1. Breakthrough or collapse ? Housing in Britain The concealed

crisis

DAVID DONNISON

David Donnison is Professor of Social Sciences and Administration at the London School of Economics, and a Vice-President of the Lon- don Rent Assessment Panel. Author of 'Hous- ing since the Rent Act, 1961,' he was a member of the Milner Holland committee of inquiry into housing in Greater London.

Weeks before devaluation, people in high places seemed to be losing their nerve about the housing programme. `The first signs that Britain is over the watershed of her acute housing shortage are beginning to be picked up in Whitehall,' reported the Guardian on 10 Octo- ber. The 500,000 target is already 'a source of derision .. . and an embarrassment . .. For Mr Wilson to go to the polls in 1970 and say Labour has "licked the housing shortage" is becoming more and more of a possibility.' Mr Wilson might indeed say just that. But would it be true?

If we go on in future as we have done in the past, building the same kinds of houses for the same kinds of people but more of them, we shall very soon have houses standing empty and unsold. The programme will collapse, not because the builders cannot attain their targets and not because the problem has been solved, but because we are building the wrong houses for the wrong people.

• Nearly every married couple in this country has now succeeded in setting up a separate household. A lot of them live in slums, some are overcrowded, a few share a lavatory or even a kitchen with strangers. But at least they have a home of some sort where they can cook and eat their own meals together—which is all that the census definition of a 'household' means. But among the single, the widowed and other groups the numbers who have Succeeded in finding a separate home are Well below the figures for comparable groups in Sweden, Den- mark—and even France.

This means that young people, old people and single people of all ages have less inde- pendence and privacy in this country than their opposite numbers in many parts of north:- western Europe. At current rates of progress it will take us years to attain the standards reached by Sweden and Denniark a de- cade ago.

Look next at the houses we live in. In most countries the standards of new buildings took a big step forward after the Second World War. In 1960, 23 per cent of the houses in England and Wales had been built since 1945. But in Norway, West Germany and the vs 37 per cent or more of the honks had been built since the war. By now, these and other countries have gone further ahead of us be- cause they have been building much faster.

These comparisons all deal-with England and Wales. They would be even more discouraging if Scotland and Northern Ireland, with their older and more crowded houses, had been brought into the account.

How can this picture of a country more cramped and more shabbily houseil than its neighbours be reconciled with talk about an end to the housing shortage?

A way of seeing is also a way of not seeing. Concentration on the things we do best has distracted our attention from a lot of other things that need to be done. The 'permanent building societies,' invented before the First World War, proved an excellent device for garnering a growing volume of small savings and keeping loans and repayments continuously in circulation to fmance the housing of young families with secure incomes. Thanks to an accident of British tax laws which permits the borrowers to deduct interest payments from their incomes before tax is levied, the Govern- ment gives what amounts to a massive subsidy for owner-occupation.

Thus the building societies finance house purchase on a scale that is still the envy of our neighbours. But they only help those capable of saving regularly for at least twenty years. They can do nothing for families with incomes too low or too insecure to be 'good risks,' and nothing for the young, the footloose and the old.

After the building societies came the local authorities, providing similar houses—minus garage and rustic ornamentation—for similar families with lower incomes. Thanks to infla- tion, they now form as powerful an instrument as the building societies for investment in housing. Besides their subsidies, they have a massive rent roll, much of it drawn from property built at low cost many years ago. The profit they make on these older hOuses enables the councils to go on building new and more expensive housing without charging too high a rent for it. But, like the building societies, the councils have neglected many needs. The output of housing specially designed for the elderly has barely kept pace with the growing numbers of old people in this coun- try. Other groups—particularly the young, the single and the migrant—seldom get on to the waiting lists and even more rarely get a council house.

Between the wars this system worked pretty well. It produced a lot of houses and it was right that young families. should be the first to get them. The rest had to fend for them- selves in a law pool of privately rented housing which at that time still constituted the bulk of the market. Things have changed since then.

- There are more old people than ever before. They want' a place of their own and are less inclined to share a home with -their daughters- in-law. Young bachelors no longer spend their premarital years in digs; landladies take the `bed and breakfast' notice out of the window and earn more money by going out to work. All this means there are far more small house- holds—more old people, more 'business girls,' more students—looking for flats and rooms. These people, whom the speculative builders, the architects, the lenders and the local authorities have never catered for, look to private land- lords for their housing.

But the private landlord is going , out of business. Between 1960 and 1964 the number of households in privately rented hawing in England and Wales declined by 15 per cent. Over the same period those in owner-occupied housing rose by 14 per cent, and those in council housing rose by 11 per cent. About half the private landlord's loss was due to slum clearance, and the other half occurred as owner-occupiers bought his property for them- selves.

Much has been made of rent controls in -explanations of the private landlord's decline. But they are only part of the story. His com- petitors, the building societies and the local authorities, are both heavily subsidised. He gets no subsidy except improvement grants which are equally available to all house owners. Worse still, he pays tax on the depreciation allowances which enable him to recover and reinvest the capital put into his business. Had he put the money into building and eciuipping a 'factory his depreciatiOn allowances would have been free of tax, and he might have got all sorts of subsidies and investment allowances besides.

Sooner or later 'the private landlord must be relieved of most of his responsibilities in the mass market. He will never again be a large• scale Wilder of new housing for ordinary families in the great cities. But if he is given a chance to compete on equal terms he could make a major contribution to the housing of special groups, together amounting to large numbers, who are not catered for by the local authorities or the building sotieties.

If Mr Wilson claims by 1970 to have "licked the housing shortage' he would only mean that we have gone as far towards meeting our housing needs as present policies -can- take us That is only an indictment of present pOlicies.

Thus far we have considered the 'quantity of housing: what about its quality? The-latest official survey of England and Wales shows that two and a half million households-17 per cent of the total—were without a bath or shower in 1964, and three quarters of a million more had to share these things with other house- holds. Over - four million households lacked hot water at sink, washbasin or bath. Stotland and Northern Ireland were much worse off. If we are really within sight of eliminating the housing shortage, this is the time to launch a massive campaign for the replacement and provernent of these houses. But the rate 0 replacement, running at an annual rate of about a half of one per cent of the houSing.Stock, ha scarcely changed for years. • So what should be dope? There are n panaceas, no gimmicks : housing problems are too central and pervasive a feature of society to be tackled in that way. New initiatives ar. needed on half a dozen diflerent fronts.

Left to themselves, a lot of people simpl cannot pay for housing of the kind a wealth and civilised society would tolerate. We recog- nised this problem long ago in the fields of education and medical care and found reason- ably effective ways of breaking down the financial barriers that deprived people of these things. We can do the same for housing. We must start by trying to ensure that people have enough money to pay for the sort of dwelling they need, being chary of subsidising the build- ings till we have distributed incomes more fairly. When we have done what we can through family allowances, old age pensions, rate reliefs and other devices, more direct subsidies for housing will still be needed. Housing, costs vary so much from London to the highlands of Scot- land that no uniform pattern of income re- distribution can enable every family to secure a decent home. But we already redistribute so much money so wastefully through tax reliefs on mortgage interest payments (most generously to the richest borrowers) and through subsidies on council housing (most generously to councils that built houses at the right moment long ago) that the task will be to rationalise these payments, not to increase them. Ways must be found for getting some of this help to private tenants.

When we have found ways of helping the poorer private tenants living in areas of scarcity—but not before—the way will be open to rationalise rents. The Rent Act of 1965 offers a means of, doing this. It is already reducing rents in the worst housing and increasing rents in the better ,housing. But it deals with only half our privately rented houses. The other half must be brought gradually within its scope.

We can then promote a flow of investment into new building and modernisation for those now neglected by the building societies and the local authorities. The capital is there, in the insurance and pension funds. Students, for example, could be housed in flats more cheaply than in university halls of residence; the rents they already pay would cover the normal charges on the capital. Firms properly or- ganised for the job could make it as easy to zet improvement grants and hire-purchase a new bathroom and central-heating system as it already is to hire-purchase .a car. Housing associations, provided we make them big enough to recruit competent managers, can also help to bridge the gap between the City and the housing market.

Meanwhile the local authorities must turn :o replacing houses on a far bigger scale than Ne have yet envisaged. Since it takes about ;ix years for an increase in the volume of clearance proposals to emerge at the other end )f the pipeline in the form of an increase in )uildings completed, there is no time to vaste.

We are indeed within reach of satisfying the lemands our house builders, public' and pri- rate, are accustomed to supply. By the early seventies, when the young people born in the )ostwar baby boom are married and housed, hese traditional demands will fill sharply may.. That could give us our chance to tear town the slums, to get bathrooms into all the older houses left standing, and to house the old, the single, the migrants and others whose reeds have been forgotten. But the chance 'annot be seized unless we gear up now for hese tasks, financially, administratively, tech- ically and architecturally. If we fail to do hat, the housing programme is bound to ollapse in a welter of recrimination and uilders' bankruptcies. And it won't be easy to et it started again.