Camden Labour have today bragged about their supposed success at reducing the number of empty properties. This has been timed to bash Kensington & Chelsea for their supposed failure to reduce the number of long-term vacant properties in that borough. The problem? It’s nonsense – and Camden has done terribly at reducing the number of empty homes.
Camden imposes a 50% council tax surcharge on properties that are left vacant for more than two years. They now want to increase this even more: proving that Labour think the solution to everything is to tax it. To support its putative success, they’ve pointed to the fact that properties kept vacant for more than two years has fallen recently.
Well, great, but there’s nothing magic about the two-year threshold – what could easily have happened is owners could flip the property on or live in it temporarily or do sporadic (but not long-term) work on it just to avoid this bill.
Economists have a rule called Goodhart’s Law: when a measure itself becomes a target, it ceases to be a good measure. It doesn’t always hold – it was coined as a criticism of Thatcherite monetary policy, which proven hugely successful – but it’s a pretty good guide: if you’re measuring the success of a policy, ask what mischief you’re trying to solve and find an alternative measure for that, not the measure that you’re actually targeting.
The aim of the policy is to increase the effective housing supply by making sure every home is occupied. To measure that, you need to count the total number of properties that are kept vacant for reasons that it is not good policy to ignore (say, if someone falls ill and needs care).
To strip out short term absences, you might look at how many homes are empty for six months – which is coincidentally also the government’s definition of a ‘long-term’ vacant property. So what’s happened to the number of total properties kept vacant for that period of time?
The above is from the Department for Communities & Local Government’s official data. And look: the number of properties empty for more than six months has fallen by a third across England since the Conservatives took office in 2010 – and by even more in London. Yet it basically hasn’t fallen at all (well, fallen just 4%) in Camden, compared to a whopping 81% fall in Conservative-run Westminster and 67% in Conservative-run Wandsworth.
Labour are trying to pull the wool over people’s eyes to justify imposing ever-higher taxes. And they do so by claim their policy has been a success when it simply hasn’t.