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To fix housing, help people buy their own homes

One of the metrics that charted the improvement in working people’s lives over the past century or more was the increase in home ownership. From a situation where most people lived in rented or otherwise non private accommodation, home ownership rose steadily in the western democracies to a situation where most people in most countries owned the place in which they were living.

In the United States, home ownership rose from around 40% at the depth of the Depression in the 1930s to peak at 69% in 2004. The trend since has been downward with some analysts such as Bloomberg predicting, indeed clearly favouring, a situation in which the majority of Americans will become renters. This “vision” is curiously shared by most on the left, except that they want the state, rather than an investment fund, to be the landlord.

In Britain, homeownership was less than 25% in 1918, with a peak almost exactly the same at 70% as the US attained in 2001. It had already fallen to 64% by 2014. Gript recently reported on a similar trend in Ireland., and as the graph below shows, we’re now below average in Europe.  Interestingly, when the British Tories encouraged local authority tenants to buy their own homes in the 1980s, it was remarked that they were adopting a policy that had been in place in the Irish Republic since the 1930s.

Even with the huge public housing programme put in place from the 1930s, families were encouraged to buy their homes from the local authorities and home ownership increased from under half of all homes to almost 82% in 2004. It had fallen to under 69% in 2019, and as in other countries that trend is set to continue. According to the Ordnance Survey’s Dublin housing observatory statistics, 30% of housing in the city area is privately rented, and the overall proportion of people living in privately rented accommodation has increased from 7% in 2000 to over 18%.

 

• Europe: home ownership by country | Statista https://www.statista.com/statistics/246355/home-ownership-rate-in-europe/

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The question is, why is this the case? Some of it has to do with an erratic housing market, and rates of ownership have declined, but recovered, during severe downturns as repossessions have increased. However, there is a new dynamic at work now in western societies as there is both a decline in birth rate and family formation, accompanied by an increase in single person or two person households. There are also less protections for potential homeowners against being priced out of the market.

That, coupled with an increasingly transient population fuelled by immigration, has encouraged the greater share of new builds that are one and two bedroom apartments. That appears not only to be the model favoured by the built to rent developers and capital funds, but even by local authorities which lease or build such units as part of their own “social housing” stock. A huge part of Housing Assistance Payment also goes to support people in such accommodation.

Apart from the obvious consequences for older people who retire without the security of their own home, as pointed out by Professor Michelle Norris of UCD, the decline in home ownership both reflects and helps to shape the type of society that is replacing the much maligned nuclear family-focused organic community. It is no accident that western societies evolved towards that stable model, nor no coincidence that the increase in social dysfunction is strongly correlated with its decline – often actively aided by ideologically driven policies, as reflected no more so than in housing strategy.

For example, while all Irish governments from the 1930s onwards actively promoted and assisted home ownership as a social good, there has been a radical shift since the housing and economic crisis of the late 2000s. In a 2019 research paper, the Department of Finance argued that the increasing prominence of institutional investors, ie those who build and buy to rent, is a positive factor.

That in itself illustrates the extent to which the Irish political and administrative elite has abandoned any pretence to represent national interests, let alone a common social objective that echoed the 1916 Proclamation and the Declaration of Independence. Now, its sole “vision” appears to be no more than to facilitate Ireland’s increasing domination by global capital. The demographics, social structure and nature of community in Ireland are secondary adjuncts to those interests and to those of what might be described as a native rentier and comprador class.

The diffusion of home ownership was not only a positive development, but was one that that was actively encouraged by the state across most western democracies. As such, during the decades spanning the 1930s to 50s, western democracies – including the Irish state –  implemented a whole range of practical measures which allowed working families to buy their own homes. Those not only including the provision of public housing with the option and indeed incentive to buy, but a range of tax and other measures that facilitated working families in acquiring a home without being in thrall to unmanageable mortgages.

That was regarded as an alternative to unbridled market control of housing and to state ownership of housing which was made available to be rented, but could never be bought by those who lived in state accommodation. The model which best served the ordinary citizen was anathema to both the free market right and to the statist left.

It was a model rooted not only in practical considerations, but in a worldview that in Ireland and elsewhere was fundamentally based in a Christian conception of society. For Catholics that was referenced to the Papal encyclicals of Popes Leo XIII and Pius XI. Indeed, critics of what they perceived to be the lack of vigour of the Irish state in pursuing a more radical strategy in pursuit of what were regarded as the objectives of the Revolution, overwhelmingly based their critique on Catholic social teaching.

That is evident in the minority submissions to the Banking Commission of the 1930s, and in the pages of newspapers and journals that embraced the views of Irish people who would have variously supported Fianna Fáil, Fine Gael, Clann na Poblachta, Labour and the republican movement of that period. Far from being “apolitical” prior to the Communist arrivistes of the 1960s – as modern Sinn Féin would have you believe if you read their expurgated party history – republicans had a detailed social and economic programme based on national sovereignty and an Irish model of distributism under the rubric of Comhar na gComharsan.

Fundamental to that is the notion that private property is essential to the health of a society, and that family home ownership lies at its centre. That not only conflicts with the leftist veneration of the state and antipathy to the family, but with the neo liberal and libertarian right’s veneration of property as a counter totem to the state.

In his encyclical Laborem Exercens, John Paul II, one of the intellectual architects of the collapse of Communism in eastern and central Europe, also criticised the amoral free market idolatry that defined much of “conservatism” at that time. Conserving traditional ways of life and the western heritage is totally incompatible with an ideology that believes in some ridiculous Randian Chicago School world in which the pursuit of wealth at all costs is the only thing that matters. Such a fantasy, in common with socialism, can only be achieved by treating the mass of humanity as means to an end.

Pope John Paul stated that the right to private property was never held to be sacrosanct within the Christian tradition where its unbridled pursuit meant the denial of individual property rights to almost everyone else. “The right to private property is subordinated to the right to common use, to the fact that goods are meant for everyone.” It was that conception, rather than any nod to socialism, that was embodied in the 1916 Proclamation.

The Pope and other thinkers in that tradition of course also rejected collectivism based on confiscation. The problem then, of course, is how to balance the right to private property with what some would argue to be a tendency towards Pareto distribution: that is, that wealth like all other attributes leads to unequal shares. So, like a game of Monopoly one person will always potentially end up with everything.

The Pareto model applies just as much to socialism as the “good things” also end up being disproportionately owned or controlled by a minority. If valid, then it also implies that crude re-distribution is pretty much pointless. It also means that we accept that inequality is a part of human existence. Talents are unequally divided. There are also accidents of birth, and just plain good or bad fortune. It is the stuff of life, and all attempts to alter that have ended in horror.

When it comes to addressing practical issues like housing, then, there can be no grand solutions. Neither an overweening state nor a developer/corporate landlordism is capable of ensuring that every person is capable should they wish of having a home. Not somewhere they simply reside – on the premise that they can continue to meet often unpredictable mortgages and rents, or as a state dependent – but as a place at the centre of their own and their family’s lives.

 

This means the ability to live in a community of similar people with perhaps radically different situations in life, ambitions and even material or social status but sharing a fundamental belief in the integrity of such a community. That is not a utopian dream, but has, in fact, been the reality of life for the great part of humanity for a long time. This reality has survived regular crises even of an extreme nature because of the robustness of the communities in which it is are rooted.

Advocates of distributism, if you will, do not regard the economy and society as something to be measured in growth rates and production or the possession of material goods. All of these are, of course, essential, but they should not be pursued to the detriment of all else, including social well-being.

That is only utopian if you accept that nothing that we have is really of value or worthy of conserving if it conflicts with the drivers of that economic growth – which in the modern world are the interests of global capital. The left claims to offer a radical alternative but it shares the same belief that all the “old crap” has to be jettisoned in order to improve people’s material existence.

How to confront and reverse that trend is another matter. A pessimist might believe that such resistance is futile, and that the forces of globalism and the overriding of individual rights, including the right to one’s own property which in every similar epoch of history has eroded all other individual rights, have the upper hand.

If there is to be a resistance to that seemingly inexorable trend, it needs to start with basics. That would mean, given the current absence in most countries of an alternative governing power, that communities take back what control they feasibly can. That can operate in the cultural sphere, but also on a simple basis by supporting the local economy.

With regards to housing, there would have to be a change in state strategy but also in its overall willingness to surrender key economic and societal determinants to external forces. A viable housing strategy within that context would utilise the available land already in public ownership, but also return to some version of the old model in which public housing, with the construction undertaken by private companies, was given to people who would be facilitated from the beginning in buying their home.

 

Far from that being a massive extension of state intervention, in large part it would simply mean the redirecting of the already huge amounts of money spent on housing. Too much of the multi-billion state spending on housing simply accelerates the trends referred to; towards renting rather than purchase, and towards the construction by developers of high rise one and two bed apartments.

Housing is a fundamental need for any society, and how that need is met says a lot about what any particular society is about. If it is about anything on a serious level, rather than its elected rulers adopting the role of an area manager for some head office located beyond our shores. Changing that, of course, also requires the people who elect those rulers to recapture some vision of what sort of place they want to live in.

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