That wrong solution to a clear and obvious problem

Phillip Inman tells us that:

What is less discussed are the unintended side-effects of encouraging girls and women to enhance their educational qualifications and join the labour market without addressing other key economic issues, including social housing.

More extensive and higher levels of education mean both parents work and generate higher incomes but, wherever they are in the world, they quickly find most of this extra cash is devoted to paying for a roof over their head and, when it is privately provided, childcare costs.

The correlation between soaring property prices and the rising household incomes that result from a higher participation rate among women is a strong one in every developed country.

Obviously so. That - glorious - economic freedom of women has increased household incomes. Therefore there’s more income available to pay for a place to be a household in.

It’s the next bit that goes a little haywire:

At the same time, a shrinking social housing sector meant households with two working people were forced into the private housing market. At first they outbid households with one working parent for the “best” family homes. Then, once two working parents became the norm, they bid against each other, driving prices ever higher.

The definition of the “best” home is often a personal matter. That said, we can see what it means from where prices rise most strongly. These are the homes nearest good schools, good transport links and high-paying jobs, and with ample space to bring up a family.

Well, that’s not a function of a shrinking social housing sector. That’s a function of increasing household income.

And, well, we could say that that’s just what’s going to happen. Women go to work, house prices rise and that’s that. But that’s not in fact correct. And this is where it goes wrong:

Social housing is the backstop every country needs to cure this ill, or at least reduce its impact.

That’s not just wrong that’s gloriously wrong. Because think through the contention there. As households have more income to devote to paying for housing we therefore require more subsidy to housing to make up for the fact that households have more income to devote to their housing desires.

Quite gloriously inverting the arse/tit interface.

The actual solution is, of course, to abolish the Town and Country Planning Act 1947 and successors. Proper blow up, kablooie. At the moment it’s actually illegal to build to the basic standard we thought necessary for those Homes for Heroes back in the 1920s. Current law insists upon 30 hovels per hectare. Without the TCPA we could build the housing people actually desire to live in. You know, the suburban des res with a front and back?

That way the increased household incomes available to be spent upon housing could be spent on more housing, better housing, for that richer population. Rather than just higher prices for the same old sh….shacks.

Mencken was right and one of the grand tasks is to note when the clear and simple being proposed is wrong. As here. The contention that a greater household ability to pay for housing requires more housing subsidy is just absurd. Rather, we need to free supply to that greater quantity can be purchased rather than just prices shooting up.

Tim Worstall