Friday, August 19, 2011

Ownership and exclusion:  a lesson from the UK riots

Many commentators correctly attribute the UK rioting to decades of misgoverning and miseducating youth.  Contributing to this has been the breakdown of family discipline, the replacement of working fathers as role models and the creation of a culture of entitlement.

Adding poison to the brew is government appointments and procedures that deflect police forces away from law enforcement into institutions, that ''reach out'' rather than prevent wrong-doing, seek to understand miscreants rather than enforce the law, and try to contain disturbances rather than prevent them.  The soft sociological and managerial ethos that has undermined policing in Britain is all too familiar here in Australia.

But there are other factors at work.  This is especially evident given the nature of those arrested.  Many turn out not to be part of some jobless underclass but relatively affluent working people, some in their late 20s and early 30s.

And the rioters are black and white -- though hardly any Indians or other Asians.  One reason for this is Asian family background, bringing values based on self-improvement by work rather than theft, reinforced by religious teachings, especially in the case of Muslims, the only group where a large majority are religious practitioners.

While the complexion of the rioters will be subject to considerable analysis over future months, we can be confident about one hypothesis -- few if any of the rioters own their own homes.  This is because nothing engenders respect for property and others' possessions more than people having a personal stake in property themselves.  Property ownership, and for most of us this means home ownership, is the key to creating a law-abiding society.  Where riots in England take place outside of areas other than those hosting electrical and sporting goods, they take place on council estates, in areas where people rent.  If in owner-occupied housing areas, the rioters are outsiders.

British families owning their own homes rose steadily up to the early 1980s, reaching 75 per cent.  The figure has since fallen back to 70 per cent.  More critically, the ability to get on the house ownership ladder has become increasingly difficult for large numbers of young people.  Demographia reports that the average house in England now costs over five times the average family's income.  That's up from three times the average family's income 25 years ago.  In London and other major cities the cost is much higher than this.

Countless reports in England, Australia and the US demonstrate planning restraints over land use are the cause of houses becoming expensive.  Governments do their level best to impose additional costs on house builders, especially through energy saving requirements, but the building industry is highly competitive and finds ways of largely offsetting these.  However, when government regulations constrain the amount of land that can be built upon this engenders unavoidable costs.

Ironically, after decades of acquiescing in creating shortages for new home building the UK Government last month finally expressed a determination to do something about freeing up more land for building.  That was met by the usual howls of protest from incumbent home owners wanting to avoid having ''riff raff'' moving close to them, barking on about preservation of villages and anxious to see a continued shortage of available properties to boost their own house values.  But these self-centred blockages of new housing stock are contributing to creating an alienation of many people from mainstream values.

Not being a participant in a home-owning democracy provides no excuse for trashing and thieving.  But it is clear that there is a vast number of young people who have decided they are excluded and have become eager participants in hooliganism.  Policies of tolerating misdemeanours and acquiescing in slack educational supervision will clearly be re-thought in the UK.  But so also must be the policies creating barriers that shut people out of home ownership.

There are lessons in the UK developments for Australia.  Not the least concerns home ownership.  Planning restraints in Australia have created home costs that are six times family incomes (nine times family incomes in Sydney).  House prices in Australia are therefore even higher than in England and urgent steps need to be taken to reform the planning policies that have caused this.


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