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iamnumerate

The welfare of Nations

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This is a good book by James Barthlomew.  He looks at the problem of housing and he comes to the conclusion planning restrictions are the problem.  For example in 2006, 24 out of 25 US states which had affordable housing had few controls.

In 2009 Houston had a median house price of 2.3 times median family incomes (in London I think this would been about £100k at most, you would have got very little for £100k in London in 2009).

 

I have to say that I am not surprised but what do others think?

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51 minutes ago, iamnumerate said:

This is a good book by James Barthlomew.  He looks at the problem of housing and he comes to the conclusion planning restrictions are the problem.  For example in 2006, 24 out of 25 US states which had affordable housing had few controls.

In 2009 Houston had a median house price of 2.3 times median family incomes (in London I think this would been about £100k at most, you would have got very little for £100k in London in 2009).

 

I have to say that I am not surprised but what do others think?

Houston is in Texas.

The land area of Texas is bigger than the UK (more than 2x bigger).

Oh and Houston has zoning, they just don't call it "zoning":

https://urbanedge.blogs.rice.edu/2015/09/08/forget-what-youve-heard-houston-really-does-have-zoning-sort-of/#.WAdKapMrJR4

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3 minutes ago, Futuroid said:

Houston is in Texas.

The land area of Texas is bigger than the UK (more than 2x bigger).

Oh and Houston has zoning, they just don't call it "zoning":

https://urbanedge.blogs.rice.edu/2015/09/08/forget-what-youve-heard-houston-really-does-have-zoning-sort-of/#.WAdKapMrJR4

Sydney is in New South Wales which has a lot more space per person than Texas but has very expensive housing. 

San Francisco is in California a lot bigger than Germany but has more expensive housing.

Germany is similar in size to the UK and has cheap housing.

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7 minutes ago, iamnumerate said:

Sydney is in New South Wales which has a lot more space per person than Texas but has very expensive housing. 

San Francisco is in California a lot bigger than Germany but has more expensive housing.

Germany is similar in size to the UK and has cheap housing.

Does Germany have no planning permission?

I think we might have just disproved the theory that expensive housing is caused by planning permission.

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45 minutes ago, Futuroid said:

Does Germany have no planning permission?

I think we might have just disproved the theory that expensive housing is caused by planning permission.

German towns regularly release land for self builds. 

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Expensive housing is nothing to do with the space available.  Just look at Australia.

The UK has expensive housing because that is what our economy requires as collateral.  If we didn't have expensive housing we'd have to work for a living.  I assume the same applies to Australia etc.

The prime directive of UK policy has been to ramp up asset prices at all costs.  That is the reason houses are expensive in the UK and other nations with expensive housing.

I certainly do not think we should abandon planning.  We don't have as much space as Texas or Australia.  There is very little Wilderness in the UK.

 

Edited by kzb

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29 minutes ago, honkydonkey said:

German towns regularly release land for self builds. 

Yup, and I'll bet they ask for planning permission.

Germany doesn't have a landed gentry. You don't really need to go any further than that.

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1 hour ago, Futuroid said:

Does Germany have no planning permission?

I think we might have just disproved the theory that expensive housing is caused by planning permission.

Perhaps I was not clear enough although I did say "few controls" not " no controls".

The world is not divided into places without planning permission and without.  Rather there are levels of control, some are relaxed enough to have a happy compromise between need for new homes and environmental protection etc, some don't.

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16 minutes ago, Futuroid said:

Yup, and I'll bet they ask for planning permission.

Germany doesn't have a landed gentry. You don't really need to go any further than that.

 

18 minutes ago, kzb said:

Expensive housing is nothing to do with the space available.  Just look at Australia.

The UK has expensive housing because that is what our economy requires as collateral.  If we didn't have expensive housing we'd have to work for a living.  I assume the same applies to Australia etc.

The prime directive of UK policy has been to ramp up asset prices at all costs.  That is the reason houses are expensive in the UK and other nations with expensive housing.

I certainly do not think we should abandon planning.  We don't have as much space as Texas or Australia.  There is very little Wilderness in the UK.

 

It is to do with the amount where you are allowed.

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18 minutes ago, Futuroid said:

Yup, and I'll bet they ask for planning permission.

Germany doesn't have a landed gentry. You don't really need to go any further than that.

We had a landed gentry 50 years ago when a house which costs £1million in London now cost £3k (about £60k at today's prices).

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7 minutes ago, iamnumerate said:

We had a landed gentry 50 years ago when a house which costs £1million in London now cost £3k (about £60k at today's prices).

Yes. In many cases, they still own that piece of land where the house sits!

Go a little further back, to 1918, and 77% of all UK households were renting. 

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/a-century-of-home-ownership-and-renting-in-england-and-wales/short-story-on-housing.html

You need to look at the big picture. Take a good, long look. Drink it in.

That's where you are going back to.

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19 minutes ago, Futuroid said:

Yes. In many cases, they still own that piece of land where the house sits!

Go a little further back, to 1918, and 77% of all UK households were renting. 

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/census/2011-census-analysis/a-century-of-home-ownership-and-renting-in-england-and-wales/short-story-on-housing.html

You need to look at the big picture. Take a good, long look. Drink it in.

That's where you are going back to.

I agree that is where we could be going, that is why we need to make it easier to build new homes

(Not the only thing, change the benefit system, reduce immigration, change council tax for a tax on land values etc would all help).

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1 hour ago, Eddie_George said:

The main reason for HPI is lax lending. When banks will lend you £1 million for a studio flat, then studio flats will cost £1 million. 

But in the US different states have widely different price ratios.

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1 hour ago, Eddie_George said:

The main reason for HPI is lax lending. When banks will lend you £1 million for a studio flat, then studio flats will cost £1 million. 

People compete with each other, so if a bank will lend one million pounds, I agree that someone will borrow it. However, why would the banks be this stupid? I can see the proximate reasons, like “they just care about the commission”, but I'm not sure banks are quite that short-sighted.

Perhaps “pounds” is the wrong currency. What they're really selling it for, surely, is 50 years of an average man's life ... if he were willing to live on sewerage and never have a family. In what world is that rational for the banks? Maybe one in which they think that a man's life will be worth even less tomorrow.

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3 hours ago, Toast said:

People compete with each other, so if a bank will lend one million pounds, I agree that someone will borrow it. However, why would the banks be this stupid? I can see the proximate reasons, like “they just care about the commission”, but I'm not sure banks are quite that short-sighted.

Perhaps “pounds” is the wrong currency. What they're really selling it for, surely, is 50 years of an average man's life ... if he were willing to live on sewerage and never have a family. In what world is that rational for the banks? Maybe one in which they think that a man's life will be worth even less tomorrow.

This all happened in the run up to the 2007/2008 financial crisis. Ever heard of NINJA loans?

Watch "The Big Short".

 

 

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6 hours ago, Eddie_George said:

The main reason for HPI is lax lending. When banks will lend you £1 million for a studio flat, then studio flats will cost £1 million. 

I quite agree with Venger on this point that the borrowers are responsible for their actions.

Lenders are responsible for irresponsible lending, sure, but borrowers are entirely responsible for their mortgages and without their participation there wouldn't be a market.

4 hours ago, Toast said:

In what world is that rational for the banks?

In a world where the deeds sit in a bank vault, a few missed payments suffices to return the asset and the worst-case scenario is covered by the inevitable bailout.

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