Immigration and housing shortages in Britain

Last week there was a lively exchange at the Guardian website, on a comment thread for a blog post by Simon Fletcher, about access to public housing in Britain.

In response to the author’s claim that the difficulties low-income native Britons are finding in obtaining affordable housing “have nothing to do with immigration,” a commentator under the name Zac Smith, weighted in with a public housing allocation list from Birmingham City Council, showing most housing in Birmingham was indeed going to recent immigrants. Then about half way through the thread a commentator named Monnie hit on the main reason why recent immigrants were more likely to receive council housing:

“…migrants jump the queue because they tend to have bigger families and that means they are deemed to have greater priority for housing.”

Family size is a key criteria for preferential treatment by local government authorities and native Britons, with smaller families on average than African or South Asian immigrants, are more likely to lose out.

Unlike skilled middle-class Britons who are able to deal with overcrowding by voting with their feet and moving overseas, the country’s disgruntled working-class natives can’t just up and leave if they can’t find a house.

Traditional blue-collar destinations like Australia only want a limited number of educated and skilled workers from the motherland, while economic stagnation, illegal immigration and language barriers mean Continental Europe is unlikely to appeal to most working-class Britons. Subsequently they have little to lose by supporting immigration restrictionist  parties like the much-maligned British National Party.

Falling home ownership rates not just lifestyle related

A report out by CHRANZ indicates that high prices, as well as social factors have influenced the decline in home ownership in New Zealand over the last few decades.

Home ownership in New Zealand peaked in the 1980s at 73.7 percent, but had fallen to 66 percent by the time of the 2006 census, while the drop in home ownership among the young has occurred in all English-speaking countries the report indicates New Zealand is unusual in not maintaining overall home ownership rates reached in the 1980s.

One of the most telling findings which indicates that housing affordability has played a significant part in declining home ownership, is that home ownership used to be higher in cities than in rural areas and small towns - a situation which has now been reversed, thanks to the increasing cost of urban real estate relative to wage rates.

Arguably the most worrying thing about declining home ownership, is that younger generations aren't saving much either, so those who are unable to save for a home are likely to be worse off than their parents in the future.

Given that neither National or Labour have any serious proposals for addressing the problem in the short term, those who are unable to afford get on the property ladder will have to hope that the coming decline in property prices provides more affordable housing without ushering in a new age of high interest rates and economic stagnation.

Housing affordability and economic inequality

Listening to a talk-radio discussion last week about housing affordability in NZ, I was a little taken aback by how few people seemed to think it was a problem.

The dominant view seems to be that low rates of home ownership is not a big issue and most young people deserve to be renting due to their preference for wasting money on gadgets and other distractions.

This got me thinking about how unconcerned many people today are with economic equality, as opposed to other kinds of inequality, and why this might be so. Then it dawned on me, most people today, are conservative on economic issues because they have grown up in an environment where the majority of families have been able to afford their own homes and cars without the need to rent or borrow, thus they don't know what its like to grow up without property and the accompanying insecurity.

Property ownership gives people a stake in their society and therefore a reason to support the status quo. Steve Sailer has pointed out that one of the reasons why socialism has never really taken-off in the US is because it's traditionally been a 'cheap land, high wage' country where most people could afford their own house and many of the trappings of middle-class life.

Until very recently, it's been the same story in this part of the world. Anyone with a steady wage, and who was reasonably frugal, could afford to get on the property ladder, so there was little reason why most young people who have been bought up in such a society should have much of a concern for concepts like economic equality.

Critics may argue that declining rates of home ownership largely reflect work and lifestyle choices, with more people going on working holidays and marrying later. Sure there is some truth in this, some people actually don't want to be burdened by real estate, but it's not as if levels of savings and other investments are increasing either. The share-market is stuck in an ongoing rut, personal savings rates are mediocre, fewer people are buying art and antiques, and in NZ there is no compulsory retirement savings scheme as is in Australia. New Zealanders who aren't able to get a foot on the property ladder aren't likely to save much money period.

Then of course rents aren't that cheap either. The traditional rule of thumb for young renters, here and elsewhere, was don't spend more than a quarter of your income on accommodation, but this is now almost impossible for non-skilled workers in the main centres, and many two-income families would struggle to find a reasonable 3 bedroom bungalow with a rental that was less than a third of their income.

Something else that irks me is the way that so many people think its ok, that hard-working people should have to spend so much of their money on rent or mortgage repayments, who particularly wants to reward banks and property speculators?

If they had been talk radio back in 1900, back incidentally, when New Zealand was the richest in the world per capita, I doubt many of the callers would have been so selfish or apathetic.

In Edwardian New Zealand producerism was close to godliness and property speculators had about the same social status as gypsy pick pockets.

Nice to see we have progressed towards a more enlightened age where ripping-off your fellow citizens is rewarded rather than criticised.