Opinion: Say farewell to #socialhousing. Celebrate the birth of #affordablehousing
Published by Jon Land for 24dash.com in Housing
'Tenant tax' costs Welsh councils £94 million - Lib Dems
By Peter Hall, housing consultant and founder of www.phhsl.co.uk
That #socialhousing in the UK is suffering a slow and painful demise is irrefutable. There is perhaps a strong case for assisted euthanasia. Instead of eulogising it, we should say farewell and celebrate the birth of its prodigal child – #affordablehousing for all funded through income based rents.
In the golden age of post WW2 Britain, millions of council homes were built as homes for heroes from the world wars and to replace apparent slum housing. But they weren’t ‘social’ housing – far from it. They were homes for all. Median earners in particular. And getting one was based on time on the waiting list. No rationing. No stigma. Genuinely mixed communities.
But the golden age came to an end with the advent of Right to Buy and Housing Acts in the 1980’s which prescribed who could access social housing and who couldn’t. And in hindsight, who couldn’t blame the government for rationing in post IMF bailout Britain. Why should people benefit from a grant funded, reduced rent home for life when they could support themselves, and others were waiting in the wings needing homes?
But that rationing is the key to the image that social housing has since developed and the problems it faces. Rationing for only those with defined vulnerability. As Kate Davies said recently it has resulted in the vast majority of the population who are locked out of accessing social housing having a ‘tendency to project negative characteristics on to groups of people we might feel are getting something we don’t qualify for’. Hence benefits street, scroungers and fecklessness headlines.
Why would anybody in #generationrent support the 98% of those in need of social housing who aren’t necessarily more vulnerable than them (other than perhaps having a low income) having a grant funded, brand spanking new or older home at an affordable rent which they’re locked out of accessing? And likewise, why would those who aspire to own their own homes but can’t because they’re locked into a low security and high cost private rented sector?
And when affordable rents are clearly not affordable to those on lowest incomes, there has to be an alternative to the #groundhogday mantra of tax the baby boomers more, tax the mansions, and give us government grant to build more #socialhousing from the usual suspects across the sector and at #housing14. It isn’t going to happen. Nye Bevan & Harold McMillan were from the last century.
Abandoning the mêlée that is current social housing rent setting and allocations policies in favour of rents based on income and opening up access could be the affordable solution.
Progressive taxation and benefits systems are nothing new, and most countries including the UK are accustomed to the principle of paying more tax, or receiving less in benefits, based on income. Why should rents be any different? Start from an assumption of a basic market rent for the type of property, and reduce the rent charged dependent on income. Or the other way around.
Pay to stay has already introduced the principle, and now it seems the sector has reacted and is looking at the problem of affordability and sustainability in the round, with some landlords considering flexible developments based on a guaranteed yield. Home Group actively seeking to pilot a scheme with rents starting at 35% and going through to market levels. Investors don’t care about the mix – they care about their return.
And so it could and be for all #socialhousing landlords. The current system of setting rents is a lottery and a mockery of logic. Instead of working towards balanced communities based on child densities or household profiles (as much of the sector did post Page report) shift the focus onto building and shaping communities with the balanced incomes required to generate the overall social and financial return on investment required.
Do the maths. Putting some models together shouldn’t be beyond the realms of finance people across the sector. If we asked Google’s product development teams, it would probably be ready in 5 days. A simple 100 unit scheme at £100k per unit could deliver 35% of homes at the current average ‘social’ weekly rent of £82 and 65% at a market rent of twice that. With no grant funding. And a 10% net return. With some grant funding or cash in kind via discounted land, the numbers on ‘social’ rents could go up further.
The naysayers will of course put this into the too difficult box claiming the sector doesn’t hold enough information about incomes to do this, it’s a bit risky, and the most vulnerable might be overlooked. So start with a local market rent as the default charged unless proven otherwise, and customers would soon start being forthcoming with their data, and put some safeguards into the social return required such as %’s of certain vulnerable groups housed?
The wider advantages would also be immense. Some key ones being:
One form of tenure, open to all, based on a defined social purpose, but not ‘social’ housing as we know it – delivering genuinely mixed rather than polarised communities.
Helping all of those in need of secure and affordable rented homes – including #generationrent.
No need for separate market rent, intermediate rent, affordable rent, or affordable home ownership
No need for fixed term tenancies. People could stay or move on as their circumstances change. The rent just increases if income rises. Maybe even staircase up to ownership if they want.
Downward pressures on house prices as supply increases, and a reduction in ‘buy to let’ investment as demand will inevitably move toward longer term and more secure options provided.
Just like the golden age – only no government capital subsidy required, and a reduced Housing Benefit bill to boot through lower rents compared to the private rented sector. Transparent and open rent and allocations policies which the general public could understand, and will probably support, too.
An ‘affordable’ solution
With pilots already actively being sought, and the clear and pressing need for more homes, surely this has ‘legs’ for all those lobbying the government to build more housing, and too many positives to be overlooked.
None the least of which being overcoming the demonisation of #socialhousing. We shouldn’t be perpetuating social exclusion and probably reducing the life chances of those in it by building more ‘social’ housing which will only be available to those deemed more vulnerable by bureaucratically rationed notions of need. Panorama has busted some myths about that and exposed the insecurity of the PRS being faced by #generationrent.
As even @OwenJOnes84 outlined at #housing14, #housing is the cause of and the solution to so many social problems in the UK. A model with rents based on income could solve the causes and be the solution. It is the personification of ‘affordable housing’ which many have been seeking in recent times. Imagine some of those £bn’s of funding the PRS contributing to affordable housing for all. And there is potentially £10bn available to get it kick started.