Some notes on the impending housing crisis.
This series about rent-seeking is just a collection of notes for the compilation of a much larger work. Footnotes and research for this piece are missing.
Smoke weed and live with your parents. There is one big elephant in the room that has been consistently ignored by Government and the political class. As Deoborah Schembri, the Labour MP, takes on her role as representative of the construction industry, Government expects you to believe that this revolving door is a normal occurrence. There is little excitement by the youths over the decriminalisation of cannabis as they struggle with the very serious social problem of today. After all, there is no amount of weed that is going to console a young couple who can’t afford to buy their first home. As a politician who supposedly is working to solve this kind of problems, Deborah Schembri is not ashamed to show you whose interests she is fighting for. Jungle rules.
The socio-economic impacts of rent-seeking are quite apparent. Sure, we have a serious geographic problem of land scarcity and a growing population and this is not of the Government’s making, but as the political-class has been interwoven with the rent-seekers for many years, they have only made it worse. Given that we have no natural resources, the economy is strictly labour-intensive meaning that economic growth can only be achieved by increasing the productivity of labour. If we don’t innovate and the value of production doesn’t increase, the only way to increase the productivity of labour is by increasing labourers. Throughout the last seven years, the Government has raked in more taxes with the expansion of the labour force, foreign workers were brought in, and more women entered the workforce.
As the population keeps growing, and property prices increase by far much more than wages do (see article on economy 2019) and property keeps getting bought at a steady pace the inevitable housing shortage emerges. Smoke weed and live with your parents.
The structural policies which should address this issue are missing because it is not in the interest of the political party-donors for Government to find a solution to this problem. If Government would increase the supply of housing and address market imbalances in terms of demand, profit margins in the construction industry will be cut and property prices may correct substantially.
A recent article in The Times quoted a study that 55-cars are added to our streets every day. Instead of addressing the problem right away with an underground metro, we have sloshed away our national funds into more roads reducing potential building space. Quality of life deteriorates with increased traffic congestion but an erosion of the quality and affordability of homes is exacerbating the erosion of the quality of life. The answer to your problems? Pay for a gym membership.