“Housing Xenophobia” and Other Nonsense
I’m pissed off this week, and it’s rant time. Faisal Islam has a post and video on “exporting homes” which is totally daft. I read a post from Matt Nolan describing “Housing Xenophobia” in New Zealand just a few months back, and thought it was a good thing that didn’t happen here. How naive.
Faisal makes the claim in the video that houses built in London and sold to foreigners (eek! foreigners!) are “not functionally part of Britain’s housing stock.” Yes, yes, really, they are. Just like the Nissan factory in Sunderland is part of the capital stock available for production in Britain, even though it’s owned by foreigners (eek! foriegners).
Increasing the supply of housing in Britain increases the supply of housing in Britain. End of story. This is unequivocally a Good Thing. That should be common sense; see also Matt Yglesias. Let us not hear silly claims about how middle-class Malaysian investors are buying London property to let it sit empty. Give me a break.
Now rant two. Let us not hear any rubbish about how “putting money into housing” is an “unproductive use of capital”. If I want to deploy capital improving my own standard of living, or that of somebody else, by building a lovely house, who the hell do you think are telling me what is “productive” and what is not? Some kind of central planner? Seriously, screw you too. If you think building more car factories will be a “productive use of capital” then go right ahead and build yourself a car factory, and good luck to you too.
Rant three, most important rant: It should not be an aspiration of the government to spend money building “affordable housing”. That is as daft as proposing that the government should spend money building canned spam factories, “affordable food”, because there are lots of poor people who can’t afford to eat. (I’m sure I stole this analogy from somebody so my apologies.)
If any politician proposed building spam factories (“Plan Spam”… “Help to Eat Spam”?) they would be hounded from office. But apparently it’s just fine for “progressives” to ensure poor people are stuck with low living standards by building crap, low-quality – uh, sorry – “affordable” – uh, sorry – “social” houses for them.
If you want to improve the quality of the British housing stock get rid of the crazy planning laws. To deliberately skew housebuilding towards the low end of the market will simply move the average quality of housing lower than it otherwise would be, i.e. it lowers prosperity. And if you also want poor people to afford more or better housing (or food), then raise their incomes through the tax system, absolutely fine by me. Confusing the means by which we achieve “better housing” and “lower inequality” is total nonsense.
Final rant: Saying that “rising house prices is bad” is reasoning from a price change. Because Japan. Japanese residential real estate prices collapsed by about 50% since 1991. Was that a “good thing” for the Japanese, did it somehow raise their “real incomes”? No. That’s nonsense. Rising demand for housing in Britain, which is mostly driven by rising incomes, is a another Good Thing. If you want to say the supply-side is crap, or that demand-side subsidies are crap, just say that. Don’t talk about changes in price being “bad” or “good”.
Alright, rants over, I feel better now.