Some questions from Henry

Henry Silke a PhD candidate in the DCU school of communications emailed me some questions which he wanted my opinion on.

As we are always open to this kind if discourse we naturally agreed and decided to post them. You can check out Henry’s work at CriticalMediaReview to which he contributes, and where they do a good job of critiquing the culture, approach and methods of the media.

His questions are followed by my answers, I didn’t split them into the proper paragraphs as I thought I’d keep all of one persons thoughts to one section and the others to the other.

Q1: Do you conceptionalise housing as an exchange commodity or as fulfilling a social need, if both which role takes precedence?

A1: It’s both, like many physical things that are traded it has commodity like features but also provides for a social need, the same goes for foodstuff which is traded, it has a market and also provides things like soft commodities which then feed populations. In terms of what matters more its hard to say, without a market would the good be provided for adequately? (Obviously for the statists out there the answer is ‘yes’) I can’t really say I see it as a valid trade off, they are both important aspects which are intertwined too deeply to say one would be fine without the other.

Q2: Over a decade in Ireland we saw the cost of housing go from three to four times the average industrial wage to 11 to 12 times the industrial wage. The same process saw massive speculation on housing and land develop into an unsustainable bubble and crash. As well as the billions paid for by Irish citizens via pay cuts and cuts in services to pay for the bailouts a whole generation is lumbered with massive mortgages due to the aforementioned hyperinflation of housing cost. Due to the near elimination of social housing and the poor quality and lack of security in the private rental sector most people had no choice but to buy on the private market. Those left behind in the private rented sector remain in a precarious position.  This isn’t the first property crash bailed out by the Irish state (commercial property in the 1970s) nor is this an Irish phenomenon; geographer David Harvey in The enigma of capital: and the crises of capitalism has pointed to the many property and financial crises commonplace around the world since the advent of the current economic paradigm in the early 1970s.
 Does this instability not point to key flaws in the market system to housing supply, and indeed shows up key problems in capitalist markets themselves? Is  there an argument against the market model for the supply of housing to be replaced by either a strictly controlled market including nationalised land banks and strict quality and price controls, or doing away with private property and land speculation altogether?

A2: The common mistake people make when blaming all ills on capitalism or liberalised markets is that that they fail to point to a real life proxy as an inherent improvement upon the stated ill. So people say ‘this was terrible it can’t happen again and capitalism has failed’, but compared to what? And at what cost? And who does it seek to serve? These are all relevant rebuttals, that we have had property crashes since the 70’s is true, but that doesn’t make it an ‘absolute truth’ because we have had property crises since the 1700’s in Ireland that we know of and crashes going back through thousands of years that other historians have shown evidence of. That people are capable of making bad decisions or allowing greed to motivate them is hardly a capitalism issue, its down to the individual and when these things happen that elation turns to dismay, there are winners and losers and life moves on. Something we don’t talk about when complaining about ghost estates and the like is that much of the infrastructure remains, the railway crash of the 1870’s in the US is a great example of how a crash helped an economy in the long run by providing the transport links that assisted the industrialisation of the USA. We also don’t have old fashioined tenements which is how property crashes used to express themselves (they’d show up as housing shortages, price inflation and rampant over crowding). The market system is the ‘least worst’ at least in my opinion. We have national land banks, the state chooses not to use them for the purpose you mentioned, and countries where the state own everything still have shortages of all sorts, sadly real life doesn’t match with ideology, if it did we’d be in a far happier and contented world with less suffering. Perhaps a better solution generally is to prevent the boom rather than cure the bust and for that you need some counter cyclical planning.

Q3: To look at the question from another side, what is the justification for a privately owned and controlled land and property and mortgage market even after the various markets have failed so spectacularly?

A3: I suppose the answer is ‘what’s the alternative’ for which we have few examples outside of communism. While we can discount the murderous politics that go with that ideology in practice, what we can’t overlook is how it provides for people in reality (because this is the only real proxy I can think of), and it fails everywhere which is why even in China they privatised housing and where the state did provide it did a job of it that consigned people to disgraceful living standards. They too will face a spectacular property crash in time, there is a structural issue with housing provision which people never talk about that is part of the problem but fixing that aspect of it is too boring and lacks political lustre to gain any true support and that is to deregulate and stop creating the false scarcity that creates shortages which translate into higher prices. We actually had lending control in the 90’s and it didn’t prevent the bubble, nor did taxation changes, nor have more penal changes year on year.

Q4: You have gone on the record to defending Dublin’s slum landlords, specifically bedsit accommodation in Dublin’s north inner city. This cohort of landlord does not build houses, pushes up rents, supplies extremely poor standards of housing and stressful precarious tenancies. This cohort has been effectively subsidised by the state through rent allowance payments and offers nothing positive to Irish society in return.  What justification is there for continued existence of this form of exploitation, wouldn’t it be more beneficial to both tenants and the state to phase out and finally banning this type of exploitation altogether and to use the saved money to build quality housing?

A4: If the implication is that I believe slums and dishonest landlords are good that is entirely incorrect, I do believe cheap housing that is up to SI534 standards has an important place in society and that removal of it hurts the less well off by increasing the cost of provision and has the exact opposite effect of what was desired. Unlike a lot of people who talk about property I don’t just study it, I am also a landlord, and investor, I have built and redeveloped houses and in doing so I think there is a highly ethical business there, people like me put roofs over the head of people who otherwise might not afford one and we do so at a fraction of the cost that they would go to should they try to do so for themselves. Bedsits have endured in every market because they have a place, in particular for foreigners who try to save money and middle aged single people. I would invite any critic to actually come to some of these properties and see if they are slums (ones I am involved with, I know there are deplorable landlords and properties out there). The language and use of things like ‘exploitation’ makes this question loaded from the start, to house a person within their means (in particular if they have limited means) is not exploitation, it’s meeting a market at a price which the market can provide for, ask the tenants themselves if they’d rather a two bed they’ll say ‘yes’ but ask them if they’d be willing to pay a two bed rental price? It isn’t up to me to demand how people want to live or need to live, what I do agree with is stringent application of law and regulations and fairness in dealing with our clients – which is what we prefer to call our tenants, they are our clients. Finally the idea that landlords can just ‘push up rents’, that is fine concept in a sentence but removed from the real world in practice, if that was possible I’d just charge €10,000 a month to everybody and retire by next February, prices are prices, they just aren’t stagnant, and for many years rents fell, the point being they are not a static concept unless you opt for long leases.

Q5: Leaving aside speculator debt (i.e. by to let mortgages), do you think there is really a large scale ‘strategic defaulter’ strategy by ordinary mortgage holders (i.e. in a typical suburban home), or could it be argued the claims of ‘strategic defaulting’ may be a strategy by certain players in the banking sector to soften up the population for a process of evictions.

A5: Sadly yes and the people who say it isn’t real are vested interests just the same as the banks but they sit on the other side of the table. We see enough financial information and are qualified by training and experience enough to know when a person is prioritising their spending in a manner that suits them more than their creditors. As for the ‘process of softening up’, we don’t do evictions in Ireland, there has been very few actual repos, most are voluntary surrenders and abandonments. The other problem is that people only talk about this emotively, and some well known commentators are the worst for making it seem like every instance of a repossession is automatically a mother out on the side of the street, that common misconception that repossession equates to homelessness touches something deep in the Irish psyche and we accept it. Having said that, this is a nation that is perhaps better at making emotive based decisions than ones enshrined in emprical evidence we have shown that time and time again.

Q6:  Do you see any connection between the sponsorship of mainstream Irish political parties and politicians (by legal and illegal means) by the property and finance industries as having any effect on policy in the area, including regulations, tax incentives and bailouts?

A6: That seems to me to be a rhetorical question, I don’t know that there is specifically illegal activity involved, but the financial lobby is the biggest, most powerful and most widely listened to one there is, they dwarf all others and hold all sway like no other.

This blog started as an offer to answer questions when Henry and I were having a bit of a back and forth on twitter, I hope that the questions were answered adequately, and for anybody else that wants to engage in this way feel free to do so.

Thanks again


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