Two important factors are gradually swinging the attention of house builders in a number of countries away from the ‘National Dream’ of home ownership — a mantra that has been popular for many years.
First, housing prices have risen so far that many first time buyers must wait half a career in order to buy a heavily mortgaged house that will then require a career and a half to pay off.
Second, middle class interest is shifting to a lifestyle that includes a healthy walk to work, nearby shops, and entertainment. That lifestyle, made particularly desirable by removing the worry of home repairs, is making renting, even luxury renting, more attractive.
Karl Marx and his nineteenth century socialist fellow travellers long ago identified a third factor, which is currently playing a growing part in determination of where and how to live.
Workers! Don’t be lured into bourgeois home ownership! It kills your mobility and leaves you anchored in a jobless environment when the siren call of employment in some other locale beckons. Meanwhile carefree renters can move immediately to exploit the opportunity.
These days, not only the workers but the bourgoisie (a.k.a. the middle class) have more and more reasons to see that the mobility of renting is both a necessary and desirable objective.
A recent article by Richard Jones in Housing Today explores how these various factors are promising a £550 billion future for a ‘build-to-private-rent’ sub-sector of the housing industry. Housing Today is a UK building industry magazine, so it’s hardly surprising that Jones calls for government study and intervention as necessary to ensure a smooth and profitable passage into a new era of free market housing. Read more in Housing Today: The Growing Importance Of The Private Rented Sector
Absent from Jones’ article are calls for some of the government studies and interventions affordablehousingaction.org would like to see about people who will be the private-renters.
At the moment, UK private renters face the worst of all worlds — landlords unconstrained by law who are able to evict on a whim, and are limited only by safety regulations to supply important physical and mental basics of life.
If there was ever reason to doubt that the ‘natural balance’ of a free market currently serves the interests of buyers and sellers alike, here’s one small example from The Guardian: Nine Out Of 10 Shared Houses Don’t Have A Living Room. Here’s Why We Need Them
In Berlin, Germany, with a shrinking rental stock and skyrocketing rental prices, a clear need for housing regulation to protect buyers has resulted in an upcoming city-wide 5-year rental freeze. Needless to say, it has been greeted with shock, horror and tales of the housing apocalypse by the house building and housing finance industries. Try:
Can Renters Survive Without Commodified Housing? Berlin Aims To Find Out
Why is this of interest to other jurisdictions?
Wherever renting lures more and more people away from the home ownership dream and towards a more flexible rental lifestyle, there’s also the tension between landlords who deserve a reasonable profit for their effort, and renters who deserve both affordability and security of tenure.
The right answers may not be found in missing UK living rooms, or in draconian Berlin rent freezes. But some government intervention will be necessary in every country where:
- the business faithful place their hope in the coming of the Angels of the Free Marketplace, heralds of an unfettered Economics 101 nirvana, believed to exist in some housing heaven but not yet seen anywhere on earth.
- the tenant’s dream that annual rent payments really shouldn’t go up faster than the rate of inflation, nor should security of tenure be made to vanish at the snap of a landlords fingers.