Friday, August 20, 2010

On cooperatives and housing.

I'll get back to my electoral series eventually, I swear. But I had this weird idea today and I wanted to spell it out. It's not an argument; more just thinking out loud. (Well, so to speak. "Speak".)

We don't have enough housing going to the people who need it. The people who have housing often can't keep it (especially now). Housing often becomes a liquidity trap when owned. When rented, it becomes potentially destablizing/undignified.

So, why not have a regulated cooperative system for housing?

I'm not a fan of the private market for housing as it's failing pretty badly. Some folks have all their wealth tied up in it, and, because the asset is illiquid, that wealth is very volatile and difficult to protect. Some folks just can't generate enough wealth to get housing in the first place. (Some can't even generate enough to get access to rental housing.) Basically, it's a system where those rich enough to last through short-term losses make a killing, those in the middle tend to lose, and those at the bottom can't even participate. It's like what a private market in health insurance/services is, really.

I'm also not inclined to think that a public system would work well here. It would be difficult to manage, for one. A market system always has the advantage of efficiency over a system that's centrally planned. and we're talking here about trying to keep the rich from making a killing, keep the middle from getting soaked, and make the poor competitive. That's a hell of a balancing act for anything; when it comes to something like housing, I'm not sure that any government or similar central agency has the ability. Or the interest.

For two, it would turn housing into another thing the government owns, and thus something that no one really has pride in. It's an Aristotelian point (in reply to Plato's communism about property for the guardian class): people tend to value things when they have some personal stake in them. People tend to not value things when they're general or "just there" or some such. If you want people to take care of their homes, you've got to give them some control over them.

For three, there's good libertarian reasons to be leery of too much mucking about with economic transactions. The view that one shouldn't muck about unless one absolutely has to is a very extreme sort of libertarianism. But there is a reasonable suspicion of the consequences of (modifying Nozick's phrase) interfering in capitalist acts between consenting adults.

So, my suggestion is to split the difference. Let's have a system of cooperatives: all housing will be owned collectively, at the level of neighbourhoods or lower. (So, these are technically communes.) But, let's have that system be regulated, pretty heavily. To be a commune would require certification, a licensed manager plus accountant etc., and regular investigations to make sure that it's in compliance with anti-discrimination laws, including a set of regulations regarding class. (So, the proportion of poor in the commune must be close to that in the region.) Transitioning to this system could be done by brute force legislation, but would probably be best done by adjusting the tax and other incentives to encourage forming communes, and discourage private ownership of housing. (And, once a critical mass is reached, anyone who sticks to private housing will find themselves in a steadily-shrinking market.)

I'm not persuaded by the suggestion that property rights are somehow inalienable, particularly when it comes to the provision of the necessities of life. General or broad private property rights can't be justified without running into acquisition problems. So, we have to look systemically anyway. and, as said, this is a necessities of life issue. your right to keep your food ends when I'm starving. Any libertarianism that privileges the right to property over the right to continued existence is really a form of oligarchy.

I'm also not persuaded by the suggestion that fully public housing actually works wonderfully. Council housing in the UK, for example, did work -- initially. But, later, it start to fail. Problems have included such obvious flaws as government cutting corners on the construction (leading to housing collapsing, in some cases), as well as problems associated with urban decay. (And there's the whole crime/ASBO problem, which gets into the paternalism underlying government involvement in this sort of thing.) I suspect the ultimate source of the problem is how unflexibile the system is, given that government has an incentive to spend as little as possible, while simultaneously refusing to admit when they've screwed up.

When it comes to putting this into practice, there are obvious issues. Whether this would actually be better than the fully private or fully public options, for example. I've given reasons to think it might be, but they might turn out to be incorrect. And the details of getting the communes up and running, as well as of the pertinent regulatory framework. But, it seems that our current system isn't working so well. So, why not try something else?

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