Sunday, October 12, 2008

Objections to socialized housing

A couple of commenters have criticized my ideas on socialized housing.

Robert notes:
Haven't you just invented council housing? [link added] Or do you not have that in the US? I think the big problem is that councils and their builders have no incentive to build houses that people want to live in. It's true they have democratic accountability, but most voters have no such incentive either, since most of them all ready have houses.
The closest we have in the US are Section 8 housing — where the federal government subsidizes rent for low-income people — and federally funded welfare (subsidized rent) housing projects.

It is clear that any serious and detailed proposal regarding socialized housing should look carefully and deeply into the lessons learned from UK council housing. Given that Wikipedia asserts that council housing accounts for 20% of all housing in the UK, I think it's fair to say the effort has not been a complete failure.

Still, the point Robert raises is important: There needs to be some impetus for building new housing, especially since in my original proposal residents — because they can buy and sell tenancy — have an individual incentive for keeping housing scarce. This incentive, however, is much weaker than in the present system; the value of a one-time occupancy transfer is considerably less than the full market value of a house or the expectation of profit from an endlessly rising Ponzi scheme housing bubble.

It might simply be the case that other local political pressures, especially businesses who have to pay (in salaries) for occupancy rights, will be sufficient impetus for new construction.

If local pressures doesn't work, there are several alternatives. Local governments can tax paid occupancy transfers, and this tax can be applied exclusively to new housing; if insufficient, the new housing rent add-on can be made proportional to collections. Another possibility is to simply mandate new housing at a higher level, (i.e. state or federal).

Black Sun raises several objections:
Such a public ownership scheme may sound good in theory, but in practice will always fall prey to corruption and mismanagement.
This is a very puzzling objection; skeptics typically do not make such blanket pronouncements about what is or is not feasible in practice without considerable specific empirical evidence.

Furthermore, the idea of the plan is not to eliminate "corruption" and mismanagement, but simply to reduce it. It's not like we can point to capitalist management of housing as a paragon of excellent management; current events show capitalist mismanagement to have globally catastrophic consequences. And simply institutionalizing corruption and calling it "profit" does nothing but sweep the problem under the rug.

People will find a way to trade on the "value" of their residence whether you call it a "title" to the property or "right to occupy."
But of course. My plan explicitly permits trade in occupancy: "Residents may buy and sell the right of tenancy, but only when tenancy is directly and voluntarily transferred; the right of tenancy cannot act to secure any financial obligation."

As Robert notes, this plan still gives residents an individual incentive to maintain housing scarcity, but we can resolve this issue in any number of ways. Additionally, since tenancy cannot be used to secure any financial obligation, credit markets are insulated from even large fluctuations in tenancy transfer markets.

Think private-sector malfeasance is bad? Just look at the dismal track record of nationalized housing in the countries where it's been tried. You end up with a bunch of decaying homes and concrete-block tenements.
This is simply a lie, trivially disproven by the immediately preceding comment.

I stop rebutting a comment at the first blatant lie.

Black Sun's comment, though, indicates a larger problem with the advocacy of communism and socialism. Just as with the advocacy of atheism and evolution, opponents of socialism have no compunction against simply contradicting known facts, and making up new facts out of whole cloth. Just this pervasive tendency should give thoughtful, critical thinkers pause, and impel them to dig deeper and not accept popular dogma.


  1. For some reason this quote comes to mind: "One death is a tragedy. A million deaths is a statistic."

    I wonder if what sounds plausible or workable on a small scale (say in a community of a few hundred or a few thousand) would work when scaled up to hundreds of millions of people. Like the link you gave me (which I loved) about the planet of people who traded in favors only. That system sounded wonderful, but it seems it might break down if there are 5 billion people and so a person who doesn't play fair can simply move from community to community, never running out of communities to scam freebies off of before he or she died. I suppose some kind of national database could be set up, but then, that starts to sound like big brother, and such a thing could be hacked.

    It seems like it is easier for people to come together and make sure their friends and neighbors in a small community all have a home than it would be to, in the abstract, try and make 300 million people you never met (and never will) have a home.

    You address that with the idea of it being handled by local governments, but there are localities with huge populations - like New York - where you end up with the scaling issues I worry about.

    Frankly, I think much could be fixed if we reversed the tax burden, so that the feds are the ones getting 1% income tax and the local township gets the 45% - putting the highest taxes under the control of the most accountable officials. As it is now, the money is sent off to DC and then disappears down the lobbyist black hole. Or at least that is how it seems.

  2. That system sounded wonderful, but it seems it might break down if there are 5 billion people...

    I definitely think it would break down. Scaling is always a problem.

    Again, I have to note that 20th and early 21st century capitalism is not scaling at all well.

    Like it or not, I think we are going to have to be much more conscious and intentional about our social organization.

    Keep in mind, though, that the "free rider" problem is actually the least of our problems right now, at least economically. Part of the problem is that our moral beliefs about work are still stuck in the resource-limited past, rather than the resource-abundant present. The problem our capitalist economy faces is not how to feed everyone, but how to make a profit feeding everyone.

  3. My major problem with this scheme is a problem that occurs with (IME) all rental arrangements - there is very little pressure on the land-lord (private or council) to carry out non-essential maintenance to the building and only flimsy pressure to carry out essential maintenance to things that were part of the rental contract (friends of mine were without heating/hot water for months whilst their landlord delayed on purchasing a new boiler for instance).

    This means, for instance, that whilst in the UK at present a low income *home owner* can get a grant from the government to get double glazing and cavity-wall insulation done (thus saving them money on their heating bills and saving the planet at the same time) a *renter* (of any wealth) has no way of getting such energy-saving measures installed other than by talking the landlord into getting it done (this has unfortunately very little benefit to the landlord, because the tenant is paying the electricity and gas bills).

    If tenancy is expected to be long-term then you could allow tenants to make such alterations (possibly with the permission of the land-owning council, but not payment from them), that would make for a huge improvement over the current arrangements for rented housing (in the UK) although it still wouldn't help very poor people.

    You would also want to allow the tenants to decorate, have kids, keep pets, choose what to do with any garden etc. etc. (all things that are not permitted in some rental homes I have known).

  4. naath: Certainly. There are any number of problems that must be addressed in the implementation. But, as you note, these are problems that exist in all rental arrangements, and they exist even with full private ownership as well.

    Just the fact that we can identify these problems argues that, with sufficient political will, we can solve them.


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