Don't replace Section 106, abolish it

A certain chance is being missed here:

Michael Gove is poised to hit property developers with a £7bn levy that could pave the way for a massive expansion of new council housing.

The Levelling Up Secretary is preparing to axe rules which force companies to build a set number of “affordable” homes on their developments themselves, and will order them to pay into an infrastructure fund instead that can be used by councils for their own projects.

Slipping another £7 billion into council budgets isn’t going to increase the amount of housing built, it’ll increase the number of grievance studies graduates employed.

Leave that obvious truth aside for a moment and think instead.

What’s the sort of profit margin on turnover that capitalists tend to be happy enough with? Can we get a bid of 10% there?

Hmm, OK. So, we could take £7 billion in profit off the capitalists and give it to councils to build houses. Or, we could leave the capitalists with the £7 billion and watch them being willing to do £70 billion of turnover to gain that £7 billion. Which is going to produce more housing, £70 billion or £7 billion?

Given that every house - solitary, sole and single, of whatever type, size or location - built lowers the market value of every other house in the country which will have more effect on making housing more affordable? £70 billion or £7 billion?

It’s as with that idiocy being promoted currently, that the solution to a supply shortage of energy is a windfall tax on energy companies. Taxing supply does not, as it happens, increase supply.

The answer to the deep, deep, silliness of Section 106 is not to replace it but to abolish it. Instead of trying to confiscate the profits of supply leave ‘em be and watch as rather more capitalist competition for them red in tooth and claw makes prices crumble in front of our very eyes.

Another way of putting this is don’t be clever about it, be vicious. Execute, don’t reform.