Why we need long-term planning to meet society’s housing needs

What if we changed everything?

Markets are on course to end human civilisation.

Because there is no price on the damage companies do to rivers, the atmosphere, nature or communities. Markets incentivise this destruction.

The economists call these impacts negative externalities, and it is becoming clear that they are so big they will destroy the markets themselves.

The logic is simple. You can’t have infinite economic growth, at least without a fully circular zero carbon economy, on a finite planet.

So it’s hardly surprising that some academics are working on different solutions to this existential conundrum.

The main theory that has been getting some publicity is ‘degrowth’. Its idea is that to save human life on Earth economies have to adjust so that they supply human’s basic needs and no more.

The challenge for this theory is that, as yet, there is no credible economic pathway to that outcome.

In the meantime, politicians compete to outgrowth each other and, more worryingly, obfuscate by using a deeply flawed measure, GDP, and relying on large scale immigration to boost this number without increasing prosperity per person.

What has this got to do with housing?

Quite a bit as it turns out.

Housing is a human right. It is one of those basic needs that a degrowth, or perhaps a better term, post-growth, economy will need to provide.

And the immigration growth mirage is made real by a housing supply that is inelastic, though in the last couple of years the housing stock has absorbed net migration of over 600,000 people a year with limited market disruption.

So how might we transition to an economic system that restores nature and the climate and provides for society’s needs?

The main barrier is politics. Politicians believe we are all selfish, voting only for our own self-interest. And we do seem to reinforce this belief at the ballot box despite opinion polls suggesting that most of us care about other people and the planet.

Much of this cognitive dissonance is because of the stories, many of them myths, that have been fed to us by vested interests.

You know them well. “Growth is good”, “there is no magic money tree”, “ you can’t tax rich because they will leave.”

So politicians go from short-term bribe to short-term bribe when what is needed is long-term planning for society’s needs.

At Futurebuild a couple of months ago I asked a great group of people who had been retrofitting a small number of council homes in Enfield what difference a ten-year funding plan would make compared with the short term funding for pilots they had been getting from government.

The answers were revealing. New factories, training, lots of new jobs. The confidence businesses need to invest to provide the basic human right of warm, affordable healthy homes.

That same week the budget announced £20 million for community-led housing.

It’s another short term bribe.

Yet the benefits of the community housing sector could be huge. These organisations value environmental and social outcomes much more highly than commercial housebuilders. They reduce the negative externalities significantly.

Community housing also needs a long-term plan. It needs to be properly capitalised to scale up, to be able to buy land in the market, and to pay a core team.

The community energy sector shows some of what can be achieved. Almost by an accident of public policy design (the feed in tariff), they have built thriving profitable organisations designed to do good.

The range of their activities is too long to list but can be summarised as producing renewable energy to save the planet and using the surpluses to fund fuel poverty alleviation and retrofit while building social capital and providing society’s needs.

These two community organised sectors could be doing so much more, and delivering so much more social and planetary benefit, if the public were aware and voted for politicians that would grow this different economic system.

The inevitable barrier is the vested interests and their financial stranglehold on mass communication.

So it was encouraging to hear Lord Callanan, the government minister responsible for energy efficiency and green finance, in the House of Lords calling out fake news spread about heat pumps funded by the gas industry vested interests, a couple of months ago. 

“We need politicians of all political parties to take a stance, to make long term plans, that aren’t turned into divisive politics, to achieve good planetary and societal outcomes.”

 His track record on telling it straight is strong though his resistance to community energy in favour of the vested interests of ‘competitive, market-based solutions’ shows where this Government’s loyalties sit.

This is important because we need politicians of all political parties to take a stance, to make long term plans, that aren’t turned into divisive politics, to achieve good planetary and societal outcomes.

Large-scale long-term policies to build a strong community-led economy that delivers the housing and green energy the country and the planet needs together, with a multitude of other co-benefits would be a great way forward.

The UK Government can do this. Within the limits imposed by planetary limits and inflation it can fund this transition.

There is also a long way to go to tax the ultra-rich fairly. Council tax is just one example of a tax that subsidises the very rich. These people wouldn’t miss the money from a low % annual tax on their wealth being worked on by the G20, but the benefit to the rest of society would be enormous.

By investing public money, through not-for-profit community-based organisations, to deliver the things that really matter, like reducing pollution and providing healthy affordable housing, we can at least transition some of the way towards an economic system that that restores nature and the climate, brings us back within the planetary boundaries, and provides for society’s needs.

We aren’t just trying to save the planet anymore, we are trying to save ourselves.