In the Irish Times, I read of how the housing crisis is becoming a Europe-wide phenonenon.
From Porto to Tallinn, the objective of a middle-class society of homeowners is under severe threat. As this is mostly affecting younger people, the EU’s fear is that it will drive them into the arms of extreme political parties, particularly those on the right who are more than happy to blame housing problems on immigration rather than ineffective policy.
Ineffective policy hasn’t just happened in the last few years: getting to this stage has taken decades of hard work by successive governments intent on turning housing and homes into income-producing assets, while simultaneously diluting the social importance of decent housing.
The global financial crisis had similar effects everywhere, drastically dismantling the homebuilding industry in the years in which many homes needed to be built to accommodate the rising Millennial generation.
I think we’re going to look back on these last few decades and realize that this was a case of generational class warfare. The Boomers and early Gen Xers were not satisfied with the arrangements of Social Security, or their 401(k) accounts. They pursued, doggedly, policies that turned their housing into one of their most important investment vehicles. The cost is a generational disaster inflicted on those under 40.
Part of the problem is that there have been no productivity gains in house construction. We’ve even seen a slowdown in productivity in recent decades. That has to change. We need dramatic investment in homebuilding tech, in automation, and in breaking up supply-choking building codes.
