Mr. Rossi asked the Minister of Housing and Local Government what is his latest estimate of the number of surplus houses which will be available in 1973.
Mr. Greenwood: The overall numerical surplus of houses over households in 1973 is still expected to be of the order of 1 million, but I cannot stress too emphatically that this surplus will not be evenly spread throughout the country and that shortages and bad housing, as I have repeatedly said, will persist in some areas. (Hansard, 3 March 1970).
One million too many houses by 1973! Can they be serious when there are now a few million people living in houses even the government admits are unfit?
What the Ministry experts have done is to compare trends in “potential” demand for housing with trends in housebuilding capacity. Under capitalism this is a pretty pointless exercise since what decides how many houses are actually built is not “potential” demand (what people need) but “effective” demand (what they can afford). The only way of measuring whether there are too many houses on the market is to compare supply and demand; a “surplus” would arise if there were more houses for sale or rent than could be sold or let profitably. As the Lloyds Bank Review (April 1970) puts it:
a ‘real’ surplus of houses can co-exist with hundreds of thousands of people either without homes or living in inadequate dwellings, if the price of the surplus accommodation is too expensive for it to clear itself.
In practice what would happen is that, anticipating such a situation, building firms would cut back on the number of houses they were going to build. The usual capitalist absurdity of curtailing production despite people’s needs would again arise. Indeed stockbrokers are already predicting this and warning capitalists not to invest in house-building companies since profit prospects there are bad. For instance, early in 1968 Cazenove and Co. commented:
The outlook for house building is particularly serious with the indication that there will be a genuine surplus of houses by 1973. The indicated annual requirement of new dwellings by then is put at only 270,000, as compared to the 400,000 expected to be built this year. These projections may be over-pessimistic, but it is evident that the house building industry is one without growth prospects.
One of the inevitable consequences of production for sale is that output goes up and down in accordance with changing market conditions. In some industries, like brickmaking, these cycles are fairly short. In house-building, because of the existence of old houses, the cycle is very much longer. The last major depression in house-building was in the 1930’s; the next one is due, the experts guess, in the 1970’s. No doubt those who think capitalism can be reformed to serve human interests will be bringing forward all sorts of futile proposals as to how “accommodation can be made available to poorer people at a price they can afford to pay” (Lloyds Bank Review). Will they never learn?