THE proposal by Sadiq Khan for rent controls to make living in London affordable is precisely the kind of policy which could give Labour’s appeal to the capital’s working-class population a real lift.
It will undoubtedly offend landlords. Already the Residential Landlords’ Association has condemned the idea, saying it would drive landlords out of the market and exacerbate an already existing serious shortage of homes.
And there lies the essence of the problem. Finding an affordable home in London is a near impossibility precisely because housing is subject to the anarchic operations of the market.
This is a market that is largely free of the “market distortions” that large-scale council housing once provided.
When working people had a reasonable chance of being publicly housed at an affordable rent there was a limit on the level of private-sector rents.
Margaret Thatcher’s plan to sell off council housing at a discount in order to create a “property-owning” class of people who might now be persuaded that their change in social status might make them into Tory voters has, a generation later, made it impossible for anyone in an ordinary job or existing on an average income to find a home at a reasonable sale price or at an affordable rent.
Take the Churchill estate in Westminster by the Thames. A well-designed and solidly constructed example of elegant public-sector of modernist design, it traditionally housed thousands of working people doing the kind of jobs that make the city work.
Unless they are long-term tenants or bought their homes, the people who now live in this perfect example of municipal public investment are either renting at exorbitant rates from the predatory landlords who now dominate ex-council estates or they have forked out well over half a million quid for a modest two-bedroomed flat.
The model for Khan’s move is the scheme whereby Berlin City Council has used powers devolved to regional authorities to limit rents for five years.
Most Germans rent and Germany already has a housing rental sector which is much more highly regulated than Britain’s, with reciprocal responsibilities imposed on both landlords and tenants.
Berlin is in a special position because, as the former capital of the socialist German Democratic Republic, it had a very highly regulated low-rent public housing sector which suppressed, even after the demise of the socialist state, the private rented market.
Paradoxically the socialist GDR had a higher level of private house ownership than did the capitalist west.
In recent times the proposed sale to big corporations of public housing, even along Berlin’s iconic Karl Marx Allee, has stimulated a big protest movement, one consequence of which is the rent freeze enacted by Berlin’s left-wing council.
Landlords in Germany make the same arguments as do British landlords.
“A rent stop would lead to our member companies building about 50,000 fewer apartments in the next five years,” the head of the German Housing Industry Association says.
In doing so these representatives of the most exploitative and parasitic sector of the capitalist class illustrate, with great clarity, the necessity for the social ownership of land and the strictest regulation of rents along with a massive programme of public housebuilding.
This would relegate landlordism to the margins of economic life and compel these people to find some productive form of labour.
Khan won’t acquire these powers any time soon but rent controls are not only the first element of a sensible housing policy but they illustrate how tackling the fundamental problems of our society entails profound socialist change.
