Dezeen Magazine

"The housing crisis isn't a crisis, it's a design project"

The UK's housing crisis is no accident, but has been carefully orchestrated to become a catch-all excuse for self-serving projects, argues Phineas Harper in his first Opinion column for Dezeen.

The housing crisis isn't a crisis. Calling it one inhibits effective action and plays into the hands of its creators. To respond strategically to the crippling British homes shortage we must abolish the term "housing crisis" entirely and call it what it is – a design project.

From "economic crisis" to "refugee crisis", the narrative of perpetual catastrophe is being deployed to divert attention from root causes, allowing flawed retrogressive proposals to be pushed upon a panicked public. Though cast as unavoidable, many of our so-called crises are not the consequences of unforeseeable chaotic forces, but of specific decisions taken by well-informed individuals to meet their political and financial goals.

"Crisis" suggests a natural disaster, something beyond human control that serves nobody's interests. The housing crisis is none of these things – it has been carefully planned, orchestrated over several decades, and is now delivering exactly the economic and social conditions it was intended to, making some people a lot of money in the process.

This is not to say that the situation isn't destructive. England, and especially London, has become an urban basket case in which the average rent can gobble up three quarters of the average post-tax salary.

The situation displaces the poor and impoverishes the well-off. Luxury towers stand riddled with unoccupied flats owned as wealth stores for investors while homelessness spirals. Local authorities force through monocultural residential developments devoid of civic or cultural life. All this is deliberate.

In 1980, shortly after Margaret Thatcher's Conservative government swept to power, it put in motion a plan that would neuter the nation's ability to adequately house its population: whole-scale privatisation.

It was actually the socialist Labour party that invented Right to Buy, the legal vehicle through which British tenants of the state can buy their house off the government, although take-up was low and it was coupled with a national house-building programme that kept prices under control. But with the Conservatives, Right to Buy was extended radically – millions of state-owned homes were sold off at massive discounts, while building projects were abandoned, causing prices to surge as housing supply fell off a cliff.

Then cabinet minister Michael Heseltine stated that "no single piece of legislation has enabled the transfer of so much capital wealth from the state to the people". It was an audacious bribe to voters and it was effective.

Thousands found the rise in value of their newly-obtained real estate so seductive that they began to favour politicians and policies promising to swell property prices at any cost. Families began to think like mini stock-traders inadvertently adopting the mentality that prioritises return on investment above wellbeing, cementing a Thatcherite ideological template into the heart of family life.

Private-sector property developers were happy too. Markets always seek to maximise profit, creating conditions which allow the highest possible return for the lowest possible investment. With housing demand now outstripping supply, developers were able to build less while charging more. Far from encouraging private sector development, privatisation actually caused stagnation. The less the state built, the less anyone else built.

A commodity's value typically depends on its utility and availability, but in certain cases holding value becomes a utility in itself. Gold, for instance, is used in jewellery and circuits, but its primary value for investors is its capacity to hold capital. Money flows around the international gold market regardless of how many wedding rings are being sold or how many computers need atom-thin wires that month.

Since 1980, housing has gradually become like gold in economic behaviour, its practical value dwarfed by its value as a speculation vehicle. However, housing is not an optional luxury but an essential commodity. We can live without housing no more than we can live without air, water or sleep. There is simply no alternative to participation in the housing market and as investors drive prices higher, we are forced to keep pace until we are priced out of our neighbourhoods entirely.

Gentrification is often cast as intrinsic to the march of development, with the displacement of poor residents or companies as a sad but necessary sacrifice on the pyre of progress. This characterisation of a trade-off between economic benefits and social harms is deeply flawed.

In the 1990 documentary Gut Renovation, Su Friedrich charts the rapid and deliberate gentrification of Williamsburg in New York City, instigated by the Bloomberg mayoral regime. Artists' colonies were evicted with predictable callousness but Friedrich also shows how hundreds of medium-sized businesses, principally manufacturing and other light industry, were forced out, their factories demolished to make way for a rash of anodyne condominiums.

Perversely the administration's own commission had concluded that Williamsburg was a valuable generator of economic activity, tax revenue and social cohesion but, eager to inflate land values, the city chose to proceed with demolitions regardless. Gentrification in the case of Williamsburg was in direct opposition to the interests of the businesses based there. It replaced economically and socially productive workplaces with unproductive capital stores. Even by the metrics of conventional capitalist wisdom, it was a strategic blunder damaging the real economy of Brooklyn.

Williamsburg shows how crises, whether British or Stateside, can be manufactured by policy makers for specific, rather than holistic, ends. There are, however, many alternative models out there in countries whose leaders are less obsessed with promoting private ownership.

In Paris for example, rent caps link prices to the median income locking in long-term affordable tenure. In Switzerland, only the citizens can buy property, preventing overseas investors from inflating the market. In Germany, which has the lowest rate of home ownership in the EU, rents take up a modest 23 per cent of net pay, while apartments have more than doubled in size since 1957.

In his keynote speech at the 2014 International Building Press awards, David Orr of the UK's National Housing Federation urged the assembled hacks to be bolder in their use of the then little-published term "housing crisis". Ministers, he argued, would only take action if the media pushed them to understand the scale of the housing shortage with robust language. The flip side though is that the crisis narrative has ultimately diminished the culpability of those responsible, neutralising the political toxicity of their actions while putting previously unthinkable policies on the table.

Last year, Britain's former prime minister David Cameron declared that the housing crisis was so acute that the UK must tear up requirements for developers to build affordable rental homes. Elsewhere, under the banner of facing-up to the crisis, others argue that London should deregulate the greenbelt – the ring of protected countryside surrounding the city – to "free up land". This despite London's super-low density and strained transport infrastructure.

The housing crisis has become a catch-all excuse for advocating self-serving projects. Estate agents use it to rezone council estates as brownfield land. New London Architecture used it to propose building on public canals. Developers use it to dodge space standards. The term "housing crisis" has itself now become a core component of how housing inequality is framed and perpetuated.

The housing shortage has been created and sustained by a political strategy unfolding over nearly 40 years. It is no more unforeseen than a hangover after a wild night of drinking.

To call it a crisis misses the point: we have created a monster, now we must kill it. Four decades of inflating property prices while failing to build significant numbers of new homes has delivered exactly what it was designed to – inequality.