the population was 30% lower - the core problem of government subsidies underpinning landlords and fuelling speculation remains (and its been made worse by successive government shovelling cheap money at banks to keep the bubble growing).

Thanks to Ruth and Roger and their ideological successors, our old "property-owning democracy" is dead. A generation has been locked out of home ownership, and speculators now buy most of the houses that are built. We have a propertied class and a peasant class, with all the horror that implies. Most kiwis outside of the jetsetting-off-to-Wanaka-in-a-pandemic Auckland elite regard this with horror. So how can we fix it?

Most obviously, build state houses. The government is doing this, slowly, but its still going to be years before we reach the level of provision we had pre-Revolution. And its obvious that we need to do a lot more. So what else can we do?

Renters United is calling for rent controls, and that seems like a good idea. Fucks the landlords and house hoarders, limits (but does not eliminate) their ability to fund their speculation by forcing someone else to pay for it, actually works. That's good as far as it goes, and removing speculation heat from the market may burst the bubble, but more likely it will just stop things from getting any worse. Necessary, but not sufficient.

So what else can we do? Here's a radical idea: expropriate the landlords and house hoarders. Take those surplus houses - tenancies intact - and manage them as state houses. Berlin is voting on doing exactly this this weekend, in order to burst their property bubble and stop large corporate landlords from gouging and so driving up rents and prices. We don't have a lot of those in Aotearoa, but stats suggest that two-thirds of rental properties are owned by those who own four or more rentals, and over half are owned by those who own more than ten. Targeting these hoarders (with exemptions for non-profit and community housing providers) and expropriating their excess hoarded homes at less than market value (what they paid for them plus inflation seems fair) and running them as state-houses with income-related rents would immediately make the people in those homes better off, as well as crush the rental market with state competition and burst the property bubble by ending speculation. It wouldn't fix everything, but that sort of market reset would put us in a much better place to start.

So will the government do either? Of course not - they all own houses (some of them multiple houses), and they're hardly likely to hurt their rich, house-hoarding friends. But as the proportion of renters grows, these sorts of demands are only going to increase. and if renters vote, they will have real power behind them.