{"text":[[{"start":7.25,"text":"Few milestones in life are bigger than the move out of your parents' home and into your own place. But in many cities and countries around the world, this is becoming increasingly hard to achieve. In fact, in much of the developed world people in their 20s and increasingly well into their 30s are finding that housing is becoming impossible to attain. "}],[{"start":28,"text":"Young adult homeownership rates plummeted during recent decades. Everywhere from the UK, US, Ireland, and Australia, to Germany, Italy, and the Netherlands. But in the places with the most severe crises, it's not just ownership that has become unattainable. Even finding a home to rent has become impossible, leaving millions of lives and livelihoods on hold. "}],[{"start":48.7,"text":"As Irish housing economist Ronan Lyons put it to me, in many countries we're now seeing a generation that's: Living provisionally with intimacy displaced, family formation postponed, job moves declined, and a backdrop of chronic low-grade worry. "}],[{"start":64.2,"text":"Politicians and policymakers are increasingly taking note. Britain's new Prime Minister Andy Burnham is pushing for a huge expansion of government-built housing. New York City's mayor, Zohran Mamdani, has announced a raft of policies and reforms, from rent freezes to streamlining of regulations that often hold up private sector housing development. "}],[{"start":85.9,"text":"That's why we talk about freezing the rent for more than 2mn rent stabilised tenants. That's why we talk about building 200,000 truly affordable homes. "}],[{"start":95.10000000000001,"text":"Are reforms like these the answer to the housing crisis or might they make it worse? To understand, we need to get to grips with what the housing crisis really is. Countries today need more homes, even when the population isn't growing. As societies get wealthier, there's less desire to live in multigenerational households, while longer life expectancies and falling rates of marriage and coupling lead to more demand for single-person households. "}],[{"start":121.60000000000001,"text":"Then there's the rise of so-called superstar cities like San Francisco and New York, London, and Dublin, economic and cultural motors that generate and attract high incomes. As these cities have come to dominate the highest-paying sectors and jobs, demand to live in them has rocketed. The number of homes has generally not. "}],[{"start":143.3,"text":"The nature of housing demand also presents difficulties. As cities from San Francisco to Lisbon show, when an inflow of very high earners collides with insufficient construction, prices and rents tend to climb in pursuit of those new high incomes, soaring above the levels that many locals can afford. "}],[{"start":162.65,"text":"The Irish capital, Dublin, displays many of these factors in one place. Rapid population growth, including from high recent immigration plus an influx of tech money, have contributed to a 40% jump in housing demand since 2011. "}],[{"start":177.25,"text":"But the number of homes has grown at only half that rate, creating perhaps the worst housing shortage in the developed world. Rents have surged in that decade, outpacing increases in incomes, and the share of 25 to 34-year-olds in Ireland living with their parents more than doubled in the 2013-2024 period, from 19% to 42%, even more extreme than what we see in London, New York, and San Francisco. "}],[{"start":205.3,"text":"High rents often capture the headlines and promises to rein them in can net votes, as Mamdani's successful mayoral campaign has shown. But rising rents are generally best thought of as a symptom of an underlying disease, a shortage of homes. While moves to reduce shortages should help hold down rent and prices, policies that seek to ease affordability but don't address the underlying shortages can have perverse effects. "}],[{"start":230.70000000000002,"text":"As Ronan Lyons puts it: rent controls ease pressures for people who already have a home, but they don't house the people without one. They manage the impact of scarcity but don't resolve it and can even make it worse. "}],[{"start":244.20000000000002,"text":"This was also the conclusion of an analysis of more than 100 studies into the impacts of rent controls. They tend to push rents even higher in non-controlled homes, they reduce new housing construction, and they erode housing quality in the controlled homes, because the capped rents cannot properly cover maintenance. They can even worsen inequality. "}],[{"start":266.1,"text":"Despite their reputation, US research shows that large corporate landlords perform a key role in providing housing for low-income households. When these landlords buy up single family homes in high-income cities and convert them into rentals, this allows people on the lowest incomes to afford to live in cities where they could never afford to own. "}],[{"start":286.5,"text":"But a big housing bill that became law in July restricts the number and type of homes such providers can buy and rent out. A policy ostensibly aimed at improving housing affordability may worsen it. "}],[{"start":300.65,"text":"London has made similar stumbles. During the 2010s, a lot of high-rise development in the capital was financed by overseas investment. But research by the London School of Economics found that, contrary to common opinion, these homes were not left vacant. They were overwhelmingly rented out to locals. However, following an increase in surcharges and other regulations over the past 10 years, most of that investment has dried up and so have the new homes. "}],[{"start":328.95,"text":"To some people, these sorts of arguments might sound pro-developer or pro-landlord, but those most affected by housing shortages are the people with the least of all. It is now much more difficult for high earning young professionals to live in the kind of houses that their parents did. But wherever you look, things have been getting much worse, much faster for those on the lowest incomes. "}],[{"start":350.9,"text":"If we drill down to the bottom third of earners, the share of young adults living with parents or flatmates now stands at 75% in Dublin, 55% in San Francisco and London, and 40% in Ontario, Canada, and New South Wales, Australia. All have increased by double digits in recent decades. "}],[{"start":371,"text":"Unless cities want to reject new jobs, income growth, and investment, the answer to housing shortages is as simple to say as it is difficult to do. Build more homes. The question is, how do we get to that destination? Most housing economists argue that relaxing restrictions on house building will encourage the private sector to build more homes, easing shortages and putting downward pressure on prices and rents. But there's disagreement on the details. "}],[{"start":398.3,"text":"There are lots of well-documented cases where easing planning rules and other pro-development policies appear to have spurred more housebuilding. But some recent US studies have found weaker results, suggesting the details matter. "}],[{"start":412.65000000000003,"text":"The most widely cited example of permitting reform leading to more homes comes from New Zealand. In 2016, large areas of Auckland were rezoned to allow higher-density building. The results were positive for both supply and affordability. The kind of multi-unit housing allowed by the new rules saw construction boom and rents stopped rising so rapidly. In fact, they remained flat after adjusting for inflation. "}],[{"start":438.95000000000005,"text":"Or take Austin, Texas, one of the most construction friendly cities in the US. Late last decade, as housing demand rose throughout the American Sun Belt, supply in cities like Miami failed to keep pace and rents soared as a result. But in Austin, the increased demand set off a residential construction boom so large that rents dropped in real terms. Most importantly, the biggest drops in rent were for low-income housing, and the share of the city's young people living in their own home jumped from 70% to 80%. "}],[{"start":471.55000000000007,"text":"Some, though, are not convinced and argue that profit-maximising private developers will never deliberately build at rates that would cause prices or rents to tumble. Austin here suggests a grain of truth. There are indications that developers miscalculated and overbuilt. They've since pulled back sharply in an effort to stop rents falling any further, and housing construction in Austin is now down to a 15-year low. "}],[{"start":498.8500000000001,"text":"But building so many homes that rents fall is only possible when the rules are loose enough to encourage construction. And not many cities look like Austin in this regard. And Auckland looks an example of what can go right if planning liberalisation is ambitious enough and focused on the most economically attractive cases. If developers are allowed to build new homes in low-density parts of affluent, growing cities, suddenly large-scale construction becomes the new profit-maximising choice. "}],[{"start":528.9000000000001,"text":"Then there are the opposites to Austin and Auckland that prove the same case, the cities where regulations are so tight that they cause housebuilding to essentially freeze. The starkest examples are London and Dublin, again, where unpredictable planning regimes are layered on top of the green belt, or other rules that stop outward expansion, as well as costly design requirements and a host of levies and charges. "}],[{"start":553.6500000000001,"text":"New regulations like these are often well-intentioned. Safety, standards and environmental protection are all admirable goals. But every new rule adds delays and costs to new housebuilding. As a result, in these superstar cities new housebuilding has become so expensive that people now can't afford to buy homes at the price they can be built at all. "}],[{"start":574.95,"text":"In both London and Dublin, many sites have received planning permission, but construction has stalled because completing under current regulations would mean not just lower profits but making a loss. New housing construction in London has now collapsed to one of the lowest recorded levels for any city in the history of the developed world. "}],[{"start":596,"text":"In one cautionary tale, the London borough of Croydon changed the rules in 2018 to let its homeowners redevelop their large single-family homes into compact apartment buildings. These small developments took off, mainly in a suburb called Purley, adding hundreds of new apartments at prices affordable on local incomes. Supply and affordability improved almost overnight. "}],[{"start":620,"text":"But it didn't last. Other residents complained about the disruption from construction and changes to the area's character. The upzoning policy became a key focus for anti-development campaigners in the next local election, and the borough's new mayor repealed it after just four years. With that, the apartment conversions quickly stopped. "}],[{"start":640.2,"text":"By contrast, one of the biggest UK housebuilding success stories of recent years has been in Manchester, where the UK's new Prime Minister Andy Burnham was mayor for nine years. Construction in the city centre boomed over the past decade after local officials worked closely with private developers. They adapted regulations and incentives so that when demand arrived, homes would quickly follow. "}],[{"start":662.75,"text":"Why did one scheme endure while the other was cut short? Well, Manchester spent years trying to build support for what was to come, while Croydon's plan was controversial with residents from the start. And while Croydon's plan triggered disruptive construction in affluent suburbs, Manchester's was centred on high-rise apartments on small central urban sites. So development was more in keeping with the surrounding area and less disruptive to other residents. "}],[{"start":691.15,"text":"But this is one of the big challenges for boosting housebuilding. The most economically attractive sites for developers are often the ones where new building faces the most local political opposition. Austin and Manchester both show that durable development often requires years of careful planning and communication, rather than pulling a single lever overnight. "}],[{"start":712.05,"text":"On balance, the evidence suggests that housing shortages can be addressed by easing constraints on construction, especially in the cities where regulations are so tight that construction has essentially iced up. But even here, deregulation won't be enough to provide housing for those on the lowest incomes, especially in the cities with the highest demand. "}],[{"start":734.65,"text":"Even in success stories like Austin, rental evictions have continued on trend despite the construction boom. And while Manchester is a clear success story on getting homes built, its previous housing shortages were so severe that the impact of the new construction blitz on costs and scarcity has been small. "}],[{"start":752.05,"text":"Rents have risen more than incomes, and affordability has worsened for the poorest. The rate of people who have been forced or priced out of their homes is one of the highest in the country. But crucially, rents in Manchester have still risen less steeply than in other cities that have built fewer homes. "}],[{"start":768.65,"text":"The lesson here is not that market-rate building doesn't help. It's that housing shortages are sometimes so huge that even record-breaking rates of building barely make a dent. So while boosting private sector building will be key, there will always be an important role for the state. But here, too, the question is how this should be done. "}],[{"start":787.4,"text":"Andy Burnham believes the answer to the UK's housing crisis is a massive expansion of government-funded housing, announcing plans to build tens of thousands of state-supported homes over the next decade. "}],[{"start":800,"text":"Number 10 North will oversee the biggest council house building programme since the postwar period. "}],[{"start":806.55,"text":"But while social housing is low cost for its occupants, it's high cost for its provider. Regulations and planning uncertainty mean that building housing of any kind in the UK is now so expensive that a large expansion in the social housing stock will come at such an enormous expense, it would be equivalent to a 1p rise in the income tax rate. "}],[{"start":827.0999999999999,"text":"Advocates of social housing often point to cities like Austria's capital, Vienna, or Helsinki in Finland, where state owned and state-subsidised homes are common and housing costs are relatively low. But these cities build far more housing of all kinds than cities like London, New York, and San Francisco, which helps to keep prices and rents lower for everyone. They also acquired land much more cheaply than it realistically could be for superstar cities today under less acute demand pressures. Vienna's population is still lower today than it was a century ago. "}],[{"start":860.55,"text":"But today, Vienna faces many of the same challenges as other growing high-income cities. Housebuilding rates are declining, private sector rents are climbing steeply, and rising land prices threaten the future of its social housebuilding project. All of this points to what is perhaps the most important part of the answer here. The same lighter regulations that can help jumpstart private housebuilding can also bring down the cost of public housing by reducing rent, house prices, and land prices, meaning state subsidies can be smaller. "}],[{"start":892.6999999999999,"text":"Housing is one of the most pressing challenges facing high-income countries today, and one of the thorniest to solve. Getting there will require action from all angles and through multiple channels. And while planning reform is a critical step, neither it nor state support are likely to be sufficient on their own. "}],[{"start":910.6999999999999,"text":"Striking such a difficult balance will require carefully planned policies, consistent communication, and working closely with the private sector to strip back regulations that have proven counterproductive. Fixes that work in one area may not always translate to others, but failure to act will leave millions of lives and livelihoods on hold. "}],[{"start":937.8999999999999,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786793799_7345.mp3"}