The housing problem

Why is getting a permanent place to live so expensive and difficult and what would the CPGB-ML do about it?

Proletarian writers

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Proletarian writers

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A shortage of housing is an inevitable by-product of capitalism. In a society characterised by wage slavery, unemployment, violent and regularly recurring economic crises of overproduction, and the resulting poverty, destitution and overcrowding, the housing shortage is no accident.

Social housing under capitalism

‘Social housing’, ie, housing provided at subsidised or capped rates for working people, first came into existence in a limited way in the late 19th century. Officially, the reasons behind it were philanthropic, but the prime motive was fear. The ruling class was afraid of the contagious diseases that festered in slum conditions; and it was even more afraid of the socialism that the slums encouraged.

It should come as no surprise, then, that there was an especially large boom in social housing after WWII. With the USSR offering a powerful alternative model, the British ruling class realised that it would have to offer British workers better housing, health, education and pensions in order to prevent them turning to communism too.

It’s no accident either that the decline in the provision of social housing (like health, education and pensions) has coincided with the collapse of the Soviet Union. With the alternative apparently defeated, capitalism has lost its fear of the workers and no longer feels compelled to provide for them in the same way, so social housing provision has fallen into a sharp decline (along with student grants, pensions, the NHS etc).

As the availability of social housing shrinks and shrinks, only the very poorest and most marginalised sections of the society are able to secure council housing, which then becomes associated in people’s minds with deprivation, so that workers no longer see social housing as a desirable option. The fact that councils have been effecting massive cuts in spending in the area of housing, so that estates are not repaired, lighted or cleaned, but are allowed to become more and more run down, naturally contributes to this view.

Engels on housing

Frederick Engels, the co-founder (with Marx) of scientific socialism, pointed out that the housing question will never be solved under capitalism.

“It is perfectly clear that the existing state is neither able nor willing to do anything to remedy the housing difficulty. The state is nothing but the organised collective power of the possessing classes, the landowners and the capitalists as against the exploited classes, the peasants and the workers. What the individual capitalists … do not want, their state also does not want. If therefore the individual capitalists deplore the housing shortage, but can hardly be persuaded even superficially to palliate its most terrifying consequences, then the collective capitalist, the state, will not do much more. At the most it will see to it that the measure of superficial palliation which has become standard is carried out everywhere uniformly.”

“As long as the capitalist mode of production continues to exist, it is folly to hope for an isolated solution of the housing question or of any other social question affecting the fate of the workers. The solution lies in the abolition of the capitalist mode of production and the appropriation of all the means of life and labour by the working class itself.” (The Housing Question)

These words are just as true today as they were when Engels wrote them in 1872.

A shortage of affordable housing

‘Social’ (ie, council) housing places are difficult to get hold of, simply because there’s a shortage of them. Not only because some (the best) have been sold off, but also because not enough are being built, or converted from other uses.

This is not an accident: the shortfall between the demand for social housing and its supply has been deliberately widened by both Tory and Labour governments over the last 25 years, thus creating a surge in demand for private rental accommodation and owner occupation – and a consequent boom in property speculation as rents and house prices have climbed.

Presently, about 6 million people live in approximately 2.5m council homes. Of the 5m council homes that were available 20 years ago, half have been disposed of under the ‘right to buy’ programme initiated by Thatcher’s Tory government and continued under Labour.

Hardly any council homes are being built today. Whereas in 1970, 172,000 council homes were built, in 2001 just 487 council houses were built. The number of newly-constructed social houses for rent declined from 42,700 in 1994-95 to about 21,000 in 2002-03. Between 1991 and 2002, as a direct consequence of the decimation of council housing, the stock of social housing fell by 50,000.

Growth of homelessness

The extreme shortage of affordable housing is forcing more and more people into homelessness and temporary accommodation. Officially, the number of homeless households is in excess of 100,000 for the first time (the actual figure will be higher of course) – an increase of 123 percent since Labour came into office in 1997. This amounts to half a million people without a proper home, without counting those living in dilapidated accommodation or those who simply do not bother to register.

The government has further exacerbated the housing crisis by cutting funding. In December 2004, Labour announced cuts to the Supporting People budget, which is the source of the majority of funding for 1.2 million vulnerable people, such as the homeless, the elderly, the mentally ill and victims of domestic abuse. Budgets of all 150 councils administering the £17bn scheme were cut in December 2004 by 5 percent. So, just at a time when the number of homeless people is increasing, the money available to support them is being reduced.


Meanwhile, nearly a third of London children live in overcrowded homes because of the shortage of affordable accommodation.

Bad though the situation for the working class is in general, ethnic minorities suffer disproportionately from the housing shortage. According to the 2001 census, black and ethnic minorities account for just 7 percent of England’s households. Yet in the year ending 2004, such households accounted for one fifth (ie, 20 percent) of those accepted homeless by local authorities. Black African/Caribbean, while constituting just 2 percent of England’s population, accounted for 10 percent of those accepted homeless.

According to homeless charity Shelter, black and other ethnic minority families are seven times more likely to suffer from overcrowding than white families. (September 2004)

Overcrowding has serious long-term ramifications for those affected, creating a poverty trap that takes its toll in terms of health, education and future prospects. It has long been accepted that there is a direct link between overcrowding on the one hand and low educational achievement and spread of infectious diseases on the other.

Fight against privatisation

The government’s attack on council housing is tantamount to an attack on the right of working people to affordable and secure housing. The Labour government, just like the previous Tory administration, is refusing to allow local authorities to build council homes and is busy using every trick and blackmail tactic in the book to push through its privatisation agenda.

The government is determined to coerce council tenants to opt for privatisation of their homes – directly or through the back door – and so has given them three options: to agree to sell to a housing association; or to a private company; or to set up an arms length management organisation (ALMO). All these ‘options’ actually amount to the same thing: an end to security of tenure and low rents, the introduction of private profiteering and a further increase in homelessness as rents start to rise.

In order to try and force tenants to agree to this, the government has threatened that long overdue repairs to their homes won’t be undertaken until they agree to accept one of these routes to privatisation. They insist that there is no fourth way. We say there is, however, and that is direct investment in council housing.

There is a need to wage a determined fight to keep council housing under public ownership and control, combined with a massive investment to bring the housing stock to a decent standard. A secure home is something that everyone should be entitled to, no matter what their income.

Owner occupation

With the shortage in social housing has come a growth in the private rental market and ‘owner’ occupation. In effect, the right to a secure and affordable home has been quietly removed, leaving the majority of workers to the tender mercies of the commercial landlords and big banks.

Owner occupation in particular has an important role to play in fostering conservatism amongst the working class. For a start, it gives many workers the illusion that they have a ‘stake’ in the system; that they are people of property (as opposed to being owners of debt, in thrall to the banks, which is closer to reality). ‘Owning’ their own home encourages workers to be politically passive; people are a whole lot less likely to go on strike, for instance, if they have a mortgage to pay. Ultimately, individual responsibilities foster an individualist outlook, helping to keep the working class divided and powerless.

Owner occupation, like social housing, had a boom time of availability on easy terms after WWII and for just the same reasons. Faced with the threat of the Soviet model, capitalism needed to make living conditions noticeably better for the workers, and so again it is no accident that, as the Soviet Union declined, Britain began to see a return to landlord profiteering, while owner occupiers were faced with massive house price inflation in relation to incomes.

That’s the big picture. House price inflation in owner occupation is also fuelled by:

– additional demand caused by phasing out of social housing;

– the introduction of multiple mortgage finance (whereby the same house previously bought with a one-income mortgage now needs two or three incomes to finance it);

– the growth of second homes in beauty spots, or in city ‘hot spots’, which ‘de-house’ local workers;

– frantic speculation on the housing market caused by the worldwide economic crisis of imperialism.


Capitalist economic crisis begins with overproduction – manufacturers are unable to sell the commodities produced in their factories due to the impoverishment of the world’s people. As markets become glutted and profits in real, wealth-creating industries dry up, capitalists run out of productive places to invest their money, so they gamble with it – on the stock exchange or the housing market – in a last ditch attempt to make profits. This in turn pushes up the markets to levels that simply do not accord with reality.

When house prices are artificially inflated in this way then, just as the stock market and dotcom bubbles burst recently, a housing crash (or ‘correction’ in bourgeois economic speak) is bound to follow. When it does, thousands of ‘home owners’ will find that their borrowings far outweigh the value of their homes. The resulting ‘negative equity’ will mean a lifetime of debt for some; bankruptcy, repossession and homelessness for others.

Periodically, the government (in cahoots with the big banks) expresses concern over house price inflation and ‘does something about it’. However, none of its ‘solutions’ (raising interest rates, keyworker loan schemes, ‘shared ownership’ etc are) any use to working people looking for a secure home – what they offer is preservation of profits for the ruling class.

Short term measures

Under socialism, it would be possible to solve all these problems easily with a massive social housing building and renovation/conversion programme to create good quality, decent sized homes with outdoor space (gardens and/or patios) as a right, not a luxury.

Socialism will achieve what can never make ‘economic sense’ under capitalism, because a socialist society takes the materials and labour available and uses them to meet the needs of the people. Capitalism, by contrast, is interested in production (and house building) only to the extent that it can make profits.

Under socialism, there will be no need for individual ownership of (and individual responsibility for) housing at all, but in the meantime:

– Good quality social housing, with rents no more than 20 percent of income, should be the right of all;

– CPGB-ML is against all forms of privatisation of social housing, including ALMOs, which are simply the latest scheme aimed at the abolition of all publicly-owned housing, which in turn would lead to even higher rents, loss of secure tenure and total lack of accountability;

– CPGB-ML supports the Defend Council Housing campaign under the additional slogan ‘Defend and extend council housing’ for all and to the highest standards;

– CPGB-ML advocates a low rent rather than a housing benefit policy (housing benefit is not ‘paid to tenants’, it is the payment of public money direct to the parasitic landlord class);

– CPGB-ML would nationalise the property of the big landlords and housing associations and levy truly punitive taxes on second ‘beauty and hot spot’ homes.

Socialism the real answer

Over 135 years ago, Frederick Engels wrote: “One thing is certain: there is already a sufficient quantity of houses in the big cities to remedy immediately all real ‘housing shortage’, provided they are used judiciously. This can naturally only occur through the expropriation of the present owners by quartering in their houses the homeless workers or workers overcrowded in their present homes.”

According to the Empty Homes Agency, an independent charity, in 2004 there were 689,675 empty properties in England. It is clear that the quartering in these of all currently homeless and overcrowded families would serve to eliminate the problem of homelessness and reduce overcrowding at one stroke.

The only thing that stops this obvious solution to the housing problem being implemented is existing property relations. Socialism takes as its prime motivation the satisfaction of the needs of the people, and uses all the resources at its disposal – land, factories, machinery, people, raw materials – to meet those needs. Capitalism, on the other hand, is moved only by the thirst for profit. To make use of all those empty homes would mean depriving their current owners of the opportunity of making profits from them – something the capitalists simply would not allow. More than that, while wealth created collectively under communism will go to raise the living standards of the mass of the people, wealth created collectively under capitalism simply serves to make the rich richer and the poor poorer, trapping many in a downward spiral that leaves them simply too poor to pay for housing at market rates.

In order to put an end to the housing shortage, therefore, only one real solution remains: the exploitation and oppression of the proletariat by the capitalist class must be done away with, the large landowners must be expropriated and those currently homeless or overcrowded can then make their homes in the properties thus acquired.

Thus it can be seen that only by the solution of the social question; only by the abolition of the capitalist mode of production, will the solution of the housing question be made possible.