• What Price Warm and Dry Homes?

    One of the crippling disadvantages suffered by the children of the poor is that they are too often brought up in houses that are cold and damp. The impact on the health of young children is all too apparent – ask any health professional – and the setbacks they endure can all too easily prejudice their life chances, imposing a handicap from which some will never fully recover.

    Most thoughtful people will react to the news that rental properties must in future be heated and insulated, so that children will have warm and dry homes, by saying – about time too! Not everyone though; some claim that it is actually bad news for families and their children.

    We are offered this surprising opinion by someone who professes to know exactly how landlords will respond to this attempt to give a new generation a chance to grow up fit and healthy. Judith Collins, no less, rubbishes our supposed naivety when we welcome the news.

    “It can only mean that landlords, if they are forced to make their rental houses healthy and habitable, will recoup their increased expenditure by putting up rents,” she says. So there we have it. From somewhere in the dark recesses of her mind, she has unerringly put her finger on what she understands to be the true role of the landlord – to make as much money as possible from low-income families who have nowhere else to live but in houses that are a health hazard.

    She appears to understand well how some landlords operate – buying cheap properties at mortgagee sales, evicting existing tenants and putting up the rents for new tenants, doing little or no maintenance (let alone improvements) and then selling the property off at a price and healthy profit – (perhaps that should be “unhealthy”) – that reflects the income stream they have been able to screw out of it.

    She warns that requiring rented houses to be healthy and habitable could reduce the number of rental properties available, and could lengthen the waiting list for state or social housing – and this from someone whose government sold off large numbers of state houses and stopped building new ones.

    Her message seems to be that trying to improve the early years of innocent children is futile because any attempt to improve their health and lives cannot survive the demand by private landlords for ever-rising profits, and should therefore be abandoned.

    And this despairing tale of woe is embellished by lamenting the prospect of a capital gains tax which, she says, will further discourage actual and potential landlords from buying rental properties. So, it is fine for landlords to charge high rents that poor families have to pay out of their earned income on which they pay tax, but the huge profits and capital gains the landlords make from their operations must be tax-free?

    Any discussion of these issues always calls to my mind a little-known speech made by Winston Churchill in 1909 when he was a budding young Conservative politician. Churchill addressed the issue of those who invested in land or real property, did nothing with it, but pocketed the lion’s share of its increasing development value.

    Who creates the development value? Churchill asked. The development value of land and property, he said, is created by the community. It is the community that funds and provides the roads, the railways, the sewers, the water supplies, the communications connections (nowadays electronic) – all the services that allow the property to be developed. It is then the schools and parks and shops and factories that others build around it that enhances the demand for, and therefore the value of, that same land or property.

    Churchill concludes by asking the obvious question – why should someone who has done nothing but sit on the land walk off with all the development value? And why should they pay no tax on that great windfall – while others have to pay tax on every penny they earn?

    It may be that Judith Collins, in leaping to their defence and professing to know their minds, has unfairly maligned landlords. We must hope that at least some of our leaders have a better and kinder view of human nature.

    Bryan Gould
    26 February 2019