There is a shortage of homes.
Not everywhere, not all the time, but often in areas where housing is most needed, such as London.
This has resulted in a massive increase in rents as demand outstrips supply.
Which is a big problem for society.
It means that in those areas, people on low incomes, many of whom perform essential but relatively low paying services (such as cleaners, nurses, catering staff etc) are unable to find anywhere to live.
Leading to a shortage of people to provide those essential services.
How can we deal with this?
There are, as I see it, three potential ways forward.
1. Leaving it to market forces to sort things out
This though is what we have been doing for the past 20 years or more. It is arguable that this is what has created the problem in the first place.
2. Imposing controls on the rent levels landlords can charge
This is being suggested by many, particularly by tenants organisations. However this approach was tried in the last century with the Rent Acts and resulted in the private rented sector dwindling to under 8%.
Personally I do not think that rent control is the answer. I much prefer the third alternative:
3. Increasing the supply of housing
There are two ways that this could be done:
- Requisitioning empty homes to use for housing and
- Building more houses.
Increasing the supply of housing
Although we have a shortage of available housing, it appears that in many of the areas of greatest need, there ARE buildings, lying empty, which could provide accommodation.
Its possible that these empty properties could, if put into use, even be sufficient to house all or a substantial number of those in need.
Lets take a look at this. First
Why are buildings lying empty?
There are a number of reasons. Some of the most common are that:
- They have been bought as an investment property (for example by a foreign investor) but the owner does not wish to rent them to tenants preferring to leave them lying empty
- They are owned by someone who does not want to use them but does not want to let them to tenants either – for example people who have inherited property from relatives which has a sentimental value for them, or
- They are in need of repair and the owner cannot afford the cost of putting the property into a suitable condition for renting or perhaps
- They would need planning permission before they could be used for housing, and finally
- They are owned by one of various government departments, for example the MOD, but are not currently being used
Then there is also the question of land which is suitable for building but which is not being developed.
Unused suitable building land
- Land in property ‘land banks’ built up by organisations such as Tesco
- Land purchased by property speculators for building projects which for one reason or another are not proceeding and
- Land which cannot be developed because of legal complications
(With the last, the obvious way forward is by compulsory purchase.)
My view is that greater attempts should be made to use these resources to increase the housing supply, before artificial limits are places on landlords ability to charge a market rent.
Or to put it another way, the market should be changed so that market rents become more affordable.
The philosophical argument for compulsory acquisition of land and buildings for housing
We live in a small country and there is a limited amount of land available for housing (bearing in mind that the majority of land space is either physically unsuitable for building or is needed for other purposes such as agriculture, woodland and conservation).
If our population continues to grow, particularly if the trend for ‘one person’ households continues, there will be an increasing pressure on the buildings and houses we have.
In these circumstances, can we allow people the right to own property suitable for housing and leave it lying empty?
This is a difficult question and goes back to the eternal argument about the rights of the individual against the rights of society.
However I think that may be a case now – and if the population continues to increase, there may be an even stronger case in the future – to argue that people should not be allowed to keep buildings empty when there is a genuine need for housing which cannot be met by the available housing stock.
And if the pressure on housing continues, the ‘homeless’ are going to include more and more people who until recently would have had no problems in finding somewhere to live. For example people with jobs whose salary is not enough to pay spiralling rents.
So how could we bring about the re-use of unused property and land for housing?
The Empty Homes Regulations
We do already have powers which Local Authorities can use to acquire properties which are lying empty. For example they have the power to take over empty homes and rent them out to homeless families as I reported here in 2006
However it seems that these powers are not being used much, no doubt mainly due to a lack of Local Authority resources, both to finance the inevitable repairs required and to provide the personnel needed to manage these properties.
However, more often it is the Local Authorities compulsory purchase powers which are being used, rather than the empty homes regulations.
Compulsory purchase is another route available to Local Authorities to acquire property, but again it is an expensive one.
There are not only the legal costs of bringing the claim but also the cost of paying compensation to the land owner (as set out in the new text book on compulsory purchase by Michael Barns QC.)
It seems from a quick flick through the Barns book, that the law relating to compulsory purchase is over complex and in need of reform.
Maybe reforms could include greater and less complex powers for Local Authorities to acquire land and buildings suitable for housing which are not being used?
Some suggestions for reform
One idea is for there to be new powers to acquire land and buildings, but limited to areas specifically designated as being in need of housing accommodation. It could even be an offence for a suitable property to be left empty without good reason.
The governing legislation would no doubt set out the circumstances which could be considered an acceptable reason for keeping a property empty.
There would have to be a procedure whereby the land owner is notified that their property is vulnerable to being compulsorily purchased, for example because it is suitable for housing but not being used.
The land owner could be required to respond within a specific period of time. Then if no satisfactory response is received within that time, the compulsory purchase procedure could begin.
Compensation would have to be paid to the land owner, but this could be subject to the deduction of fines, maybe for the offence of failing to offer a suitable property to tenants in an area of designated housing need.
This is all VERY speculative and I am basically just throwing out ideas to see what people make of them.
However if the housing problems continue, something like this will have to be considered.
And government will have to make more funding available to Local Authorities to allow them to employ sufficient staff to take the steps necessary to bring available empty buildings back into use.