Solving housing crisis means bad news for homeowners

DOES Guernsey have a housing crisis? Do we need to build lots more homes? If so why? Will the solution drive down property values? If so will that be a good or bad thing?

To be frank, I think many in our community hold irrationally contradictory views on these various questions and therefore expect political answers which simply don’t add up.

Most accept there is a housing shortage, although they probably don’t realise how bad it has become. Somehow they hope that situation can miraculously be resolved without too much more development.

They look at official population figures and wonder how this situation has developed.

They desperately want their sons and daughters to be able to get on the property ladder, or else be able to afford to rent decent accommodation. But of course that has to be achieved without reducing the equity in their own property.

Let me answer my own questions.

Yes, Guernsey has a real housing crisis. Probably as bad as at any time since the early ’80s.

Yes, we do need to build lots more homes in both the private and ‘affordable’ sectors. In respect of the latter, I estimate we need about 1,000 new homes split between social rental, partial ownership, and key worker accommodation over the next 5-10 years. And that’s before the rapid population growth some of my colleagues are determined to see.

Why? Two factors.

The first is the changes in the make-up of our society. Typical household sizes are getting smaller. As a result, we need more homes for every 1,000 people living in the island than we used to. For the same reason, most of those new homes should be small ones – mainly one and two bedrooms.

The second factor is population growth. I know the official figures don’t really show this yet, but they tend to be a lagging indicator, only showing the genuine trend a couple of years after it happens. By contrast, several secondary indicators suggest that there has been a spurt in Guernsey’s population over the last year or two. Maybe masked by the reduction in guest workers, who would have been living in staff quarters anyway.

Indeed one of those ‘secondary indicators’ is the housing waiting list itself. For several years Employment & Social Security and the Guernsey Housing Association were on top of the social housing situation having met [indeed exceeded] all of the targets in the States Housing Strategy.

Then suddenly, a couple of years back, that position changed and the waiting lists for both social rental housing and partial ownership started to burgeon. At the same time we started to receive information from Health & Social Care and others that they were losing many of the key workers they had recruited because they hadn’t been able to find anywhere suitable to rent at a price they could afford.

Does any real solution need to impair property values? Not to put too fine a point on it – yes, it does. I know that is probably bad news to Guernsey’s legion of homeowners but it is the stark reality.

If people can neither afford to buy nor rent a decent home then they will be unable to house themselves or their families properly. As a result they will be forced to live in very substandard or overcrowded accommodation. Even worse, they might quit the island in search of more affordable housing elsewhere. Just when every young worker in our community should be regarded as a little speck of gold dust.

So the solution must involve using the laws of supply and demand to make decent housing more affordable. That in turn means houses will have to cost less, both to make home ownership more attainable, and to moderate private sector rents, which have a direct correlation to property prices.

And by the way, don’t believe the often trotted out line that rents are being driven up by absentee landlords buying up lots of Guernsey properties. The stats simply don’t support that. This crisis is 99% home grown.

Hopefully the required solution, of making houses more affordable, can be gradual, rather than plunging people who have bought at the height of a housing boom into significant negative equity. But the bad news for some is that this problem can be tackled only by breaking middle Guernsey’s addiction to wealth accumulation through constant increases in property prices.

OK. Having upset just about every homeowner in Guernsey, let me put myself in the bad books of the rest of our community by posing another question. Where should these new homes be built?

Firstly, the trite disclaimer. I think Guernsey is already over-populated and over-developed and I would prefer to see no new development at all. OK, that’s the world as I would like it to be – now on to dealing with the world as it is. Where to build the homes that I wish we didn’t need but do?

I am going to strap on my suit of armour and opine that by and large I think the Island Development Plan has got it right.

I don’t think it’s about the north, south, east or west. Certainly I would be very happy to see homes built in the higher parishes. But what the IDP says is that new development should largely be in and around Guernsey’s existing nucleated settlements. As those tend to be concentrated on the eastern side of Guernsey, then so will the majority of new housing. Hopefully reusing as many brownfield sites as possible.

What is the alternative? Should development be spread evenly all across the island like marmalade across a slice of toast? Doing that would make Guernsey one bland suburban sprawl and destroy our remaining countryside. What a great loss, wherever in the island you live.

If anything, we have suffered too much from ribbon development and we should be emphasising the contrast between our urban settlements (north and south) and our countryside. Not least because the existing infrastructure tends to be better in urbanised areas. My only caveat is that the IDP should recognise the important role of iconic green spaces in built-up areas.

Then there is traffic. Every site where new housing is suggested brings howls of protests about worsening congestion.

Firstly, I think this is sometimes over-stated. Secondly, how are we best to overcome this problem? By not building the homes we know we need? Or by having the courage to just tackle Guernsey’s traffic problems head on?