What are housing associations for? (part 4)

I have been taken to task (gently and politely) on the Guardian website by Brendan Sarsfield, the chief executive of Family Mosaic and current chair of the G15 group of large housing associations, for my blog criticising housing associations for their role in the ‘Affordable Rent’ programme and, more broadly, for losing touch with their mission to house people in the greatest housing need and the homeless.

To recap, my piece supported comments made by Tony Stacey, the chair of the Placeshapers group of housing associations, who protested about housing associations ‘walking into acquiesence’ with the Government’s (unaffordable) ‘Affordable Rent’ regime – ‘the wretched thing’ as Tony called it.

I went further and argued that the industry had more to explain away than a naïve acceptance of the Government’s agenda; some leading lights were ‘complicit’ in the development of the policy in the first place. Market-related rents, reduced security and greater ‘conditionality’ on tenancies is exactly what some key people in the sector have argued for. For years they have been walking away from social rented housing, let on the basis of need, on secure terms and with affordable rents, preferring to provide more diverse products for a wider range of customers. They have stigmatised tenants by associating social renting with the ‘dependency culture’ and justify themselves by claiming to be on the side of ‘aspirant’ people who want to become home owners. In my view they have, in the process, lost touch with their mission to assist those in greatest need and the homeless. Some associations have become obsessed with building for its own sake, badging themselves as developers or regeneration agencies.

Brendan argues that successive Governments have reduced funding for social housing since the 1970s, which I fully accept, but there is a difference between stretching the financial model by reducing subsidy and ending it. He says that associations accepted the ‘AR’ model because it was that or nothing. When it was introduced it was common for people to say that AR was ‘the only game in town’ but the product is hopelessly unaffordable in high rent areas and the associated requirements to sell property and to ‘convert’ a share of existing social rented homes to ‘Affordable Rents’ on re-letting are extremely damaging. The Government (and the London Mayor) were (and are) desperate to keep up the number of ‘affordable’ homes being delivered; a principled refusal by the sector would have forced concessions.

Some associations were reluctant participants and have done the minimum they think they could get away. But others (and indeed some councils) were dead keen and more than happy to deliver this product.

I accept what Brendan says that associations like his have tried to minimise the impact of AR on residents, but that is not universal. He argues that, if associations had gone as commercial as I claimed, they would have charged the full rent and not built any social housing at all. The point is, some have charged the full rent and some have virtually ended building for social rent. Brendan believes they made ‘sensible, practical decisions driven by our longstanding social values’. It is the case that in London the average rent is 65-70% of market – but some of the contracts have rents at 80%. Not much mitigation there.

Brendan’s piece and my blog both suffer from the difficulty of trying to generalise about housing associations and their motivations when they are very diverse – and very secretive. Looking at a selection of their websites to find information about their development programmes, it is impossible to get any worthwhile evidence. They tend to have boastful pieces about how many homes they are producing in total, and PR pictures of individual schemes, but they never say how many of each tenure they are producing (market sale, shared ownership, AR, social rent). None of the ones I looked at even admitted that they are ‘converting’ social rented homes to ‘Affordable Rent’, nor do they provide much information about their market sales. Given that the programme information produced by the funders HCA and GLA is also very poor, it is hard for any commentator to compare associations’ strategies and performance. Too often they hide behind commercial confidentiality when in fact it is concealment and a lack of transparency and accountability.

But the thrust of my blog was that the AR abomination is precisely what some in the housing industry have argued for in the past. They have got what they wished for. Read for example, Kate Davies’ (CE of Notting Hill) Chairman’s (sic) introduction to the report of the committee she chaired, the ‘Housing and Dependency Working Group’ of Iain Duncan Smith’s think tank the Centre for Social Justice. The name of the group almost says it all, but her conclusion is: ‘social housing is not a desirable destination; private ownership is preferable to state provided solutions’. She and David Cowans of Places for People were also key advisers to the Localis think tank’s report on social housing which, I have argued before, became the road map for the Coalition Government’s housing policy.

I am on the record many times for supporting the provision of ‘intermediate housing’ and did some of the work that led to this being enshrined in Ken Livingstone’s London Plan. I have also supported associations building for sale to provide surpluses that can be used as cross-subsidy. But somewhere along the line, and in some places, the tail has started wagging the dog. Association must have, at their heart, a burning desire to meet the needs of the homeless and badly housed and not just to be big developers. The response to AR shows a dangerous drift towards the latter.

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3 Responses to What are housing associations for? (part 4)

  1. Alan Sinclair says:

    Well written. I have believed this ever since this iniquitous lie was first published. However, I must admit that I would have found it hard to stand up to the might of the establishment alone, but surely that is what the NFHA is for to unite and represent the sector? Have housing associations forgotten that they were, and could be again, a movement based on ethics and with aspirations to improve the world?

  2. Pingback: Home, security and locatedness | Alex's Archives

  3. Most things to excess are a bad idea. But here’s my take on the issue of “affordable” rents; the scepticism is rightly stressed.

    In my first stint as a councillor from 1982, I was struck by quite how low many council rents were. The consequences were inevitable – council housing, especially the low rise with gardens stock, was in considerabnle demand, and the Housing Revneue Account did not have enough revenue to maintain the properties in tip-top condition (how often do you hear that phrase used of ouncxil housing). The result was that both Conservative and Labour councils used capitalisation of what was in many ways arguably revenue spending. The knock-on of that was that the cpaital programme was not then sufficient for things like lift replacemernt/improvement. When Labour gained councils in the wake of the dubious charm offenseive Mrs Thatcher launched on the unsuspecting British public, they often came in on pledges to freeze rents which compounded the problems.

    My local Tories were probably not laone in seeking to raise rents to what they called policy rents. Whether this was the equivalent of what are now called market rents or affordabnle rents, I cannot say, but the programme of getting disparate rents up to a common and higher level was to be staged over years. Labour put a stop to that. As a result some other inconsistencies in rents persisted – sometimes you had identical properties, which had been let in different eras with the result that different rents, sometimes markedly so, were charged with no policy justification for the difference.

    My own view was coloured by the realisation that a high proportion of tenants were on Housing Benefit and were at no risk of exercising Right To Buy as they could never afford it. I thought it wiser to edge rents up annually, at a bit above the inlfation rate, confident that Housing Benefit would cover the increase. The outcome, had this been pursued, would have been greater revenues to ensure decent maintenance (and incidentally ensure the Direct Labour Organisation was kept fully busy to the point of taking on labour instead of shedding it).. We would have released more of our capital programme money for its proper purpose and perhpa even might have afforded to buy or build.

    How far up should rents have gone? I don’t know. The tenants who were working in jobs that took them above Housing Benefit entitlement had to be considered. I didn’t want to condemn them to tail-chasing existences of their income being eroded in real terms by the largest charge on it – their rent – moving away from them. No did I want them to “move on” so as to release the housing stock for the truly poor. I believed then and still do in mixed ohusing developments botrh within the stock and in terms of mixed tenure in streets.

    Some Housing Associations have gone way overboard in pursuing the same objectives as the government. Their boards have lost sight of the purposes for which they were established, and often have on sense of place. It’s come to a pretty pass when you hear Labour councillors having pops at the main local Housing Assoications as being remote, insensitive, inflexible, etc,; all criticisms levelled at local authority housing departments (often with good cause). HAs should self-examine and rediscover their mission.

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