Social housing in England after the GFC: affordable vs ‘affordable’

1. Social housing in England after the GFC:affordable vs ‘affordable’ Kath Scanlon LSE London RESHAPE final conference Bolzano 19 April 2017

2. Themes • England’s ‘housing crisis’ • Changing nature of social landlords • Marginalisation of social housing and growth of ‘affordable’ – but not social -- products

3. Number and % of social units in England, 1961 - 2015

4. Built form • Reflects sector’s history—municipal construction boom in 1960s/70s, including many high-rise or deck-access monotenure estates • Current practice is to provide mix (social/tenure/income) in new build • Many existing estates have become mixed through RTB—but not all

5. Has public perception caught up? 1960s estate, Wapping, East London

6. Social landlords • Two types: local authorities (historically the main providers) and housing associations (now more important) • Councils have always operated under strong government constraints • Housing associations in principle private non-profit (often charitable) organisations

7. Control vs freedom • Government increases constraints on housing associations’ social-sector activities • 2015: requires associations to reduce rents for 4 years • 2016: Extension of right to buy But • Great freedom outside the social sector

8. Increasing commercial focus • Largest associations focus on areas where government exercises less control • Consolidations and mergers create some very big players, who compete directly with major house builders in private sale market • Genesis (32,000 homes): will no longer build new social housing

9. England’s ‘housing crisis’ • Generally shorthand for affordability problems in private housing markets • Focus on • difficulties of would-be first-time buyers • high rents and insecurity of tenure in the private rented sector • Largely a London problem

10. Current policy priorities • stimulate housing construction so as to dampen price increases, • help first-time buyers purchase new homes and • increase provision of ‘affordable’ housing. • Social housing is seen as irrelevant for working families needing a home in higher-cost areas.

11. Policy case study: The Housing and Planning Act 2016 Social housing measures: • increase targeting • enable more social tenants to buy • reduce stock in expensive areas and increase in cheaper neighbourhoods • Introduce new affordable but not social products—e.g., Starter Homes A collection of policy ideas rather than worked-out rules

12. Idea 1: Give housing association tenants the right to buy • Would give housing association tenants same right to buy their homes as council tenants • HAs crafted ‘voluntary’ agreement to protect status as private organisations • Government compensates them for discount using…

13. Idea 2: Make councils sell high-value homes • Councils sell ‘high-value’ homes as they become vacant • Transfer £ to government, who uses it to compensate housing associations • What is ‘high value’?

14. Idea 3: Make higher-income social tenants pay more rent • Historically social rents in England not income-dependent (unlike in many countries) • ‘pay to stay’—rent would increase for higher-income tenants

15. Idea 4: Require councils to use fixed-term leases • Social leases generally indefinite, in contrast to very limited security of tenure in PRS • Eligibility assessed on arrival but not after • Idea: councils to use fixed-term leases for all new tenancies

16. One year on

17. Social vs affordable • ‘Affordable’ products/schemes include • Discounted Market Rent • Affordable Rent • London Living Rent • Help to Buy • Shared ownership • Starter Homes Etc etc etc

18. Conclusions… • Housing systems are highly path dependent and can be hard to change--especially when there is no consensus about the need for change • Given long-term ↓ in subsidy, less reason for housing associations to remain onside. Many now want to fulfil their social aims in other, less regulated sectors of the housing market

19. …and questions • Will social housing strictly defined retain its relevance for broader housing issues? • Is the traditional housing-tenure split (o-o, social, PRS) still a useful analytical tool, or should we look more at submarket options in the round?