Image: Metropolitan Police

After Grenfell: An Alternative to the Housing Crisis

Grenfell was a result of deregulation, of people forced to compromise on safety to avert homelessness. Britain’s housing crisis needs a workable solution.

Grenfell Tower. With eighty people presumed dead the tragedy in Kensington is the worst of it’s kind in more than a hundred years. The tragedy looks certain to leave long scars in the working-class community of Kensington, with grief and anger being expressed for years to come.

After tragedies like these, it is the duty of all to look at the causes, and act to ensure that something like this never happens again. At one level the tragedy can be seen as an indictment of Britain’s housing crisis. Research from Shelter; Britain’s leading housing charity shows that real estate prices continue to rise in Britain much faster than wages, that homelessness is rising by roughly fifty thousand people each year, and that tens of thousands of people each year are having their homes repossessed because they can’t keep up with high mortgage payments.

 

housing, crisis, deregulation
The cladding added to the 24 storey tower was reportedly in fragrant violation of fire safety regulations / Source: Getty Images


In this kind of situation it’s easy to see why people might be forced to sacrifice basic fire safety, to bring prices down, so that they can afford to keep a roof over their head. The basic response of rentiers has largely been to facilitate this steady erosion of living conditions under the guise of responding to ‘market’ conditions and imperatives. The  Adam Smith Institute, it’s partiality to far-right economic ideologies clearly evident from its espousing of neoliberal policies, spelled this out clearly in an article in 2015 where they argued that ‘solution’ to Britain’s housing crisis was for Britain to have more slums.


The Adam Smith institute calls for this to be facilitated by deregulation. This approach towards solving an economic problem by focusing on deregulation primarily stems from a worldview where private profits are the primary focus and where financial consumption is regarded as the normative ideal. This philosophy has since become much more formalised in the British state approach in 2010, with the creation of Regulatory Policy Committee; a government body filled to the brim with corporate lobbyists with responsibility for vetoing new regulations. This group is known to act on a principle known as ‘one in, three out’ in which no new regulations are allowed, unless they are offset by cutting three existing regulations of roughly the same scale.

This bonfire of regulations has hurt all areas of British public life, but the housing problem in Britain is particularly acute. As a general rule, markets don’t work well for controlling house prices, because houses are an essential good. People need a home, and they’ll pay very extortionate rates to get one. Much of the problem with housing in the UK can be traced back to the reforms of Thatcher, who with their ‘right to buy’ policy encouraged the public to treat their homes as a financial asset and investment.

So long as people owned their own homes, and house prices were rising, their wealth was increasing. This was however a problem, because house prices don’t rise on their own, the rise is caused by demand for houses outstripping supply. Since the time of Thatcher’s policy, the government has to continually intervene in the housing market to keep prices rising. ‘A whole series of measures have come in that have bid prices up in relation to income. It’s QE, it’s Funding for Lending, it’s Help to Buy one, two and three, it’s discounted houses,’ says Erik Britton, co-director of Fathom Consulting and ex-Bank of England macro-economist.  ‘This country has never seen even as much as a quarter of the stimulus for the housing market as there is in place now. It’s all been done quite deliberately by the government and the central bank.

The over-inflated British financial sector has also lend a hand, jumping on houses as a potential financial asset, relying on both conventional and more illicit means to drive up house prices, including fraud, and money laundering. According to a report from Britain’s National Crime Agency foreign criminals launder billions of pounds every year by purchasing expensive London properties.

Ultimately, our society must step back from our view of housing as an investment, cease viewing it as a source of profit, and shift instead to a rigorous program of government-led house building.This will require a moderate expenditure of government funds, reforms to our use of land, and likely a rebuilding of some urban areas to increase population density. This need not be cramped, apartment style buildings, but more like the mansion-style blocks common across much of Europe, providing people with space, and a reasonable level of comfort.

housing, crisis, deregulation
Cooperative Housing suggests images of communist-era block flats. However, there is no reason why better, more limited forms of housing are not an option


At the same time it is worth thinking seriously about how these new blocks are built, how cohesively they will work as a neighbourhood and as a community. Since the invention of rapid transit in the 20th century, strong and long-lasting communities in Britain have been on the decline, with many more people moving away in their lifetimes, living far away from their families, and not building up the long inter-generational connections which make for strong neighbourhood communities. This is particularly a problem for the elderly in Britain, with acute loneliness being documented as a rising and serious problem. 

A brief look at the website of the Grenfell Residents Association shows a community trying to look out for each other, but hampered by the disconnected and profit-driven management who ran their homes. One rather prescient blogpost last November reads; ‘It is a truly terrifying thought but the Grenfell Action Group firmly believe that only a catastrophic event will expose the ineptitude and incompetence of our landlord, the KCTMO, and bring an end to the dangerous living conditions and neglect of health and safety legislation that they inflict upon their tenants and leaseholders . . . their sordid collusion with the RBKC Council is a recipe for a future major disaster.

A solution to this problem emerges in the form of Cooperative Housing. Cooperative housing is a shared house, block or neighbourhood owned and democratically managed by the people living in it. Cooperative Housing is promoted by among others; Cooperatives Uk, and the Commission on Cooperative and Mutual Housing. In their recent report ‘Bringing democracy home’ the Commission lays out the benefits of cooperative housing. Beyond the obvious benefits of cheaper rent, and real power in the development and maintenance of your shared home, Cooperative Housing provides a cohesive framework within which to build strong communities, which would in turn facilitate a significant increase in mental health, opportunities for skill-sharing and mutual aid, and a much cleaner and safer environment.  The government’s new builds can be built as cooperative housing from the start, and we can all look at the possibility of converting existing properties into cooperatives, to provide us control over this essential part of our owns lives.

After Grenfell, it is more important than ever to fix Britain’s housing crisis. In modern society, it should not be considered a radical notion to provide all our people with good homes, and strong communities and the capacity to live a life with basic dignity. Unfortunately, with the vested interests arrayed against us it is something that progressives will need to fight for. The standard retort to the ideas set out above was that the market is a good indicator of availability of resources, and if there are no houses, it is simply because there aren’t the resources to provide one. The fallacies and factual inaccuracies in these arguments are too numerous to be dealt with at once, but will be dealt with in articles to come.

About Andrea Grainger

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