
London: the city that ate itself - smacktoward
http://www.theguardian.com/uk-news/2015/jun/28/london-the-city-that-ate-itself-rowan-moore
======
sytelus
This is just not London, it's happening in almost every major city. There is a
massive real estate investment movement in progress where wealthy and giant
investing funds are dumping bucket loads of money to buy up properties in
popular areas. These then gets put back on market with extra-ordinary rents
(typically 5% annual of purchase price). I think the hope is that even if
property stays without renters for even half a year, its returns when combined
with appreciation would exceed other "safe" investments. It's not unnatural
anymore to go in high demand areas of city in night just to find empty
apartments all over. I shudder to imagine how next real estate crash would
look like...

 _If you walk through Knightsbridge in the evening, at a time when people in
well-adjusted cities might be having dinner with their families and friends,
or at least watching TV with their kids, you will see a wall of black,
punctuated by the odd square of illumination._

~~~
nosuchthing
Couldn't this be solved by passing city ordinances, and state taxes on vacant
properties, non-primary houses, and un-rented apartment spaces?

Without any way to counter balance out speculation, land hording, and
gentrification/displacement of urban areas, syndicates of real-estate
investors would just buy up everything in sight, turn it into luxury
condos/lofts and set the price at a rate determined to be some minimum of %75
of the target populations' average income..

~~~
eru
> Couldn't this be solved by passing city ordinances, and state taxes on
> vacant properties, non-primary houses, and un-rented apartment spaces?

Why restrict these taxes only to unused spaces? If you do so, you'll have to
get around people only nominally using the spaces.

> Without any way to counter balance out speculation, land hording, and
> gentrification/displacement of urban areas, syndicates of real-estate
> investors would just buy up everything in sight, turn it into luxury
> condos/lofts and set the price at a rate determined to be some minimum of
> %75 of the target populations' average income..

If only making money was so easy..

~~~
nosuchthing
>Why restrict these taxes only to unused spaces?

To create an incentive for unused spaces to be used, instead of horded.

>If you do so, you'll have to get around people only nominally using the
spaces.

Who could pull that off? Someone who owns 4 houses?.. 10 apartment units?

~~~
eru
How would the legal system tell apart used from unused spaces? How would you
make that distinction hard to game for someone with expensive lawyers and
resources.

------
peteretep
The author went to Eton and then Cambridge, moving to London for the first
time after university. In the process, he himself pushed property prices up,
and directly contributed to gentrification.

Obviously, when he moved there, that's when London was at its best. Since
then, these upstarts and their money, moving there, pricing out the real
Londoners... etc.

It has always been thus.

~~~
crdoconnor
>he himself pushed property prices up, and directly contributed to
gentrification.

Not nearly as much as those Russian oligarchs and Arab oil barons did.

~~~
peteretep
It's amazing, with the tens of thousands of Russian millionaires coming to
London each year, stealing our houses, that the Russians have any left at all!

Much less amazing: the same xenophobia and racism as always towards
immigrants.

~~~
crdoconnor
I used to live in one of the most multicultural areas of London before the
rents started going through the roof. I loved it.

Now it's slowly turned into a string of soulless Gucci/Prada/Maserati shops,
and all the people/immigrants who made it a genuinely nice place to live have
been priced out by foreign investors.

But sure, racism or whatever.

~~~
facepalm
How can an investor price somebody out? The investor only makes money if
people are willing to pay rent for his property. So it is the willingness of
people to pay the high rent that drives the prices up.

Edit: HN doesn't let me write more comments. I still don't understand from
those videos how they make money with the vacant houses. Also the articles are
a bit weird, as if renting out a few houses in an expensive street would
really have a significant impact on the housing issues of London.

~~~
SideburnsOfDoom
> The investor only makes money if people are willing to pay rent for his
> property.

In most cases, yes. But not in all cases. The thing is, it is _not normal_ to
be able to make money on an empty property. So then, the expensive parts of
London are not normal.

[http://www.theguardian.com/society/2014/jan/31/inside-
london...](http://www.theguardian.com/society/2014/jan/31/inside-london-
billionaires-row-derelict-mansions-hampstead)

[http://www.standard.co.uk/news/london/lights-out-london-
stre...](http://www.standard.co.uk/news/london/lights-out-london-street-
where-7-in-10-houses-are-second-homes-10249301.html)

[http://www.theguardian.com/uk-news/2015/jan/25/its-like-a-
gh...](http://www.theguardian.com/uk-news/2015/jan/25/its-like-a-ghost-town-
lights-go-out-as-foreign-owners-desert-london-homes)

------
d4rkph1b3r
Need to tax _unoccupancy_. If an entity is preventing people from living in
the city, they should be paying more than those contributing to the well being
of the city.

~~~
abstractbeliefs
We tried to tax underoccupancy in state provided accommodation, ie, if you
lived in state housing, with empty rooms, you'd have a reduced benefits
payout. It was an absolute nightmare response.
[https://en.wikipedia.org/wiki/Under-
occupancy_penalty](https://en.wikipedia.org/wiki/Under-occupancy_penalty)

~~~
Mandatum
There was large campaigns to abolish this tax, I believe this was largely
funded by lobbying. Edge cases, like the ones below which was largely used to
stir criticism from public could easily be accounted for (ie implement
allowance of 6 months after the death for under-occupancy tax to kick in and
medical requirements). Yes these allowances may be abused/dodged (I can see a
lot of "home offices" popping up and people claiming tax on their "office
rooms"), however there will be a large amount of revenue generated from
implementing an under-occupancy tax.

But as we all know getting bureaucracies to implement something like this will
cost hundreds of millions, and will it be beneficial in the short term?
Probably not. But we should start looking at long-term solutions.

> Michael Rosen writing in The Guardian has criticised how, under government
> proposals, parents living in social housing could become liable for what he
> calls the bedroom tax after only three months following the death of a child
> – something that inadvertently causes the creation of a "spare" room.[26] In
> March 2015 the Daily Mirror, a British tabloid newspaper, reported that a
> woman had become liable for the bedroom tax following her son's death from a
> brain haemorrhage following an assault.

> The changes in housing benefit have been criticised for having a
> disproportionate effect on disabled families. Two-thirds of individuals
> affected by the under-occupancy penalty are registered as disabled.

Source: [https://en.wikipedia.org/wiki/Under-
occupancy_penalty](https://en.wikipedia.org/wiki/Under-occupancy_penalty)

~~~
toupeetape
> But as we all know getting bureaucracies to implement something like this
> will cost hundreds of millions, and will it be beneficial in the short term?
> Probably not. But we should start looking at long-term solutions.

Penalizing people for having extra rooms while it is impossible for them to
downsize because there is insufficient supply of smaller properties is not a
long term solution.

[http://www.independent.co.uk/news/uk/politics/big-lie-
behind...](http://www.independent.co.uk/news/uk/politics/big-lie-behind-the-
bedroom-tax-families-trapped-with-nowhere-to-move-face-penalty-for-having-
spare-room-8745597.html)

~~~
Mandatum
In which case it would make sense to rent the spare room out.

------
coldcode
Hawaii got bought up by the Japanese when they were flying high and then they
crashed to earth. I remember playing golf once in a beautiful country club
that was now public. Glorious gold everywhere in the clubhouse and no one
would ever use it again. Eventually things will crash and all that golden
London will die.

------
facepalm
London is not creating the prices of property, the people are. They will be
prepared to pay as much as they think living in London is worth. If eventually
all the cool stuff is driven out by the high prices, prices will fall
accordingly. Or rather, presumably there will be an equilibrium of prices vs
coolness.

It kind of sucks, but what would actually be a better system? That people get
assigned places to live by lottery, so if you happen to live in a cool place
on the cheap, you were simply lucky? It sounds good on the surface because you
only have the people living there in your mind. You forget about all the other
people who never get a chance of living there. Why is it fair if some randomly
selected people get to live in nice places and others don't?

I am not convinced that the market approach is not preferable. After all,
those people PAY for the privilege to live in a cool place. If they have the
money, presumably they should have delivered something good to the world in
exchange.

And, hello, welcome to overpopulation. The number of nice places to live is
finite. Even if we can cram ever more and more people into the world (by
building skyscrapers or whatever), it doesn't seem obvious to me that we can
provide nice places for everyone. For example, the length of shorelines is
finite (glossing over fractal issues), so if your idea of living in a nice
place is to live by the sea, there are only so many people who can have that
privilege.

~~~
toupeetape
_" It kind of sucks, but what would actually be a better system? That people
get assigned places to live by lottery, so if you happen to live in a cool
place on the cheap, you were simply lucky? It sounds good on the surface
because you only have the people living there in your mind. You forget about
all the other people who never get a chance of living there. Why is it fair if
some randomly selected people get to live in nice places and others don't?"_

We actually have had something not completely dissimilar to this since the
1980s. Anyone who lives in state housing for at least a minimum period of time
is able to buy that home at a subsidized price. As local authorities are
banned from using this money to build more state housing, this leads to long
term shortages in state housing which is one of the causes of the problems we
are facing now. (Source:
[https://en.wikipedia.org/wiki/Right_to_Buy](https://en.wikipedia.org/wiki/Right_to_Buy))

Nobody is expecting to get a cheap home in Kensington or the equivalent super-
expensive part of whatever city you are from. But it is not just the "cool",
"nice" places that are becoming unaffordable. And the problem is that people
are not paying to _live_ in these homes. People are paying to use them as big,
shiny piggy banks in the sky that happen to offer a better rate of return than
other investments. Poor people who actually live in London and use London
businesses generally contribute more to London's culture than rich people who
don't.

~~~
facepalm
Of course it is the cool, nice places that become unaffordable. Pretty sure if
you move further out, or to another city, it is cheaper?

How much would you say contributing to the culture should be worth?

And I still don't understand how they make money by letting houses remain
vacant?

------
l33tbro
Very similar sentiment to the Vice article from the weekend:

[https://i-d.vice.com/en_gb/article/london-its-over-and-
its-n...](https://i-d.vice.com/en_gb/article/london-its-over-and-its-not-me-
its-you)

------
vermooten
Boo bloody hoo. Are we in 'the provinces' meant to feel sorry for Londoners?
Are you shitting me?

~~~
techsupporter
Sure, since it's happening on this side of the pond, too. "The provinces" have
their own messes, like Toronto and Vancouver and Montreal (to some extent).

Same in "the colonies," like: San Francisco, Seattle, Portland, Austin, the
Bronx and Brooklyn (ways you know the real estate market has gone bonkers:
people are buying in Manhattan because it's _cheaper_ than Brooklyn).

Vancouver, Seattle, and Portland are getting the exact same double-whammy as
London: very popular places to live along with very popular places for foreign
investment.

Schadenfreude doesn't help anybody, really.

~~~
threedaymonk
In a British context, "the provinces" is a rather pejorative expression for
the rest of the country outside London. It doesn't refer to Canada.

