Who is affordable housing for?

Wide differences in approach to the future of social housing and of social housing providers were exposed in a Guardian Live online debate yesterday.

The debate, entitled ‘Who is affordable housing for?’ included a range of housing association representatives and other commentators. The first question that the title of the session begged was what is meant by the word ‘affordable’? Since the 2008 Act, affordable housing has come to mean anything that is sub-market. It has been applied by some authorities (notably the former administration in Hammersmith and Fulham) to include market homes for sale that have been discounted by a few percentage points. The master of spin, Grant Shapps, invented the phrase ‘affordable rent’ to describe his new programme of homes built with grant, but as he was cutting the grant by 60% they became anything but affordable in most cases. Most providers now count their output of homes using the word ‘affordable’ to include rented homes at up to 80% of the market rent, shared ownership which can only be afforded by people earning well above the average, and so on. This obscures the fact that very few of the homes now being produced are social rented available at traditional social rent levels and with security of tenure.

In the debate, several people argued that housing associations (and increasingly councils) have been pushed into being more commercial as capital grant has been removed, and that this move should be welcomed and embraced. I accept that, and have no problem with profit-making activities such as build for sale being undertaken in order to cross-subsidise new social rented homes. The problem is that over time the tail has started wagging the dog and it has an impact on the values and ethos of the organisation. Instead of being commercial to further the mission of the organisation – to provide genuinely affordable homes to people in housing need – the objective becomes development itself. In some cases, build anything anywhere as long as we grow. Associations start to see themselves and describe themselves as developers. I just do not see very many of them trying to squeeze every possible unit of social rented housing out of their developments.

The problem over the definition of ‘affordable’ housing is that it confuses the debate about who the homes are for. Some participants talked about the fact that the housing crisis has plunged many more people, higher up the income range, into housing need, and that agencies should therefore offer a wider range of products geared to meeting this wider variety of needs. Again, this is a matter of balance and emphasis and we have to make a judgement on whether we want to provide homes for people on minimum incomes or people on higher incomes who are struggling to buy. Ken Livingstone recognised the wider range of needs but took a strong line on the balance to be struck: of the affordable housing produced, the target would be to achieve 70% as social rent and 30% as ‘intermediate’ tenures such as shared ownership and sub-market renting. Normally the intermediate housing would be targeted in some way, for example towards key workers or towards people in the on or around average incomes. In a short period we have moved to a totally different policy position, where the proportion of affordable homes in development has been allowed to reduce and the share going to social rented homes is moving towards zero. The Mayor of London has even taken the possibility of requiring social rented out of the London Plan and has specifically excluded social renting from his funding regime.

Added to the mix were comments that social housing is a ‘damaged brand’ and that allocations policies cause ‘sink estates’ where the majority of tenants are ‘benefit dependent’. This was a charge laid at the door of council estates in previous decades but is it right now? First, virtually all developments are now mixed tenure, with social housing in a small minority, so it is hard to see how the ‘monotenure’ problem could arise. Secondly, allocations policies do not favour unemployed over employed people because they emphasise housing needs not income or status. Third, there is a confusion, deliberate or otherwise, between tenants who are unemployed (ie on Jobseekers allowance) and tenants who do not work – a category that includes elderly people, people with small children, people with severe disability of ill-health, and so on. Social housing is not a tenure of unemployment as it is often characterised. And fourth, rents for new homes are so high that most low paid people in work require benefits to be able to pay the rent. This is the fastest growing group of people receiving housing benefit. If the aim is to have more people on estates not receiving benefits then rents should come down not go up.

A final theme I would pick up from the debate is the desire of a number of housing associations to have more control and more flexibility in what they do – who they offer homes to and how much they charge. In my view it is broadly right for the local authority to set priorities for allocations in an area, but within a national code which specifies the factors to be taken into account – like giving reasonable preference to homelessness. I don’t think councils should have carte blanche (for some reason the Tory administration in Hammersmith always comes to mind as an example) to decide who gets housed, and, because they are not the elected strategic body, the argument is even weaker for housing associations to be able to adopt their own policies. On rents, there have been lots of criticisms of the ‘target rents’ policy, but it had the benefit of being consistent and certain and it reduced many of the anomalies in the system from the previous regimes. It must be wrong for a tenant to move into a property at an ‘affordable rent’ and find they are paying twice as much as the social rented tenant next door.

Previous thoughts on the role of housing associations can be found here

And my wider views on the importance of social rented housing can be found here.

The debate can be found here and the Guardian Housing network will publish a summary later in the week.

 

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5 Responses to Who is affordable housing for?

  1. Pingback: ‘Poor doors’ and a ‘failed brand’ | Red Brick

  2. Sioned-Mair Richards says:

    Well said Steve & well said Tim.

  3. joehalewood says:

    Sorry I have some pesky facts to reveal that have relevance here.

    Last week I estimated that the bedroom tax has increased social landlord arrears by about £140m in a quick analysis of the claimed independent and much delayed and now out-of-date DWP bedroom tax report. That would be a serious problem in isolation……YET…

    A week or so before I estimated that increased rental income from the 38,000 or so AR properties in 2012/13 was worth somewhere between £85 and £103m and this will have increased sharply during 2013/14 to be much more than any bedroom tax arrears losses.

    Hence is AR the sop to prevent landlords challenging the bedroom tax (as well as nudge theory to incentivise more RTB sales as a mortgage is cheaper than AR rent levels? Not forgetting of course that AR rent levels increase the HB bill by over £1bn according to last years NAO report.

    • runner500 says:

      I don’t see the AR as a sop about bedroom tax, it is largely replacing grant and because they are unaffordable to virtually all residents replacing grant with HB. Whether AR is sustainable in the medium to long term is debatable, if interest rates rise housing associations won’t be able to afford to borrow and hence develop as much

  4. Tim Morton says:

    Thanks for this Steve, a good summary of a long discussion and I think you pulled out the key points that were raised.

    One thing that didn’t get discussed is your last point about the Easyjet tenancies where once everyone starts discussing how much they paid for their seat they soon discover a wide range of prices, yet they are all on the same plane going to the same destination and getting the same level of service.Thus those affordable rent conversions from social rents don’t also get a smartened up rent collector in a tuxedo, or faster repairs for their extra money do they?

    With regard to whingeing about centralised allocations policies the CEOs seemed to forget that they got the land cheap in return for nominations especially as councils could not build themselves. Be interesting to note if there are cultural differences between stock transfer associations and the big developers who grew out of the 1974 Act in this regard.

    Lastly I remember being told that there is no such thing as a council estate anymore, even where the council still owns housing, as the impact of the right to buy means that any former council estate is a mixture of council tenants, private tenants, some HA tenants, leaseholders and owner occupiers some of whom used to be tenants and some of whom bought from former tenants. But try telling that to the BBC News who seem to think there are council houses in every local authority in Britain.

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