Tagged: social housing

“Fixing our broken housing market”

The Housing White Paper for England, Fixing our broken housing market, has generally been seen as a damp squib.   It’s not immune from ideological claptrap – for example, the assertion that “housing associations belong in the private sector” (p 51).  It must be welcome, though, that this is the first document in many years to recognise the fundamental problem: there are not enough houses.  Most documents on housing policy since the 1970s have been obsessed with the issue of tenure, which is a question of how the housing is distributed after it’s built, or affordable housing, which is about relative costs.  There has not been enough building for more than forty years, and by now Britain needs a couple of million more houses. The crude numbers matter, because wherever there is a shortage, people get left out.  If there are not enough houses, then some people will have nowhere to go, some will be excluded, and others will be forced to live in housing that is unfit.  Because it’s a market system, the people who this is most likely to happen to are those with the lowest command over resources – that is, the poorest.

The policies suggested in the White Paper – it’s more of a Green Paper, with some scope for consultation – are not going to fill the gaping hole in housing supply.  While the proposal to build 275,000 a year will help, there will have to be several years of continuous growth before the benefits are clearly felt. One of the problems is the reluctance of many of the main stakeholders – builders, local communities and banks – to do anything which might jeopardise house prices.  I was intrigued, then, at a suggestion from an unlikely source: the deeply Conservative Michael Portillo, speaking from the couch on the satirical programme This Week.  Portillo suggested that the building had to be done by the public sector, and then went further.  The sale of council housing had shown, he argued, that it was possible to feed council housing back into the private sector as the occasion demanded: so it would be possible to create a bank of public housing now, and slowly to release it for owner-occupation so as not to unsettle the private sector.  I doubt we would ever be able to do this with the fine degree of control that would be needed to manage the market, but the idea has a lot of merit.  In particular, that it could do something for the people who are excluded now.  Let’s build half a million new council houses right away, and then we can talk about what happens next.

Ending homelessness, or not

Crisis has published a manifesto to end homelesslessness in Scotland.  There are five main proposals:

  • Adopt a new cross-departmental strategy for tackling homelessness
  • Commit to investing in a more proactive approach to prevention
  • Increase support for homeless people with complex needs
  • Time limit Temporary Accommodation
  • Commit to using devolved powers on social security to prevent homelessness

While there’s nothing here to dislike – this will help people –  none of this could end homelessness.  It is not sure even to reduce it.  The problem of homelessness is not in the first instance a problem of people with complex needs; it’s all about maths.  If there are more households than units of accommodation, then however you cut it, some people will end up with nowhere to live.  The people who are left out are those who are least able to compete for scarce resources – usually the poorest, sometimes people with complex needs, sometimes people who are excluded.   They are whoever comes last.  They will have to live wherever they can – with friends, with relatives, surfing sofas, in unfit housing, and so on.  But if there aren’t enough places to live, someone is going to wind up with no home.

I made an argument last summer for a substantial expansion of the building programme.   We can’t respond adequately to  homelessness without it. Because extra houses go first to people with more resources – second homes, people in household breakups, the children of better off parents – the numbers needed will be more than the crude housing shortage suggests. We have to build now, build accessibly, and build in large numbers.

How many ‘affordable’ homes do we need?

At the SURF conference yesterday (that’s the Scottish Urban Regeneration Forum), I took a punt at guessing how many ‘affordable homes’ we need to build.  It’s a dreadful piece of jargon, which doesn’t mean a great deal by itself.  All housing should be ‘affordable’ for someone; what we really mean is housing that’s accessible to people on relatively low incomes.  The Scottish Government is currently aiming to build 6000 a year.  One paper for Audit Scotland was based on a 2005 estimate of 8000 a year.  An earlier  paper by Ken Gibb and Chris Leishman refers to margins between 4,700 and 11,350.

These estimates are based on the demand for housing, and I can’t see that any estimate which doesn’t take a broader view than that is ever going to be adequate.  From the Scottish Housing Statistics there are about 2.4 million households in Scotland, and 2.5 million housing units.  Let’s assume that we need about a third of all housing to be ‘affordable’.  That figure is admittedly arbitrary – it would make as much sense to argue for a quarter or 40%.  That means, though, that we should be talking in terms of a total stock of affordable homes, assuming a constant population, of 800,000 houses.   Houses wear out.  If we build 6,000 houses a year, the average life of an affordable house has to be 133 years.  So we need to build 12,000 more a year, additional to any housing to meet fresh demand, just to replace the housing that is wearing out over a standard 60-year life.  If we accept the existing figures, that gets us to 18-20,000 a year.

Then we need to account for a few other shortfalls.  Audit Scotland noted a current deficit of 14,000 houses.  Further replacement is needed for about 40,000 low income units that have been demolished – generally prematurely, in the sense that they have had to be demolished before their projected life has been reached, or the associated financial liabilities  have been settled.  With increasing numbers of single-person households, we need to consider whether we have sufficient numbers of units to accommodate household fission.  And we need to allow for locational shifts – the kind of thing which has left surplus houses in some places and shortages in others.  And so, if we’re planning for the next 10-15 years, even for a static population (a big assumption), we get from the current level of 6,000 a year to a need to build something that looks closer to 25-30,000 affordable homes – four to five times more than we’ve planned for.

The sale of housing association property: the Conservatives' answer to the threat of sausage rolls

While a UKIP candidate is being questioned for the ancient offence of “treating” potential voters, in this case with sausage rolls (a report here), the Conservatives have unveiled their retaliation.  They are proposing to give away £20 billion of housing association property – a madcap commitment which, of course, is rather more expensive than giving away sausage rolls but is not subject to the same legal limitations.    They hope to replicate the success of the Thatcher government in persuading tenants with aspirations to vote for them.

The sale of council houses now has a long track history, so we don’t have to guess what the effects of such a policy might be over time.  They include:

  • the residualisation of social housing: the better housing is sold, the worst remains
  • severely reduced access to housing for people on low incomes
  • restricted takeup, because tenants tended to be on low or inseucre incomes – that was why the strategy to close down council housing shifted from sale to stock transfer
  • gradual transfers of the rented stock into private hands, and
  • massive public expense, not just through sale but because of increased costs for government in the form of housing benefits.

There are however three key obstacles to the sale of housing association property, which did not apply to council housing.  The first is  that the current system of social housing finance depends heavily on the ability of housing associations to raise development capital on the basis of  the security of their income, and the sale will disrupt that system.  Second, most housing associations have an overriding charitable function, and governments have limited powers to tamper with  them – which is why the Thatcher government was defeated in the Lords when it tried to do this in  1980.   The third, however, is fundamental and crucial.  Housing Associations are independent corporate organisations. The government doesn’t own these houses.  It has no more authority over them than it does over the assets of any private citizen.    I will be intrigued to see how the government proposes to frame legislation in terms that might apply to housing associations but would not apply equally to the tenants of private corporate landlords.

DCLG guidance on residential qualifications

I wrote in March about the government’s intention to re-introduce residential qualifications in social housing.  On 31st December the DLCG released new guidance  for England and a statement that, although this a matter for local authorities to decide:

The Secretary of State believes that including a residency requirement is appropriate and strongly encourages all housing authorities to adopt such an approach.

The objections to this are long-standing; central governments have been arguing against these restrictions since 1945.   Giving priority to ‘hard working’ local families leaves out some other important categories of people – former psychiatric patients, prisoners, women fleeing domestic violence, people moving to find work and, of course, people unfortunate enough to live in neighbouring local authorities.  The Guidance nods in the direction of making allowances for special hardship; equally,  it nods in the direction of excluding people on higher incomes or owner-occupiers.  There is no evidence that local authorities have to make extensive provision for people outside their area; the effect of restrictions is to force people to apply as homeless, because it is the only avenue through which they can be housed. Overall, however, allocations policies can only distribute the housing that’s there, and this measure will do nothing to help to meet the need.

How to get a council house: down memory lane

The Channel 4 documentary, How to get a council house,  takes me back a way. My first real job, in Hartlepool, was allocating council houses; I was the sole lettings officer for a stock of about 12,500 houses. Tower Hamlets has just over 13,000 council houses and what seemed to be an army of people doing the job. There were striking differences from the way things used to be done. First, people are invited to ‘bid’ for express a preference – despite the (fairly obvious) problem that the vast majority have no hope of being considered, and in some cases there would be well over a thousand people having their hopes raised. Second, people were being told how long they might have to wait, even though it was clear to them that it wasn’t a queue and the length of time was not what mattered to get priority. Third, the computer provides the answer, and the council takes multiple viewings at a time to get the allocation done as quickly as possible.

That last bit is something of an improvement. When I started in the job, I asked the person who’d done the job before me how the decision was made to allocate which property to which person. Part of the answer was based on an assumption: people from the old town wouldn’t want to go to West Hartlepool, or vice-versa (though no-one actually asked them). Then came the main issue: how clean and respectable they were. Prospective tenants were graded as excellent, good, fairly good, good, fair, moderate, poor or shocking, and the quality of the property they were offered matched their assessment. (That was fully in accordance with Macey and Baker, the leading textbook on housing management at the time: “The personal suitability of the applicant and his wife are a guide to the type of dwelling to be offered.” ) I did change the way things worked – introducing a points scheme, allowing preferences, giving priority to need and doing what I could to stop the grading. I wasn’t popular for doing it.

The DWP threatens local authorities with penalties

Some landlords – most recently, Welwyn Hatfield DC – have been redesignating rooms in order to reduce tenants’ liability to the bedroom tax.  This has attracted an aggressive response from the DWP , directed at local authorities rather than social landlords.  Lord Freud has rewritten to Chief Executives to warn them that

“Blanket redesignations without a clear and justifiable reason and without reductions in rent, are inappropriate and do not fall within the spirit of the policy. … Where it is found that a local authority has redesignated properties without reasonable grounds and without reducing rents, my department would consider either restricting or not paying their housing benefit subsidy.”

The first problem for the DWP is, of course, that there is a clear and justifiable reason for redesignation.  There is a statutory definition of room size, and box rooms, alcoves and walk-in cupboards don’t meet it.

The second part of this, referring to reductions in rent, is rather more complex.  Traditionally, rents in the social housing sector have reflected historic costs rather more than the amenities they offered.   Rent setting in England has been since 2002 subject to a process of ‘convergence’, intended to rationalise the morass of  different levels of rents charged for otherwise similar properties.  (In Scotland and Wales the issues have been considered, and there has been some ad hoc adaptation, but there has not been the same uniform process.)  Target rents in England have been set on the following principles:

•   30% of a property’s rent should be based on relative property values compared to the national average
•   70% of a property’s rent should be based on relative local earnings compared to the national average
•   a bedroom factor should be applied so that, other things being equal, smaller properties have lower rents

Initially the English policy was supposed to bring rents into conformity with a common standard by 2012.  The rent rises demanded were unmanageably high, the deadline has slipped back, and it is now scheduled to be done by 2015/16 unless the Bedroom Tax upsets it further.

Do make allowances if I get this next bit wrong; I don’t work in England, but  I trust that my English readers will set me right.  From what I can decipher, while the government would have liked bedroom size to be a determinant of rents, it hasn’t quite happened, and it is not always obvious what proportion of rent is attributable to the number of bedrooms.  In places, it seems that the main effect of the DWP demanding a deduction of the proportion of rent attributable to bedrooms will be to limit the scale of increase in rents that the DCLG has been requiring social landlords to make.  It looks, then, like a case of government pulling in two directions at once; it’s also a mark of a wider failure to understand that Housing Benefit is not just a benefit, but an instrument of housing policy.

Residential qualifications in social housing

It’s reported today that the government will introduce a residency test for ‘council housing’ , requiring people to have lived locally for up to five years before they can even be admitted to the housing list.   (Despite what the linked article says, the rule will almost certainly relate to local residency rather than migration to Britain – the second would be counter to EU rules.)

This is a long-running issue.  Some local authorities have long had residential rules, but the continuing use of residential qualifications was condemned in the reports of the Central Housing Advisory Committee in 1945, 1949 and 1969 (no, I haven’t mis-typed those dates).  In the 1970s, the London Borough of Hammersmith removed its residential qualifications and demonstrated, the process, that they served no useful purpose  – they didn’t alter the pattern of demand, even in an area where   pressure was high and people could easily be coming from immediately adjoining local authorities.    The critical arguments – reviewed e.g. by Derek Fox, a former Director of Hammersmith, in the 1970s – were that

  • residential qualifications stop people moving to find jobs
  • the fears of local authorities that they will be inundated by applications from people outside their area were shown to be groundless.
  • residential qualifications lead to a mismatch between the supply of housing and the incidence of need, particularly in places like London where people often  move across local boundaries.
  •  the effect of restrictions is to force people to apply as homeless, because it is the only avenue through which they can be housed.

The main problem that local authorities are facing now is different: much of the demand comes from single people, for smaller accommodation which doesn’t exist.  And no alteration to the law governing allocation policies is going to make any difference to that.

If it’s not 70 sq ft, it’s not a bedroom

Special note, 12th December, 2014.  The argument I made here in the last paragraph has been considered by the Upper Tribunal and rejected.  See this link for an explanation.  However, the decision of the Upper Tribunal also says two other things:  that it is not up to the landlord to decide and there must be an inspection of the room, without which no imposition of the bedroom tax is lawful.

Further note, 3rd April 2016:  The Upper Tribunal has now decided that to be a bedroom, a room “…should be capable of accommodating a single adult bed, a bedside table and somewhere to store clothes … , as well as providing space for dressing and undressing.”  Joe Haldeman has calculated this to imply an absolute minimum of 65.81 sq ft, and more depending on the layout of the room.

The new under-occupancy rules will mean that people will have their benefits cut when they are deemed to be occupying property that is too large for their family size. This will affect benefits for hundreds of thousands of people – the estimates for Scotland alone run between 80,000 and 105,000 tenants of social housing.

The standard that is being applied is the 1960 bedroom standard, introduced in 1960 for the Social Survey (the first use was in P Gray, R Russell, 1960, The housing situation in 1960, Central Office of Information.) This was intended. more than fifty years ago, to be used in place of the restrictive standard in the Public Health Acts (1936 and 1957).

It’s been reported that Knowsley Housing Trust are in the process of reclassifying the size and type of their bedrooms. This is not as radical as it sounds; they are only reclassifying 566 properties in a stock of 14,000. When I was letting council housing in the 1970s, I had to reclassify properties to help house larger families. Most local authorities had only two- and three-bedroomed properties; very few properties had four bedrooms or more. So where a three bedroom property had a dining room or a ‘front kitchen’ area, reclassifying a downstairs room as a bedroom made sense. Later, a housing association committee I was on routinely arranged for permitted storage space with walk-in cupboards to be pooled, to make something that could be used as a boxroom or small bedroom. If revisiting those classifications means that people can afford the rent, it’s worth doing.

Beyond that, there’s another standard to take into account. For the purposes of the 1936 Public Health Act, there was a minimum size of bedroom. No room less than 50 sq ft (4.65 sq metres) was allowable as a bedroom; any room between 50 and 70 sq ft was classified as a half-person bedroom (only suitable for one child under 10); any part of a room less than 5 feet in height should be disregarded. The 1936 space standard is now contained in England in the Housing Act 1985, s.326 and in Scotland in the Housing (Scotland) Act 1987, s 137. This is still the law. It can’t be claimed that a standard designed for one purpose is conclusive in a different context, but there is at least a reasonable case to make that we know what should be counted as a bedroom, and what should not. If a room is not at least 110 sq ft (10.2 square metres), it’s not big enough for two people over ten, and if it’s not at least 70 sq ft (6.5 square metres), it should not be counted as a bedroom at all.

Additional note, 10th September:  A recent tribunal case in Fife permitted a challenge to the definition of a bedroom, discounting a room that was 67 sq ft with a combed ceiling.   This is not authoritative but does indicate that the definition of a room is open to challenge.

Housing Benefit cuts

One of the problems of working out what’s happening with the cuts is that there are so many overlapping changes that it’s difficult to be sure what the implications might be. Gareth Morgan has just posted a lengthy report (be warned – it’s a big file) identifying the combined effects of limits in Local Housing Allowances and the benefits cap for different rental areas throughout England, Scotland and Wales. In most places the cuts really bite for couples with three or more children.