‘Affordable’ – a case study in the use and misuse of language

You can often tell where someone is coming from in public policy debates by their use of language. In Capital in the Twenty-First Century, for example, Thomas Piketty uses the word ‘claimed’ to describe the share of output attributed to a group of individuals or a certain country. This use, ‘the Industrial Revolution allowed these two regions to claim a share of global output that was two to three times greater than their share of the world’s population’, tells us something about the author’s worldview. As the Café Hayek blog points out, the impression given is that output exists as a collective resource and that countries compete for it. This fits in with a narrative of equality as a guiding principle – ‘claiming’ output suggests that output pre-exists, is fixed and that one country taking more means others have less. It plays down the idea of output being the result of freely agreed transactions.

At least this gives us an insight into Piketty’s thinking, however. But what are we supposed to do when words or phrases are given an entirely different meaning from their conventional definitions in order to subliminally promote a particular political objective?

Consider the term ‘affordable’. To ‘afford’ something in an economic sense is to have enough resources or money to pay for something. It reflects the purchase of a good being inside my budget line. I can afford to go to football matches or cricket matches. Quite a lot of people could afford to go on a holiday to New York but would choose not to because of the sacrifice of other things that are necessary. Most people, however, cannot afford to buy a luxury apartment in New York - it is beyond their budget line: though some of course can. 

But this term, affordable, is often used very differently in certain public policy debates. In his book What Money Can’t Buy, for example, Michael Sandel suggests that ticket touting is unfair because ‘people of modest means…can't afford to pay $150’ for tickets to events. As Deirdre McCloskey has outlined, what he really means here is not that most people cannot afford $150 – which is well inside most people’s budget constraints - but rather that it would be more difficult for them to afford it than it would be for somebody who was wealthier.

When people talk about something being ‘affordable’ in public debates, they do not seem to mean ‘affordable to anyone’ – that some people would be placed to be able to purchase something - but actually ‘affordable to everyone’, that things are so cheap that we are all able to buy them without having to forgo much else. And it’s this definition – this perceived ‘right’ to access cheap stuff, which leads inevitably to ‘affordable’ in public policy debates meaning ‘subsidised by taxpayers’.

Consider the term ‘affordable housing’. The cost of housing is a real problem in the UK as far as a large proportion of the population is concerned. This can be seen from the growing ratios of house prices to incomes which are higher here than many other countries or even in the UK historically. Demographia (2014) shows for example that only two regions of the UK (Belfast and Falkirk) have house price to median income multiples of between 3.1 and 4 – regarded as ‘moderately unaffordable’. The rest are above 4 – with certain areas such as London, Dorset and Devon with median multiples above 7. For many people, then, homes in these areas are outside of their budget constraints. They are unaffordable. Clearly, though, the houses are affordable to others. No builder would build an unaffordable house.

However, the term ‘affordable housing’ is instead used as a synonym for ‘social housing’. This itself is a phrase that has had its meaning changed as part of attempts to change the political debate (what is a non-social house exactly?). What people really mean is either subsidised housing or, possibly but more rarely, simply cheap but unsubsidised housing.

A lack of ‘affordable housing’ is thus nothing really to do with affordability, but refers to the availability of state-subsidised tenure. This is an important distinction because the policy implications of being in favour of more affordable housing in a broad sense differs from the policy implications of being in favour of cheaper housing for particular groups. A policy of making housing more affordable to more people might involve making more land available for development. A policy in favour of what commentators describe as ‘affordable housing’ may actually lead to housing being less affordable to others. Subsidies for housing increase the demand for housing and, for a given supply, will raise the price of unsubsidised housing. This is the case whether the subsidies are explicit or involve requiring a certain number of houses in a development to be affordable.

Similarly, discussion of ‘affordable childcare’ follows a similar pattern. One could attempt to make childcare broadly more affordable by pledging to reverse the formal regulatory system imposed on home-childminders over the past decade or so. But if your aim is really to subsidise childcare for certain groups, then this can increase the total cost and reduce take-home pay for other families, even if the private costs for some families who are able to use subsidised childcare are reduced.

Other examples include President Obama’s decision to call his signature healthcare legislation the ‘Affordable Care Act’. The Affordable Care Act should really be described as the ‘Subsidised Care Act’. It makes care more expensive for some and less expensive for others. The Act makes no real attempt to deal with the underlying problems that have caused the cost of healthcare to rise in the US.

This problem is an extension of the tendency identified many times by Hayek for socialists to redefine words in order to enhance the perceived credibility of their arguments. In this regard, a good test of whether a word is meaningful in a particular context is to ask whether its opposite is meaningful. For example:

Socialists and interventionists often describe themselves as ‘progressive’. Yet would any party believe in regressing? Progressive is simply used as a synonym for the state taking more income from people in the form of tax and regulating people's lives to a greater extent.

Likewise, the Blair government was very much in favour of an ‘integrated transport policy’. Yet is anybody in favour of ‘unintegrated’ or disintegrated transport? The key question, of course is whether the provision of a service is best integrated by the market or by a central planner in Whitehall.

The word ‘affordable’, for similar reasons, should be consigned to the political lexicon dustbin. Nobody is in favour of unaffordable housing; nobody wishes to build unaffordable homes; but not everything will be affordable to everybody. Thus we need a proper debate about whether we should subsidise housing, or allow more housing to be built. We’d all benefit from policy ideas being defined explicitly and debated without trying to redefine the English language. 

The mis-use of 'affordable housing' to mean 'modern slum' is dreadful. Anyone who has looked at what developers are required to build (by planners) and what people are therefore compelled to live in will know that the State is now DEMANDING the construction of: over-densely built over-crowded ill-lit small-roomed poor parking poor local infrastructure (ie not upgraded to cope) inflexible houses, named as 'affordable'. If is an axiom that what the State controls, the state rations' and never was this more true than with housing. The solution is, of course, blinding obvious (if politically neigh-on impossible, due to 60 years of failure to move Green Belts with population rises) - namely to scrap ALL planning laws within (say) 200yds of the current urban boundary. Then any builder who put up poor housing would find the homes unsaleable, as there would be many, better quality homes nearby that the buyer could choose instead. In addition, with an additional 5-10 million new homes built by, say, 2030, we'd finally have UK house numbers close to matching UK housing demand, meaning that EVERY house in the UK would see its price fall significantly (by 60-75%) such that EVERY home became more 'affordable'. Never forget that, until c1970, a couple could get engaged, save hard for 3-5 years (whilst living at their parent's home) and then buy a 'starter home' (eg a Victorian terraced house) FOR CASH: no mortgage. That means that my grandparents and parents generations (who all had modest white-collar jobs) all owned their own homes by the age of 30 at the most - and never paid a penny in mortgage interest throughout their entire lives. We now have graduates who will be 40+ before they can even consider having a mortgage on a decent home and who will never have a 'free' place in which to live in throughout their entire life. And we call that progress?

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