Thursday 22 June 2017

  Housing really is central to everything

  Housing really is central to everything

An alliance of mortgage owners, property developers and bankers all end up having a strong vested interest in keeping the supply of new housing low.
Why? Because scarcity is what allows these groups to reap the fruits of financialisation: if everyone could have a nice home to live in, the cost would drop like a stone, and so would the profits. 
The result is a “low-supply equilibrium” where supply is kept artificially below demand.
The only answer is bold government intervention to change how housing is supplied and owned; to put people before the rentiers.  
If anything, the reverse has happened – there has been government intervention, but mainly to provide a form of welfare which reinforces the existing financialised housing dynamic. 
In the 1970s, over 80 per cent of government housing subsidies went towards supply-side intervention; mainly the construction of homes.  
Today that has flipped to 85 per cent of subsidies for the demand-side, in the form of billions in housing benefit payments, support for first time mortgage lenders and such like.

The fundamental issue of the monopolisation and financialisation of housing remains untouched. The result is a deeply embedded class divide based on those who own the land and those who rent.

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