Why Mental Health Is the Hidden Cost of the Housing Crisis

Yves here. While we in the US don’t discuss a “housing crisis,” since Americans on average are over-housed (in terms of typical square footage) while Brits are house poor. However, Americans are facing increasingly pricey housing in major and even secondary cities, which can create stresses in terms of tiring commutes. For instance, I know a young couple, both Harvard grads living and working in the NYC metro area who can’t afford a house big enough for them to have children in anything less that a killer commuting range from their jobs…which would undermine parenting. And they really want to have kids. And if they are facing unattractive choices, imagine what it is like for people who are less well situated.

By Lydia Smith, a freelance journalist with a focus on health, mental health, wellbeing and human rights who writes for national newspapers and magazines. Follow her on Twitter @Lyd_Carolina. Originally published at openDemocracy

Our homes are supposed to be safe and welcoming, yet one in five adults in the UK suffer from mental health problems due to housing pressures.

For six years, Anastasia Miari has suffered from clinical insomnia triggered by anxiety.

Like many other people, financial worries keep her awake at night. The 27-year-old freelance writer lives in a house-share in east London and pays £750 a month for her room, but is considering moving to cut down on her rent.

“I get bouts of real anxiety but it doesn’t come in the form of panic attacks—it rears its ugly head in my sleep,” Miari told me in a recent interview, adding that she only slept one hour the previous night.

“Basically, it is difficult to know how much money you’re going to earn every month and if your rent is super expensive, you can’t afford to save to buy a house. A place has just become available at a friend’s house and it is £100 cheaper a month than mine, but it’s a box room.”

Our homes are supposed to be safe and welcoming places free from the pressures of everyday life, so it’s no wonder that housing problems have a major impact on our mental wellbeing.

High rents, the threat of eviction, overcrowding, substandard housing and financial pressures brought on by the ‘bedroom tax’ (in which tenants in social housing have their benefits reduced if they have a so-called ‘spare’ room) are all issues which can lead to stress, anxiety and depression, and which have a knock-on effect on all aspects of our lives from work to relationships.

London is Europe’s most expensive city in which to rent according to recent research by the analytics firm ECA International, but prices are rising across the UK, including in Manchester, Edinburgh and Glasgow. And with increasing rents and stagnating wages comes financial insecurity, which plays havoc with our mental health.

In fact one in five adults in the UK suffer from mental health problems due to housing pressures, according to research carried out by the charity Shelter. In the worst cases, some people reported experiencing suicidal thoughts.

According to the same source, around one in six adults also said that housing problems had affected their physical health too, in the form of hair loss, nausea, headaches and exhaustion.

“Housing and mental health are closely related,” said Helen Rowbottom, policy officer at the National Housing Federation, when I talked to her. “The negative impact of poor housing on someone’s health and wellbeing is well evidenced. In many cases, it can prolong illness and escalate healthcare costs.”

Housing problems not only cause mental health problems, they also have the potential to make existing conditions worse. People with mental health conditions are one and a half times more likely to live in rented housing, according to research by the NHS Confederation mental health network and the National Housing Federation, leaving them at higher risk of rent increases which perpetuate the cycle of stress and anxiety.

In addition, since it was introduced nearly five years ago, the bedroom tax has hit some of the most vulnerable people in society the hardest, leaving tenants in social housing out of pocket just because they have a ‘spare’ room. Three-quarters of people paying the tax have had to cut back on food, according to a report published by the Department for Work and Pensions in 2015. Nearly half had also cut back on heating for their homes.

It doesn’t take much imagination to link these problems to mental illness. Three months after the Department’s report was published, a study in the Journal of Public Health found that all of the residents in one community in northern England—in which 68.5 per cent of the population live in social housing—reported stress and symptoms of anxiety and depression as a result of the bedroom tax.

In a recent interview, Gareth Bradbury, a 54-year-old single father from Bolton, told me that his girls were nine and five years old when they came to live with him. The family lived in a three-bedroom house and he worked as a gardener to support his daughters, who went on to attend university.

Then, a string of problems changed Bradbury’s situation. He had a heart attack and had to have bypass surgery, but later went back to work. While cleaning the gutters of his house he fell and seriously injured one of his legs, leaving him unable to work. When the bedroom tax was brought in in 2013, the added pressure on his finances took its toll on his mental health.

“The bedroom tax came in and I have to pay £30 a week out of my benefits,” he said, “but I also need a car to get about so my disability [allowance] pays for that. I have been on meds for depression and I’m still on them. I went for a swap of houses to a two-bedroom house, but got knocked back. I was offered a one-bedroom flat but my daughters still come and stay with me so I could not accept it. I’m stuck paying this forever.”

Against the odds, Bradbury says he has managed to cope. “I got on with my life and now I run a small group of volunteers called Bolton Community Kitchen. We feed the homeless, vulnerable and elderly people of Bolton every Monday night. I’m a lucky one that will bounce back.”

Anne Power, a professor of social policy at the London School of Economics, told me that the bedroom tax has undermined people’s confidence in their entitlement to the “peaceful occupation of their home,” which is a legal entitlement—a right.

“It has made them feel insecure when they simply cannot afford to pay the additional rent and many people have had to turn to family when they couldn’t meet the rent, increasing the feeling of being a burden,” she said. “Generally, welfare reform has greatly increased people’s sense of anxiety and uncertainty, which is the last thing you need in your home.”

For Bradbury, his community has been a source of support during difficult times. But if you don’t have that kind of support and housing pressures are affecting your mental health, it’s worth getting in touch with Shelter which provides advice on a range of issues, from falling behind on your rent to living in a home which isn’t up to standards.

The mental health charity Mind also covers the impact of housing problems on mental health extensively and can provide crucial support, as can another organisation called Rethink. Speaking to your GP about a mental health problem is always important.

It may also be helpful to contact Citizens Advice, who give free, confidential advice to people struggling with housing issues. Your local council may also be able to help in the form of a discretionary housing payment—an extra payment to people who claim housing benefit—which could help you if your housing benefit doesn’t cover your rent.

Whether it’s the pressure of paying an extortionate rent or financial anxiety caused by the bedroom tax, Britain’s housing crisis is having a serious effect on mental health. What’s worse, this is a problem that is being largely overlooked, and with very dangerous consequences.

When Brenda, from Manchester, was evicted from her home she spiralled into a deep depression. “You blame yourself and you feel a sense of total helplessness. I remember not wanting to go on and wondering if I should end it,” she told Shelter.

Things began to turn around after she spoke to one of the charity’s advisors. “She was the first person who had asked how they could help me. It was the beginning of me taking back some control. I think about that call practically every day. All you need is someone to listen.”

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  1. The Rev Kev

    This is such sad reading. To introduce a bedroom tax to force people to downsize into smaller homes which are mostly not there anyway is just cruel. If they had used the supposed ‘savings’ to build housing with a smaller number of rooms that might have been different but – never happened. This is like when Thatcher tried to push through a Poll tax (https://en.wikipedia.org/wiki/Poll_tax_(Great_Britain) at Wikipedia) which took taxation off the wealthy and put in on the shoulders of the poor.
    I wonder if the benefit savings achieved were balanced against the costs of this scheme such as an increased use of mental services, the costs of the disruptions to the economy as people had to move homes, hospitalizations of people, suicides, etc that would never have happened if they had not introduced this scheme. I know that this is a generalization but having read a lot of British history all I can say is that the British establishment really hates the British people and I mean really hate them. This article just happens to fit a long held pattern is all.

    1. ambrit

      Using family history as a guide, I would say that the hatred is mutual.
      The ‘bedroom tax’ looks to be a natural campaign issue for Labour. Is there any public pronouncement about this by English politicos? The opposition to an obvious social “bad” seems to be a natural fit for the “Loyal Opposition.” Corbyn looks to be a crafty politician. Any deployment of surrogates to attack the Right on this issue yet?

      1. Clive

        Unfortunately our society here is still all too happy to accept a notion of the deserving poor.

        What serious and effective push back there has been has more-or-less only come from that faction of the disability rights movement which hasn’t been captured and neutered by the mega charities (which are just businesses with tax breaks) and other third sector players which are in cahoots with the government for their own benefit. It has been effective, see here, but the honest campaign groups are chronically staved of funds because far more funding and fundraising ability goes to to the organisations with the friends in high places.

        Labour under Corbyn have tried to get this kicked up the news media’s agenda, but of course the harpies in the mass market titles and the Daily Mail scream “socialism! ugh!” and the BBC plays with along with the Conservative party line about “affordability”. Sigh.

        1. ambrit

          A shame to hear that Clive.
          One of my Grandads was in a union and participated in the General Strike of 1926. Even though the aftermath was reactionary, the point had been made. Labour could no longer be taken for granted. Now Labour is stuck as the “Loyal Opposition.” The ‘Disloyal Opposition’ might have to re-arise from the Scots or Welsh? As for “socialism, ugh,’ I see that all about over here in America. Todays’ politicos don’t seem to have a clue. Put them up against some hard core Trots and see what happens.
          The present day oligarchs are, if anything, inferior to the old fashioned aristos. At least “noblesse oblige” was a commonly taught attitude in the past. When even the educated among the elites fail to heed the lessons of history…

    2. kevin

      Taxes don’t force you to do something. They simply encourage you to alter your habits. I can’t help thinking the extra 2 bedrooms in my “empty nester” parents home is wasted space and detrimental to society. I don’t think taxing them accordingly would be so bad. They are free to downsize if they wish to avoid it (or airbnb it a couple days a month etc.) Perhaps taxes can even be lowered on other welfare related things so people who are truly struggling like these examples aren’t worse off

  2. ambrit

    “All you need is someone to listen.”
    There it is in a nutshell.
    The atomization of ‘modern’ society has come to this point. People are so psychologically isolated that they begin to break down. Some work on building community is in order. This is neo-liberalisns weak point. The ‘rugged individual’ is touted as the ideal member of society, but, when taken to the neo-liberal extreme, the ‘rugged individual’ becomes the very antithesis of society. If the ‘swinging pendulum’ idea is correct, then the ‘pendulum’ of social relations will begin to travel the other way, away from the neo-liberal dispensation and towards the communitarian order.

    1. Snubble

      People hit by the “bedroom tax” by definition don’t own their homes. It’s not a general tax – it’s a benefit reduction applied to people in social housing or in receipt of housing benefit if they have a spare room. Home owners and private renters not receiving help with housing costs can have as much space as they like. If you’re allowed to knock the walls through – or hell, paint them so you can stop staring at beige every day – then you’re not paying the bedroom tax.

  3. Tomonthebeach

    If this was the US, I would attribute the bedroom tax as motivated to reduce welfare cheating by having off-the-record (but paying) roommates. I live near a neighborhood in decay. Most the houses are rented by family members of the original inhabitants who died. It is not unusual to see 6 cars in the driveway every night in front of a 2 bedroom house. Young people on entry-level wages load up and share rent. Why wouldn’t somebody on public assistance consider the same thing?

    It does make one wonder why such pocket-change cheating (?) is enforced as it helps struggling people increase resources that can help emerge from poverty.

    1. ambrit

      One problem with the alternative you suggest is that the present system no longer holds out hope for the young to escape from the ‘poverty trap.’ Working hard and succeeding has been decoupled in the public mind. Being forced to endure privations simply for being ‘unlucky’ has no moral weight. Indeed, just the opposite now prevails. Look up experiments with population densities among rat populations. As the densities increase, so do destructive behaviours. Do not be surprised when your previously conformist masses switch over to being nonconformist rabbles.

      1. kevin

        This is not true. it’s cheaper to rent a room in a “group” home then to rent even less in space as a private studio or 1 bedroom. Since it’s cheaper it is a means to save money and escape the poverty trap. This is exactly what I did. I also take issue with your comment equating a private room to some sort of “privation”. Some people actually prefer the social aspect, increased common space, and consider it a pro. Its certainly no more of a “privation” then alternatives like hour plus commutes

        1. ambrit

          I know I’m gnawing my own leg off to escape the trap but, the main attribute of most “group homes” that I have seen is an almost authoritarian enforced conformity. That is the downside of communitarianism. Thus, the ‘statist’ versus ‘anarchist’ divide on the left. The provision for an individual ‘room’ per person is an accommodation for the ‘public private’ balancing act all people go through. The basic point is that income is not at all a ‘natural’ means of distributing resources, living space being a major resource for any social animal. This is where a well balanced communitarian housing system makes its’ mark.
          I realize that you might be using a ‘room’ as your basic unit of living space. Rooming houses were a common form of housing a few generations ago. It looks to be a basic issue of the division of available resources.
          Finally, the definition of ‘escaping the poverty trap’ changes over time. Absolute poverty is one thing. Relative poverty is what we face here in the West now. We call it ‘inequality’ today.

  4. Clive

    Not drawn out in the post (it wisely concentrated on real-world situations rather than getting into the weeds by postulating alternatives which probably aren’t really alternatives) is the factor of socioeconomic divides by geography. Here in the U.K. equivalent of flyover (the north of the country) housing is inexpensive. In my home town I cannot buy a house over £500,000, which down here in the south is now the bottom rung for what passes for middle-class “family housing” ( say, 1,500 sq. ft+ with a bit of garden and some sort of community that’s not a car ride away in inevitable congestion). £200,000 buys you something quite nice and you need not pay more than £600-700 pcm for renting a decent place. Living in a closet in London costs you that much.

    So, the cry usually goes out, “why don’t people move?”. Because jobs. Not that you can’t get skilled work outside London and the south east, but because is it scarcer job insecurity is greater. At least in London, and I imagine the same is true of NYC, San Francisco, Seattle, Chicago and first tier sunbelt cities, the nastiest and most vicious employers will struggle to keep staff because there are a fair number of alternatives. You may earn more at, say, a ghastly TBTF bank, one of the Big Four accounts or the yucky top consultancy shops and they will treat you like (family blog) but you can still take a bit of a pay cut and go work for someone slightly less horrible a mile or so away.

    US readers please do pick me up if I’ve wrongly assumed that the same argument is made for why people don’t relocate to flyover if they don’t like the costs of living in the coastal cities — and why people still find themselves having make the pact with the Devil and continue to live there.

    1. ambrit

      Insomniac ambrit here.
      I would say that the sheer size of America comes into play. Also, the lack of decent public transport, in which category I lump trains and bus lines, severely limits the non car owning populations’ mobility severely.
      At present, I check the state job bank site every morning, just to see what’s available. You log in to the site and navigate to the “I Want A Job” page. At the top of that page, there is a line with the search criteria. You have to cue that line up to see the jobs. First is ‘Type of job.’ This can be ignored if you want to see all that is on offer. Second is, ‘Distance from location.’ This is scored in increments of 10, 25, 50, 100 and 200 miles from your location. Last is your location. Type in the location you call home and set the distance you are willing to travel each day and the list of jobs pops up.
      First, notice that you are given the choice of electing to travel 200 miles each way per day for a job. I know someone who drives 100 miles each way per day for an admittedly well paying job.
      Second, the default distance used on this site for the commute is 50 miles each way. Unless you manually change this parameter, it is assumed that you will willingly travel a hundred miles a day for work. As I learned from an experience with contesting a companies contestation of unemployment for me, fifty miles was then the distance a company could require you to drive to an alternative job site if work was no longer available at a job site you had been working at previously before you could get unemployment.
      Outside of the larger conurbations, decent work availability is shrinking. The brick and mortar retail locations are ‘shrinking their footprints’ in a major way. Nothing is replacing these jobs. Thus, a refugee from the megalopolises will have to have sufficient resources to live on independent of the ‘new local’ economy. One thing Phyl and I learned quickly when we moved inland was that there are many people here who will love to know you when you have money they can siphon out of your pockets. When the money dries up, so does their love. My Mom called that “cupboard love.”
      So, many people can move to the cheaper places, but cannot afford to live there long term.
      Strangely, the rents here in the ‘flyover country’ aren’t all that lower than the average in the conurbations. The centralization of ownership and management has somewhat ‘nationalized’ the rental stock in the American regions. As an example, I checked rents over three places in my region of the American Deep South. Adjusting for ‘desirability zones,’ I found the rents of similar properties here inland, on the Gulf Coast, and in Louisiana to be roughly equal. The rents were somewhat disconnected from the economic conditions peculiar to each sub region. One has to consider moving to less desirable sections of the region to encounter lower rents.
      People do have to make that Pact, but with a Pack of Devils.
      We were lucky to find a 1940s house of 1250 sq. ft on a quarter acre for $65,000 USD. Exurban land has finally dropped in asking price. Now, ten acres and up tracts can be found for $1,500 to $2,500 per acre, freehold. We know several families who do the ‘hippy trip’ out in the country. Like in “The Waltons,” one of the family usually had to live out of town to work and send money home. Really, the American rural life is becoming similar to what we are told the Mexican rural life is like.
      Basically though, the main difference between Anglo European and American conditions is that of sheer physical scale.
      Thanks for engaging on this issue. We have been feeling that we were outliers in the “Cosmic Misery” boogaloo. Misery loves company? Well….

    2. Which is worse - bankers or terrorists

      I’ve worked for one of California’s largest apartment developers delivering a 1000+ unit deal in Silicon Valley. Now I work across the Middle East and have also held a C-level position in India doing the same. I’m passionate about developing urban housing and affordable housing whatever I can, promoting smart growth, and reducing commute time (which normally requires urban housing located near jobs).

      Yes, because jobs. Unless our economy fundamentally changes, most higher wage jobs are located in the same place due to clustering effects. And the reality, as much as we want denser housing at the macro level, there does not exist a way to deliver this at the micro-level, since the politics of real estate is still local in our society, and existing owners will always vote against density next to their homes to inflate their own existing housing.

      There is really not a solution for this unless state and federal level governments find a political mechanism to override local governments’ necessary reflex to respond to their own residents’ demands to reduce local housing density. The best example I can think of this occurring is in the Soviet Union and Eastern Bloc in the 1950s to 1980s, and this certainly did not produce the most attractive looking cities.

      Keep in mind that apartment buildings with greater height do not increase in cost linearly in relation to height; they increase exponentially in relation to height. This is due to a mix of changeable and non changeable factors, such as increased wind pressure on the buildings, vertical and lateral structural costs (especially, where applicable, due to seismic considerations) and regulatory costs due to fire and life safety. For example, as buildings become taller, fire stairs and elevators take up a greater percentage share of the floor space, but these spaces do not generate revenue to cover building costs. This makes providing affordable housing in high rise buildings exponentially more difficult as costs rise exponentially but revenues from affordable units are by definition capped (most of the cost of a high rise unit is fixed due to structural, MEP, and life safety costs, not due to the finish costs that, by California law, serve as the only way to differentiate affordable from luxury units).

      Roughly speaking, the construction cost of a 1000sf unit in a 5 story California luxury apartment has increased from $200k in 2012, when I started construction of my deal, to about $400k today, excluding the highly variable component of city fees and project land costs. Same unit. Much of this is due to regulatory changes increasing construction costs and limited supplies of materials and labor.

      These kind of technical constraints, prohibitive regulatory regime and escalating costs are part of the reason why developers make decisions to save money on poor quality exterior finishes like those chosen on the Grenfell Tower in London that are believed to have led to the fire…this is the only place to save, when you are at the end of the construction of your deal since most of the building cost is driven by various regulatory regimes…exterior building cladding is one of the only places to save to make your budgets work. The cladding for that Tower was not, as I understand it, yet illegal, just inexpensive and poor quality.

      Part of the issue is the lack of coordination between regulatory regimes…there is no regulatory entity that balances the relative social value of reasonable cost housing versus green building versus prohibiting exterior building panels with inadequate fire safety rating…all of these various regulatory agencies just add requirements at their own pace and time incoherently, and given that your profit margins are defined by your lender and cannot be reduced, all these costs are on to the end user. At the same time, it would be difficult to find technical experts that could have enough broad technical expertise to truly effectively balance the various regulatory regimes; I just don’t know anyone in the industry with that depth of technical knowledge. While developers clearly cannot self-regulate, I have serious concerns that the complexity of large scale urban development has become so extreme and polixymaking has become so narrow minded and subject to rent seeking behavior that I doubt that government can effectively regulate either. I’m not sure there is a solution to the regulatory side of the problem.

      1. ambrit

        Good info here. It is interesting that the builders of the newer “campus” style company centres do not agitate for, or include in their costs of doing business, interurban mass transport to allow for a more spread out living zone for their employees. I read in Silicon Valley that some companies are running their own busses. Would that they could invest in local mass transit and do everyone a favour. That’s a public private synergy that could work.

        1. Which is worse - bankers or terrorists

          Either Google or Apple are actually building housing on their campuses and swallowing the entire supply chain. Who can argue with them given the incompetence of Silicon Valley area local governments and the supporting body politic.

          In Silicon Valley the left simply abandons the poor and those who need workforce housing. I was on the Board of a Silicon Valley affordable housing developer and provider of services for the homeless from 2012-2016 and actually heard it stated by the Chairman of the Board: “we will simply have to tell the homeless and those who need affordable housing to live outside Silicon Valley”. He said that! Bay Area liberals could care less about the poor and don’t want them there. I see the Bay Area housing crisis as a back door way to promote eugenics in the region.

          1. Off The Street

            … a back door way to promote eugenics in the region.

            Those back door ways provide windows into the soul, or what might remain, of so many in our neo-liberal world. The phrase out of sight, out of mind has become increasingly poignant. Now, off to that bowl of morning gruel.

          2. kevin

            TBF, any homeless your local govt helps out are a drop in the bucket of actual homeless people. Homeless by definition do not live in the community and are free to come and go to whichever area provides the best services to them (either from the govt, charities, or informally via panhandling).

            I’ve always thought its the federal governments job to tackle homelessness. I can’t see a city being particularly successful. The more successful they become the more and more work they’ll need to do as word spreads to homeless in neighboring towns.

          3. perpetualWAR

            I hope that all those that serve Silicon Valley, including landscapers, housecleaners, fast-food workers, etc., tell the same thing to Silicon Valley.

            1. Which is worse - bankers or terrorists

              I think they are saying the same thing; this is why construction labor is getting so expensive; they simply won’t make the commute from the Central Valley.

              But of course, ultimately the are a number of these kinds of jobs that the Valley can simply automate.

      2. Jean

        Bankers or Terrorists,

        “unless state and federal level governments find a political mechanism to override local governments’ necessary reflex to respond to their own residents’ demands to reduce local housing density.”

        California senate bill 827, promoted by assemblyman Weiner from San Francisco does just that.
        Responding to the building trades unions, contractors and his main donors in Silicon Valley, he is trying to force all communities in California to override all local zoning, environmental, density, parking and other quality of life criteria forcing them to accept 5 story buildings (85 feet), in a ONE MILE WIDE area along any bus line with headways less than 15 minutes at rush hour. Yes, that includes temporary private Google and Facebook buses as well as real transit.

        This is a means to allow the techbros to move out into the nice suburban housing and as a bonus, these structures will have to have a certain percentage of low income housing in them, meaning built in staff for them without the onerous commutes for the nannies, housemaids and task rabbits to come service the .1%

        The bill [SB 827] is backed by a group that calls themselves YIMBYs, which stands for “Yes in my backyard.” Like the colonizers whose agenda they seek to replicate, it takes a certain entitlement / supremacist mindset to call a community they didn’t grow up in, don’t live in or are new to as “theirs.” It’s NOT their backyard – it’s ours. Ideologues, whether on the left or right, endanger the social fabric that holds our society together.


        1. Which is worse - bankers or terrorists

          There is a long history of these efforts failing, either through failure to pass legislation or if passed, massive bureaucratic resistance. The reason for this is that the NIMBY forces always have much more money and political muscle than the building community.

          Builders never want to legally challenge a city in California, because if you win, the city just slows down all of your permits for ever and ever and you will never be able to build. San Carlos and Palo Alto are experts here…despite the regulations they permit projects they “like” and as a city dare the builder to sue them so they can blacklist you from the city via this process of bureaucratic resistance. Planning regulations are written so there is always room for interpretation, given planning departments tremendous power. You can’t build without a city and there are only so many in a regional environment (builders are a regional business)…you can run yourself out of business as a builder.

          This is why the bill you mention won’t work. To effectively execute what the bill intends you would need to eliminate every planning and building department of every California city and centralize the function in Sacramento, which would be obviously pretty impossible on legal and logistics grounds. Not sure of the legal issues on this but eliminating local planning and the associated citizen inputs to the local General Plan I think would require amending California’s constitution; the proposed law clearly cannot override that.

          At the end of the day, the system exists because it is what the rent seeking landowners want.

          1. Jean

            What you say is true about bureaucratic resistance against builders by the municipality, however, the plan leaves plaintiffs plenty of leeway to sue local governments should they try resist a private landowner’s quest to build an 85′ building on his property when he has state ministerial law on his side.

            Local building and planning departments will not be eliminated, they will just have another set of regulations controlling them like for example, the federal Americans With Disabilities Act, which also provides profits to individuals who sue instead of property owners who are sued.

      3. Harrold

        Silicon Valley clustering is a result of proximity to venture capitalists on Sand Hill Rd.

        I have no idea why Apple & Google have never done as Amazon is doing and create a second location some where else in the country.

        1. Mike G

          Both have substantial operations in other places like Austin and Sacramento not to mention abroad, and I expect them to shift more and more operations out of the valley as the affordability situation gets worse.

      4. False Solace

        > [E]xisting owners will always vote against density next to their homes to inflate their own existing housing.

        The known solution to this is to tax away the gains, which are totally unearned by the property owner. Odd how so many economists are ignorant of this. It’s almost like there’s a mysterious pattern of ignorance that entirely benefits the property-holding classes…

            1. kevin

              Perhaps. I believe that’s limited to one individual throughout their lifetime, though. And that doesn’t take into account inflation. If you’ve lived somewhere a couple of decades a couple hundred thousand in “gains” is really just diminished purchasing power.

    3. Carolinian

      The other day I mentioned the Ken Loach film I, Daniel Blake which directly addresses these problems in a tale about a disabled, late in life carpenter. Not only do they mention the “bedroom tax” (now I know what that is) but also the “sanctions” that are placed on those requesting public assistance who don’t dot all the i’s and cross all the t’s in their quest for help. While I thought the movie was just so so you do get the sense of a society that only grudgingly provides assistance via a Kafkaesque labyrinth of bureaucracy. You could compare it to the medical system in the US where lives are saved while the means to live them are taken away (or in the UK case the needed self-respect is taken away?)

      1. Clive

        Yes, “being sanctioned” is a method by which whole assistance neighbourhoods, not just individuals (although ultimately this is class warfare inflicted on real, actual people) can be targeted. If you have a social landlord, they’ll probably tolerate a degree of rent arrears. But if you’re reliant on the private rental sector and your rent is covered by social security, then you’ll be evicted. As your credit will then be wrecked, you’ll have to rely on social (public) housing which will mean having to relocate to where accommodation is available in a housing project well away from where you live.

        Scarcely justified — or entirely arbitrary — infractions of a Byzantine labyrinth of the rules of the system result in payment being stopped.

        The worst thing to me is how it’s all normalised and hidden in plain sight. My medium sized town has half a dozen pawnbrokers or payday lender stores. Do people never stop to think why such numbers are needed?

  5. paul

    The Bedroom Tax and its supposed savings was a classic example of simplistic, ideological and punitive thinking.
    The bright young things in the coalition government, encouraged by the not so bright, not so young type likes Freud and Smith decided that that it was ridiculous that a person or family should not have an extra room.
    After all, isn’t a 2 bed flat more expensive than 1 bed?

    Turns out it’s not that simple, supply constraints mean there wasn’t enough capacity in the system, legislation regarding ‘affordable rents’ meant people changing tenure could end up needing assistance with higher rents,landlords having vacancy and reletting costs, not to mention the externalities of policing and health provision disruption in previously stable neighbourhoods.

    Which is why Discretionary Housing Payments had to be introduced.

    Looking at the numbers, it was no magic bullet, Housing Benefits:
    2010/11: 21.5 bn
    2016/17 22.4bn
    Over a period where 8% less people receiving Housing Benefit over that period

    The 15/16 figure for homeowner subsidy (imputed rental/mortgage differential, capital gains) stood at 21.9bn, so we’re all deadbeats together, in a way.*

    *apart from renters who are not able to buy but are above the benefits threshhold

  6. Eustache De Saint Pierre

    One in five MPs are landlords.

    ” The Labour Party tried to pass through a law that would require private landlords to make their homes safe & fit for ” Human Habitation ” in January last year – but it was rejected in Parliament by 312 votes – 219.

    But according to Parliament’s register of interests, 72 of the MP’s who voted against the amendment were themselves landlords who derive an income from a property. ”


    1. Eustache De Saint Pierre

      Incidentally – the list of the seventy two shown in the above article includes twenty seven Labour MP’s.

      1. Eustache De Saint Pierre

        You could say that – Blair stated he wanted to abolish the house of old farts being very well compensated for snoring etc, but found it very handy for selling honours.

        The fact is that when you take a close look at the so called ” Great & the Good “, they are largely base & tawdry creatures forever in a blinkered search for a full trough. I wouldn’t mind , but for the fact that it involves impoverishing many decent human beings who in comparison to the turds in high places are labelled as ordinary & therefore seen as being of little or no worth except as ever expendable human capital.

        It is a shame that so many are dazzled by the glitter.

  7. Northeaster

    In desirable communities outside of Boston, we are starting to see buyers literally knock on doors and ask:

    “How much for your house?”

    The problem here is, even though you can make a killing selling, there’s simply no place to move to, unless you’re leaving the region.

    1. Wukchumni

      We had a realtor knock on our door about a dozen years ago inquiring if we knew how much our house was worth, and soon after put it on the market as said used home pimp reminded me of a shoeshine boy giving stock tips, sold and moved away to a place of lesser real estate values and a much richer life.

      Breaking the social ties that bind, is the most difficult part of being an equity refugee.

    2. economicator

      Yeah, this has been happening in Silicon Valley for maybe the last year. And of course, people cannot move, because prices go up literally monthly. A condo complex in Milpitas I am following was listing a 2BD,1.5B, 1066 sqft townhome, 1 car garage (and Milpitas literally stinks because of a garbage dump a couple miles away with winds coming at Milpitas, nice) at $569k in March 2017. Now it is listing the same mediocre unit (no green park for children to play withing walking distance, just some playground surrounded by a parking lot, middling schools) for $766K. That is what – roughly $15k in cost per month? And it is much worse for single family homes. Try and move.

      There is so much wrong with this.

  8. Wukchumni

    Is it just coincidence that vast amounts of homeless here in California didn’t exist before housing bubble version 2.007, later supplanted by housing bubble part deux currently ongoing?

    1. Which is worse - bankers or terrorists

      I propose that there is a massive internal contradiction in being a tech liberal in the Bay Area who spends their entire career trying to automate away working class jobs.

      What makes these people liberals? Perhaps only Heinrich Himmler lived through life with greater internal contradictions.

  9. Jeff N

    15 or so years ago, I started going to expensive weekly therapy for several years. (Sadly, it did absolutely nothing for me.) The only time I cried during a session was after the 2007 crash, when I was freaking out about my job tenuousness and, more specifically, its effect on my house and its expenses.

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