Many people were stunned when Barking and Dagenham's Goresbrook Ward seat was won by the British National Party, in a local by-election, last year. Only 20% of registered voters had bothered to vote, but over a thousand voted for the BNP, leaving the Labour candidate far behind with just over 400 votes.
What was significant about this election was not, as the tabloid press immediately proceeded to claim, that it was a reaction against the so-called "flood" of immigrants allegedly threatening Britain. No, it was that the BNP had almost exclusively canvassed on the issue of housing conditions, lack of decent health services, and the general social degradation of the area. And the same had happened before in the North, in Burnley, where the BNP had also managed to get some of its members elected on the council.
In areas of East London such as Barking and Dagenham, the main subject of racist griping among the poor white working class is housing and the idea that immigrants are given priority. Of course, this is nonsense. The same nonsense that used to make Irish immigrants the targets of lynch mobs in the 19th century, whenever unemployment was on the increase, because they were accused of taking away jobs. Just as, at the time, there was a scarcity of jobs for everyone, Irish immigrants included, today there is a serious scarcity of decent, affordable homes for British workers and immigrants alike.
Housing and employment are two vital elements that determine the lives of those who cannot rely on the wealth accumulated from the exploitation of others - that is, mostly, the working class. By the same token, they reflect the degree of exploitation of the working class and its ability to keep the greed of the capitalists within certain limits.
Every historical period involves ups and downs in the relationship of forces between the two main classes in society. And the conditions of the working class are always determined under capitalism by this relationship of forces. When the working class is strong enough to be seen as a potential threat by the capitalists themselves, it can make some gains. But these gains are always temporary, subject to the capitalists regaining confidence. Ultimately, it is only by fighting for the long-term aim of overthrowing the capitalist system, that the working class has any chance of making lasting gains, in housing as in all the areas which are decisive for its conditions.
This is what history teaches us and what we intend to discuss here.
From the "house of terror"...
Britain's first "social housing" if one can call it that, was the infamous workhouse. It dates back to the 16th century when the sick and elderly were taken in, but also able-bodied homeless paupers who had to work for their pitiful board and lodgings.
With the advent of capitalist agriculture in the 18th century, the landowners expropriated the peasantry and finally evicted them from the land, together with most rural labourers. Cottage industries like spinning and weaving were also ruined by the invention of new machines.
Destitute peasants streamed into the towns and cities thus providing a source of labour for the vast new manufacturing industry which was mushrooming, thanks to the industrial revolution, helping to form a brand new class, the urban industrial proletariat. But where were they to live? Accommodation did not come with the job. And there was a surplus of labourers, whose ranks were soon swelled even more by their even more destitute counterparts arriving from Ireland in search of jobs. So they crowded into basements, wooden shacks, ruined buildings and into the purpose built slums created by the property sharks of the time, usually the very same landowners who had dispatched them from their rural abodes, and who charged rents which were always too high compared to the wages paid by factory owners.
The homeless unemployed could still take refuge in the workhouse, of course, if they were desperate enough. The urban workhouses were not that different to prisons and were commonly known as "Bastilles". Inmates were given the job of stone-breaking, had strict discipline imposed on them, were lodged in tiny freezing cells or shared dormitories and the food was meagre. But there was still a system under the Poor Law through which the poorest could obtain small amounts of money in times of hardship.
However, by 1834, the Liberal government abolished the system of relief payments. The numbers of poor had grown to such an extent that local rates would have needed to be increased significantly to fund it - and there was no way that property owners would agree. So a new Poor Law was passed, justified as a way to end once and for all, the poor's "dependence" on public support, which, they said, just encouraged "moral degeneracy".
The new law required that the poor enter the workhouse in order to receive relief of any kind. And, its promoters argued, as quoted by Marx in "Capital", the "ideal workhouse ... must be made a 'House of Terror' and not an asylum for the poor... where they shall work 14 hours a day". After the economic crisis in 1866 the number of workers classified as paupers grew to 1.3m, but, writes Marx, "the frightful increase of deaths by starvation in London during the last ten years proves beyond doubt the growing horror in which the working people hold the slavery of the workhouse, that place of punishment for misery". The homeless preferred to sleep rough and die of hunger and the cold.
Workhouses persisted more or less in this same form right up to WW1 and the last institutions of the Poor Law system were only abolished finally after WW2, with the advent of the welfare state.
...to the stinking Victorian slums
As to the city slums, where most of the industrial workers lived, these were not too unlike those found today in the cities of the Third World. Except that workers in this hemisphere also had the cold to contend with for 8 months of the year - and the damp all year round.
Marx's comrade in arms, Frederick Engels describes these slums in his study on "The Condition of the Working Class in England in 1844". And what he presents is a picture of a living hell, illustrated by diagrams showing how the "housing developments" of back-to-back houses purpose built by landlords could not allow any circulation of air through workers' cramped living spaces. His mortality tables also show how many workers and their children died prematurely as a direct result of their living conditions.
Of the old town of Manchester, with half ruined buildings vacated by the middle class who were escaping the pollution produced by the factories, he writes: "the landlords are not ashamed to let dwellings like the six or seven cellars on the quay directly below Scotland Bridge, the floors of which stand at least two feet below the low-water level of the Irk ...or like the upper floor of a corner house on the opposite shore ...where the ground-floor, utterly uninhabitable, stands deprived of all fittings for doors and windows, a case by no means rare in this region, when this open ground floor is used as a privy by the whole neighbourhood for want of other facilities!" Common to all the working class districts in the old and new town of Manchester was "the filth, the debris, and offal heaps .... the multitude of pigs walking about in all the alleys, ...as every court is hired to pig raisers who build their pens in them".
As he comments, "True the original construction of this quarter was bad, little good could have been made out of it; but, have the landowners, has the municipality done anything to improve it when rebuilding? On the contrary, wherever a nook or corner was free, a house has been run up; where a superfluous passage remained, it has been built up; the value of land rose with the blossoming of manufacture, and the more it rose, the more madly was the work of building up carried on, without reference to the health or comfort of the inhabitants, with sole reference to the highest possible profit on the principle that 'no hole is so bad but that some poor creature must take it who can pay for nothing better'."
There were the odd exceptions to the rule however, like Robert Owen's social experiment at the New Lanark Mill on the Clyde river near Glasgow, which began as early as 1800. He rebuilt workers' houses on the site, ensuring there was a minimum of two rooms per family and instituted rubbish collections, as well as a system of health visitors to ensure that standards of cleanliness were maintained. He also built dormitories for the children, a school and play areas for them. This experiment carried on after Owen departed in 1828. But Owen's chief objective was to prove that the productivity of workers increased markedly when their living conditions were improved. Even so, few followed his example.
The vast majority of workers in the industrial heartlands were left to rot in their rented hovels. If they got sick or died, there was always another desperate soul to take their place in the factory. So why should the landlords or factory owners bother to improve their housing?
Right up to World War I, almost all housing was privately owned. The biggest landlords were the old aristocrats of course, but the new capitalist class came to own a sizeable chunk of urban land and buildings. And the landlords constantly complained that the rents they received yielded too little profit for them to spend anything significant on upgrading the housing stock or investing in new builds. What is more, they actively opposed any state intervention in housing provision which might interfere with their rights as freeholders - rights which dated to pre-feudal times and which in some respects persist today.
First state intervention
The public health hazard of the overcrowded and filthy slums - where every infectious disease was rife - including cholera, syphilis and TB - resulted eventually in some legislation in 1868, which gave local authorities powers to demolish unsanitary dwellings, regulate new building and prevent the unhealthy use of existing houses. But these powers were discretionary and placed no obligation on the local authority to rehouse occupants after demolition.
Disraeli's Tory government, which could not easily be accused of "socialist" interference in the rights of freeholders, encouraged the clearance of some of the worst hovels, but only by offering compensation to the owners of demolished houses. The local authorities were supposed to rehouse displaced families on the same site. But they were permitted to sell the sites after clearing them, to trustees of so-called "model dwelling companies" and philanthropic trusts, at below market prices. In addition these companies were given cheap loans from the Public Works Loans Board as an incentive to undertake building. But there was no question of subsidies to the tenants. Although rents were set at "below cost" they were still far too high for the poorer social layers. In fact demolitions just exacerbated the housing shortage - and therefore overcrowding and sickness - for the vast majority of the working class.
The assumption was that the "model dwelling companies", through the rents they charged, would achieve at least a 5% return on their investment. These companies, most of which still exist today as so-called "voluntary sector" providers of social housing, included such names as the Peabody Trust, originally set up by a wealthy American, the Guinness Trust and the Improved Dwellings Company. It was during this period that the Cadbury brothers, the wealthy chocolate manufacturers, began building the model industrial town of Bournville in Birmingham in 1879. And taking advantage of the subsidies provided by Disraeli, they founded the Bournville Village Trust in 1900, which did actually provide decent homes for some workers - not just those from the Bournville factory - at more affordable rents as well as offering some for sale with low interest mortgages.
These companies built over 50,000 houses and tenements which were often criticised for looking too much like the old workhouses. However, the management of the new housing was paternalistic and humiliating for the poor. Tenants had to pass eligibility tests and their behaviour was tightly controlled, curfews being imposed, for instance. In the Bournville precinct, no alcohol was allowed.
Disraeli's government also allowed local authorities to proclaim by-laws regulating the specifications of buildings which very gradually began to eradicate the building of back-to-back houses, so well-described by Engels. However, the building of such houses carried on - in Leeds right up to the 1930s - even if it was actually illegal from 1905 onwards. Some of these houses were only demolished in the 1980s, or even later!
The new building standards, sanitary controls etc., obviously risked cutting into the profits of private developers and landlords. But the extension of the vote to the lower middle-class and to a section of the better off working class during the 1880s, gave some local authorities the incentive to be seen as attempting to regulate private landlords. Predictably, the latter turned elsewhere for profit-making, afraid they would be forced to spend some of the rent they extorted from the working class on improvements.
The sty that made the pig
In fact, the slum barons' continuing failure to supply rentable dwellings for working class families became a factor in forcing the state and local authorities to intervene in housing and the development of council housing. But it was not the only factor and, possibly, not even the most decisive. Indeed, this was also a period in which the working class was raising its head. Its numbers were growing fast, with the needs of British capital, but so was its militancy. And this must have led a section of the capitalist class to begin to admit that some state funds should be spent on trying to tame this militancy, by investing in housing in particular.
In 1884 a Royal Commission on Housing used the phrase "the sty that made the pig" - for the first time officially recognising that it was not the "feckless and undeserving" inhabitants of slums who were responsible for the squalor they lived in, but the disgusting state of existing stock and the drastic shortage of homes fit to live in, not to mention the lack of drains, sanitation and water pumps supplying drinkable water.
This was the basis for the 1890 Housing of the Working Classes Act - the first statement of need for a national housing policy. Local authorities were empowered to build and renovate "working class lodging houses". But the assumption remained that housing schemes should be self-financing, so this meant local authorities were certainly not going to cater for low income families, who would not be able to afford the rents. So the model companies already in existence were still expected to be the main providers of social housing, even if they did not provide for the most poor either.
Another important aspect of the 1890 Act was that it stipulated that authorities should sell the properties they had built into the private sector within 10 years of their completion! So the sale of council houses actually goes right back to the very inception of council houses! In practice this selling-off did not happen on a large scale, however, because demand for rented properties obviously rose exponentially. And anyway, municipalities preferred to retain such assets.
That said, it took a long time for local authorities to respond to the desperate need for habitation. Eventually by 1914, 316 councils had used their powers under the 1890 act to build 28,000 council houses nationally, to add to the 50,000 built by the model housing trusts, whose projects were mainly in London.
It should be noted however, that the government's intervention - which actually needed to provide at least 120,000 homes, took place in the context of a building slump. And no doubt helped to alleviate it for the construction companies, even if only 23% of the housing target was met in the space of 24 years!
Homes fit for heroes
The First World War led to a lot of shocks for the British ruling class, not least the threat of what they called "Bolshevism" taking hold, as a result of the 1917 Russian Revolution. There followed a tranche of social legislation designed to pre-empt potential unrest.
In fact during the war already, tenants in Glasgow's Red Clydeside, but also elsewhere, had organised rent strikes and even rioted after landlords had tried to increase their payments and evict them when they didn't come up with the cash. As a result rent controls were introduced. But this had the effect of exacerbating the shortage of housing, as many landlords simply stopped letting out their properties. The alternative which was then proposed was a state subsidy to encourage landlords to provide cheap accommodation. But it was more than likely that these sharks would have just used the money to line their own pockets, even if this risked sparking another social crisis. So once more the state stepped in, to supply homes for the estimated 1m families who were reduced to sharing rooms in slum apartments.
The Liberal/Conservative coalition which came to power after the war under Lloyd George, did so under the much quoted slogan of "Homes Fit for Heroes". These were to be provided under the terms of the Addison Act, named after its parliamentary sponsor. But it was initially regarded as a one-off, meant to cope with the housing emergency. Local Authorities had only to take one penny in the pound out of the rates on their side, while the rest of the cost came directly from the Treasury. Within three years, 170,000 homes had been built.
The Addison Act was aborted in 1922, by the incoming Conservative government, partly due to its high cost and because it had been optimistically regarded as a stop-gap measure. And having broken the 1921 miners' strike, the Tories no doubt reckoned that the threat of civil unrest had receded and that therefore an "insurance against Bolshevism and revolution" was no longer needed.
But still, the Addison Act heralded the beginning of mass social housing. It also established the framework which was to be replicated more or less, in all council house building until the end of the 1960s - that is, that it was paid for out of the total sum of rents, central subsidy and rate fund contributions, with local authorities acting as the developer and the landlord.
It did not take too long for the Tories to feel impelled to reintroduce subsidised council house building because there was still such a critical shortage of working class housing - which, in fact, persisted throughout the interwar period. But, at the same time, they introduced subsidies for private building, for the very first time, and removed rent controls from all new houses in the private sector. In other words, their prime aim was to give a big boost to private landlords and property developers. For the same reason, local authorities' subsidies were reduced and councils had to demonstrate to the ministry that the private sector was not supplying the housing needs of an area before getting permission to build social housing.
Labour timidity and Tory necessity
Of course there was a kind of interregnum within a year - that of the Labour government of 1923/24 which lasted only 9 months. The minister for health in this very first Labour government was John Wheatley, who was one of those Christian socialists who rode into parliament on the back of his association with Red Clydeside of the war years. Of course Labour's manifesto promise of nationalisation of all housing, including the private rented sector, was predictably dropped immediately. Wheatley chose merely to increase subsidies for council house building and repeal most of the cuts made by the Tories. But to keep the bosses happy, he also got trade union leaders in the building industry to agree to end many of the unions' so-called restrictive practices, which had at least, to some degree, prevented over-exploitation of the workforce. The excuse was that it would facilitate a public housing drive, but of course it was the exclusively private construction sector which was to reap all the benefits, at workers' expense.
That said, when the Tories returned to power, most of the subsidies previously legislated carried on operating. And while the Tories restored their sweeteners to private landlords to encourage them to build cheap housing for workers, this hit the same buffer as before - the greed of these landlords. Why invest in long term building projects when they could make money more easily by other means - even by just increasing rents? So by default, local authorities had the job of building the homes for rent to workers - no longer "heroes", apparently - and with the necessary subsidies. And the private sector as a whole still made a mint, at public expense, because it held all the construction contracts.
From the mid-1920s to the outbreak of WW2, private house building of homes for sale however, grew at an unprecedented rate of 100,000 new houses per year. This was the first such boom in "home ownership". In fact, despite the Depression and mass unemployment, the number of white collar salaried jobs in banking and insurance increased significantly. Cheap finance became available with the setting up of building societies whose main function was to provide mortgages. Greenfield sites - to become the garden suburbs - provided relatively cheap land for developers.
Curiously enough (or maybe not), in this period council housing tended to be built to a much higher standard than private housing, with housing estates like New Earswick in York, Letchworth New Town and Hampstead Garden Suburb being notable examples. Another, the Becontree Estate in Dagenham, was at that time said to be the largest council housing estate in the world, with 27,000 homes housing 90,000 people by 1934. In reality, it was aimed at the "better-off" working class Londoner. All the houses had electricity, gas, inside toilets, fitted baths and even front and back gardens. The LCC imposed strict rules on housework, house and garden maintenance, children's behaviour and the keeping of pets, recalling the paternalistic regimes in the Model Dwelling Companies with their curfews and rules on personal conduct.
But in fact between 1924 and 1929, only 75,900 council homes had been funded by the state compared with 362,000 subsidised private sector dwellings. In addition, however, 300,000 houses in slums had been refurbished, on the cheap of course, by private developers, thanks only to statutory improvement orders imposed on the worst landlords.
In the meantime, the poorer working class families and the increasing number of unemployed had not had a look-in as far as new council housing was concerned. Most of them remained stuck in filthy slums at the mercy of private landlords. At least 20% of council homes were occupied by white collar workers, and the rest by better-off manual working class families. It was not until the slum clearances of the 1930s that poor working class households began to access council homes and then only a minority of them.
In May 1929, the second Labour government got into power. In October that year there was the great Wall Street crash, precipitating a decade of destitution for the working classes throughout the world. Labour's Prime Minister Ramsay MacDonald, however, declared that his government would be "a government of continuity". In the context of growing, desperate poverty and unemployment, Mac Donald replaced the Poor Law Guardians with Public Assistance Committees who enforced stringent household means tests before a family could qualify for any social assistance or benefits. Arthur Greenwood was in charge of housing and in this area, "continuity" meant presiding over growing slums. He did pass a new housing Act - which introduced means tests for rent rebates as well. In Birmingham a successful rent-strike was mounted against such a scheme. Of course Greenwood did announce a demagogic 5-year plan which placed a responsibility on local authorities to clear slums and rebuild homes within this period. But by 1931, there were 3m unemployed, drastic cuts in government spending had been introduced, another social crisis was pending and MacDonald abandoned his own party to form a coalition with the Tories in the so-called "National Government".
Council housing building stagnated once more, falling to 1/3 of new building in 1932 and 1/8 in 1935, although some slum clearance did continue. Wal Hannington, the Communist Party's organiser of the Unemployed Workers' Movement at the time, provides a graphic picture of conditions in the 1930s in his many writings on the period. He describes in detail typical examples of rented slum accommodation citing the case of a widow in Liverpool, for instance, who rented one room and a boxroom to accommodate herself and 4 children, one of whom was crippled by tuberculosis of the spine and slept in the boxroom, but because they only owned one blanket, had to use old coats as bed covers. The other four family members shared two beds in the room where they had to do their cooking on a spirit stove, eat and sleep. Or a family of nine in Pontypool who were somewhat better off, because they were able to rent three rooms - two bedrooms and a small living room/kitchen. Two boys slept on a rented bed and four on another, while husband and wife and the smallest child shared a bed with broken springs.
The overall picture of the interwar years is, however, one of dramatic change if compared with the housing situation before WW1. Over this 20-year period, local authorities had built a total of 1,112,000 houses and flats, or 1/4 of new construction. Private developers had build half-a-million state subsidised homes for renting out to the better-off working class plus another 2.5m dwellings. But because private landlords felt their "returns " were not high enough, over 1m privately-built homes were quickly sold off rather than rented.
By 1939, 32% of households owned their homes. Private renting constituted 58%, leaving 10% renting council homes or homes managed by housing trusts. But for the working class poor, little had changed in the 1920s and 1930s, with many millions stuck in the sub-standard conditions of the inner city.
Then came World War Two, and the bombing blitz on London and other main cities, first in 1941 and again in 1944 when the so-called "doodlebug" bombs were dropped. Over 2m homes in London were destroyed, as well as one third of Coventry's housing stock and thousands more homes elsewhere. Over 3.5m houses suffered damage which needed repairing, leaving an enormous gap to fill in the housing stock.
Ducking out of nationalisation
Aneurin Bevan was the incoming 1945 Labour Minister for Health, whose remit included housing. He was apparently vociferously opposed to allowing the private developers to "suck the teats of the state", as he put it. However, he adopted a policy of allowing the private speculative building industry to do precisely that, because they were to build most of the new housing for rent. That said, for all building, a new complex system of licensing was brought in. But it also delayed new projects significantly. Prior to WW2 only 3% of Britain's land was subject to planning permission, before building would be allowed. Bevan extended this to cover all land.
Labour had made a manifesto commitment to "work towards land nationalisation", but again in effect all they did was to take some measures to limit land speculation. This was one of Labour's typical halfway-house measures designed to stave off working class discontent rather than address its root causes.
The housing subsidy to councils was, however, trebled and 3/4 rather than 2/3 was to come directly from the Treasury, with a quarter of the cost from rates. But progress was slow considering the housing crisis. In 1946, families could find themselves 4,000th on a housing list - including families of ex-servicemen with small children. To give an idea of the situation one writer related the following: "...vigilantes went about looking for apparently vacant buildings, even if they had "sold" notices outside... an empty Nissen hut at an airport could house 2 families, so if there was no one looking, you moved in. Landlords might cut off the water, gas, electricity; but in desperation you could use spirit stoves and candles. The climax was reached in the "Great Sunday Squat" of September 1946 at Duchess of Bedford House, an empty block of flats in Kensington. ...Elsewhere in the country, squatters occupied abandoned army camps (more than 46,000 ended up in them). They were not evicted because the government suddenly realised that this was really a rather good idea which they ought to have thought of themselves."
The post-war Labour government managed to get 1,017,000 homes built - but this was under half of what was needed. These included 146,000 of the promised half a million pre-fabricated bungalows. Some are still in existence today despite their 10-year life expectancy. But the government could have done a lot more if it had not relied on private companies to do most of the construction - even if it did, for a period of time, reverse the balance between house-building for private sale and council house building for rent. Local authorities ended up having insufficient funds to pay private contractors. As to the 25 New Towns developments, another element in Bevan's policy, eventually they were to house 2m people on greenfield sites. But these were long-term projects and, by the time Labour left office, most were still building sites.
In any case, Labour's failure to meet housing targets - by 240,000 houses per year - and therefore to address the ongoing housing crisis, certainly played a role in its 1951 election defeat.
Promoting so-called "owner-occupation"
The incoming Tories promised 300,000 homes by a combination of public and private provision. Macmillan, the Minister for Housing and Local Government wanted owner occupancy to increase, but accepted that local authorities would have to make up for the deficit in council houses. Indeed, council building resulted in the 300,000 target being met by 1953, partly due to the completion of programmes started under Labour. But this was also certainly facilitated by the cutting of building and design standards. Licensing for the private sector was phased out and abolished in 1954. The tax limiting land speculation was also abolished. Between 1954 and 1957 the government guaranteed loans for mortgages so that larger mortgages could be offered to prospective buyers. The 1955 election pledge of the Conservatives was to create a "property-owning democracy". And indeed, a second 20th century boom in construction for private home ownership took place, in the context of the peak of the so-called "post-war economic boom". This was when Macmillan told the nation that "they had never had it so good".
The result was that the role of public sector housing was reduced to provision of residual "basic housing" and after 1954, even this declined. By 1961 local authorities had build only 105,000 dwellings - less than half their output in 1954 alone. As Macmillan said, "Local authorities and local authorities alone can clear and rehouse the slums, while the general housing need can be met , as it was to a great extent before the war, by private enterprise."
All subsidies to councils were ended, except the general housing needs subsidy, which was retained only for slum clearance and for the construction of one-bedroom flats for the elderly.
What is more, rent policy from 1955 onwards compelled councils to increase rents towards "market levels " - so-called "realistic rents" - a way of protecting private landlords against public sector competition, but probably also a way of getting more rent from those in council homes who were not eligible for rebates. Local councils' subsidies for housing were gradually replaced by means-tested housing benefit for low income families, tying them to the social security system.
Councils were also encouraged to build high rise flats, especially in slum clearance areas where space was limited and land relatively expensive. But with low cost being the operative word, many of these flats turned out to be a social disaster - not least because of the materials - like asbestos - which were used in them. They were a parody of the vision of socially conscious architects like Le Corbusier, whose ideas were based on the imaginative use of space for collective living, with all the collective facilities and recreational areas which would have made them safe and friendly for families with small children.
This "solution" also played deliberately into the hands of the private building industry which was dominated by a few giant companies who built most of the high-rise blocks. While the new mass housing may have got millions of people away from Victorian slums, many of the worst giant schemes turned into new slums before they were even completed. At the peak of the high-rise boom in 1966, blocks of flats accounted for a quarter of public sector building approved for construction by central government and in Greater London, 91% of completions in 1967 were flats, mostly high rise blocks.
Financial packages were offered which tied local authorities into huge debt repayment costs to the banks, while tenants were called on to pay higher rents. However, in 1967, after Ronan Point, a tower block in the London Borough of Newham partially collapsed following a gas explosion, killing 13 people, high rise construction was abruptly terminated.
As for landlords in the private rented sector, despite incentives like the removal of rent controls, as always, they proved unwilling players in the Tory government's strategy. They failed to build new homes for rent, failed to do maintenance and left their properties to deteriorate. But then again, it is not as if this was not just history repeating itself. In other words this policy was laced with cynicism on the part of the government.
And while it is true that it was always a key Conservative policy to promote home ownership this policy was continued by Labour governments of the 1960s and 1970s.
Politicking on homelessness once again
Housing by its very nature is an explosive issue and by the 1960s homelessness was growing again. Housing Acts passed in 1961 and 1964 gave local authorities the powers to force landlords to repair and improve properties. To encourage home ownership, improvement grants were given in the early 1960s to avoid deterioration in this sector. But general needs housing subsidies to councils had to be reintroduced as well.
It was the 1961 Act which allocated loans for the establishment of "Housing Societies" now called Housing Associations. And with housing a key election issue in 1964, the Tories rushed through the Housing Corporation act that year to encourage these associations to build for letting at so-called "cost-rents". To this purpose, the Housing Corporation was to arrange 100% mortgages for them.
Labour won the 1964 election, however and promised to build 500,000 houses. But Wilson's government was not even going to try to make a major shift in policy towards council house building. Its White Paper of 1965 said "the expansion of the public programme now proposed is to meet exceptional circumstances... The building for owner occupation on the other hand is normal."
While in 1967 the 180,000 council houses built was a post-war record, the so-called "National Housing Plan" of Labour was then halted and the 500,000 target quietly dropped - the excuse of the day being the devaluation of the pound.
But it must be said that building standards and specifications had once more been improved with large kitchens and a general increase in living space being provided. This was the Parker Morris standard based on a 1961 report commissioned by the Tories. But it cost a lot more and itself became another reason for the reduced housing programme.
This whole period of the first Wilson government was marked by social action on the housing issue. When rolling programmes of slum clearances were attempted in areas which by no stretch of the imagination could be classed as slums, residents' associations and community action groups sprang up to stop the bulldozers. The dissatisfaction with high rise living and the higher rents which were imposed by councils to pay back their huge debt charges reached breaking point.
Tenants organised themselves and staged rent strikes. Labour councils were thrown out - like Sheffield City Council in 1968-69 which fell to the Tories for period of 12 months for only the second time since Labour took control of it in 1926.
In 1968 a new initiative called "Old Houses for New Homes" switched policy away from slum clearance and new builds to private refurbishment of existing stock through the offer of grants once more to home-owners.
The Housing Acts of 1969 and 1974 introduced "General Improvement" and "Housing Action Areas" where grants for house improvements were offered and environmental improvements undertaken. In other words, both under Wilson and Callaghan, Labour was withdrawing from the social responsibility of providing new council homes. Of course these cuts were blamed on the IMF monetary fund restrictions imposed on the Labour government in 1976. But what this clawing back of public subsidies resulted in was an increase in the social divide between low and high income tax payers, because the better-off owner occupiers were awarded tax relief on their mortgage repayments.
By the 1970s, over half of the country's housing stock was privately owned. By 1973, one third of house-buyers were manual workers, and by 1979 this figure was 40%. The most likely reason for this was the shortage of good quality and affordable council accommodation, forcing workers who could probably ill-afford it, to buy a house for their families.
Contrary to a common view, it was the Labour governments of the 1970s rather than Thatcher, which initiated a turn from developing social housing at public expense towards owner-occupation. Their 1977 Housing Policy Review which is regarded as a "Conservative" paper, openly advocated home ownership, even if it called for a more "pluralistic approach", to what it identified as smaller scale needs, incorporating housing associations and private provision in social housing.
Labour had already established this turn in practice anyway, of course. They enhanced the tax breaks given by the Tories to home owners and mortgagees, and instigated cheap mortgages (called "Option Mortgages") at a 2% discount from building societies and from local councils, financed by taxation, for families on lower incomes, which allowed them to borrow more.
The Homeless Persons Act of 1977 was Callaghan's last measure before Thatcher came in. While councils were building fewer homes than ever, they were endowed with the obligation to house selected homeless families, like those with dependent children and people made homeless due to emergencies like floods or fires. It was certainly not going to ease the already long waiting lists, swelled by the unemployed who could no longer afford private housing. At a time when 1m unemployed was shocking and unprecedented in the post WW2 period, the homelessness figure of around 62,000 households (roughly equivalent to 240,000 people) also seemed huge.
Selling off council stock
For the Thatcher governments of the 1980s housing policy was a repetition of Tory history - i.e. to create "a nation of home owners". Although this policy was consistent, the zeal with which it was carried out was new. And of course, while previous Labour governments still incorporated council housing in their plans, Thatcher's aim was to replace it by private sector provision and provision by the voluntary sector - that is, housing associations and trusts. To quote her: council estates were "breeding grounds for socialism, dependency, vandalism and crime", while home ownership encouraged "all the virtues of good citizenship".
Of course Thatcher did not invent the "right to buy" for council tenants. However, sales of council houses had required ministerial consent in the inter-war years, to ensure that authorities got the best price. After WW2, Conservative local authorities, particularly Birmingham's had actively promoted sales by introducing discounts. At the end of the 1960s, the Wilson government had stopped this on the grounds that it was unjustifiable to sell public assets for private gain. Heath's Tory government had reinstituted what then became known as the "right to buy" with discounts of 30% of the property value. Between 1970 and 1974, 100,000 council houses were sold but most of them were replaced by new council builds. What is rather ironical, is that at this time Thatcher actually registered her opposition to the selling of council properties!
Under the following Wilson-Callaghan governments, a 20% discount on the selling price was retained and although only 2,700 homes were sold in 1975, sales increased year on year to 30,000 in 1978.
However, between 1980 and 1992, a total 1.75 million council homes were sold. In the meantime, the Tories' 1984 Housing Act had cut the qualifying period for the "right to buy" to 2 years and increased the discount so that tenants of flats were allowed up to 70% discount! By 1986, Thatcher herself attended a ceremony marking the one-millionth sale. Parodying Labour's redistribution policies of the 1970s, Michael Heseltine claimed that these sales represented "an irreversible shift of wealth in favour of working people and away from the state". He might have mentioned that the total amount raised by these sales, £28bn, made it the most profitable privatisation the Tories conducted, exceeding the combined value of the sale of British Telecom, British Gas and electricity! This was a major reduction in public expenditure. Having owned and maintained one third of all homes in 1976, by 1995, councils only owned 19%. Over the same period, owner occupancy had increased from 55% to 67%.
The corollary of this was the collapse of council house building. Compared to 1975 when there were 145,000 completions by local authorities, by 1995 these had fallen to a mere 1,900. Housing Association completions, however, were 38,500 and renovations by these associations also managed to cushion this collapse somewhat. But this lack of new homes was a major factor in increasing homelessness. More importantly, however, when the housing market collapsed after 1989 and an exponential rise began in mortgage interest rates, many of the new "owner-occupiers" could no longer afford their mortgage repayments. Repossessions due to mortgage arrears rose from around 18,500 in 1988 to 75,540 in 1991.
Although the statistics are misleading because of changes in the method of calculation, the statutory homeless for whom local authorities were obliged to find alternatives increased from 70,000 in 1979 to 180,000 in 1992.
In fact the government was forced to intervene despite its "free market" philosophy. In December 1991 it introduced a £1bn rescue package to help victims and potential victims of repossession, many of whom were recently unemployed. It made cheap loans available to housing associations whereby they could acquire repossessed homes and rent them back to their former "owners". Also, funds were made available to building societies so that they could convert existing mortgages to lower interest agreements. Income support for the unemployed who had mortgages was paid directly to lenders to reduce arrears and prevent foreclosure. But unsurprisingly this had very little effect in alleviating the situation.
Of course only the better council houses had been sold and the high rise flats and houses in the most derelict areas did not find buyers. So the profile of council house dwellers changed dramatically too. Low or no-earners, that is the unemployed and single mothers as well as the most vulnerable elderly were stuck in the most run-down council estates and increasingly ghettoised. By 1991, 63% of council house dwellers were non-earners. By 1996/7 47,6% of council tenants derived their income from social security payments compared with just 9.1% of home-owners.
When the HAT doesn't fit...
By 1988/9 there were still 4m council homes. So it was decided that the remaining council homes should be sold off in chunks to so-called alternative landlords. This was meant to be done under compulsory stock transfer. To by-pass local authorities, Housing Action Trusts (HATs) would be established by the Secretary of State and these would take the remaining council flats and houses out of local control. The problem with HATs was that they were rejected in every single area that they were proposed. Not because tenants were given a say by the legislation, but because they were not, and this led to a vociferous campaign by tenants' associations against the transfers. As a result the government had to back-peddle and ballots were organised among tenants resulting in a massive "no" vote against transfer in all of the six targeted estates. By 1994, only four HATs had been established, but in each case with massive injections of public subsidy to buy everyone's co-operation. As a way of getting rid of council housing HATs had failed.
The other means whereby housing stock was in the end transferred was via a Large Scale Voluntary Transfer (LSVT). As the new financial regime prevented councils from using the bulk of their receipts from "right to buy" sales in order to do necessary maintenance, let alone provide new homes, they were invited to transfer their entire stock to newly created housing associations or to existing ones, now usually referred to as "Registered Social Landlords" or RSLs. But in the 10 years between 1988 and 1999, only 250,000 properties were transferred by 60 local authorities - mainly in rural localities in south England.
As for the private rented sector, which accounted by 1988/9 for a mere 7% of provision, an attempt was made to boost it once more, by the freeing of rents from controls, and, in order to eliminate public sector "competition", by forcing councils to increase the rents they charged tenants to "market levels" - something which had always failed in the past due to councillors' reluctance to alienate their constituents and due to tenants' resistance.
However, the fact that housing benefit was available as rent to both private and public landlords did eventually boost the private rented sector in the early 1990s, but that was only after the housing market crashed.
The other aspect of Tory legislation applied to Housing Associations. In 1984, the National Federation of Housing Associations had 3,500 member organisations, many of which specialised in providing homes and renovations for groups of people with special needs. Under the 1988 Act, Registered Social Landlords were brought under a new financial regime based on a fixed grant which meant they would have to find other sources of income and capital as well as bear much of the financial risk which previously had been shared by the government. This undermined the voluntary sector and boosted the commercial ethos of the largest Housing Associations, which focused increasingly on building homes for sale and for market renting. As a result, the number of Registered Social Landlords fell to 2,500 by 1997.
A range of new initiatives were also tried under John Major's government to try to transfer inner-city and poor quality stock to new landlords. Local Housing Companies emerged as an alternative to housing associations. These would take over council housing and place them in the private sector. But in the meantime the social degradation in inner cities was taking its toll and the government had to look as if it was tackling this. Six new Regional Offices were set up with a Single Regeneration Budget (SRB) to incorporate the previous housing programmes like HATs and Estate Action. This budget was supposed to target training, employment and education initiatives, under a new so-called "holistic approach", as if it was the ignorance of the tenants which was to blame for the social degradation and not the appalling conditions and ghettoising effects of the housing estates. Labour's various initiatives emanating from the so-called "Social Exclusion Unit" are really just a continuation of this policy.
New Labour, old Tory policies
While in opposition, Labour had fiercely opposed the long string of schemes produced by the Tories in order to take the existing housing stock out of local councils' hands. When David Curry, Major's last housing minister, threatened councils with funding cuts for failing to achieve his transfer targets, Labour's housing spokesman, Nick Raynsford, thundered in the Commons against what he called "the last desperate convulsion of a dying government." And he added, quite rightly, that "simply transferring stock from one landlord to another does nothing to make up for the shortage of resources."
However, after Labour's return to power, in 1997, Raynsford's tune changed dramatically. Now that he was Blair's housing minister, he found Large Scale Voluntary Transfers not just acceptable, but indispensable. There was no longer any question of increasing the resources available for social housing. Funding the £19bn backlog of repairs in council estates would have required taking the money from where it always is - in the coffers of the capitalist class. But the Labour government was far too determined to please its masters in the City to choose this road. Instead Brown proceeded to cut corporation tax!
So council tenants were left facing the same crass blackmail: they would either have to watch their estates fall increasingly into disrepair or else agree to "Large Scale Voluntary Transfers", with the certainty of having to pay higher rents in return for uncertain improvements. The big difference now, however, was that unlike the Tories, Labour controlled most of the large local councils across the country. And Blair and his ministers probably hoped to achieve far swifter progress than the Tories had managed.
But it did not work out that way, at least not in the first few years. There was some resistance from the tenants themselves, of course, and quite a few campaigns against housing transfers were successful. But many Labour councillors proved just as reluctant to go along with these plans. Some out of a genuine hostility to what amounted to the privatisation of social housing. But others, including among arch-Blairites, because these transfers also threatened to reduce the social status and privileges enjoyed by the local government machinery, thanks to the fact that they handled such large housing budgets.
As a result, by the beginning of 2000, the government had barely managed to achieve an average of 31,000 transfers a year. This was a far cry from the 140,000 target originally announced by Raynsford. But it did not stop Prescott from upping the stakes by announcing an even higher target of 300,000 transfers per year, and claiming triumphantly that by 2010, council housing would be a thing of the past.
But such posturing was not likely to resolve Blair's problem. He had to take into account the resistance of the local government machinery. A series of reviews, green and white papers floated a new way of enticing councils into releasing their housing stock - well, not entirely new, since it had been copied from a trick already used by the Tories for the privatisation of bus services. Councils which were "good performers" in housing management were to be allowed to set up independent "arms length management organisations", or ALMOs, to use Labour's weird jargon, which would then manage their housing stock, while the councils would retain ownership. These ALMOs were to be allowed to borrow on the money market, within certain limits, without this increasing the government's public debt. However, unlike RSLs, ALMOs were not to be allowed to build new homes.
Subsequently, however, due to continuing lack of success, various sweeteners were added to these proposals, both to win over the support of Labour councillors and to defuse tenants' anger. So councils were encouraged (but not required, unlike in the case of sales to RSLs) to get tenants' support for transferring to an ALMO. Legislation introduced in 2001 and 2002 provided that ALMOs would have some tenants and council representation on their boards, that they would receive government subsidies for repairs provided they were deemed "efficient" enough and that the housing debts of councils transferring their stock to ALMOs would eventually be written off.
The ALMO option went a long way towards meeting the objections of a number of council officials, if only because it opened new career prospects in front of them, as advisors or even directors of the new ALMOs, with much higher salaries. And the fact that, on paper, the housing stock remained owned by the council, certainly helped to allay many tenants' fears.
As an additional option, however, Prescott also offered a third way for councils to carry out repairs with the help of public subsidies - that of entering into PFI deals with private companies. Of course, there was a high price attached to such deals, since they involved expensive long-term maintenance and management contracts in addition to having to pay for the repairs. But then, most councils were already familiar with such deals and less likely to be wary of them.
As to the option of giving councils the grants required to carry out the long overdue repairs themselves, instead of handing their housing stock over to RSLs and ALMOs, it was simply not on the table.
True, at last year's Labour party conference, a motion supporting this "fourth option" was adopted with a 3 to 1 majority and hailed as a major success among those opposed to Blair's housing policy. The left Labour weekly Tribune, for instance, went so far as to claim that this "decision will force the government to rethink its entire housing policy" But since when has the Labour leadership felt bound by conference decisions with which it disagreed? Predictably, only a few weeks later, Prescott issued a deliberately provocative statement reiterating that there would be no question of a "fourth option". And that was it.
Towards the abolition of social housing
Not only is there no question of a "fourth option" in Labour's book, but Prescott's ultimate aim to get rid not just of council housing, but of social housing as a whole, remains firmly on the agenda.
So, for instance, it is now an open secret that Prescott's office has been circulating for some time a proposal which would allow existing ALMOs to take over the ownership of the housing stock they manage as early as 2006. Along the same lines, the latest Housing Bill passed last November introduces for the first time the possibility for the Housing Corporation to offer grants directly to private companies building or owning so-called "affordable housing". In passing, it must be noted that the phrase "social housing" has disappeared from the official jargon to be replaced with "affordable housing". Except that what Prescott describes as "affordable" is, at best, affordable for middle-earners, but certainly not for low-paid households.
Already the existing RSL system is a thin cover for what is really a profit-making system. This is best illustrated by a report published last October by Barclays. This report showed that in 2003, the combined assets of all RSLs had increased by 10% in value, reaching £54bn, their turnover had increased by 12.5% to £6.3bn and their operating surplus had increased by 30%! Any private company producing such figures on its balance sheet would instantly become the darling of the share market! But RSLs are supposed to be "not-for-profit" companies and their surplus is meant to be ploughed back into investment. So, we should see a sharp increase in the numbers of new buildings planned? Wrong! These numbers are actually decreasing overall.
So, where does the money go? In fact, most of this growth comes from a relatively small number of very large RSLs, which control the bulk of non-council-owned social housing, with each of them owning tens of thousands of homes. These so-called "not-for profit" companies operate along the lines of private businesses by providing lots of top cushy jobs on high salaries, which have to be financed from the RSLs' income.
But in addition, RSLs have their own ways of getting around regulations, by setting up "for-profit" subsidiaries specialising in providing housing and planning advice to local authorities (including to help them to put together LSVT deals!) and smaller RSLs. Most have gone into the very lucrative property development business - all the more so because government rules actually encourage them to do so and even offer them subsidies, not only to build new homes for rent, but also to build homes for sale. So, for instance, one of the biggest "social landlords" in the South-East of England, which was originally set up as a charitable organisation by a bequest from the wealthy finance magnate Samuel Lewis, owns around 30,000 rented homes as well as the leaseholds of another 16,000 homes that it has built and sold over the years. Needless to say, with all their lucrative consultancies and property developments, these big RSLs cannot have too much time to devote to taking care of their tenants.
By offering private developers the same subsidies as RSLs, without the constraints, and by paving the way for ALMOs to become RSLs, Blair's government is shifting the goal posts in a direction which is all too clear. If it gets away with this, Labour will have achieved what Thatcher and Major had failed to complete - the wholesale privatisation of social housing.
The main beneficiary of this, of course, in addition to developers and property-owning companies, will be - and is already - the financial sector. Privatising social housing also means privatising the huge housing debt accumulated over the decades by successive governments, either in the form of mortgages or in the form of loans to property companies acquiring council stocks. In either case, the interest paid to lenders is much higher than that paid by the government itself. The bulk of this privatised debt, however, takes the form of mortgages. And at a time when mortgage debts have reached an unprecedented £870bn - or £14,700 for every adult and child in the country, a level which has no equivalent anywhere in the world - it is no wonder that British banks can boast of being the most profitable in the world and that their profits are at an all-time record - thanks to Labour.
The housing shortage and the price explosion
The other reason for which finance capital should be grateful to Blair's government for its housing policy, is the artificial housing shortage that it has generated and the resulting explosion in house prices.
Since Labour's aim was to dismantle council housing, which had always been the main supplier of social dwellings, it made it impossible for councils to find the resources to build new houses.
The figures speak for themselves: the number of council homes completed each year, which was already down to a catastrophic level in 1997 with only 1,543 dwellings, grounded to virtual halt in 2003 with just 247 completions. Meanwhile, the numbers of homes completed by RSLs, which were supposed to make up for the shortfall for low-income families, went down from 24,443 to just over 18,000. And why should it have been otherwise since, thanks to Labour's policy of large-scale transfer to RSLs, the latter only had to sit and wait for councils to deliver ready-built properties into their hands! Since, at the same time, thousands of council houses were being demolished due to their dereliction, while between 60 and 80,000 others were being sold to sitting tenants, the total number of social dwellings shrunk by nearly half-a-million.
Over the years, more and more families, who would normally have lived in rented accommodation, were de facto forced into buying a house, even when they could not afford the mortgage. But since private developers had made no plans to cater for this sudden increase in demand, house prices began to increase.
It was on this backdrop that share prices collapsed in 1999. Large amounts of money fled from the share market in search of safe investment - and what is safer than property at a time when properties are scarce? This was the starting point of the explosion of housing prices which then fed itself, as speculation pushed prices in an upward spiral.
The construction industry, in particular, played an important role in this speculation. As long as prices were rising, they could overcharge customers and make record returns. In the first half of 2003, for instance, Wimpey, the country's biggest house builder, registered a 42% profit increase. At that time, the Observer noted that the giant house-builders were making a 15 to 20% return on investment, far more than any other industries. But then it was not in their interests to kill the goose that laid such golden eggs by building enough houses. The same article noted that the 17 largest house-builders had accumulated enough land with planning permission to build twice the number of houses they built each year. But, of course, they were not using this land. They were simply waiting for the most profitable opportunity to do it, for the time when they would be in a position to extract subsidies from the government on top of their "normal" profits - a time, which has now arrived as we shall see.
The result was a neck-breaking spiral. According to the Halifax bank, just over the last two years, average prices increased by 57%! And the worst thing about this, is that it was not the multi-million pound houses whose prices increased most rapidly, but those in the previously cheap areas of Northern England.
The government could easily have forced the construction giants to use their stocks of land. Just as it could have brought property speculation to a halt by imposing much more drastic taxes on the large profits which were made on the buy-to-sell and buy to let markets. And of course, it could have weighed on house prices by making a massive investment in social housing.
But apart from the fact that this would have involved a confrontation with a section of the capitalist class, which was making a killing, the price boom was actually convenient for Labour. It helped to conceal the general stagnation of the economy. Millions of owner-occupiers were able to remortgage their houses, thanks to their increased valuations, thereby boosting their purchasing power. Retail sales went through the roof, not because the income of the majority of the population was increasing, but because of an enormous increase in the use of credit.
However, this is a dangerous game. It is not for nothing that week after week, the possibility of a crash in the housing market has been discussed again and again in the papers. Such a crash happened in Japan in 1990. It took a whole decade for the country's economy to find its feet again, and the Japan's economy was incomparably more powerful than the British economy is today. The social irresponsibility of the Labour party leaders and their subservience to the capitalist class is effectively putting millions of households at risk and threatening them with what would amount to total bankruptcy.
And it is not the plan to build 640,000 new homes over the next 20 years in the South East, announced by Prescott last November, which will change anything to this threat. Not only is this number ridiculous compared to actual needs, but it will involve no dwellings for low-income working class families on any significant scale. Worse, as a damning review of this plan concluded, some of the projects involved, like Barking Reach in east London, will be a "new-built desert" offering "nothing other than a box to live in". And it added, "we do not need to see the Treasury model of £60,000 homes built quickly, with the minimum of infrastructure costs" - in other words cheaply-built boxes with poor local facilities!
The working class and the housing crisis
For the working class, this policy has meant yet further degradation of its conditions of living.
In England alone 137,000 households are officially homeless today, as many as the peak which Major's Tory government managed to achieve in 1991/2. This probably represents more than half a million individuals, while the waiting lists for social housing have constantly increased, reaching 1.25m households today.
Among those who are living in social dwellings, 800,000 households have already been transferred to RSLs since Labour came to power. This means that on average, they pay a rent which is 17% higher than those in council homes. It also means that they can be evicted far more easily. A recent decision by the Court of Appeal even allowed RSLs to evict tenants who fell 8 weeks behind in their rent due to delays in housing benefit payments - never mind the fact that this delay was of no fault of their own and should have been blamed on the general chaos caused by the government's cuts in the benefit system, including the contracting out of housing benefit payment to private companies like Capita and CSL which promptly collapsed leaving thousands under threat of eviction.
It has often been argued, including by the Left, that the growth of home-ownership among the working class was creating yet another division in its ranks. If anything, in fact, the bosses' attacks against workers' living standards over the past decade are increasingly blurring any distinction between working class tenants and home-owners. While renting is becoming more and more expensive, more and more low-paid workers have had to turn themselves into lifelong tenants of their building societies through successive remortgaging of their homes and, for them, home-ownership is no more than a fantasy, if not a nightmare.
The housing crisis is therefore a threat for the working class as a whole. It is an immediate material problem and, in the absence of a fighting class perspective for the working population and jobless, it is a fertile soil for the dangerous development of reactionary prejudices within its ranks - illustrated by the handful of successes registered by the far-right. This is why Blair's policies and the degrading housing conditions resulting from them should be opposed.
But there should be no harking back to the "good old days" of council provision or illusions about a "fair housing system". If is to be effective, the fight against the housing crisis, like the fight against poverty and for an improvement in workers' standards of living, can only be part of a much more far-reaching struggle for social change.
We can only conclude by quoting from a pamphlet called "The housing question" written by Friedrich Engels 133 years, because in fact, from this point of view, very little under the sun has changed. In this pamphlet, Engels argued, with regard to the housing crisis faced by the working class, "that it is a necessary product of the bourgeois social order; that it cannot fail to be present in a society in which the great labouring masses are exclusively dependent upon wages, that is to say, upon the quantity of the means of subsistence necessary for their existence and for the propagation of their kind; in which improvement in the machinery, etc.., continually throws masses of workers out of employment; in which violent and regularly recurring industrial fluctuations determine on the one hand the existence of a large reserve army of unemployed workers, and on the other hand drive the mass of the workers from time to time on to the streets unemployed; in which the workers are crowded together in masses in the big towns, at a quicker rate than dwellings come into existence for them under the prevailing conditions; in which, therefore, there must always be tenants in the most infamous pigsties(..) In such a society the housing shortage is no accident; it is a necessary institution and can be abolished with all its effects on health, etc.., only if the whole social order on which it springs is fundamentally refashioned."
Today nothing in Engels' argument needs to be amended.