UK 23 June 2017 How the fire at Grenfell Tower exposed the ugly side of the housing boom Nobody consciously chose to harm those at the bottom of society, but governing in the interests of the rich has done it nonetheless. Photo: PA Sign UpGet the New Statesman's Morning Call email. Sign-up It’s impressive, in a way, how quickly we slot horrific new events into the beliefs we already hold. In the Grenfell Tower fire – a tragedy that, at the time of writing, is presumed to have cost 79 people their lives – some on the right saw a story about poorly built high-rise social housing. The left, however, saw it as fresh evidence of the damage that seven years of austerity had done to local councils. The fire does feel symbolic: of the inequality at the heart of one of the richest cities in the world; of a government unable to look after its people. But reality rarely slots neatly into our prefabricated narratives and, although the details are still emerging, it already seems as if many of those assumptions were flawed. Experts’ theories about why the fire spread so fast have focused not on the poor quality of the building’s original 1967 design but on problems with the external cladding installed in a £10m refurbishment last year. What’s more, while most councils have struggled with years of centrally imposed cuts, the Royal Borough of Kensington and Chelsea (RBKC) isn’t one of them: it is sitting on reserves worth £274m and, in 2014, found enough money to give council-tax payers a rebate of £100 per head. And yet, it seemed, it could not find the cash to pay for sprinklers or the £5,000 extra it would have cost to use a fire-resistant form of cladding. There was austerity in Kensington, but it was the product of conscious choice, not financial pressure. Voting intention by housing type in the 2017 election For a whole week, those who survived the fire faced a second indignity: the uncertainty regarding where they could now live. The day after the tragedy, the housing minister Alok Sharma offered his “guarantee that every single family from Grenfell House will be rehoused in the local area”. This was both morally and politically right – but whether he would have made this promise if he had been more than a couple of days into the job seemed an open question, because few in the housing sector believed it was one he could keep. The council already had more than 2,700 households waiting for accommodation (actually quite low for inner London). It was possible to give priority to survivors of the fire, but it would require pushing others yet further down the list. Nor did it seem likely that the homes on offer likely to be adequate replacements for those that have been lost. “Most people made homeless in London have a very long wait in temporary accommodation,” Kate Webb, the head of policy at the housing charity Shelter, told me. “And even that is going to be outside of their area.” In the immediate future, at least, it seemed likely it would be much easier to find bed and breakfasts in Hounslow than permanent new homes in Kensington. In the event, the naysayers, myself included, were wrong: on Wednesday afternoon, after the print copy of this article had gone to press, the Evening Standard reported that the Greenfell families would be rehoused in 68 apartments in the luxury Kensington Row development, at a cost of tens of millions of pounds. The deal, specially brokered by the Homes & Communities Agency on behalf of the government, was great news for those families. But it is striking that it took a tragedy and national scandal on the scale of Grenfell to make it happen. And those homes – which were always earmarked as social housing – are now not available to the 2,700 other families on RBKC’'s waiting list. They will not be receiving similar treatment. It doesn’t feel like this should be difficult: Britain is rich, London richer and RBKC the richest borough of all. Yet the shortage of available homes reflects not just some kind of moral failure on the part of the council but a genuine shortage of property. Who is building houses? To be blunt about this: we have not been building enough for a very long time. In the decade after the 2001 census, London’s population grew from 7.3 million to 8.2 million, an increase of roughly 12 per cent. The capital’s total number of homes, however, increased by just 7 per cent. Both trends have continued since, with all sorts of entirely predictable results: higher rents, overcrowded homes, hilarious news items about renters going to see “studio flats” that turned out to be a bed in a shed with a tree growing through the wall. London’s housing crisis is the biggest and most visible in the country yet it is far from unique. In Oxford, Cambridge, Bristol – in almost any city with a decent jobs market – housing costs have soared in recent years. In other parts of the UK, house prices are lower; but so, unfortunately, are wages. The result is a collapse in property ownership among the under-40s – and, one is tempted to suggest, flatlining national productivity and unexpected enthusiasm for Jeremy Corbyn’s Labour Party. We know how to fix this (in that we know how to build more homes) but we haven’t, for two main reasons. One is that we have inadvertently constructed a housing market in which nobody has both the interest and the capacity to build more. Private developers bid for land based on the price they believe they will be able to sell new homes there for. As a result, if prices fall, they stop building: look at a graph of housing supply over the past 50 years, and it is abundantly clear that the private sector will never give us the homes we need. This would be fine if other organisations were allowed to build but they are not. Housing associations are restricted by government finance rules. Councils were explicitly banned from fully replacing homes sold under Right to Buy; today, they lack the money and, after decades of disempowerment, the expertise, too. The 2004 Barker review argued that the UK needed to be building 250,000 new homes every year just to keep up with demand. It feels telling that the last year we managed to do this was 1979. Total government grant to local councils The other reason we haven’t built enough homes is that we place such tight restrictions on what we can build. Land-use restrictions such as on the green belts prevent our cities from growing outwards; rules on tall buildings prevent them from growing upwards. These are often legal, but are rigidly enforced by public demand. Last year, for instance, the Friends of Richmond Park, residents of the west London suburbs, fought a noisy campaign to stop tall buildings from being built 14 miles away in Stratford, in the East End of London, because they would ruin their protected view of St Paul’s Cathedral. The buildings wouldn’t prevent west Londoners from seeing St Paul’s, you understand: the buildings could simply be seen behind it. All these restrictions, all these campaigns, are there to protect something good. Between them, they add up to a shortage of housing that is blighting lives. It is hard not to notice the parallels between the Grenfell Tower fire and the broader housing crisis. RBKC bosses chose to promote electorally motivating tax cuts for the borough’s largely rich residents over fire safety in its social homes. As a nation, we have consistently chosen to protect the views and house prices of those who have housing over the needs of those who don’t. Nobody consciously chose to harm those at the bottom of society but governing in the interests of the rich has done it nonetheless. The survivors of the Grenfell Tower disaster were left homeless by the tragedy, and it looked for several days like that they would have nowhere else to go. Both of these things may well have been avoidable. But austerity is not just a policy: it’s a state of mind. George Eaton: The Grenfell Tower fire has turned a spotlight on austerity's limits › Theresa May missed an easy opportunity on EU citizens' rights Jonn Elledge is a freelance journalist, formerly assistant editor of the New Statesman and editor of its sister site, CityMetric. You can find him on Twitter or Facebook. 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