The overwhelming case for new public housing

The Fabians have published a timely and strong new report written by John Healey and John Perry making ‘the overwhelming case for new public housing’.

It is timely because it appears as the Election enters the short campaign and the outcome is so uncertain. Housing has featured in the Election but in a familiar guise, as if the – undoubtedly important – issue of access to home ownership was the only thing that matters. I suppose we should be pleased to have had a minor reprise of the 1950s and 1960s Election campaigns when the parties traded housebuilding promises.

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John Healey

Healey and Perry summarise the housing crisis and challenge the Parties: “It is a measure of a nation’s politicians whether they can rise to the big challenges their country faces. Housing is now such a test.”

john perry

John Perry

At its core, the crisis is a simple calculation: we need to build 250,000 homes a year yet  2012-13 saw just 108,000 new homes completed, the lowest since the 1920s, rallying to a not much better 119,000 in 2013-14. Rather less than half what is needed. Healey and Perry emphasise that a bigger contribution is required from everybody – commercial housebuilders, housing associations and councils – but that “Above all, strong leadership and smart action from government is imperative.” And that new public housing must be central to a new national political mission.

The desire for action is expressed across most of the political spectrum. They quote the call of ‘The Good Right’ for “a Harold Macmillan-sized, state supported housebuilding programme”. The Good Right are too canny to be too directly critical of the Government, but they come very close.

Healey and Perry make the case for more social housing in 5 simple points:

  • First, the private market cannot build 250,000 new homes, and never has.The public sector must step up to fill the gap.
  • Second, genuinely affordable social housing (and not the Government’s aberration of ‘Affordable Rent’) is needed to make the new homes affordable for the millions of households on low incomes who cannot access any form of housing today.
  • Third, building social housing is the best way to get value for money from public spending: over 30 years the public purse makes a profit because of lower housing benefit payments, and public spending is a lever for major private investment as well.
  • Fourth, it will help make work pay: housing costs are a critical disincentive to earning more.
  • And fifth, public investment would be an important boost to the economy.

“Recent modelling by John Healey shows that working up to building 100,000 new social rented homes a year by the end of the next parliament would not only pay for itself in less than 30 years but provide a net benefit to the public purse of £12bn through lower housing benefit cost.”

The report identifies the three biggest challenges to a major new programme as cost, public support and delivery.

On cost, they point out a number of ways that more social homes could be built without cost to the public purse: a revival of the principle of ‘planning gain’ from private development, the need to ‘borrow to invest’ (creating a long term asset and yielding a financial return).

On public support, they point to rising majorities in polls supporting more social housing, and the improved policies that many councils are implementing to engender public support. They point to the importance of challenging the ‘maginalisation’ of social housing and creating mixed communities.

On delivery, they acknowledge the scale of the challenge and the vital importance of a new target for new social homes, the need for Government funding and land, and the requirement for a new sense of social obligation from developers.

To my mind the case is well made in this report and is irrefutable. The Government’s policies to date – which, at a tangent, have always been totally contrary to the stated policies of the acquiescent Liberal Democrats – have become increasingly focussed on demand-side initiatives when the clear need, as was obvious from the analysis in the Lyons report, is for extensive action on the supply side.

We are close to the launch of the Parties’ Manifestoes. We will look at them here on Red Brick with as much objectivity as we can muster (which isn’t always a lot). It may be too much to hope for that, if any of the Parties emphasise social housing, the media will cover the issues.

Potential first time buyers are important prospective voters for parties to try to impress, but so are those who will never be able to buy and whose housing needs will only ever be met by good quality genuinely affordable social housing. They all have one vote each.

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2 Responses to The overwhelming case for new public housing

  1. James says:

    Interesting article and good to have this work brought to wider attention. You mention how the private sector has never been able to build 250,000 homes a year and the principle that private development alone cannot meet demand – and has failed to do so throughout the 20th Century – is often argued in housing circles.

    I was wondering your view on why exactly this is? If there is demand for housing, why isn’t the supply there to fill it?

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