Housing and the credit crunch: government and market failure

Document type
Paper
Author(s)
Duncan Bowie
Publisher
Compass
Date of publication
1 May 2008
Series
Thinkpiece
Subject(s)
Housing and Homelessness
Collection
Social welfare
Material type
Reports

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This paper makes the case for a fundamental change in the government's housing policies. It reviews the history of recent government policy, noting that the current Labour government have uncritically adopted two fundamental ideological assumptions that it inherited from the Thatcher/Major period: that home-ownership was the essential basis of citizenship and should be promoted, and that the market could be relied upon not just to deliver market housing, but also to enable the provision of affordable housing. The ramifications of these policies are then examined, with the current housing credit crunch highlighting how misguided the Government has been in relying on markets to deliver its housing policy objectives. The beliefs, encouraged by the Barker review, that deregulation and the abolition of planning and public sector led frameworks for development was the solution to housing shortage, and that the Community Infrastructure Levy would fund sustainable communities, were always naïve and a diversion from the dangers of market dependence.  Finally, the paper examines options for government intervention and discusses the need for a paradigm shift towards promoting collective ownership over home ownership, and ensuring that the provision of public investment or revenue support is conditional on democratic public control, regulation of standards and access to housing on the basis of housing need.

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