The Future of Capitalism series
Steve Keen, Can We Avoid Another Financial Crisis?
Ann Lee, Will China’s Economy Collapse?
Malcolm Sawyer, Can the Euro be Saved?
Danny Dorling, Do We Need Economic Inequality?
Chuck Collins, Is Inequality in America Irreversible?
Peter Dietsch, François Claveau, and Clément Fontan, Do Central Banks Serve the People?
Deborah Hargreaves, Are Chief Executives Overpaid?
Josh Ryan-Collins, Why Can’t You Afford a Home?
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Copyright © Josh Ryan-Collins 2019
The right of Josh Ryan-Collins to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.
First published in 2019 by Polity Press
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All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.
ISBN-13: 978-1-5095-2329-0
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Names: Ryan-Collins, Josh, author.
Title: Why can’t you afford a home? / Josh Ryan-Collins.
Other titles: Why cannot you afford a home?
Description: Medford, MA : Polity, 2018. | Series: The future of capitalism | Includes bibliographical references and index.
Identifiers: LCCN 2018019591 (print) | LCCN 2018020874 (ebook) | ISBN 9781509523290 (Epub) | ISBN 9781509523252 (hardback) | ISBN 9781509523269 (paperback)
Subjects: LCSH: Housing--Prices. | Housing--Finance. | Mortgage banks. | Banks and banking. | BISAC: POLITICAL SCIENCE / Public Policy / Economic Policy.
Classification: LCC HD7287 (ebook) | LCC HD7287 .R93 2018 (print) | DDC 333.33/8--dc23
LC record available at https://lccn.loc.gov/2018019591
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Josh Ryan-Collins is Head of Research at the Institute of Innovation and Public Purpose, University College London, a new research and policy centre focused on how the public sector can shape and create markets to deliver public value. He was previously Senior Economist at the New Economics Foundation (NEF), one of the UK’s leading think tanks, where he worked for ten years and led a program of research focused on the role of money and land in the economy.
Josh has written two previous co-authored books: Where Does Money Come From? (2011, NEF), now used as a textbook in many universities; and Rethinking the Economics of Housing and Land (2017, Zed Books), which was included in the Financial Times’ top 12 economics books of 2017. He holds a PhD in economics and finance from the University of Southampton Business School and has published in academic journals including Nature: Climate Change and the British Journal of Sociology.
He lives in Brixton, South London with his partner and daughter.
The central idea for this book of a feedback cycle between finance and house prices was first published in the form of a blog – ‘Fixing the Doom Loop’ – I wrote in 2016 as part of a series of seminars on ‘Rethinking Public Assets’, co-organized by Oxford University Department of Politics and International Relations, the New Economics Foundation and Positive Money. The concept was further developed in the UK context in Chapter 5 of the book Rethinking the Economics of Land published by Zed books and co-authored with Toby Lloyd and Laurie Macfarlane.
I owe an intellectual debt to a number of experts – on banking, housing, economic rent and land and the links between them – with whom I have engaged over the past seven years. These include Richard Werner, Dirk Bezemer, Michael Hudson, John Muellbauer, Claudio Borio, Tony Greenham, Michael Kumhof, Adair Turner, Alice Martin, Duncan McCann, Beth Stratford, Andrew Purves, Mariana Mazzucato and Steve Keen. George Owers at Polity Press and two anonymous reviewers provided valuable comments on early drafts of the book.
I would also like to thank Òscar Jordà, Moritz Schularick, Alan M. Taylor, Katharina Knoll and Thomas Steger whose path-breaking – and publicly available – long-run macroeconomic history dataset has been a key resource in tracing the historical relationship between house prices and bank credit and which I used for a number of the graphics in the book. The dataset is available online at: http://www.macrohistory.net/data/.
The arguments in Why Can’t You Afford a Home? have benefitted from being presented at a number of seminars and lectures at the New Economics Foundation and the Institute for Innovation and Public Purpose, based in the Bartlett Faculty of the Built Environment at University College London.
And a final but large thank you to my partner Salome and our daughter Elsa, for their support and patience during the writing period.