By George! Houses Are Unaffordable!

John Dewey called his ideas “one of the great philosophical contributions of the 19th century.”

Leo Tolstoy lauded his work as a moral and economic solution to inequality.

In 1892, Alfred Russel Wallace declared his book Progress and Poverty “undoubtedly the most remarkable and important book of the present century.” Wallace had earlier helped develop and publicize The Origin of Species.

Albert Jay Nock wrote that anyone who rediscovers this man and his work will find that he “was one of the first half-dozen minds of the nineteenth century, in all the world.”

Who could this intellectual titan be?

Born on September 2, 1839, in Philadelphia, Henry George emerged from humble beginnings to become one of the most influential thinkers of the 19th century.

Leaving school at 14 to work as a printer’s apprentice, George’s early encounters with poverty and inequality shaped the ideas that would later define his legacy.

George’s magnum opus, Progress and Poverty, addressed a still-relevant paradox: How could societies become wealthier while leaving so many people behind? This bestseller sold millions of copies worldwide, catapulting George into global renown.

The book’s central argument was the concept of a “single tax” on land value, which George believed could eliminate poverty, curb inequality, and fund public goods—all while spurring economic growth.

George’s theory was simple but radical: unlike labor or capital, land is a finite resource, and its value should benefit society, not just the landowner. His critique of speculative land practices and their role in perpetuating economic disparity was ahead of its time, resonating in modern debates about housing crises and wealth inequality.

Henry George wasn’t just a thinker but a man of action. In 1886, he ran for mayor of New York City under the banner of the United Labor Party. While George didn’t win, his campaign against corruption and economic injustice shook the political establishment. His message resonated in America and globally as he toured the world lecturing on economic reform.

Why George Matters Again

Henry George died on October 29, 1897, while campaigning for a second mayoral run, but his ideas endure and may now come to the forefront again. His proposed land value tax is a perennial topic in economic and policy debates, championed to tackle modern housing crises and wealth inequality.

George’s story is a reminder: great ideas don’t fade—they wait. And in today’s world of housing bubbles, soaring rents, and widening inequality, it seems George’s moment may finally be here.

The 19th-century economist and social reformer warned of the perils of land speculation and its potential to wreak havoc on economies. Fast forward to today, and his insights resonate more than ever, especially when we examine the housing affordability crises gripping major cities worldwide.

George’s Key Idea: Land Speculation and Economic Turmoil

George believed land was limited and necessary and shouldn’t be used to make a quick buck. He argued that when people or companies hoard land to profit from rising prices, it leads to fake price inflation, making housing too expensive for the average person. George thought this behavior would result in an unfair economy and could cause financial meltdowns.

It’s easy to see how this pertains to the present.

Modern-Day Realities: A Stark Reflection of George’s Warnings

Let’s delve into some contemporary statistics from major cities that highlight the severity of the housing affordability crisis:

• Sydney: With a median multiple of 13.3, Sydney ranks as the second least affordable housing market globally after Hong Kong. This means that the median house price is 13.3 times the median household income, placing homeownership beyond the reach of most residents.
• Vancouver: Vancouver has a median multiple of 12.3, making it the third least affordable city. Speculative investments have driven prices and sidelining local buyers.
• Auckland: New Zealand’s first city has a median multiple of 10. Why Auckland? What’s there?
• Melbourne: With a median multiple of 9.8, Melbourne is grappling with severe housing unaffordability.
• Toronto: With a median multiple of 9.3, Toronto’s housing market is considered “severely unaffordable,” reflecting a significant gap between property prices and local incomes.
• London: The UK’s capital has a median multiple of 8.2, highlighting the challenges residents face in securing affordable housing amid soaring property values.
• New York: The New York metro area has a median multiple of 5.4. However, it fares slightly better than other global cities if you like living in a shed-sized room.

The Consequences: Economic Disparities and Social Strain

These statistics reveal a troubling trend: As housing becomes unaffordable, economic inequality widens. Middle—and lower-income families are priced out of the market, leading to social stratification and economic instability. Moreover, high housing costs stifle economic growth, as individuals have less disposable income for goods and services.

George’s Remedy: The Single Tax

Henry George advocated a “single tax” on land value to curb speculation and promote fair distribution of wealth. By taxing the unimproved value of land, the incentive to hoard property for speculative gain diminishes, stabilizing housing markets and making homes more affordable.

It’s a nice idea, but the root cause is too much money chasing too much real estate, which means central banks. As long as central banks keep printing, this problem won’t be solved.

Still, George was onto something. At least he got the unaffordability right and offered a solution.

Wrap Up

The housing crises in cities like Sydney, Vancouver, and others call for revisiting George’s ideas. Addressing land speculation through targeted taxation may be a pivotal step toward mitigating these modern real estate catastrophes and fostering economic equity.