Why are so many poor countries stuck with huge economic problems? Why, for example, are there so many unemployed young people in Egypt – 41 percent of 19-24 year-olds? The poor state of British housing can help answer these questions.
By developing world standards, the British housing system works quite well. In Egypt, it takes 77 bureaucratic procedures in 31 offices, and between six and 14 years, to get legal approval for construction of a new house, according to the 2012 doctoral dissertation of Abdel Hamid El Kafrawy of the University of Glasgow. The result: housing is in chronically short supply and 65 percent of the population live in unregistered and untaxed buildings.
For a rich country, though, the UK does remarkably badly. Construction has been inadequate, at half the modest target rate set by the government in 2007. The relatively few new houses and apartments which are built are mostly relatively small – new American houses have almost three times as much floor space and new French houses have 45 percent more, according to a 2009 study by the British Commission for Architecture and the Built Environment. And rental and mortgage payments for these under-sized living quarters take a higher share of income in the UK than almost other developed country.
There is no simple explanation of what’s wrong. Rather, many strands are knotted up into one big mess. The list of problems include: a government-mandated decline in the supply of inexpensive “social” housing; the common belief of most politicians and current and would-be homeowners that house prices should always rise faster than national income; a property tax system which reflects that ultimately self-destructive desire; irresponsible lending practices; asphyxiating planning rules; high land prices which encourage builders to think small; and a shortage of skilled craftsmen.
A strong dictatorship could try to resolve all these issues with a series of decrees: ordering more construction, allocating housing, importing craftsmen, setting rents and so forth. However, no government could manage to do all that well, even if it did not have to worry about dissatisfied citizens. In a democracy, where such worries are paramount, substantial changes are all but impossible. While almost everyone in Britain agrees that more, larger and cheaper houses are desirable in principle, homeowners do not want the value of their own properties to fall and few people welcome new construction in their neighbourhoods.