The economic impact of social housing
Published by Jon Land for 24dash.com in Housing and also in Central Government
The economic impact of social housing
On the day the latest GDP figures for the UK are published, Dr. Chris Handy (pictured), Chief Executive of Accord and Chair of the Matrix Housing Partnership Strategy Committee, assesses the economic contribution of UK housing associations.
Economic tests now set the benchmarks of success for social landlords. Both the Housing Strategy and the new regulatory regime seek to gauge the economic value of our work to tenants, to tax payers and above all, to the wider economy. Economic tests include how we can ‘sweat’ our assets to provide more bang for the taxpayer buck, the value for money of our activities in the eyes of customers, and our contribution to supporting economic growth and kick-starting stalled social mobility.
Our role in galvanising economic growth may become increasingly important as the economy heads for an unprecedented triple-dip recession after today's final quarter growth figures from the Office for National Statistics.
Even so, despite the greater emphasis on the economic contribution of social landlords, I contend that housing associations in particular, many of which have been around for more than 50 years, have always played a pivotal role as economic investors.
Our investment role, although evolving over time in both scale and focus, has not only encompassed traditional financial outlay on new housing, repairs and direct provision of employment and training but also included the often under-reported development of social and community enterprises, help to tenants wishing to move to meet their changing employment and family needs, support for vulnerable local supply chains and, more recently, investment in green technology.
The economic contribution of England’s 1,800 housing associations is impressive: collectively managing £100 billion in assets including more than 2 million homes, with an annual turnover of about £35 billion, and £40 billion in private finance raised to invest in housing. Annually, housing associations also invest £750 million through community initiatives to help local people find jobs and take-up training, to contribute to the development of social enterprises, to access money and debt advice, and to establish community facilities.
Yet we have not always been active in demonstrating our economic value, the return on our investment and the pivotal role we play in localised economic growth. So we now need to see a step change in evaluation of our economic contribution. That’s why the Matrix Housing Partnership has embarked on a formal appraisal by an independent panel of ‘think tanks’ of our direct and indirect economic impact. The study will also chart how we might increase this impact for the good of the national and local economies.
Our initial research shows that, collectively, the housing associations, social enterprises and co-operatives that constitute Matrix - Accord, Ashram, Birmingham Co-operative Housing Services, Caldmore, Rooftop, Trent and Dove, Trident and WATMOS - manage more than 20,000 homes across the Midlands with a value in excess of £1 billion. And a combined turnover of more than £250 million, £30 million spent yearly on repairs, planned maintenance and home improvement programmes, and employment of 2,500 people is a significant economic base on which to build.
Matrix also supports the wider economy by providing a range of ancillary goods and services that create employment and training opportunities, build social capital through innovative community projects, help to maintain the fabric of some of the region’s most disadvantaged communities, and contribute significantly towards localised prosperity.
Recent initiatives include a major venture capital fund for young entrepreneurs in Birmingham valued at £10 million, a green manufacturing venture, a network of community shops, an independent money advice centre keeping money circulating in local economies, and a community web managed by young people called ‘social breakfast’.
Our initial research estimates that investment in housing is one of the most cost-effective ways of stimulating economic growth while creating a national asset for the long-term. The ability of housing investment to kindle multiplier effects speedily was charted by Lord Keynes in the 1930s and is championed today by economics Nobel Laureates Paul Krugman and Joseph Stiglitz as an alternative to austerity.
Social landlords now need to track the ways in which we deploy our assets - our housing stock, investment and community projects, and the social capital of our staff and tenants - to generate even greater economic value. This is where our research will look next.