Is this how to deliver a ‘One Nation’ housing policy?

Will Policy Exchange still be the go-to think tank for housing policy under this government as it was for Cameron’s? The latest contribution to the post-Brexit housing debate comes from Alex Morton, formerly of PE and behind several of the ideas that the last government adopted, notably the sale of high-value council houses. When he left PE in 2013 he moved to No.10 as housing adviser, until April this year when he jumped ship to become a lobbyist.

His advice to Theresa May on delivering her One Nation housing policy will, however, probably be ignored. In a rambling piece that’s riddled through with his distaste for local government, Morton offers few new ideas and is largely negative. His first point, that ‘the key structures are broken’ is hardly an inviting one, especially as it turns out that the main villains of the piece aren’t (say) developers who build at a pace that suits their profits but are – yes you guessed it – local authorities. And their main failure is to create over-elaborate local plans that are invariably behind time and fail to prioritise housing. He claims that ‘over 300 councils failed to oversee delivery of housing need’, which means there are precious few that do.

This obvious exaggeration ignores the dual pressures that council planning departments face – to deliver plans and to administer development control – with steeply falling resources. In 2009/10, councils spent £2.3 billion on planning: spending is now less than half of that, at just over £1 billion. It is hardly surprising that many councils – particularly smaller ones – struggle to provide even the minimum service expected of them. Of course there is underperformance, and some councils have no doubt cut planning staff more than they should so as to maintain spending on, say, homelessness. But no government can expect to have a first class planning system when its resources have been decimated.

Morton’s ire is then turned on central government, for failing to introduce the reforms he thinks are needed. He offers grudging praise for some of the changes to the planning system ‘since 2015’, but doesn’t acknowledge that planning policies about housing (especially affordable housing) have been the subject of constant tinkering for the last five years, which has hardly helped to achieve consistent decision-making. In any case, firing random shots at the planning sector is hardly helpful to a government looking for ‘One Nation’ policies.

Morton’s dislike of councils extends, too, to housing associations, who are said to gobble up twice as much grant to build rented homes as the government now spends on shared ownership properties. He ignores the savings in housing benefit this achieves, despite there now being plentiful sources of research to remind him. But he gets his sums wrong anyway – the government is planning to spend £4.1 billion to build 135,000 homes for shared ownership, that’s an average grant of £30,000 a piece compared with £27,800 for Affordable Rent dwellings in the current programme that’s being run down.

To be fair, he makes the worthwhile point that stoking up demand (as the previous Chancellor did) is unlikely to stimulate more supply. But he seems to think that councils could secure much more private development even though there is little plausible evidence that councils in general (as opposed to specific cases) are frustrating developments that would otherwise take place.

At this point, Morton’s argument gets confusing, because although he seems to be opposed to measures that stimulate demand (like Help to Buy, presumably) he’s all in favour of more home ownership. This is because it is a) popular, b) what voters worry about and c) necessary for the very survival of the Conservative Party. He’s no doubt right about all these points. But a ‘One Nation’ policy surely (by definition?) has to be directed as much at those who can’t buy (however much they might like to) as to those who can, albeit with some help. The current policy is hugely unbalanced, as Red Brick has pointed out regularly, including as recently as last month. If Theresa May genuinely wants a policy that addresses a wide spectrum of needs, she needs to change the government’s priorities and recognise that many young households aren’t able to buy in any conceivable circumstances, in part because they have to spend so much on rent that they’ll never have the necessary deposit.

It just so happens that the new communities secretary, Sajid Javid, has the perfect excuse to reappraise the investment programme, given the likelihood of a post-referendum recession which will make it harder to sell market-oriented products and in which the construction industry may hit the doldrums. He’s just been sent detailed recommendations from the NHF and CIH on what could be done. Let’s hope he pays more attention to some of the advice he’s getting from those who want a more balanced programme and have experience of delivering one, even though their views are dismissed by Alex Morton as belonging to ‘vested interests’.

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Another day, another Housing Minister

You need all your fingers and toes to count the number of Ministers of Housing we have had in the last 30 years. The short term nature of occupancy of the job is one of the reasons we have had so few attempts to create an effective long term housing policy, just short-term stunts and attempted quick fixes. Under Labour, people shuffled in and out rapidly and the Tories have made an art of changing the Minister pretty much every year.

Now its Gavin Barwell, MP for Croydon Central, one of Theresa May’s last appointments on Sunday. Are there any grounds for optimism apart from noting he’s not Brandon Lewis or Kris Hopkins or Grant Shapps? Turning to trusty old Wikipaedia, he has at least a little bit of a track record in his new subject, but, worryingly, largely at Conservative Party headquarters and as a Party apparatchik. He worked on housing and was special adviser to John Gummer when he was Secretary of State for the Environment before moving on to wider political duties. He was also a Croydon councillor for 12 years. A genuine achievement as an MP was his sponsorship of the private members’ Bill to outlaw some forms of discrimination against people with a history of mental health problems, which became law in 2013.

Mostly a loyalist, Barwell has gone along with the policies of his predecessors. Some people have seen some hope of a slight change in direction in Theresa May’s speech outside Number 10, where she highlighted the need to unite ‘all our citizens, every one of us, whoever we are and wherever we’re from’. She promised to fight against injustice, and to promote the interests of ‘ordinary working class families’. Regrettably, her only mention of housing was the cost of paying a mortgage. And the cynics amongst us will remember Thatcher’s first words on the steps of No 10, quoting from St Francis of Assisi’s prayer:  ‘Where there is discord, may we bring harmony……..’ So, Prime Ministerial first words are often the opposite of what follows.

Barwell’s first tweets raised some hope of a more cooperative and considered approach to the job:  ‘Look forward to working with councils, housing associations, developers & investors to ensure we build the homes people need and deserve…’. But they all say that, don’t they?

The Government now has not a One Nation housing policy but a One Tenure housing policy

As Monimbo has showed clearly on Red Brick recently, (here and here), the Government now has not a One Nation housing policy but a One Tenure housing policy, committing vast sums to try to reverse the downward decline in home ownership, largely by boosting subsidies to demand rather than supply.

This short-term, expensive and economically illiterate approach is throwing away the opportunities that exist to use the resources and powers available to create a balanced housing policy which looks to achieve a much faster rate of housebuilding across the board – market homes, intermediate homes including shared ownership, and social rent.

Thinking along those lines is the only way that Theresa May and Gavin Barwell have a hope of tackling the increasingly intense housing injustices that disfigure our country.

Will they rise to the challenge or will it be more of the same? My money, sadly, is on the latter.

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Councils could boost housing investment but they’ve been straitjacketed

While the prospects of a post-Brexit boost to public housing investment must have faded with Sajid Javid now in charge at DCLG, he could at least have a quick look at the mess that’s been made of council housing finance by departing Chancellor Osborne. In a report out yesterday, CIPFA and CIH show that the self-financing of council housing, which took place just over four years ago and was supposed to generate a huge boost in council house-building, has been systematically undermined by changes made by the Treasury that pay no regard to the promises made at the time.

Grant Shapps, the former housing minister, was much maligned by Red Brick, but at the same time we were always willing to give credit where it was due. Most importantly, he inherited the planned self-financing settlement for council housing from Labour minister John Healey, and he implemented it. Sure, some crucial features were changed, like the plan to let councils keep all capital receipts. But Shapps was strong enough to fight off the worst of the Treasury’s attempts to undermine the deal, and he rightly claimed the settlement was ‘intended to endure for the long term’. Soon afterwards, of course, he was replaced by a series of ministers who seemed to have little allegiance to the promises that had been made. Shapps himself – wittingly or otherwise – started the undermining process by ‘reinvigorating’ the right to buy. But much worse was to come, with a succession of changes to rents policy of which the worst was the latest – a cut of 1% in council rents last April, to be followed by three more 1% cuts at yearly intervals.

fig 6

The report shows how this has massively undermined the investment potential available to councils (see chart). In theory, if all of their spare capacity after 2012 had been invested in new housing, they could have built up to an average of 18,000 new homes per year, even within the borrowing caps that the Treasury imposed. But their capacity has been eroded, so soon after the settlement, to leave them able to build little more than 1,000 homes per year, more or less what they are doing now.

Of course this is a national picture but survey results confirm the trends at local authority level. Some LAs no longer want to build, and are prioritising paying off debt. But many councils, both big and small, are eager to add to the housing stock. Some are resorting to council-owned housing companies, outside their housing revenue accounts, as the only way to do so – but inevitably this means developing a mix of properties of which many will be let at higher rents or offered for sale. Building via housing revenue accounts is the best way to get new houses that can be offered at genuinely affordable rents.

If Theresa May’s government is minded to launch a public investment drive, it will find councils severely handicapped to help. Coinciding with the report, John Healey called for such an investment boost at this week’s CIPFA conference. He said there must be an end to constricting council’s capacity and ‘a change of direction that is both fast and fundamental’. Red Brick couldn’t agree more. The irony is many councils could respond if only their income were not being eroded by Treasury-imposed rent policies. While they would then increase their borrowing, it’s unlikely that they would need to breach the borrowing caps set in 2012. And they wouldn’t necessarily need grant, either. Fundamentally, council housing is still a self-financing business with a healthy income and low debts (much lower per unit for most authorities than is the case with developing housing associations). While councils cannot soon be expected to reach the dizzy heights of new building that many hoped for four years ago, they could certainly build at twice or three times their current level.

Red Brick has no idea if Grant Shapps is on speaking terms with Sajid Javid, but if he is he could pass on a quiet tip: get Phillip Hammond to quietly drop one of his predecessor’s many ill-thought-out policies, and you could spark a building programme by councils that will help tackle housing needs and boost local economies, with minimal impact on public funds.

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Can this continue?

Briefing cover

More than £42 billion of government money to prop up the private housing market, and just £2 billion invested in affordable rented housing: even before Brexit this looked like a huge distortion, now it simply looks absurd.

Most readers of Red Brick will undoubtedly be focussed on wider political issues than housing finance just at the moment. But the analysis carried out for the latest UK Housing Review Briefing Paper is a reminder of what is at stake. The Tory government is so obsessed with restoring home ownership to previous levels, and with ensuring that public money sustains the housing market, that it has cut its support for below-market rented housing to a derisory figure. In fact, the sums only just cover the commitments made in the now defunct Affordable Homes Programme that was to have run until 2019/20. To replace it, we now have a ‘Shared Ownership and Affordable Homes Programme’ that will run until 2020/21. But this has virtually no provision for below-market rented housing: it will, as its name suggest, focus almost entirely on shared ownership. In parallel, we have the £2.3 billion devoted to Starter Homes, itself only part of the total commitment to build 200,000 of this new type of product, most of which will be delivered via planning gain. So instead of being a reliable, continuing source of homes to let at social rents (or, at worst, at Affordable Rents), the planning system’s ‘affordable’ housing output will soon be another variant of houses for outright sale.

Readers might be forgiven for thinking there is a ‘now you see it, now you don’t’ quality to these commitments, however, for a range of reasons. One is that the products are either untried (Starter Homes) or else have never been built on the scale now proposed (shared ownership housing). Other commitments like the Help to Buy ISA and the (new) Lifetime ISA are dependent on take-up and whether potential savers believe they will really help them overcome what the UK Housing Review calls the ‘deposit barrier’ to home ownership.

The Briefing Paper flags up two government targets that were difficult to meet before Brexit and may now prove wildly unrealistic. First is the aim to help an extra million new first-time buyers into the market. Even the last English Housing Survey showed numbers going down (564,000 in 2014/15, down from 617,000 the year before). As the Briefing says, ‘The reality is that younger households are less able and less willing to buy a first home.’ The Legal & General’s report The Bank of Mum and Dad suggests that home ownership in the UK will actually fall further, to only 55% by 2025.

The second government target is the aim of building one million new homes over the five years to 2020/21. Oddly, Brandon Lewis, who appears to still be the housing minister, denied that this was a target only yesterday, barely a week since (as part of the Remain campaign) he was talking about the target’s importance. Even the government website quotes Lewis referring to the ‘aim,’ ‘intention and ‘ambition’ of building one million new homes. (We might add that, by denying that these terms equate to setting a ‘target,’ he indulges in the sort of evasiveness that has helped undermine respect for politicians and deliver the referendum result.)

Overall, as the Briefing Paper says elsewhere, even this government’s massive market intervention represents only a relatively small part of total market activity, so that for example despite Osborne’s moves to make the tax system less favourable to buy to let landlords, the rented market is still a lucrative one for many would-be investors and is likely to continue to compete strongly for properties that might otherwise be available to first-time buyers.

Looming over the whole of the housing budget, especially those parts that have yet to come on-stream, is of course the referendum result and its likely effects both on the public finances and on the housing market itself. Brandon Lewis would have been received more warmly at this week’s Housing 2016 conference in Manchester if he’d been honest and said that an extra one million homes was the target, but he now simply has no idea if it can be delivered and, indeed, whether the £40 billion plus stimulus package can be maintained. To repeat an over-used cliché, we are in uncharted waters: how long before the government’s housing budget shares the fate of many other projects that the FT thinks are now likely to be ditched?

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More evictions, more homelessness: what’s the government’s response?

Every new set of homelessness figures shows that the ending of a private tenancy is the biggest reason why people are losing their homes. It’s becoming a genuine emergency: in England it accounts for 30% of homelessness acceptances, rising to 40% in London. Ending of private tenancies accounts for practically all of the growth in homelessness since its last low point in 2009. What’s been the government’s response?

You would think it might try to find out why landlords see the need to force out over 12,000 more people from their homes than was the case only seven years ago. Or why over a third of a million were under threat of eviction last year. It’s not difficult to think of possible reasons: rents being raised faster than people’s ability to pay, social security cuts meaning that low-income tenants can no longer afford their rents, or greed by landlords who simply want to end a tenancy so they can get tenants who can afford higher rents. A reasonable response might be to investigate how to change landlords’ behaviour, using legislation if necessary, to give more time to tenants having payment difficulties and making it less easy for them to be converted into a responsibility (as homeless) for local authorities to deal with. After all, mortgage lenders are now better equipped than they used to be to help people deal with their debts, and this shows in record low mortgage repossession figures. In Scotland, landlords can no longer end tenancies on a whim but need specific reasons, like selling the property.

Another response would be to question whether further tightening the screw of so-called ‘welfare reform’ is really a good idea, since it’s pretty obvious that measures like the freezing of local housing allowance rates, further reducing the ‘benefit cap’ on out-of-work tenants, and withdrawing support completely from the youngest tenants will simply make matters worse as they take effect over the coming twelve months.

But no, the growing problem is being blamed on local authorities. After pressure from landlords, councils who insist on tenants waiting until they actually face eviction before they are recognised as homeless are being told to act much earlier on. Housing minister Brandon Lewis says he’s ‘working to prevent more people from becoming homeless’, but his priority is to get tenants who’ve become an inconvenience to private landlords to be rehoused quickly, thus relieving landlords of ‘significant costs’. It follows ‘a large amount of correspondence’ from landlords, complaining that ‘an alarming number of private tenants are being told by their local council to ignore eviction notices’. The National Landlords’ Association worries about ‘vulnerable tenants’ waiting for assistance from local authorities, but doesn’t ask whether perhaps their landlords share some of the blame for their vulnerability. The NLA will no doubt be opposed to Olly Grender’s Renters’ Rights Bill, currently in the House of Lords, which offers some of the protections for tenants that Brandon Lewis might consider supporting if he were seriously looking to tackle the main cause of homelessness.

Now of course it is also true that local authorities should help people as soon as possible and some are, no doubt, guilty of trying to minimise the numbers they are dealing with as homeless. But Lewis makes no acknowledgement at all of the extreme pressures they are under, especially in London, or of the extent to which their workload derives from private landlords’ actions. His letter makes not even a passing reference to these pressures, currently resulting in record use of temporary accommodation, and in more people being placed ‘out of area’ because of the shortage. London councils are spending nearly £700 million annually on temporary accommodation. If the available spaces are full, if councils have already exceeded their annual budgets, and if homeless families can only be put in expensive private lettings or else moved out of the area completely, some element of demand management is bound to be occurring.

While homelessness grows remorselessly, and private tenants are the ones most likely to be vulnerable to it, Brandon Lewis applies a sticking plaster to the haemorrhage. Meanwhile the Treasury has halted the Affordable Homes Programme, so as to switch all remaining funding away from social renting and into schemes to support home ownership and the private market. How many of the spending programmes announced since last year’s election will ‘prevent more people from becoming homeless’, which is what the minister says he wants to do? Does he think homeless families will rehouse themselves by buying starter homes?

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Solving the land problem: Tesco and car parks

We are constantly told that a shortage of developable land is a primary reason for the shortage of homes. It is the biggest part of the case, for example, for building on the green belt. But there are two things about land use, especially in London, that amaze me.

First, there seems to be a perverted principle that, while people have to be stacked on top of each other in multi-storey buildings, motor cars should have their own patch of sky above them. Secondly, that so much of our urban land is used by single-storey structures – look in particular at all of our supermarkets and business parks.

The picture below illustrates a typical scene anywhere in London or indeed any other town or city.

vacant-car-parksYes, it’s a large open-to-air car park surrounding a single storey supermarket. There are thousands and thousands of these all over our urban areas. Yet it doesn’t have to be like this.

My first experience of a more radical use of land like this came in Tottenham in the 1970s. There, Tesco and Haringey Council came up with an intensive scheme, pictured below, which essentially had 3 layers: the shop on the ground floor, car parking above, and housing above that. These were council houses provided to local people desperate for a home, around 50 of them from memory. They were built in the form of an inward-looking pedestrianised street: it was only when looking out from a window that you would realise that you were off the ground. Access for residents was separated from access to the shop. The only specific problem I remember emerging from managing the scheme was a tenant letting their bath overflow and water seeping down into the store below – but that is a common-enough problem in any multi-storey development. Haringey was on a good run at the time: I also recall an excellent housing development above and alongside the Wood Green Shopping City, done I believe in conjunction with Metropolitan Housing Trust.

tesco south tottenham1My feeling at the time was that this would become the norm for retail development in London, but it hasn’t. I know of another scheme, also Tesco, in Earls Court (also pictured) which has a brilliantly-designed Notting Hill Housing Trust development on top, with separate access from the rear. Great, intensive use of precious land in a dense urban area. I understand Sainsbury’s also have some similar schemes.

tesco earls courtMany of the large chains of retail stores have suffered losses in recent years. Partly this is due to the general economy, partly to growing competition, but there has also been a change in shopping habits. We are now more likely to stop off at our local Tesco or Sainsbury’s each day and less likely to go to a big store in the car for a traditional weekly shop. This combination of economic pressures inevitably means that the big chains are reviewing their holdings of land and buildings. Tesco are closing stores and have abandoned plans for new large stores. Not only do they now have over 100 sites in mainly good locations at their disposal, they should also be looking at their entire holding from the perspective of South Tottenham and Earls Court.

The examples show that retailing and housing could be compatible uses of the same site, especially if the scandalous under-use of land for car parking is taken into account. I can’t see why every large company with single-story plus car park premises, from Tesco to B&Q to PC World, shouldn’t be reviewing its holdings. Personally, I think it would be great to live above one of London’s many garden centres or its car park.

The underlying point is that you can find land if you look for it. It seems not to have attracted much attention before: a search of the GLA website reveals no information at all about the conversion of free air above car parks and retail premises to housing. Maybe someone somewhere has done some research, maybe people in the big retailers are beavering away on it right now. One of the few articles on this topic – a post by Paul Wellman on the excellent ‘The Pint of Milk Test’ blog (from where I borrowed the car park photo) – suggests that the idea is gaining some traction.

Crucially, this is an opportunity where the new pro-active Mayor of London, Sadiq Khan, could provide a hefty push rather than wait for the market to take its course. And there might be a strong case for a hefty tax on free-to-the-sky car parks. That might just bring a few forward for development as new homes.

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So why are we so weak?

At the recent annual general meeting of the Labour Housing Group, addressed by Shadow Housing Minister John Healey MP, there was a general air of disbelief that housing policy could have become so perverted that the most extraordinarily damaging legislation – the Housing and Planning Act – could be passed into law. We have arrived at a position that even the most alarmist commentator would not have predicted as being possible in 2010. We have regressed so far in this Parliament that it is even possible to begin to feel nostalgic about the reign of Grant Shapps as Housing Minister.

Several people in the meeting praised the sterling opposition put up to the Bill during its passage, in particular by Lord Kerslake and others in the House of Lords. Some amendments were achieved, but the Government pushed the Bill through the Commons without serious fear of defeat, helped by the fact that it was England-only legislation. There was little sign of rebellion on the Tory benches. Yet in recent times the Government has faced defeat on a wide range of other policy issues and has backed down humiliatingly on a significant number of them. Why not housing? The point I made was that, if we want to make the case powerfully for a decent housing policy, we have to start by challenging ourselves: ‘why is the housing sector so weak?’ and ‘why is the progressive housing case so lacking in influence?’

Since then I have been impressed by two brilliant housing blogs that addressed similar and overlapping themes. In a sweeping and comprehensive restatement of the case for genuinely affordable housing, called The Theory of Everything, Colin Wiles wrote: ‘I have a unifying theory that the housing crisis underpins almost every social, political and economic problem of our time.’ He argued that the core solution – investment in social rented housing – is ‘staring us in the face’. Colin concluded that making the case for housing as the fundamental bedrock of a decent society ‘is the challenge for our sector. We have to make the case for change and if we don’t do it, who else will?’

On Shelter’s excellent housing blog, in a very perceptive post Kate Webb asked ‘why was housing such an easy target?’ and pointed out that, despite almost universal condemnation and several rounds of Lords’ defeats, ultimately the Government ‘felt comfortable enough to stand firm with its vision for social housing’ despite U turns on everything from tax credits to forced academisation to the Human Rights Act. We are all influenced by anecdotal evidence and Kate recounts a radio phone discussion in which ‘starter homes’ were seen as a fantastic idea (despite the maths) and social housing was seen as for people on benefits. ‘Bluntly put’, she writes, ‘there was too little political pain attached to squeezing social housing when done in the name of promoting home ownership.’

So why is the case for social housing so weak? I suspect there are a number of inter-linked reasons but if I was forced to sum up my view in one sentence, I would say that we have been losing the battle to control the political narrative around housing for 40 years. The winning side – private housing good, socialised housing bad – has had it mostly its own way and trying to understand this might lead us down a better path.

First I would mention the media. Some people think I am obsessed by media bias, and it has been a hobby horse of mine since I worked at Shelter in the 1980s. Then, there were a similar number of people with mortgages and people who paid rent. Yet changes in mortgage rates were always top item on the news and changes in rents rarely if ever got a mention. Peoples’ views are partly dependent on the information they receive; if that wasn’t true, we wouldn’t have such a huge propaganda and advertising industry. Bias against ‘subsidised’ social housing and in favour of ‘stand on your own feet’ home ownership has been systematic and all-powerful. The confluence of interests between the bulk of the written media and the Conservatives has driven popular political discourse around housing. I am often told that I am ignoring the fact that people get most of their information from TV and radio and the internet these days, as if these were neutral, but as a big BBC fan it is obvious to me that their agenda is strongly driven by what appears in the predominantly right wing papers – and most influential people across the media identify mainly with home ownership, a little with private renting, and not at all with social renting.

Socialised housing pays for itself in the long run but building it needs capital subsidy up front. Social housing investment has been a major victim of the economic policies adopted by Governments since Healey and the IMF crisis in 1976 and the prevailing view that public spending is a drain on the economy. Behind the economics lies the politics: while direct public housing investment has been slashed, there have been waves of very expensive subsidies to homeownership in the form of tax reliefs, discounts on right to buy, and now direct subsidy for starter homes. Demand subsidies like these tend to reinforce prices. The truth is that private housing wealth accumulation makes a significant group of voters feel happier and more secure, even if it is ultimately at the expense of everyone else. Keeping house prices rising and offering more people the chance to jump on what seems to be a gravy train buys votes.

On the ‘progressive’ side we have undermined our own case for more social housing through self-inflicted wounds. It was probably just bad luck that the greatest period of investment in social housing, in the 1960s and 1970s, coincided with the worst period of design and construction, leaving a legacy that is not as bad as it is painted but is very challenging nonetheless – and easy to stereotype, even in the Guardian. Large parts of the sector have gone along with the wider attack on ‘welfare dependency’ and have failed to challenge the ‘scrounger’ narrative which the right has been so keen on. Social housing was frequently condemned as the enemy of aspiration. As a result, the door was opened for the monster Duncan Smith. It took a very long time to reform the paternalistic and bureaucratic mode of housing management (currently making a comeback sadly) and to appreciate that some of the things people liked most about home ownership – security, control, self-determination, mobility – could be replicated in social housing through progressive management models.

If the Conservatives have grabbed their opportunity for ideological purity with both hands, Labour’s approach has been unhelpfully ambivalent. Like trades unions, building council housing was not a ‘New Labour’ thing. Although vast improvements were carried out to the council housing stock under Blair and Brown, a genuinely great achievement, money was only available if you were willing to move away from the traditional council housing model. The role of building new affordable housing was given to housing associations, but on a much reduced scale despite their hubris. A hopelessly inadequate number of new affordable homes were built under Labour – until Brown’s Keynesian response to the financial collapse in 2008 – and in the event many of the biggest developing associations had lost sight of their mission to help the homeless and badly housed, becoming equally ambivalent about social renting and obsessed with home ownership and market-related solutions.

The housing lobby has also failed. It was once a progressive force, building a case based on an assessment of the housing needs of people on low and moderate incomes. There are still many brilliant people working in it, but in terms of raw influence it is a shadow of its former self. Some parts of it, especially the producer lobby the National Housing Federation, have been slowly migrating away from being one of us to becoming one of them. Their well-funded big effort before the 2015 election, Homes for Britain, couldn’t bring itself to make the case for social renting rather than vaguer notions of ‘affordability’. In its 50th year, and despite a lot of good work, Shelter’s impact now seems very modest. New campaign groups have emerged, often with a burst of publicity, like Generation Rent and a plethora of local groups, but at a national level few voices argue unambiguously for social rented housing. By and large the voices of consumers – by that I mean both existing social tenants and people in housing need who want to be social tenants – are totally unheard.

To get to the point where no Government would dare bring in an Act like this one we will have to climb several mountains. We will have to challenge prejudice and demonization, we will have to contradict the view that all public borrowing and spending is non-productive, we will have to contest the view that housing policy can be reduced to promoting a single tenure. We must stop being embarrassed by council housing and other social renting in the face of grotesque stereotyping. Even if we manage to build more homes in the future, we must shed the ambivalence: because we know that the needs of the homeless and badly housed will only be met by a return to the provision of social rented housing on a large scale.

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More lazy sterotypes

There are few things that irritate me more (although Boris Johnson and Iain Duncan Smith irritate me the most) than lazy stereotypes about council housing estates and council tenants. Sadly, an article this morning in the Guardian by Rhiannon Lucy Cosslett  has got me going.

If I was to write a spoof article about what was wrong with council housing, it would have two elements: the scrounging anti-social occupants and the ‘brutalist’ architecture of post-war estates.

In the section on brutalist architecture I would bring the following sterotypes into play: some of the settings in the film Clockwork Orange, the iconic Trellick Tower in west London (unfortunately the Red Road flats in Glasgow are no more), and I would quote the awful writings of Dominic Sandbrook. More recently the film High Rise could get a mention. I would pull in key phrases, things to do with broken lifts, the smell of urine, and fear of dark corners. The word dystopian would have to appear.

Cosslett ticks all of these boxes in one short piece.

Like the demonization associated with scroungers, the image most people carry of council estates is strong. You just have to look at the estates that appear occasionally on EastEnders to see what I mean about stereotyping (despite the fact that all the real thugs and crooks are owner occupiers in the Square, step forward Phil Mitchell). The conventional wisdom about council housing is extremely damaging to the case for a progressive housing policy. This helps achieve the political objective of making council housing sound and appear unappealing. Council housing has failed, hasn’t it? Time for a free market solution.

The real story is different and I would recommend anyone seeking the truth and a genuinely balanced assessment to follow the extraordinary website of @municipaldreams here. Properly researched histories of estates around the country, warts and all – but a positive picture overall.

I have worked on many council estates over the years. Some have had real problems, usually due to appallingly bad building standards (by construction companies that were never held to account), child occupation densities that were too high, poor amenities in and around them, and atrociously bad housing management done on a shoestring. And some of the estates with the worst problems I encountered comprised houses not ‘high rise blocks’.

But overall my experience of being brought up on a council estate (in Newcastle) and of working on many since has been extremely positive. The homes are generally of a very high standard with generous space and amenities. There are often strong communities – with a lot of mutual support groups – which often only become apparent when demolition plans come along. Best of all, these homes have helped transform the lives of millions of people. The reform of housing management that took place in the 1990s and 2000s, and the rise of tenant involvement, had a very positive impact. And – until 2010 – gradual improvements in pay and in both in-work and out-of-work benefits, especially for the elderly and disabled, reduced poverty. Many of the worst problems have been tackled through better management and social investment, the removal of some of the most badly constructed blocks, and the physical modernisation brought about under Labour’s decent homes programme.

Look around the housing market and see how much people are willing to pay to buy ex-council homes, including high rise. Prices between half a million and a million pounds are not uncommon in London now.

If the Guardian wants to provide decent coverage of the history and quality of social housing, I would propose giving Municipal Dreams a regular column.

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Council housing’s brief Spring

There are not many words of praise for former housing minister Grant Shapps in the pages of Red Brick. But in comparison with current minister Brandon Lewis, the tenure of the coalition’s first housing supremo now almost looks progressive and enlightened. We don’t know if Lewis regards his Housing and Planning Act, just given Royal Assent, as his crowning achievement, but he must know that if his colleague Shapps offered the prospect of a new Spring for council housing, the Act will ensure that it quickly turns into a chilly Autumn.

Shapps’ achievement was to ensure that the deal under which council housing became self-financing, started by Labour minister John Healey, actually came to fruition only two years after the coalition took power. Admittedly the deal wasn’t as good as Healey’s would have been, but many were surprised that it was done at all and Shapps brought reluctant Tory councils into line, making them all restructure their debts on the same day in April 2012. The majority of councils took on new debt, a minority had debt paid off, and all were left with at least the potential to keep up their investment in their existing stock. A succession of reports, invariably discussed in Red Brick, began to explore the possibility of a very significant increase in the output of new council houses. Grant Shapps claimed that he’d made ‘a reform intended to endure for the long-term’.

It’s now obvious however that the undermining of the deal, though now severe and probably terminal, actually began under Shapps’ stewardship; it continued when Messrs Prisk and Hopkins briefly became his successors. It was Shapps that ‘reinvigorated’ the right to buy, raising discounts and reducing qualifying periods from the very date of the self-financing settlement itself. Sales accelerated, although in themselves they would only have damaged, not sunk, the settlement. But two other policy changes began which were to gather pace after the Tories won the 2015 election. The first, the following summer, was the ditching of the rents policy which underpinned self-financing and ensured councils’ ability to pay off the higher levels of debt that most of them now had. The second was welfare reform, with measures like the bedroom tax causing turmoil as tenants tried to downsize and others like the benefits cap making it difficult for tenants to avoid getting into arrears. Instead of increasing, council rental incomes started to look very uncertain.

When Brandon Lewis was reappointed in May 2015 almost his first act was to agree to the Treasury tightening rents policy still further, by requiring councils to make cuts of 1% each year for four years. He’d already agreed (presumably) to the Tory manifesto commitment to launch the right to buy for housing association tenants, with the deposits financed by forcing councils to sell off their better housing stock. When the Housing and Planning Bill came out last October, the two measures that were most damaging to the April 2012 settlement were already in it: the extended right to buy and the pay-to-stay scheme to penalise slightly better-off tenants and encourage more of them to opt for right to buy. Extra measures, such as the ending of properly secure tenancies, would be added later and while they didn’t further undermine the financial settlement they certainly added to the damage being done to council housing’s attractiveness as a tenure.

Then, unexpectedly, there was the announcement that housing associations were likely to be treated as public bodies for accounting purposes. Suddenly the government, which had been indulging in a campaign against associations, was forced into giving them more freedoms and widening the gap (which in April 2012 had been narrowed) between their status and that of council housing. It has to be said that the NHF then had no qualms about accepting a deal over right to buy which both had distinctly better terms than council housing’s right to buy and ensured that any financial penalty fell on the council sector, not on associations.

In these circumstances it’s hardly surprising that councils have retrenched. Soon after the Bill came out I spoke to a housing director of one of the largest authorities who was starting to look at the implications of the coming legislation combined with the rents freeze. He said they would try to buy time by using their reserves, but if policies continued as they were within two years they would be making severe cuts: and this is a council which badly wants to build large numbers of new homes. Already the evidence is that councils are borrowing less money, rather than more. This has started to be reflected in new build starts. In 2014, councils started building eight times as many new homes as they did in the final year of Labour’s last term of office. But by 2015 the number of starts, which should have been increasing year-on-year if the settlement was leading to a sustained increase in new output, had actually fallen by one-third. It now looks as if we might be passing through the (very modest) recent peak of council house-building.

The prospects for the financial health of council housing by the time of the next election look very bleak indeed. John Healey hoped to base his promised commitment to build 100,000 new social rented homes on several years of increasing capacity in the council sector, the experience of housing associations that were still building homes to let at social rents, and a planning system that could still be used to ensure that developers contribute to affordable housing supply. None of these conditions will now apply by 2020. A future Labour promise to build large numbers of genuinely affordable homes will be even more challenging to carry out than it would have been in 2015.

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‘Balance’ – the new watchword for housing and investment policy

One of the constant refrains on Red Brick over the years has been the need to direct Government funding as far as possible towards increasing housing supply, which will help cool prices. We have argued that it is counterproductive to provide a) an ever-increasing amount of public money towards helping people to pay for homes that are too expensive and b) (even worse) heavy subsidies for demand that are likely to lead to an increase in prices.

My colleague Monimbo reported recently on figures compiled for the UK Housing Review which showed how the Government’s housing plans are now distorted massively towards supporting the private market and away from building affordable homes. The Review estimated that market support packages now total £43 billion whereas affordable investment totals only £18 billion. Investment in affordable renting has been cut back to zero if you exclude commitments from the last Parliament.

The Chartered Institute of Housing (CIH) projects that the current combination of policies will result in a loss of 350,000 social rented homes by 2020, a fall of 9 per cent from 2012. The ending of direct investment in social rented homes, and now even in unaffordable ‘affordable rent’ homes, means that ‘section 106’ deals are the last significant source of social rented homes. This source has been reducing and will shortly be virtually removed as ‘starter homes’ get priority. That means any future social rented homes will rely on housing providers’ internal funding, and there isn’t much interest in doing that.

So far, so disastrous. But deep in the financial pages over the past thirty years there has been another concern about the impact that an over-reliance on home ownership within housing policy has on the wider economy. Subsidy over decades and a lack of building has brought about huge price inflation, as we are all aware. This week, Kate Allen, writing in the Financial Times (paywall), discussed a study by the NIESR (who produce an excellent periodic housing market commentary, see here) which argued that rising house prices have been driving down long-term saving rates. In short, people who buy their own home tend to save for their old age at a lower rate, putting their funds into paying their mortgages and growing their personal housing wealth. One outcome is that their pension income is 15% less on average, another is that there is less funding available to pension funds to invest in more productive sectors. The research suggests that policies that prioritise home ownership could have negative effects for other parts of the economy.

The Government’s rather desperate attempts to promote home ownership come under particular scrutiny. Allen quotes Angus Armstrong, NIESR’s director of macroeconomics, saying: “The more you tax incentivise [home ownership], all you are doing is whacking the price up and the more you do that, the more money it is taking away from other parts of the economy. I am not against home ownership but I am against the subsidies we keep pouring into it.

The implication of the research is that the UK needs a less skewed and more balanced approach to saving and investment which supports the productive economy rather than static wealth creation. Red Brick has often argued that we also need a balanced housing policy, one that aims deliberately to provide homes across the income distribution in a variety of tenures, rather than the ideological pursuit of a single tenure to the benefit of  narrow income and demographic groups. It seems that ‘balance’ might be the new watchword.

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