The housing problem: “Not a supply issue but a consumption crisis”

Monday 14 June 2021

Building more properties is not the only answer to Guernsey's housing shortage, according to a data scientist, who says people appear to be buying larger properties with more spare bedrooms because of the pandemic.

One man faced with the challenge of finding a place to house his family of six thinks we’ve been looking at the problem the wrong way.

Michael Herwitz is a Data Scientist from California who recently moved to the island, encountering his own problems when trying to rent.

“We were bidding as much as 20% above asking and tripling the deposit, and we bid on about 22 properties before someone said 'yes',” he recalled. 

“We weren’t losing out to people with six family members, we were missing out to couples, or two people and one child.”

Pictured: Mr Herwitz argues that there are many people in Guernsey who have more bedrooms than they need.

Most parties involved in the ongoing discussions surrounding the housing crisis  suggest that building more is the only way to go; estate agents, surveyors, and most recently the President of the Committee for Employment & Social Security, Deputy Peter Roffey, who said ‘flat-pack’ houses could provide a short-term injection of new housing stock.

Mr Herwitz suggests this is the obvious route for people invested in supply.

“If you ask everyone in charge of supply what’s the problem, there’ll say supply. That doesn’t mean that’s the correct solution,” he said.

“Classifying this as a supply problem is a misnomer, believing that if we just build more it’ll be better. 

“What we really have is a consumption crisis. People are consuming the available supply in ways that are unheard of,” he said, highlighting the fact that more people are working from home, and repurposing spare bedrooms as office space.

“When we shift from all of those office buildings to home, there are less places to sleep," said Mr Herwitz 

Pictured: Local market properties are currently starting at around £1,400 p/m and have more than thirty people applying at a time.

Mr Herwitz also suggests the push to build could actually see Guernsey lose money, as you increase the spend off island.

“If you harp on about supply, you’re saying Guernsey money is going to leave the island for bringing in supplies to build houses, and those houses will most likely be bought from mortgages not necessarily from Guernsey-based banks, the interest from those mortgages will then leave Guernsey,” he said.

“So, you can see that leaning on a supply problem will also lead to money exiting the island – you don’t want to pick a social policy that leads to an exodus of funds.”

So, what’s the solution? There are many ways this could be avoided, and numerous policies could be chosen to promote best use of bedroom space, according to the data scientist. 

“It wouldn’t be difficult for Guernsey to pass protections where landlords must choose a tenant on their references alone and can’t see the full number of people looking at their property.”

Pictured: Mr Herwitz also suggests the promotion of older people renting out ‘dead-space’ in their homes.

Guernsey faces a monumental task is sorting out the housing crisis and Mr Herwitz isn’t the only person throwing ideas around; from levelling Castel Hospital, long-term winter lets, campervans, and ‘flat-pack’ houses.

However, he suggests it would be prudent to take a step back and possibly look at the situation from another angle.

“When everybody shares one perspective only, for example, build more, that becomes the window that everyone sees through, but realistically, that’s not the answer.

“At least, it’s not the only answer.”

You can listen to our full podcast with Mr Herwitz HERE.