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The Economics of Housing

The worker who cannot get a house, or has to put up with overcrowding, or who struggles for years with payments on a mortgage, will ask why something is not done about it. He may be surprised, though not helped, to be told that a great many people for a long time have been vainly busy with the problem.

Since 1851, when the first Housing Act was passed by Parliament, there have been nearly forty governments, Liberal, Tory and Labour, and every one of them has been pledged in some way or other to deal with the housing problem. Many fact-finding inquiries have been made by government departments, Royal Commissions or private organizations; hundreds of books and reports have been issued; and Lord Shaftesbury, who sponsored the 1851 Act, has been followed by a long line of well intentioned social reformers who, on humanitarian or other grounds, sought the abolition of slums and overcrowding or tried to keep rents down. One Royal Commission on Housing, 1885, had as a member the then Prince of Wales, later King Edward VII.

Yet after all this time the housing problem has not been solved and it shows no sign of being solved now. What is more, it never has been solved at any time in the past century: there was never a time when people could look round and say that the things had at last been done.

The problem has been there all the time, though to succeeding generations it has seemed to take on different forms. At present it is the overall shortage of decent accommodation which makes the sufferers think how much better it would be if there were so many houses that you could see in every street “ House for Sale ” or “ To let” signs. But that is just what people did see earlier in the century.

In 1911, in England and Wales, there were over 400,000 uninhabited houses, with landlords looking in vain for tenants or buyers, yet at the same time there were another 400,000 houses officially described as “overcrowded.” Rents were much lower then than now, but so were wages, and the tenants of the overcrowded houses could not afford to move into the “empties." Anyone who imagines that housing problems started with World War I, or anyone who blames overcrowding on immigrants, should note that date, 1911. It was before World War I and was at a time when hundreds of thousands of people were leaving this country every year to settle in America and what were then British Colonies. The flow of immigration was out, not in.

The reason the housing problem has never been solved is that it is not really a housing problem at all but part of another and larger problem. The nature of this problem is indicated by the names of some of the housing Acts, names such as “Housing of the Working Classes Act,” “Artisans Dwellings Act "—but whoever heard of an Act for the housing of landed aristocrats or one for millionaires and company directors?

In the capitalist world we live in, the making of profit is the driving force behind production, and the employing class to whom the profits flow therefore have a continuing interest in keeping wages down. But they also have an interest in the health and efficiency of the workers they employ. In the nineteenth century, governments and employers were alarmed at the effects on health, physique and working efficiency of slums and overcrowding, but they were and are also concerned about its cost. So all the measures to improve housing or to reduce rents by subsidies or rent restriction have had the wages situation in mind.

When a Tory minister in a coalition government started rent control in 1915 it was because the rise of rents when building stopped during the war was causing violent discontent, and workers were pushing for higher wages. Rents were restricted (at the expense of the landlords) in order to help keep wages down. The same thing happened in other countries, and it. was shown by an International Labour Office inquiry into the effect of rent control in some continental countries in 1925 that the low rents had primarily benefited the employers.

In 1956 when the Tory government announced its intention to lift rent control on many houses the spokesmen for the Labour Opposition attacked it on the ground that the raising of rents would provoke determined and successful pressure by the workers for higher wages. This is indeed what happened. The year 1957 was a peak year for strikes. Wages went up by more than the average rise of the cost of living, and the addition to the total wage bill of the employers in fact exceeded the increase in rent gained by the landlords.

The employers had never minded the landlords being squeezed by rent control in the first place, but it became evident in the course of years that restricted rents and low profits for landlords had as one of their consequences the deterioration of housing and the creation of more near-slums. All three of the big political parties recognised this, though the remedies they offered were different. While the Tories imagined (wrongly) that decontrol would bring into the market spare accommodation where tenants were clinging to controlled houses larger than they needed and that this would prevent big increases of rents and house prices, and the Liberals slated them for not having done it sooner, the Labour Party proposed allowing some increase of rents conditional on improved maintenance. They linked this with the retention or reintroduction of control allied with the policy of wage restraint, as under the last Labour Government.

None of the three parties claimed in 1956 that the existing housing policies had been successful and should be left as they were. For one thing, with an acute shortage, control was to a large extent unenforceable: a writer in The Times (17.6.61) estimated that more than half a million houses that were supposed to be controlled were let at illegally high rents. And, in face of the facts, nobody claims that the housing problem has been solved after a hundred years of solutions. Nor will it be as long as capitalism lasts. Only when ALL production is carried on solely for use, by and in the interest of the whole community, will the production of houses be brought into line with human need.

Edgar Hardcastle