Bristol's Housing Time-Bomb
Bristol is facing a housing time-bomb and yet the people in a position to do something about it as simply adding more explosives to the pile. Why is Bristol facing a housing time-bomb? Because of the raft of luxury housing developments that have permeated the city and represent the vast majority of the housing being built. Why is this a time-bomb? The answer to this will take a bit more explaining...

To understand what is going on requires a little understanding into how the market is functioning. What is happening is that private capital is being poured into a large number of high-profit housing ventures. To be high-profit they must be luxury, as while you can make money from building affordable housing, you can make a whole lot more from luxury projects. To build anything significant, you require planning permission from the local authorities. They then act as a regulator of housing to ensure that what is being built matches the plans for the area and so, theoretically at least, benefits Bristol and it’s people.

However, that regulatory role seems to have been overlooked in a rush to attract investment into the city. Without any form of regulation, the property developers are naturally going to choose the high-profit ventures of luxury housing. As such the city has a raft of luxury developments as various private contractors and finance groups seek to profit from Bristol's wealth.

Normally in a capitalist economy, competition drives the market. But competition needs a degree of regulation to ensure the market is a level playing field. Housing is a necessity and driven by insecurity in the rented market, most people seek the security of their own home.Competition without regulation results in a twisted market, which is unstable and prone to collapse. In this case the market that is twisted and prone to collapse is the economy of our city and the people who live there; us.

So the lack of a level playing field and any serious regulation means a huge amount of luxury housing becomes almost the whole housing market. This is where the time-bomb develops. Lack of housing in the affordable sector combined with cheap credit means people buy properties beyond their means. In a low-interest rate environment they are already living on the edge. Too much housing in the luxury sector means housing units are left unsold, but key workers such as nurses and teachers still don't have good stable housing. The developers are unwilling to loose out on profits by significantly lowering the price, so they sell the housing in other cities such as in London, which does nothing to address Bristol’s housing issues.

When the economy takes a down-turn, as surly one day it will, interest rates will rise and jobs will be lost. Then the time-bomb explodes. Those morgaged to the hilt will loose their homes. Those without their own homes in rented property will find their rent rising to meet the morgage costs. The already strained housing sectors, despite having the space to house us all will, because of economic factors out of our control, begin tearing a the fabric of the city. Developments will lay derelict, monuments to lost opportunities. The global investors will move out of our city, happy to wait until the market bounces back to realise a return on their investments. We’ll be picking up the pieces while they move their attentions to profitable opportunities elsewhere.

But then I’m just some faceless pleb, I bet you are thinking that the global investors in such schemes know more about this subject than I do? Yes they do and their plans on making a profit rest on taking wealth from Bristol, not living here with the results of their schemes. And the argument I’m making is based on the writings of Noble prize wining economist Joseph Stigliz, who as a former chief economist to the World Bank, knows a thing or two about money.

And what of our councillors, what are they doing to defuse the time-bomb? They are busy bending over backwards to accommodate another luxury housing development at Broadmead. Even though the luxury housing already built has not been sold, the council persists in pushing a policy of 'give me luxury housing of give me death!'.

Yup, the luxury housing is not selling. Don't take my work for it, see for your self. Take a stroll around the Point, by the SS Great Britain at night and see how few flats look habited. Stoll over the river to Hotwells and see the blazing banners for the showhomes – a sure sign that all is not sold. Workers in the docks area speak of seeing the same kids bike and balcony furniture being moved from vacant balcony to vacant balcony in a desperate attempt to weave the illusion of habitation. This glut of unsold luxury housing combined with a lack of affordable housing is the winding of the timer. The time-bomb is being set.

Tick. Tick. Tick. Tick.