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That Definition Should Be Framed To Endure For The Life Of The Plan, For ...

that definition should be framed to endure for the life of the plan, for instance through reference to the level of local incomes and their relationship to house prices or rents, rather than to a particular price or rent applicable at that one point in time'.
Affordable housing causes particular demographic cleavages such as the inaccessibility of certain areas of London to what are referred to as key or essential workers such as teachers, nurses, police officers and employees of the health and social services (Greater London Authority, 2005, Karn and Wolman, 1992; p.16). This problem of inaccessibility means that these groups are ‘priced out of the market' which means that on the salary that is typically earned by people in their jobs, it is difficult to find a house which is affordable (Karn and Wolman, 1992; p.16).
The problem of affordable housing has also defined as ‘infrastructure needs'. These needs have been elaborated on in the following way:
‘The changing face of London's population has immediate implications for every aspect of London life-education, health and benefits, transport and infrastructure, water and power, housing and leisure, employment and employability, competitiveness and cultureHousing provides a useful exampleas the population grows and as more and more people choose to live alone, the housing market bears the strain. London has 42 per cent of England's most overcrowded households, average house prices are beyond the reach of most public service workers, London needs an investment of more than £50 billion to provide 420,000 affordable homes to meet demand over the next 20 yearsroads are congested, rush hour trains and buses are over-crowded, schools are full and house prices are high. Building capacity, by simply fitting more into the space that is London, is perhaps the biggest immediate challenge.' (Greater London Authority, 2006; Section 2.8).
The problem of affordable housing and its theoretical underpinnings and context will be examined using qualitative research methods, as the next section, an economic analysis of the problem of affordable housing and who really wants it, will elucidate.
3.3 Economic Analysis of the Problem
The price of housing in a free-market economy is determined by supply and demand. The supply of houses increases, other things equal, as the price of housing rises. The reason for this is that as the price of housing rises, other things equal, producers will find it profitable to allocate more resources to the production of houses relative to the production of other things they might otherwise produce. However, as the price of housing rises, other things equal, the demand for housing falls. The reason for this is that as the price of housing rises, other things equal, consumers will find it advantageous to substitute away from the consumption of houses towards the consumption of other goods that are now relatively cheaper to purchase.


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