By Josh Ryan-Collins
- Why Can't You Afford a Home? (2018)
- Rethinking the Economics of Land and Housing (2017)
Throughout the Western world, a whole generation is being priced out of the housing market. For millions of people, particularly millennials, the basic goal of acquiring decent, affordable accommodation is a distant dream.
Leading economist Josh Ryan-Collins argues that to understand this crisis, we must examine a crucial paradox at the heart of modern capitalism. The interaction of private home ownership and a lightly regulated commercial banking system leads to a feedback cycle. Unlimited credit and money flows into an inherently finite supply of property, which causes rising house prices, declining home ownership, rising inequality and debt, stagnant growth and financial instability. Radical reforms are needed to break the cycle.
This engaging and topical book will be essential reading for anyone who wants to understand why they can’t find an affordable home, and what we can do about it.
Brendan Coates on Inside Story wrote:
"Published as part of Polity’s The Future of Capitalism Series, the book is a reminder that our housing crisis is global in nature. It is also a a timely challenge to the mantra that supply alone is the answer. We know, or at least we should know, that house prices do not conform to the simple laws of supply and demand. [...] To understand house prices you need to understand the relationship between land, mortgage finance and global investment. The economics of land, argues the author, is one of the great blind spots of modern economics. [...] Linked to this, Ryan-Collins argues, is the changing nature of bank finance since the 1980s. [...] Thankfully Ryan-Collins also offers a range of policy options available to policy makers and governments to ensure the delivery of affordable housing. [...] Why Can’t You Afford a Home? is a short, readable and valuable book. For this reviewer it makes a convincing set of arguments that explain much of our current housing crisis. It also reminds us that while many of the policy levers for change are to be found in Government Buildings and Leinster House, there is also much work to be done to better regulate finance at an EU and global level if we are to break the housing-Finance feedback cycle."
"In Why Can’t You Afford a Home?, British economist Josh Ryan-Collins pins the blame on the banks — sound familiar? — arguing that the combination of unlimited loan funds and scarce land have pushed up house prices, reduced home ownership, and increased inequality and debt. [...] Many of Ryan-Collins’s policy prescriptions to tame housing markets echo those made by Grattan Institute in recent years [...] But Ryan-Collins also pushes a more radical idea: a return to the Keynesian 'golden period' where most countries adopted 'credit guidance' — essentially controls on credit for mortgages. [...] But the book doesn’t engage seriously with the arguments for liberalising mortgage markets in the first place, and the costs of turning back. [...] Reining in mortgage credit would not make housing more affordable for everyone: people who could still obtain a mortgage would be winners because housing would be cheaper to buy; people who couldn’t get a loan would be the losers. [...] Ryan-Collins’s argument would be much stronger if he’d addressed the potential downsides to his proposals. And one wonders whether his objective of more affordable housing could be achieved without such collateral damage. [...] But most importantly, his book neglects the potential for planning rules to boost housing supply, reducing rents and house prices. After all, while land may be scarce, housing doesn’t have to be if we’re willing to build denser cities. [...] Why Can’t You Afford a Home? is a powerful call to arms to younger generations worried about worsening housing affordability. Ryan-Collins is right that radical change is needed to make housing more affordable: higher taxes on land, more secure tenancies and less favourable tax treatment of housing would all make a difference. But policymakers should be cautious about adopting all of his policy prescriptions without considering their costs, and should remember that they will also need to set planning rules to allow enough new building for a growing population."
Video of the Book Launch
Table of Contents of Why Can't You Afford a Home?
- Land, Home-Ownership and the Problem of Economic Rent
- The Housing-Finance Feedback Cycle and the Deregulation of Finance
- How and Why Economic Policy Went Astray
- Breaking the Housing-Finance Feedback Cycle
About Josh Ryan-Collins
Josh Ryan-Collins is Head of Finance and Macroeconomics and Senior Research Fellow at the University College London's Institute for Innovation and Public Purpose and an economist with interests in finance and banking, land and housing, economic rent and climate change. He has published in leading academic journals including Environment and Planning A: Economy and Space, Nature Climate Change, the British Journal of Sociology and the International Journal of Finance, Money, Institutions and Markets.