It's a start, I suppose. Photo: Getty
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"There is no shortage of land. None, zero, anywhere": the National Housing Federation's David Orr

The National Housing Federation chief executive on politicians missing the urgency to build more homes, his solutions to the housing crisis, and why it's "rubbish" that there's not enough space.

This article was originally published on the New Statesman's sister site about cities, CityMetric. Follow it on Twitter @CityMetric

“I think it is the big issue we are facing at the moment,” David Orr tells me. You can practically hear the italics. “People think immigration and the health service are the big issues – but actually, if you want to reduce people's perception of the impact of immigration, you have to deal with housing.”

Not just immigration, either: for David Orr, chief executive of the National Housing Federation (NHF) umbrella group of social housing bodies – and thus a man with some skin in this particular game – high housing costs are at the root of just about everything. They swallow up household budgets, depressing the economy. They make it hard for businesses to pay the wages required to attract and retain staff. They’re a major drain on Britain’s contested welfare budget, too.

The good news, Orr says, is that we can solve this. “We have talked ourselves into believing this is difficult when it's not,” he told a meeting at last autumn’s Labour conference. “It’s easy. We know how to build housing, we have the land, and there is a wall of money looking to get into residential property.”

The bad news is that, four months on, with an election looming and manifestos being prepared, almost nothing seems to have happened. I wanted to ask Orr what his solutions were – and why, if they were so obvious, nobody had so far embraced them.

Facts and figures

Orr began our meeting by reeling off a series of depressing numbers, outlining quite how rich you have to be to drag yourself into home ownership these days. A generation ago, the deposit typically required to buy your first home was, in today’s money, about £3,000; now, it’s 10 times that.

Consequently, in the last five years, the share of buyers who received family assistance to buy their first home has doubled, from one third to two-thirds.

It gets worse. The average household income among first time buyers today is £34,000. The median household income is only £32,000. In other words, Orr says, “We have precluded more than half the population from becoming new owner occupiers.”

Fewer owners means more renters, and in booming cities like London, rents, too, are through the roof. Salaries, unfortunately, aren’t. “The government quite often says that housing benefit is out of control, and they're right. It is. The public narrative is that it’s out of control because of scroungers and feckless people screwing the state.”

Actually, though, the amount of housing benefit being paid to people who are unemployed has remained pretty much constant over the last five years. The real increase has been in benefits for people who are in work. “There are people who are on above median incomes who are eligible for housing benefit. We've created an environment where work doesn't actually take you out of poverty.”

One might think that a government would look at this situation and conclude that housing costs were too high. One would be wrong. Instead, all talk is of clamping down on an over-generous benefits system.

That almost certainly won’t be enough: the NHF predicts that private sector rents will increase by 40 per cent over the next decade. “We have just had the biggest baby boom since the baby boom generation,” Orr notes. Back then, “we were building 300,000 houses a year or more.” Last year, it was 140,000. “That's why I was able to buy on an income of £20,000 a year, and why people in their mid-late 20s now can't do that.”

Most authorities think we need at least 250,000 new homes a year to keep up with demographic change. “I am really anxious about what will happen to the next generation,” Orr adds. “Unless we become properly seized of the importance of dealing with the housing crisis, I don't think there'll be an offer for them.”

"The single biggest cut anywhere in the Whitehall budget"

If Orr sounds uncharacteristically hesitant – it’s not a matter of dealing with the crisis yet, just of persuading politicians that this is something they might want to do – that’s because fixing it is going to be a long job. After all, the roots of this crisis stretch back a generation or more.

The housing policy pursued by the Labour government elected in 1997 focused on cleaning up decrepit social housing stock: replacing bathrooms, kitchens, windows and so on, and getting it up to “Decent Homes” standard. “I think it was actually quite a significant achievement by that government, and I'm not sure that they've taken sufficient credit for it,” Orr says.

“But,” he continues, “they took their eye off the ball on building.” The expectation was that, with house prices rising so strongly that banks were offering mortgages at 125 per cent of home values, the market would work its magic and the construction industry would step up. It didn't.

Labour only began pouring cash into new social housing during Gordon Brown’s premiership:  initially this was to deal with growing waiting lists; later it became a form of economic stimulus. But in 2010, there came a change of government, and a spending review. “The single biggest cut anywhere in the entire Whitehall budget was the two-thirds cut in capital for housing supply.”

The coalition’s signature housing policy hasn’t been supply-led at all. “Help To Buy” is, in effect, a state subsidy for first time buyers, boosting prices yet further. It’s not clear if this has had a positive impact on supply of new homes, but the signs aren’t good.

So how do we get out of this mess? It’s no good expecting the industry to step up, Orr argues: the major developers consistently say they're most comfortable building around 130-140,000 a year. “It doesn't matter how many kicks up the backside they get, their economic success is predicated on collectively building that many houses. So if you want to get to 250,000, don't ask them. You have to look at the contribution housing associations, local authorities and others can make.”

That, in other words, means the NHF’s members – but Orr denies he’s pitching for public money. “There's no problem financing housing,” he says. “There's a wall of institutional investment looking for a home: if we can get the right offer, we can bring the money in.” 

Nor is lack of space any barrier. “There is no shortage of land. None, zero, anywhere. There is a significant problem of rationing of land – through the planning system, the green belt, NIMBYism and so on – but that's all just noise. There is more land in Surrey set aside for golf courses than there is for human population. We don't have a shortage of land at all.”

What we do have a shortage of is guts. “The first thing we need is some kind of political commitment. Any government was going to get it in the neck for making the decision to build HS2 [the high speed rail line from London to the north] – but once the decision has been made, it happens.”

The same should be true of housing. “This is something that'll take more than one parliament to do, so you need to get cross party support for it. We have to think about housing in the same way we do as major infrastructure.”

To inspire such courage, the NHF is spearheading the Homes for Britain campaign, working with a range of other housing bodies to keep the crisis visible. “We are all going to be saying the same thing in the run up to the general election,” Orr explains. “If you want our vote you have to commit to ending the housing crisis within a generation, and having a detailed plan for doing it.” The goal, in not so many words, is to make it less scary talk about housing than to try to duck the issue. 

Feet to the fire

It’s early days, but success so far looks a long way off, and while the three main parties have all accepted the existence of the crisis, their response has been distinctly tepid. The LibDems are talking high numbers but have said almost nothing about how they'd achieve this. Labour has said it wants to be building 200,000 homes a year by the end of the next parliament: this, Orr says, is “nowhere near ambitious enough”. Meanwhile, the Tories refuse to name a figure at all, and prefer to talk of “tenure policy” (that is, ownership rates) than “housing policy”.

“All three parties will go to the general election expecting to have to talk about housing,” Orr says. “But I'm not sure that any of them has understood the urgency of it.” For their part, UKIP mostly seem to blame foreigners.

At the end of our meeting, I go back to the question I started with: if it's so easy to fix this mess, why haven't we done it already? “Some of it's inertia. Some of it's the sense that housing is a private good, not something susceptible to government intervention. Some of it's about protecting your own space: if you're an owner occupier, your personal advantage is retained by not losing your view and by seeing house prices sustained.”

And some of it, Orr says, is simply hysteria, about protecting green space, whatever the cost – a mania (my word) of the sort typified by the Campaign for the Protection of Rural England. Build six homes in every village in Britain, Orr says, and you would “basically solve the rural housing crisis. You don't need to concrete over the countryside to do it. I love the countryside, I want it to be protected. But I don't want our villages to be just be the homes of very old, very wealthy people. I want them to be real, dynamic living places, and if you don't build the homes for people who grew up there, you're not going to get that.”

“It's all part of the same narrative,” he says, getting into his stride again. “Britain's small, we're overcrowded, there's no land, we haven't got any space. It's rubbish.”

He catches himself and stops. “I'm beginning to sound like I'm on a platform.” At least somebody is.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.

Photo: Dan Kitwood/Getty Images
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Conservative disunity is not all good news for Labour

The Tory leadership election could squeeze Labour out of the conversation, just like Blair and Brown did to the Tories.

The first test of opposition politics is relevance. Other key yardsticks - political plausibility, economic credibility, setting the agenda and developing a governing vision - all matter greatly. But making yourself a central part of the relentless cycle of daily politics, the terms of which are generally set by the governing party, is the first hurdle. It matters not whether you sign up to new politics or old: be relevant or wither. 

The issue of relevance is becoming a pressing issue for Labour. Take George Osborne’s favoured issue of the so-called national living wage.  Leave to one side the rights, wrongs and nuances of the policy and just consider the basic political dynamic it creates.  Osborne has, quite deliberately, set up a rolling five year argument over a steadily rising wage floor. On one side, is the Chancellor arguing that his policy is the right thing for Britain’s ranks of low paid workers. Pitted against him are ranks of chief executives of low-paying big business. With each impending hike they will holler at Osborne to go no further and the media will happily amplify the row. In response the Chancellor will quietly smile.

Sure, on occasions this will be uncomfortable stance for Mr Osborne (and if the economy takes a downward turn then his pledge will become incredible; there are always big risks with bold strokes).  Yet the dominant argument between the Conservatives and big business leaves Labour largely voiceless on an issue which for generations it has viewed as its own.

We may well see a similar dynamic in relation to the new national infrastructure commission – another idea that Osborne has plundered form Labour’s 2015 manifesto. It’s far too early to say what will come of its work looking at proposals for major new transport and energy projects (though those asserting it will just be a talking shop would do well not to under-estimate Andrew Adonis, its first Chair). But there is one thing we can already be confident about: the waves of argument it will generate between Osborne’s activist commissioners and various voices of conservatism. Every big infrastructure proposal will have noisy opponents, many residing on the right of British politics. On the issue of the future of the nation’s infrastructure – another touchstone theme for Labour – the opposition may struggle to get heard amid the din.

Or take the different and, for the government, highly exposing issue of cuts to tax credits. Here the emerging shape of the debate is between Osborne on one side and the Sun, Boris Johnson, various independent minded Conservative voices and economic think-tanks on the other. Labour will, of course, repeatedly and passionately condemn these cuts. But so have plenty of others and, for now at least, they are more colourful or credible (or both).  

The risk for the opposition is that a new rhythm of politics is established. Where the ideological undercurrent of the government steers it too far right, other voices not least those within the Conservative family - moderates and free-spirits emboldened by Labour’s current weakness; those with an eye on the forthcoming Tory leadership contest – get reported.  Where Osborne consciously decides to tack to the centre, the resulting rows will be between him and the generally Conservative supporting interests he upsets. Meanwhile, Labour is left struggling for air.

None of which is to say there are no paths back to relevance. There are all sorts of charges against the current government that, on the right issues, could be deployed - incompetence, complacency, inequity – by an effective opposition.  Nor is the elixir of relevance for a new opposition hard to divine: a distinct but plausible critique, forensic and timely research, and a credible and clear voice to deliver the message. But as yet we haven’t heard much of it.

Even in the best of times being in opposition is an enervating existence. Those out of power rarely get to set the terms of trade, even if they often like to tell themselves they can. Under Ed Miliband Labour had to strain – sometimes taking big risks - to establish its relevance in a novel era defined by the shifting dynamics of coalition politics. This time around Jeremy Corbyn’s Labour is up against a Chancellor willing to take risks and pick big fights: often with traditional Tory foes such as welfare claimants; but sometimes with people on his own side.  It’s also a new and challenging context. And one which Labour urgently needs to come to terms with.   

Gavin Kelly is chief executive of the Resolution Foundation