As the British housing crisis rages on, the so-called solutions become more and more exotic. Shared ownership, help to buy, intergenerational mortgages, work/live spaces, houseboats, shipping containers… the list goes on. But what if we are treating the symptom and not the cause?
Unless we start calling the housing crisis by its real name: extreme land monopoly – we’ll end up with ever more loony solutions for what should be a basic human right.
Host Ross Ashcroft is joined by author of The New Enclosure, Brett Christophers and the Co-Director of Shared Assets, Kate Swade to discuss who owns Britain and why we should care.
The predicament that the UK finds itself in today is one in which the housing and land market can be compared to the game Monopoly. Kate Swade points out that the game – invented by Quakers – demonstrates how a system predicated on the extreme monopolizaton of land, ultimately leads to an accumulation of wealth into the hands of the few. “I think [the game] is a salient demonstration of how the current way of thinking about land can be really messed up….Obviously, it was originally invented as a cautionary tale”, says Swade.
The way humans have ordered, and interacted with, the land market marks the beginning of the sense of the ability for an individual to own a piece of land outright – a notion intrinsically linked to the birth of modern capitalism.
According to Swade:
“It was actually one of the key mechanisms that enabled colonialism and the crown to fund people to go off adventuring to find new lands. We have exported this system to the rest of the world. It continues to have really detrimental impacts both in terms of the way the systems that we’ve set up there and the way in which our land use has become so unproductive in lots of ways. We rely on the land use of the rest of the world for so much of our food, fuel and fibres and all of the things you traditionally produce from land. I think there’s knock on impact in terms of the way we have things today, that’s been built up over a really long time.”
In the view of Brett Christophers, the early period of capitalism, land monopoly and rent on land, has served as a model for other forms of rentierism over time:
“I think rent as a kind of a capitalist, social institution, has diversified over the past hundred and fifty years and land, rent and land monopoly has been the model on which other forms of monopoly and rent have been modeled.”
The historical context outlined above gives credence to the idea that the system is fulfilling the objectives it was designed to set up to achieve, that is, to augment the financial interests of the ruling class predicated on the assumption that value is determined by the location of land that the said class deem as being desirable.
Land, in other words, is deeply embedded within the broader tradition of neoclassical economic thought – a relatively narrow orthodoxy that increasingly became the mainstream throughout the 20th century. “Within that very narrow mainstream”, says Christophers, “there was a development towards treating land like any other asset.”
The author of The New Enclosure adds an important caveat:
“I think it’s important to note, however, that within a broader tradition of political economic thinking, land never really disappeared and there continued to be significant, constructive and creative thinking about the role that land plays in the capitalist dynamics of accumulation and wealth concentration and so on… associated with…various forms of Marxism. The problem was, though, that this wider school of thinking was very marginalized within the academy specifically, but also within wider western society as well.”
“Radical economic thinking of most stripes became marginal, particularly from the 1960s onwards….Big questions about the politics of land ownership was central within the UK. Through to the 1970s there was lots of stuff being done about land. Issues around unearned increment and so on, were pretty significant questions on the political agenda. But from… the 1980s onwards, land was… shunted from the political agenda in the UK and it also disappeared from the academic agenda. And it’s only really in the last few years that you can say that the land question broadly conceived and all the political aspects to that has kind of begun to bubble up again.”
By the early to mid-1980s, government legislation was enacted on behalf of the interests of landowners and the banking asset class in order to boost profits. It was during this period that the Tories Right to Buy policy was introduced whereby council house tenants were encouraged to buy their homes. The notion of the ‘property owning democracy’ that had been cultivated about a decade prior, has today become normalized within a large swath of working class culture. “I think there was then an active approach of making both council housing less normal, less secure and more stigmatizing”, says Kate Swade. Indeed, as an article citing Shelter attests, the harsh reality is that segregation and stigma are being institutionalized in our housing system.
The said system is rooted in the Right To Buy programme. Instead of local authorities re-investing the revenues generated by the selling off of council homes to build more of them, the Treasury ended up getting their hands on the surplus. The decision to sequester the funds into central government coffers was largely a political one as local authorities were seen as bastions of resistance against Thatcherite policies.
Christophers points out the impact of this shift in government economic policy:
“In the UK over the last 20 or 30 years, the real estate sector has become massively more significant in economic terms. For all the talk that we hear about the financialization of the UK economy and it all becoming about financial services, if you look at the actual data for the changes in the UK economy over the last 40 years, there’s been more growth… in real estate then there has in finance.”
For Kate Swade, the notion of perpetual growth in real estate against a backdrop in which wage growth is stagnant, is unsustainable:
“One of our kind of core beliefs”, says Swade, “is that we should use land to produce the things that people need. And people absolutely need homes. But the kind of vacuum like effects of the housing market on the money that people are spending on running to stand still literally in their own homes, means that you’re really jeopardizing other productive things that people could be both doing with their time and with land. People are very much invested in the idea of hope value and waiting for it to go up to a point at which they feel they can sell. So that becomes your primary driver rather than how can I use this land best.”
For Swade, hope value as the primary decision-making driver is expressed in the regressive way taxes are levied on the occupiers, rather than levied on the owners of land:
“If you go back to Henry George and the idea of land value tax, it’s all about taxing land and the value of land rather than its productive use. And I’m not necessarily an advocate of land value tax, but I think we have the almost exact opposite at the moment where we have council tax and business rates, both which are levied on the occupier not the owner. So the owner can sit there and their assets can go up in value while the people who are actually living in or working in those properties are having to pay the tax that I would say in reality they should be paying.”
Brett Chrisophers reminds us that on the whole, people don’t associate housing with land.
“When people buy and sell housing what they don’t realize is that what they are essentially buying and selling is largely the land on which the housing sits. So I think that people just don’t think about land and about the question of who owns land or about the question of the ways in which the ownership of that land matters to what that land is used for and under what circumstances and what condition”, says Christophers, who adds:
“Over the period during which land has been privatized, en mass, the questions of land ownership have been pushed off the agenda. I think that people who own land, particularly people who own lots of land and institutions who own lots of land, don’t want other people to know about it. A very high proportion of Conservative Party politicians, for example, are significant landowners. That’s a significant issue. It’s something that people don’t want to be brought to light.”
Kate Swade points out that land reform – at least in Scotland – is starting to become a political issue again:
In Scotland they’ve had two land reform acts now. This issue has very much been on the political agenda thanks to decades of activism and the fact that Scotland is, I suppose, the starkest place in the UK in terms of that inequality of land ownership. And so you have amazing stories about communities buying their islands back….In England it feels a lot further away,”
Swade has been active in something called The Land Justice Network – a conglomeration of housing, anti-gentrification and food activists – whose starting point is that land is a common good regardless of who owns it and therefore the use of it should come with responsibilities as well as rights. “Actually having a much deeper conversation about what should the responsibilities of land ownership be, feels a bit more of a fruitful path to go down”, says Swade.
According to Brett Christophers:
“There is no one best model of land ownership and land use. Different forms of ownership can work well for local communities in different situations, and sometimes private land ownership might work perfectly well. But sometimes land is best owned by the state because the state can perform a kind of coordinating role that other landowners can’t. And sometimes land is best owned by local communities. A kind of a mixed ecology of land ownership is probably the best that we can aspire to.”
Kate Swade, on the other hand, argues that a mixed ecology of land ownership would be more effective in conjunction with more of a mixed ecology of models of use and management:
“At the moment one of the problems with the system is it’s based on hierarchy and exclusion, right? I have my freehold, I will grant you a lease over this bit and tell you what you can do or what you can’t do.”
Swade argues that what is needed is a model that combines what both the state and community do best. But the current model, says, Swade, is not fit for purpose. It’s one in which the community is effectively forced to take out, say, a 25 year lease on ‘take it or leave it’ terms. “It actually doesn’t work well for the way in which communities work”, says Swade.
Christophers agrees that the current model is unsustainable:
“If the current model persists then if you think about how current privately owned land and particularly housing land get passed onto the next generation, then that’s going to be exclusively passed on to people whose parents are homeowners because there’ll be no one else. And it’s just a recipe for greater social fracture in the long term.”
“One of the things that works in Scotland”, says Swade, “is to get people talking about land in the pub. And so that sense of like the housing crisis is a land crisis. Climate crisis is a land crisis. And people becoming, I suppose, more literate in the fact that it exists as a problem.”
When people become more confident connecting the dots, and have more knowledge of the issues, they are more likely to talk about it and ask pertinent questions of their politicians.
However, the problem, as Christophers acknowledges, is that:
“So many people and institutions in the UK are heavily invested in the current system as it currently is. The Tory party will never do anything significant about land and land ownership for obvious reasons, which are to say, not just the personal investment of people within the Tory party itself, but also its main constituency. But, you know, it’s tough for the Labour Party to really take on these questions as well because you begin to make noises about possibly land value taxation or things like that and you get hammered [by the tabloids].”
“If you look at voting patterns within the UK, property owners vote a lot more than renters and so people ask, for example, you know, why are the Labour Party 10 points behind in the poll? Well, things like The Land for the Many Reports, probably didn’t help, sad to say. If people feel that their own personal investments are in any way likely to be threatened, then they’re not going to vote for a party that’s taking things in that direction.”
In other words, the political choices people make are often shaped by narrow financial imperatives, many of which – as Swade points out – were previously the obligation of the state:
“People feel that they can’t trust that their state pension will be there or their private pension will be there or that social care will step in when they need it. And it’s not because we’re a nation of like greedy, avaricious accumulators – although maybe some people are – it’s because we have sort of systematically dis-invested in the rest of the kind of common fabric that we need to keep us all afloat. So people are totally reliant on their houses as an investments to sort them out, to pay for their children’s university fees; to think about their pensions. You can’t blame capitalist entities for being capitalists in the capitalist system, and you can’t blame people for acting in that way, in the system that we’re in”, says Swade.
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