the total net income of a worker on the so-called National Living Wage in 2017 by about 50%. Even for those on median pay, the ‘gap’ between this and an affordable rent was £1,057. And while, for obvious reasons, the unaffordability of private rental housing is most acute in the centre of the city, the general problem exists across it: average rents exceeded total minimum monthly net pay in 30 of London’s 33 local government areas (32 boroughs plus the City of London). In 16 boroughs the same was true for average rents for a one-bed flat, and in the remaining boroughs a worker on minimum pay would have to pay upwards of about 80% of their net income. Average rent for one room in a shared house was £607 – 53% of the net minimum pay income – ranging from £813 in the most expensive area to £460 in the cheapest. Of course, a one-bed flat, let alone one room, is below ‘decent’ standards for a family with children.
Figure 2.2 Typical wages and average rents in England and London in 2016: the housing dilemma illustrated
There is an additional housing cost that needs to be factored in to these equations in some parts of the world. Although there are obvious exceptions, particularly for cities at high altitudes, very generally speaking the societies of the GN are colder than those of the GS. This does mean that the issue of keeping houses warm becomes more crucial – it is another facet of poverty. In the UK, the housing affordability issue is compounded when energy bills are factored in. These averaged £1,356 per year per UK household in 2012. Research using average rents and energy costs in England in 2012 found that these totalled £10,248 per year. A minimum-wage worker would be unlikely to live in the average home, but, if they did, it was calculated that for that year their ‘disposable’ income to cover necessities such as food, clothes, transport and council tax would have been less than £1.50 per day. That would have been impossible.19
Similarly impossible situations face low-paid workers in the USA. The National Low Income Housing Coalition there found that, in 2017, ‘there is not a single county or metropolitan area in which a [full-time] minimum-wage worker can afford a modest two-bedroom home, which the federal government defines as paying less than 30% of a household’s income for rent and utilities. And in only 12 counties [mainly rural ones in the West] in the country is a modest one-bedroom home affordable.’20
Because data on incomes and housing costs in rich countries are often better and more available, it is actually easier to demonstrate the housing affordability dilemma there. Nonetheless, playing the devil’s advocate, let us think about the arguments that might be put forward against the analysis of the UK or US in the paragraphs above. It might be said that costing in extra bedrooms for families with children is too generous: why cannot everyone sleep in the same room or, less drastically, why cannot children, or even adolescents of the same sex, share a bedroom? Or why is there any discussion about the mismatch between incomes and rents for a one-worker multi-person household, or a family with a full-time and a part-time worker? If families want shelter, everyone must work full-time. Or perhaps people should not have families if they cannot afford to house them ‘properly’ and such people should remain ‘single’,21 living endlessly in cheap, shared lodgings. Well, that is precisely what happens in the GS. Whole families often do have to sleep in one room, no matter the mix of generations and sexes. And often everyone in the family – often including children and old people – does have to go out to work, no matter how exploitative or dangerous the conditions, and bring back cash at the end of the day or the week. Furthermore, these sorts of conditions were typical of the cities of the GN in the nineteenth century. But these were and are the conditions of poverty, and for a few lucky generations in the GN national wealth and public policy combined to determine that these conditions were unacceptable. In the absence of proper sanitation, the outcomes of such conditions can be epidemics, which have had a very definite impact on housing policies. But beyond the public health situation, decisions have been made in the past about what standards of housing are commensurate with the desired norms of a wealthy and safe society in which it is possible to live as a family.
These points bring up two key issues explored later in this book. The first is the role of policies on housing standards: both the type of house that can be built and expectations regarding a safe and healthy living environment for residents. This is the topic of the next chapter. The second is that the housing situation deemed acceptable for children is a very important influence on the outcomes of such policies. Children cost money, take up space and affect the kind of work, if any, that their primary carer can do. All these things in turn affect how the housing dilemma works out for different types of households.
It is important to note that none of the arguments made above deny that the supply of housing provided by the market is important. For those able to afford such housing a shortage will increase prices or rents, meaning that some will have to buy less housing than they otherwise might have bought. However, from the perspectives of those in the housing dilemma – the focus of this book – as they were already unable to afford such housing, what difference does it make? For those in the income decile closest to affording some type of decent housing, however, it does make their aspirations less realisable. For those in the decile just above, they may be driven down into the housing dilemma. As housing activists point out, cities frequently have empty housing and some live in houses with far more bedrooms than their household needs while many are unable to afford adequate accommodation or are homeless. Danny Dorling, Professor of Geography at the University of Oxford, in his book on the housing crisis in the UK, All That Is Solid: the great housing disaster,22 suggests that one solution would be somehow to reallocate excess accommodation to those in need. In theory, this could help; in practice, contemporary political realities make it impossible. Vigorous policies to reduce speculation on housing and land would help remove an egregious source of supply limitation. However, even politicians can be implicated in this.23 In sum, for most in the housing dilemma, only non-market or informal market solutions are likely to help.
It would be possible to outline the parameters of the sorts of housing dilemma detailed above for Zimbabwe, South Africa and the UK for most urban societies across the world.24 Yet so far the examples given here have been mainly about the rental sector. In nearly all cases the dilemma is greatly magnified for house purchasing, where costs tend to be much higher. In all countries and in both the rental and homeownership sectors, the essential element is the mismatch between earnings (the labour market) and rents or mortgage payments (the housing market). In most cases, the households unable to meet the housing payments include working adults.25 In other words, the problem is not one of unemployment, although that makes it worse, but pay levels that are incommensurate with the ‘requirements’ of contemporary, formal housing markets. These markets are influenced by the usual economic factors of supply and demand; they set the cost of housing. Additionally, as market forces determine the wages and incomes of urban workers, they in turn influence the pensions that older citizens might command (see Chapter 5), although in many poorer countries in the world pensions are non-existent for most and utterly inadequate in relation to urban living costs for many lucky enough to receive them. And those market forces, in almost every city across the world, not just in the GS, determine that some proportion – often a very significant proportion – of the city’s workforce and its older citizens are not paid enough to ‘demand’ the housing that the city’s formal housing market can supply. In other words, there is an inevitable and serious mismatch that is an outcome of the ‘invisible hand’ of market forces in the late twentieth and current twenty-first century. This is true whether you are in London or Lagos, Hong Kong or Rio de Janeiro, Los Angeles or Shenzhen.
