“But there would be consequences.” Some thoughts on Jeremy Corbyn’s promises on housing

Jeremy Corbyn in Brighton today. Image: Getty.

Labour leader Jeremy Corbyn – the absolute boy, who inspired a generation, won the 2017 election and is even now literally the prime minister – just made his closing speech to the party conference in Brighton.

A large chunk of it was on housing. That’s not a huge surprise: it’s a huge issue for younger voters, from whom Labour draws much of its support, and a clear red line with the Tories who seem incapable of even admitting that they’re presiding over a problem. In that election, Labour’s unexpectedly strong performance came in part from the party’s strong performance among renters.

But what did Jez We Can actually say? And will his policies fix anything? You can read the full speech over at the Staggers, but here are some extracts, with my commentary.

We will insist that every home is fit for human habitation, a proposal this Tory government voted down.

This is not 100 per cent accurate, but it’s at least 96 per cent accurate, which is a lot more per cent than the Tories should really be comfortable with.

The government did vote down an amendment which would have required both private and social landlords to make homes fit for human habitation. It claimed that existing regulations were adequate, and that this amendment amounted to “unnecessary regulation and cost to landlords, which will deter further investment and push up rents for tenants”.

But it’s far from clear that existing regulation is strong enough – and anyway, if it is, surely this wouldn’t be imposing any extra burdens on landlords?

At any rate, this is a huge great open goal for Corbyn, and the Tories have nobody to blame but themselves if it costs them votes.

And we will control rents – when the younger generation’s housing costs are three times more than those of their grandparents, that is not sustainable.

Rent controls exist in many cities across the world and I want our cities to have those powers too and tenants to have those protections.

This is more complicated.

Rent controls are certainly popular – not surprising, when you consider the state of actual rents – but economists all hate it, including those on the left. They argue that it reduces the supply of rental property. Moreover, it splits tenants into insiders (who live forever in rent controlled homes) and outsiders (who can no longer find anywhere to live because nobody is moving out of those rent controlled homes). San Francisco has rent controls, yet is one of the few cities on the planet where housing is more of a problem than in London.

That said, it’s not entirely clear what these rent controls would look like – whether they’d cap prices or link them to inflation; whether they’d be temporary or permanent; even whether this is just misleading code for things like changing the length of tenancies. The devil is in the detail.

And once again, it’s very difficult to look at the actual British housing market and conclude that the status quo is just fine (at least, unless you’re a landlord). As more and more people are forced to live in rented homes for the long term – even bring up children in them – there is certainly a strong case for changing the balance of power between tenants and landlords.

So while there is likely to be much squawking from Tories about the dangers of rent controls, once again I’m forced to point out: your total complacency on this issue is a big reason Labour is now eating your lunch.

(More on rent controls here.)

We also need to tax undeveloped land held by developers and have the power to compulsorily purchase. As Ed Miliband said, “Use it or lose it”. Families need homes.

This is probably broadly a good thing: the big housebuilders do tend to sit on land with planning permission for a while, to help them maximise their profits, and during a time of enormous housing shortage this is pretty gross.

But (there’s always a but, isn’t there?) developers move at the pace they do for a reason. If they moved much faster, prices would fall, and they’d lose money. Builders are not going to build, if it puts them at risk of going bust.

So while this may help at the margin, and it’ll certainly change house builders’ behaviour, my suspicion is it’s not going to be enough to magically double their output and fix the housing crisis. Although I’d love to be wrong on this.

Now for the bit where I get really conflicted.

Regeneration is a much abused word.

Too often what it really means is forced gentrification and social cleansing, as private developers move in and tenants and leaseholders are moved out.

(…)

Regeneration under a Labour government will be for the benefit of the local people, not private developers, not property speculators.

First, people who live on an estate that’s redeveloped must get a home on the same site and the same terms as before.

No social cleansing, no jacking up rents, no exorbitant ground rents.

Okay. This looks great, obviously. Of course housing should be about people. Of course regeneration should benefit residents, rather than clear them out altogether. We can all get behind that.

But, in what is now becoming a theme, things happen the way they do at the moment – developers chipping away at their social housing commitment, tenants being offered a choice between replacement homes elsewhere and paying much higher rents – for a reason. And those reasons are a bit more complicated than “uncaring councils and parasitic developers”.

One is the squeeze on council funding, combined with their statutory responsibility to sweat their assets. In expensive bits of the country, that’s forced inner city councils – often Labour ones – to come up with creative ways of using the highly lucrative land their housing estates sit on. Because they’re not swimming in cash themselves, that’s often meant partnering with developers, who by definition care more about shareholders than tenants. So: tenants get screwed.

Could we stop this? Sure. But there would be consequences. It’d be less profitable, so it’s plausible fewer regeneration schemes would happen. You might be okay with that, but it would mean crumbling estates keep crumbling, fewer homes get built, and those inner city councils are forced into making even more cuts.

We could probably deal with the consequences of that, too – but only if we’re willing to chuck more money into the system. In other words, better regeneration would inevitably be more costly regeneration.

Oh, and if we’re not going to “regenerate” council estates any more, that’s yet another place we can’t build to meet demand for housing in London. Again, that’s a legitimate policy choice – but it will have consequences in terms of worsening the housing shortage, placing yet more pressure on other sources of land (hello, green belt).

Last but not least:

And second councils will have to win a ballot of existing tenants and leaseholders before any redevelopment scheme can take place.

Again, this seems like common sense. But if implemented literally, I fear it would result in no redevelopment ever taking place, because NIMBYism is a thing and anyway who in their right mind would vote yes on having their home demolished?

And yet. As with so much else in the world of housing, the status quo is very clearly awful. Of course tenants shouldn’t be forced out, promised homes that will never arrive, and end up living miles and miles from their homes. Of course we should do this better.


What’s more, it’s no longer clear that what Richard Florida has termed “superstar cities” like London are even capable of generating affordable housing any more. Since London isn’t going to stop needing nurses or teachers any time soon – not to mention carers or retail workers – that’s a very strong argument for defending the idea of state subsidised housing, in a way that no government has done in decades.

So. I’d like to believe this is going to work. And I’m certainly pleased that someone is trying to defend council housing once again. But I have worries.

And the biggest is what was not in the speech. Ending the housing crisis will mean building a lot more houses. Corbyn has said in the past that he’s in favour of that. But where or how a Corbyn government would do so is very far from clear.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and Facebook. Want more of this stuff? Follow CityMetric on Twitter or Facebook.   

 

 
 
 
 

To see how a city embraces remote work, just look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”