I’ve heard it said, unfairly, that political blogging is solely about making empty but vicious criticisms of the people who have to make hard decisions, offering nothing positive or constructive in return. I mean, it’s mostly about that, but not today.
Because I’ve got some solutions to the housing unaffordability crisis. Since letting the market completely off the leash (compounded by badly-targeted government handouts) has condemned most of the generations from here on in to permanent renter status, how about we make up for it by giving tenants some more protections?
- Giving renters more security – make it more difficult for landlords to kick tenants out when they feel like it;
- Giving renters more rights to make changes to their homes – fixtures, etc; and
- Capping rent increases at CPI.
I’d also advocate taxing landlords’ income – ie, capital gains – at the same rate as ordinary taxpayers. Half is not even close to fair.
Limiting rent increases is particularly critical, not only because increasing them ahead of CPI is unjust, but because it gives the government back some ability to control the boom/bust cycle. At the moment, investors are immune from the supposedly cooling effect of interest rate rises because they simply pass them on to tenants. But if they couldn’t… then there’d actually be a way to slow down the overheating market. And, frankly, it’s absurd for tenants to find their basic housing costs increasing faster than the CPI. It drives the poor further into poverty, and keeps those who might have been able to make the leap into home ownership on an eternal treadmill, where it keeps getting further and further out of reach.
Now, landlords being tricky buggers, they’d probably just try kicking their tenants out at the end of each lease and starting anew with a fresh lot at a higher rate – so you’d have to enable tenants to register their current rent on a property, and make it unlawful for a landlord to increase the rate beyond that, even for subsequent tenants.
These clipart people are thrilled that finally they’ll have a chance to buy their own home and they’re going to vote for whatever party implements these awesome ideas.
These sorts of measures would, of course, have the effect of making investment properties much less enticing – which would, in turn, decrease the pressure that’s been pushing prices up so hard. Many landlords (in particular, the ones who were planning on screwing over their tenants the hardest) would sell up and leave the market, enabling those homes to be bought by people who actually want to live in them. Houses would still appreciate – they’re always going to be worth a few years’ income, and there’ll still be competition as the population grows – but at a vastly more reasonable rate. Homeowners wouldn’t be significantly negatively affected – on the downside, their properties wouldn’t be “worth” increasingly ludicrous amounts of money they’ll never actually see, but on the plus side their rates would be lower and their kids would eventually move out of home.
These clipart homeowners are particularly happy at the idea of their kids finally moving out.
Landlords and special interest groups like real estate agents would cry foul, of course. They’ve jumped on the property treadmill and expect it to take them to richtown, and screw the people who’ve missed out and will continue to miss out. But is housing an investment engine to help the wealthy get wealthier – or a means of housing people? I’d argue, strongly, that governments should be looking at the more basic rights of the people increasingly left behind, and consider the social implications of generations who’ll never have a realistic prospect of owning their own property, and the effect that will have on community problems like crime. You take away hope and see what the consequences are.
Obviously it’d be a tough political fight – the people who’d be negatively affected are also the ones with the most money and power – but isn’t it better than the alternative?
Pop quiz for politicians: did you know that there are more renters than landlords, and that many of them live in marginal electorates? It’s true! Can you spell “opportunity”? (It’s easy, it’s right there in the previous sentence.)
The status quo is not the answer.