Showing posts with label affordable rent. Show all posts
Showing posts with label affordable rent. Show all posts

Tuesday, 8 January 2019

Social housing can be 'homes fit for heroes' once again

David Lloyd George never actually promised "homes fit for heroes" after the First World War.
The Liberal prime minister's pledge was that his coalition government would construct "habitations fit for the heroes who have won the war".
But whether a "habitation" is the same as a "home" the substance was clear: the state, in the form of local authorities, would build new residences on a large scale.
National resources would be ploughed into improving the housing conditions of the working class, who had paid such a fearful price in the military conflagration.
A new ironclad political will came forth, forged in the sacrifices of the Great War.
Shelter's cross-party Social Housing Commission, a century on, urges a similar housing revolution, although one forged not in the fires of war but the flames of the Grenfell Tower disaster.
The report, which has been in the works for a year, argues that the state should commit to constructing three million new social housing units over the next 20 years.
This would not only represent a housebuilding revolution, it would ultimately create a profound shift in the way we live.
The dominant housing trend of the past two decades has been the doubling of the number of households in the private renting sector to 5 million, with the share also doubling to 20 per cent. The commission's supply surge would probably squeeze down the share back down to the 10 per cent last seen in the early 1980s.
The upfront cost would be around £11bn a year according to the commission, around half a per cent of GDP. Yet additional social housing (rather than the more expensive "affordable housing" category invented in recent years) should ultimately reduce the housing benefit bill. And the additional construction activity should boost tax revenues. The consultancy Capital Economics estimates suggest this would cut the average net cost to the taxpayer to around £4bn a year.
This estimate seems broadly plausible. We've had a vivid demonstration in recent years of how housing policy creates feedback in the broader public finances. The coalition slashed grants to housing associations - which build social and affordable housing - after 2010 but this didn't save the taxpayer money in the end.
It merely inflated the housing benefit bill as people were shuffled into the more expensive private rented sector and required higher welfare payments to make their rent, precisely as experts in the sector had warned.
The obstacle may be less the cost of the commission's proposals than the politics.
Margaret Thatcher's Right to Buy revolution of allowing tenants to acquire their council houses at discounted rates is seen in Conservatives circles as one of the party's greatest policies - supposedly spreading wealth and boosting socially mobility - despite the fact that it severely depleted the stock of social housing for future generations. For all the claims of Conservative ministers to have reformed their attitudes to social housing, a surge of construction on this scale would probably feel like a painful repudiation of Thatcherism.
Conservatives have also been opposed to social housing for more practical reasons since, in the reported words of George Osborne and David Cameron, it "just creates Labour voters". Survey evidence backs this instinct up. Social tenants were more likely to vote Labour in each of the past three general elections.
Yet the context here is that the nature of social housing tenants has been shifting. Research by the Resolution Foundation shows 80 per cent of social renters are in the bottom half of the income distribution, up from 60 per cent in the 1960s.
To reactionary sections of the media social housing has become a place where only poor people should live - something that explains the outrage when it emerges that a relatively well-paid MP like Kate Osamor or a trade union boss like the late Bob Crow does so.
From "homes fit for heroes" to "homes fit for zeros". If the stigma around social housing is to be vanquished, this is surely where a major battle needs to be won.
But the electoral logic is shifting. A stark feature of the 2017 general election was the large advantage for Labour not only among social renters but also among the growing ranks of younger and middle-aged private renters. The housing status quo, for the Conservatives, does not look electorally attractive.
A mass expansion of social housing is not the only way to tackle the housing crisis of course. Tenure reform is another. Private tenants in Germany, who make up the majority, have extensive rights and security of tenure and, as a result, are not clamouring for social housing. And rather than making housing cheaper, politicians could focus on ways to boost families' incomes, which have been under heavy pressure for a decade.
Yet a major expansion of UK social housing supply from the current feeble levels - even if they do not reach the volumes urged by the Commission - is plainly warranted. Those sprawling waiting lists for social housing and the explosion of homelessness since 2010 tell the frustrated demand story for this form of heavily subsidised accommodation in themselves.
And if ministers stall on promises of making life more secure for all private tenants - if the vested interests of MPs, a fifth of whom are landlords, contrive to block it - the radicalism of the Shelter Commission will surely start to look increasingly attractive.

Tuesday, 14 August 2018

Tory actions speak louder than words on social housing

"I don't understand why you keep going on about the need for more social housing - it just creates Labour voters."
Nick Clegg doesn't recall whether it was David Cameron or George Osborne who uttered these words.
But he knows it was one of them. Why? Because he was sitting across the table from them in one of the coalition's "guad" meetings when this nugget of unguarded Tory honesty slipped out.
The former deputy prime minister is in no doubt that this represented the cynicism-drenched view of the Conservative leadership on social housing and its residents, going all the way back to Margaret Thatcher's Right to Buy revolution in 1980.
Have things changed? Ministers, scarred by the eruption of anger over the treatment of social housing tenants and government housing policy in general in the wake of the Grenfell disaster, want us to think so.
"Regardless of whether you own your home or rent in the social sector, residents deserve security, dignity and the opportunities to build a better life," says the communities secretary James Brokenshire.
The new green paper on social housing talks of "tackling stigma", "empowering residents" and "ensuring homes are safe and decent". All sorely needed. But then there's the kicker: "expanding supply".
What better way for the Conservatives to bury the perception that they secretly regard social housing tenants as Labour-voting deadbeats than by creating more of them? But will they? Despite colossal pent-up demand - more than a million households have been on social housing waiting lists for at least a decade - the coalition deliberately ran down construction rates of homes for social rent.
The Conservatives, governing alone, have carried on with the policy since 2015. Official figures show that just 5,380 new homes for social rent were created in 2016-17, down from around 40,000 in 2010-11.
Cameron and Osborne devised a new category of social housing called "affordable rent", which essentially means subsidised housing that is more expensive for tenants without being quite as dear as open market rents. It was essentially an indirect means of reducing government funding for social housing (although it didn't contribute to cutting the deficit because it simply meant tenants needed to claim more in housing benefit to pay their rent).
The supply of new affordable-rent homes rose from zero in 2010-11 to 24,350 in 2016-17. But even if one adds new affordable rent to new social rent the supply of subsidised rental housing is still around a third lower than it was six years ago.
Kit Malthouse is the new housing minister, the eighth in eight years. He admitted yesterday that the annual supply of new social rent housing by 2021 is not likely to rise above 12,500. Which is not terribly surprising given the government, despite many flashy pledges of new funding, has not announced any major additional grants for social landlords to enable them to ramp up construction.
And the Treasury is still resisting pleas to scrap the borrowing limit on local authorities, something needed to enable them to start building council housing in serious volumes again, as they did between the Second World War and the 1980s.
There is a vigorous debate taking place among economists over whether increasing national housing construction rates to 300,000 a year, as the government is targeting, will actually have a significant impact on house prices. But regardless of the impact on house prices, it's clear that the UK needs more and better quality social housing, whether from housing associations or councils.
There are some 80,000 households in temporary private accommodation because councils cannot house them permanently, up 64 per cent since 2010. And those who have secured social housing are more likely to be overcrowded than they were a decade ago.
The numbers of families living in unsuitable private rented accommodation has shot up, as home ownership rates have collapsed. Many of them would be better off in social housing - and that is what hundreds of thousands of them say that they want.
Given that there are around 4 million subsidised rental homes, many of which will need to be replaced due to age, Malthouse's pathetic projected levels of new supply are essentially a prescription for the sector to wither.
Words are cheap. Creating more social housing isn't. Ministers will rightly be judged on what they actually deliver.