About Basic Income and Rents.
By: Tim Rourke
Tags: Inflation, Basic Income, Housing, Rent, Guaranteed Annual Income

I have got into another of these twitter debates in the past two days. I generally avoid them because they are so futile. They usually start when I make a comment to these interested in that topic, to correct some type of misinformation. I do not particularly invite any response from the author of the misinformation.

What I often get is a kind of pile on from people repeating the misinformation like it is a received truth and not processing what I said. I usually end by explaining the facts of the matter as clearly as I can within the limits of the Twitter format and then blocking any further responses.

Sometimes the experience motivates me to write a short piece explaining the matter, and blogging it. So it is with the little piece of nonsense from a couple of days ago now, about how Basic Income will solve the problem of high rents and shortage of rental units in most large cities.

There never was a cause more ill served by its devotees than the idea of a Basic Income. That is, the idea of just giving everybody a flat income. The Basic principles of Basic Income are that the income must be for everybody, enough to live on, and without conditions. Almost every BI ‘expert’ misses at least one of these points.

The problem is that there is no real organization developing and promoting the idea. There are some half assed groups mostly interested in philosophical discussions and disdainful of brain tanking; of actually working out how the concept would work and how to actualize it.

As well, all public forums are jammed with self appointed experts on BI. Most of them use the idea to drum other concepts they are really more interested in. But BI has become a top topic these days.

I have been a proponent of a BI from back in the seventies. However, in recent years it has become clear to me that BI and capitalism, or any other mode of oligarchy, do not mix. It will become a passthrough subsidy for landlords and employers. Much more sinister, it can be used to warehouse surplus populations in sacrifice zones.

What I focus on these days is getting the ‘Left/Progressive’ section of the public to integrate the BI concept into thinking about how a post capitalist society will work. BI will be essential to solving the ‘Work vs. Needs’ imbalance.

I also live in the centre of a major city in Canada. I have examined the causes of the housing crisis which is common throughout the “westernized” world. The matter has been well explained by people who know how to do actual research, whose thinking is fact based.

I can also see it in the neighbourhoods around me. There is plenty of housing. Much of it is sitting empty. Yet rents keep going up and the numbers of homeless people keep growing. Friends are having to move away, often with life limiting consequences, ends to careers. They became surplus, economically unjustified people.

The building boom continues, even though no one is moving into many of these new places. Some construction industry people report that some of these places look like they are not even meant to be lived in. They are to be traded around as investments, like gold coins.

Some of the less clueless commentators are aware that the very low interest rates are a cause of this speculation. The sentiment is that raising interest rates will cure the speculation problem and bring down rents. It would, but there is a reason why interest rates have been so low recently. That is; the economy in most capitalist industrial countries is in a crisis and raising interest rates would collapse everything. That is what will happen soon, anyway. That will be the ultimate solution for the high rents problem but will create an even bigger problem for normal people.

People with the ability to see the real problem also have the short term solutions. First, we need a system of rent control; rents rolled back and maintained at what people can afford. We do not need noise against this from “market will bear” types who, when the shoe is on the other foot, cry that rent rollbacks will bankrupt landlords. The more landlords go broke and are expropriated, their units turned over to public housing organizations, the better.

Second, we need measures to curb housing speculation. There is much that can be done, such as banning foreigners from buying real estate. The most effective things, as shown in many places, are stern sanctions on vacant units. Again, the best thing would be for them to be expropriated. At least there should be special taxes on ghost housing, Airburbs, etc.

Basic Income is being touted as a cure for everything except obesity and erectile dysfunction. Oh, I think it has even been proposed to relieve one of those. But the folks who tout it as a remedy for high rents and housing shortages seem to come from one of two camps.

The first are the people who insist that raising incomes will not raise rents. This is simply stupid. At the low end of the housing market the relationship between rents, and minimum wages and program income, is stark. In single room occupancies in jurisdictions with no rent control, rents are often identical with welfare incomes. The landlord of agent will often just have the tenant sign over the welfare cheque.

The proportion of a household’s income devoted to rents declines as income rises, but the proportion of a Basic Income to total income would also fall as other income rises. Even at the higher ends of the rental market, the relationship between incomes and rents in a locality is strong. This is not perception, this is research and data.

The second camp is the people with the idea that with a Basic Income, people would be able to move to where rent is cheap. The high rent areas would be less crowded and rents would decline. This is also stupid, but in a more complex way. I focus on two points here.

First, people receiving Basic Income are usually not going to stop working. People will still want to live in cities where there is work, services, recreation, and entertainment. Most people I know who moved to lower rent areas soon moved back into the city.

Second, this idea of people moving to where it is cheaper sounds like the flip side of another lovely idea we often hear in my city. That is, cities are only for elite people who deserve it and can afford it. The lesser mortals should be sequestered somewhere with cheap rents where minimal services can be provided.

The point of this essay is this; that the cause of a Basic Income would be much better advanced if people listened to the good housing economists who work for city governments and social agencies. We need more evidence based thinking and less B.S. on B.I. from internet know-nothing echo chambers.

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