Back in the ‘90s, the government dealt with the collapse of the private pension system by encouraging the baby boomer generation to invest their wealth in buy-to-let property. As solutions to public policy problems go, this one was a bit like dealing with a blocked toilet by crapping on next door’s lawn, and it always seemed inevitable that it would come back to haunt someone – albeit not the people whose problems it was set up to solve.
And lo, it came to pass that the government launched an inquiry into what will happen when millennials who have neither decent pensions nor home ownership retire, and lo, the all-party parliamentary group on housing and care for older people did conclude that the young people are well stuffed. From today’s Guardian:
People’s incomes typically halve after retirement. Those in the private rented sector who pay 40 per cent of their earnings in rent could be forced to spend up to 80 per cent of their income on rent in retirement.
Or to put it another way: the rent is too damn high. Remarkably, it gets worse:
If rents rise at the same rate as earnings, the inquiry found that 52 per cent of pensioners in the private rental sector will be paying more than 40 per cent of their income on rent by 2038. This will mean that at least 630,000 millennials are unable to afford their rent.
“The number of households in the private rented sector headed by someone aged over 64 will more than treble over the next 25 to 30 years,” said Richard Best, the chair of the group. “But unless at least 21,000 suitable homes are built a year, there will be nowhere affordable for them to live. The consequence is bound to be homelessness for some.”
In other words, a policy intended to protect retirement for one generation may well have helped to completely destroy it for the next. Isn’t that wizard?
But that’s fine – we just need to build more houses, right? Who could possibly object to that?
To find out, let us turn to the pages of the Barnet & Potters Bar Times, which reported this week on the demise of a plan to build 86 affordable homes right next to Woodside Park tube station:
Developer Pocket Living wanted to build two blocks of five-storey flats on land to the south of Woodside Park underground station in Chipping Barnet.
All 86 of the one-bedroom flats would have been classed as affordable, and residents would have had access to roof terraces and cycle parking.
Now, I have some questions about micro-home developers like Pocket: the homes they build, while functional, are ridiculously tiny, while the prices they charge for those homes are generally not. Nonetheless, densifying the suburbs is going to be a key part of any solution to the housing supply crisis, and this feels a lot like what that densification should look like: a lot of homes on a small site right next to public transport links. This is, basically, a good thing.
And what happened?
...the council received 19 letters objecting to the development, which did not include any car parking spaces and would have involved building next to locally listed St Barnabas Church.
Among the opponents was MP for Chipping Barnet Theresa Villiers, who warned about the lack of parking and claimed the flats would be out of character with their surroundings.
Let’s say that again: the council of London’s most populous borough rejected plans for 86 new homes, with cycle parking and right next to a tube station, on the grounds that it didn’t have enough parking for the cars its residents probably wouldn’t have.
At a certain point, you start to wonder whether people like Theresa Villiers MP actually want to build any homes at all.
Laurie Williams, a Labour councillor for East Barnet, told the paper that the development was
“...an excellent opportunity for the borough to say to people with a limited income, ‘you are welcome in this borough’....If we’re saying to that sort of person, ‘we don’t want you in Barnet’, I think that is a completely alien message to send out.”
But it isn’t, is it? Alien would suggest it was strange and unfamiliar. This is neither of those things. “You aren’t rich enough to live here” is a message that poorer, younger people have been hearing with increasing frequency in ever larger swathes of the country for a decade or more.
There’s a rarely spoken assumption that underlies a lot of politicians’ thinking on the housing crisis for the last few years now: that this is just a young people’s problem, and young people don’t vote. There’s no point bringing house prices down, because it’s a vote loser; there’s no point doing anything for renters, because they’ll all become owners soon enough, and so they’ll never thank you for it.
The two stories quoted above between them highlight quite how stupid this strategy has been. One of the residents quoted in the Barnet & Potters Bar Times in favour of the plans is 39 years old and earns more than £35,000 – a demographic that, for most of the last half century, would scream “homeowner”. Yet she doesn’t own a home, and is talking of moving out of the area because she has no prospect of doing so. It’s no longer just the young being denied secure housing: as the APPG report shows, it’s increasingly going to be the old, too.
I can think of a few plausible solutions to this mess. Reform planning to make it easier to build homes in the places, like Barnet, where people want to live. Allow local authorities to build council houses in vast numbers once again, so that those of limited resources – like poorer retired people – can still access secure housing. Or raise the retirement age so far it effectively abolishes retirement.
On the basis of the last few years of government policy, which of those feels most plausible to you right now?