The death-knell for council housing – again August 18, 2006
Posted by Brickonomist in History of social housing, Local government, Party politics.add a comment
The Mirror says David Cameron is trying to ‘[K?]ILL’ council housing. The Telegraph, for once, is a bit more sober:
Every social housing tenant will be given the opportunity to own his or her home under a Conservative government, David Cameron announced yesterday.
He wants to create a revolution in ownership by allowing any council tenant the right to convert rental payments into a mortgage.
“In this way we can create a whole new generation of home owners,” the Tory leader said. “Millions of people would be able to own their flat, own their home. Millions of people would be able to pass property on to future generations.” …
Under the policy, the opportunity to have a mortgage instead of paying rent would be open to all council tenants and those in housing association properties.
As in current shared equity schemes, the mortgage would allow the tenant gradually to buy the property, with the rest being owned meanwhile by the council or association.
Mr Cameron said the policy – which follows Margaret Thatcher’s hugely successful right to buy plan – would allow greater social mobility.
Addressing a conference examining the difficulties of first-time buyers, he said: “There is a huge gap opening up between those who have achieved the dream of owning a home and those who, although they are working and striving and earning, can’t see how they are going to be able to achieve that dream.”
But critics said that the scheme would worsen the housing crisis by depleting the number of affordable rented homes.
Graeme Brown, of the housing charity Shelter, said the proposal would “exacerbate the nightmare of bad housing for thousands of families suffering at the sharp end of the housing crisis”.
Peter Tutton, of Citizens Advice, said that some people who had taken up their right to buy council properties had been unable to pay their mortgages and faced being left without a home. “For them, the dream of owning a home has become a debt nightmare,” he said …
[Michael Gove, Tory housing spokesman] said it was vital that social housing was replaced as it was sold off. Councils should be able to use the capital from selling the homes to build new houses.
“We are in favour of expanding the housing supply overall,” he said …
The Tories’ right to buy scheme was introduced in the 1980s in the face of fierce Labour opposition. Labour eventually accepted it but introduced restrictions which have made it less attractive and reduced the properties available for purchase.
Labour and the Liberal Democrats dismissed Mr Cameron’s scheme, saying that it was simply a recycling of a failed policy when the Tories were last in power. Labour said the policy had resulted in only 400 sales in the 11 years before it was abolished – fewer than 40 homes a year.
There was indeed a Rent to Mortgage scheme until it was abolished in 2004. Why it was so unsuccesful I’m not quite sure – perhaps anyone who could afford to just opted to take up the Right to Buy instead. But that may be changing now, as since the government fixed the maximum RTB discount to £16,000 in high demand areas and tightened up other aspects of the policy, sales have plummeted, as revealed by Inside Housing today. That should make a rent-to-mortgage where a tenant buys a share instead of the whole property more attractive. But the devil will be in the detail: will the tenant pay rent on the remaining share? Who will be responsible for the costs of management and maintenance? How will the costs of major works to leasehold properties – often several thousand pounds a year in London at the moment – be shared out? This might be a succesful policy for the Tories, or it might end up being a very expensive and time-consuming way to usher a few people into home ownership and a few others into serious debts. And while landlord councils are a natural Tory enemy, I wouldn’t have thought he wants to antagonise housing associations, who now own around half the social housing in England and build the vast majority of the new stuff. It’ll be interesting to see their reaction.
Housing need and the reciprocal welfare state March 2, 2006
Posted by Brickonomist in Communities, History of social housing, London, Overcrowding.add a comment
Here’s Will Hutton on housing, racial tension and the welfare state in London’s East End:
And while the public institutions look good and the place well-ordered, beneath the surface there is an ominous cracking of the values that underpin both public initiative and the welfare spending on which so many families depend. For, as The New East End, one of the most original and authoritative recent books of contemporary sociology, argues, there is mounting disaffection here about the principles on which today’s welfare state is constructed.
It is breeding both a disaffiliation from the Labour party and unwelcome racism that Labour’s leaders should heed more closely. The New Labour aristocracy should beware; this is toxic stuff – and it arises mainly from the principles it espouses.
The flashpoint is not welfare spending, education or health, although all can be problematic – it is housing. The white working class, once the largest group in the borough, thinks that Bangladeshis are more readily housed in bigger and better homes. ‘They’d come over from Heathrow immigration,’ reports one of the 800 interviewees on whom the book is based, ‘and straightaway, they’d be housed. Our children couldn’t afford to buy around here, so they had to move out.’ Such sentiments are expressed many times over.
The authors think the white working class has at least half a point. The 1968 Housing (Local Government) Act made homelessness the key to housing entitlement, which had the unintended effect, they write, of pushing council housing away from the realm of the respectable poor to the rough. It revived the notion of welfare as charity. No longer could working-class families make their way to the head of the housing queue through patience and good behaviour; instead, those in need, especially from minorities, could leapfrog them.
The resentment this sparks is huge. The postwar working class thought it had created and earned a welfare state that was based on the same principle of ‘reciprocity’ as their communities: families looked after their own and others, expecting the favour to be returned.
The working class was wrong. Partly because of cost pressures, partly because of liberal, middle-class guilt and partly because it has seemed rational to target money where it is most needed, the welfare state has transmuted into a means-tested entitlement system. This may seem rational in the Treasury, the Institute for Fiscal Studies or the LSE lecture room, where targeting scarce financial resources is elementary housekeeping. On the ground, it is sheer poison.
… families and individuals most likely to lose in the race for housing are both more inclined to be racist and distrust the values of the current welfare state. To drive the point home, women over 55 are more likely than men to be racist; but, as the authors acknowledge, it is their children who are least likely to be housed, and they who are most likely to suffer loneliness when the kids move out of the borough.
Kate Gavron, one of the authors, told me that she was pulled both ways; if the state does not meet need, however undeserving, who will? My view is more uncompromising. Better a welfare state that works for the majority on the basis of universalism and reciprocity and which people of every race understand than a welfare state that works for the minority and succours racism. The lesson is clear. Means testing and targeting are, in the long term, a social, racial and values disaster.
The implication of Hutton’s conclusion is that housing should not be allocated with a means test, which leaves two options: ration the same supply of housing out on the basis of time spent on waiting lists, or increase the supply to meet all or at least more needs.
The frustration is that he addresses the cost of neither option, which are considerable: if housing is no longer allocated on the basis of need, those in most need will lose out, while the cost of meeting all housing needs in Tower Hamlets would be immense (which is not to say it wouldn’t be worth it).
Hutton’s article (and possibly the book he describes) might give the impression that Bangladeshis in Tower Hamlets are doing pretty well out of the welfare state, but they still suffer the most poverty and the most overcrowding in an area where around a quarter of social renting households are overcrowded (see tables here).
Some might argue that the parents of overcrowded families have brought their situation on themselves by having too many children, which ignores the fact that poverty often goes hand in hand with overcrowding, and also that many Bangladeshi families are large primarily because they look after their elders at home. It also begs the question of whether the faults of the parents should be visited on the children who would otherwise have to grow up in overcrowded conditions.
Hutton is right that the problem of housing need poses a problem for the reciprocal welfare state, but it would be much less of a problem if the supply of social housing wasn’t so pitifully inadequate in today’s Britain.
Where should we build new social housing? February 28, 2006
Posted by Brickonomist in Communities, History of social housing, Planning.2 comments
This presentation to the 2005 Planning Summer School by Professor Glen Bramley has some interesting slides in it, not least the decomposition of regional price differences and price changes into different causes such as labour market trends and planning restrictions. But most intriguing to me is the chart reproduced below, which shows the proportional increase in social housing stock in wards grouped by their level of deprivation.
What this seems to show is that the most deprived 10% of wards, which already hold around one-third of the existing social housing in England, seem to be where most of the new social housing is being built.
Arguably, there are good reasons in favour of such a strategy – the most deprived areas are probably cheaper to build in, there will be less political opposition from affluent local home-owners, and deprived areas tend to have more existing local housing need anyway.
But aren’t there equally good reasons to resist an ever-growing concentration of social housing in the poorest areas? I recently argued that the local concentration of social housing tenants contributed to concentrated poverty and deprivation. A better policy might be to scatter new social housing in the less deprived parts of the country. This would help de-concentrate poverty, and if it does hit house prices in those affluent areas, well, some would see that as no bad thing.
Places of last resort February 16, 2006
Posted by Brickonomist in Communities, History of social housing.add a comment
In their article (page 3 here) for the LSE’s Urban Age conference on London, Miguel Kanai and Sarah Ichioka say
the decaying and rapidly shrinking stock of affordable housing in inner London continues to be, depending on the analyst’s view, an etrapment or the last resort for the least fortunate in a largely unaffordable metropolitan housing market.
I would argue it’s a bit of both. Social housing has undoubtably been a last resort for those unable to access housing through the market, but it’s also true that many social housing estates have become pretty bad places to live. Why?
I’d pick out three main reasons.
- Residualisation: council housing used to be mostly inhabited by the working classes, ie the upper end of the lower end of the income distribution. This was in large part because council rents were too high for the poorest of the poorest. But from the 1970s on, as rent rebates finally allowed the very poorest to afford council rents, as local authorities were forced to accept a duty to accommodate homeless households, and as the more affluent tenants left the sector by exercising their Right to Buy, social housing was predominantly the tenure of the workless poor. These effects were compounded by the huge rise in unemployment in the 1980s. As Chris Holmes says in his book A New Vision for Housing, this ‘residualisation’ was not necessarily a bad thing by itself – “the opening up of council housing to more of the poorest households was a desirable and overdue change”. The problems arose because of the interaction of residualisation with the second major factor.
- Concentration: The wave of council house building after the second world war was notable for creating local concentrations of social housing in far greater numbers and densities than had been seen before, many in inner city areas. This was partly a result of the extreme resistance to social housing from residents of affluent areas. As the poor and workless came to comprise a greater proportion of those living in social housing (as described above), the natural result was a great concentration of poverty and worklessness on single estates. Being poor is bad enough, but being poor and surrounded only by other poor people is worse, because it means fewer links to job opportunities, a neglected physical environment, and probably a worse schooling for your children as the impacts of deprivation on each child’s education and development are compounded – and children with a no prospect of a job and bored at school are more likely to gravitate towards anti-social behaviour and crime. In many cases, these effects interacted to create a downward spiral into hopelessness.
The combination of residualisation and concentration would have been bad enough in many cases, but only when combined with our third factor did many estates become such supremely bad places to live.
- Design: Holmes rightly calls the post-war ‘mass housing experiment’ “a disaster”. Most new estates were built in a rush and with little money, in a time when modernist architectural ideas were offering a hopeful but in retrospect totally impractical vision of high-density living. In practice, high-rise towers were often badly designed by architects, shoddily built by private contractors, poorly maintained by landlords and bereft of safe and secure play areas and surrounding amenities. High density living can work, as it does in many continental European cities, when accommodation is well designed and maintained and poverty is not piled on top of poverty, but in England the combination created serious problems. The fact that some former ‘no-go’ towers are becoming attractive to renters in the private sector suggests that greater mixing of tenures would have avoided many of the problems, but the urgency of providing accommodation to so many in need and, again, the resistance in other areas mitigated against that.
Recognising the increasing problems on the estates, those who could afford to often upped and left, which unfortunately tended to compound the problems for those left behind. Apart from simply being poorer, those left behind faced several barriers to finding work and, if they could, moving on and moving out:
- The benefit trap – The combination of high marginal tax rates, steep withdrawal of housing benefit and the cost of childcare makes work a pretty unattractive proposition for many who rely on HB to pay part of their rent. So they stay workless, and stuck in social housing.
- Immobility – Moving around within the sector is complicated and costly, which makes relocating to take advantage of job opportunities more difficult. Again, the net result is you’re stuck where you are, with any skills you have going to waste.
- The housing market - Even without these other factors, the unchecked rise of house prices would have made a home of their own an impossibility for many in social housing.
Social housing itself can’t be blamed for making its tenants poor, and without subsidised housing millions of people would quite clearly have been much worse off, as they were in the private sector slums and hovels occupied by so many well into the latter half of the last century. As a tenure of last resort, it does its job very well. But for too many social housing became something of a dead-end, and because they all tended to be lumped together in the same places the estates became places of last resort.
But it isn’t a lost cause by any means. Here are a few suggested solutions:
- More mobility within the sector across local and regional boundaries to allow greater access to work opportunities.
- Get rid of (or at the very least significantly reduce) the benefit trap by reducing the housing benefit tapers, cutting taxes on the lowest incomes, and subsidising childcare costs.
- More spatial mixing of tenures – Where possible and without neglecting the primary purpose of social housing to meet housing needs, move economically active people into council estates and poorer people into richer areas. Social housing has worked best when it has been mixed in with other tenures. Many streets in London demonstrate this – they contain apparently identical homes, some of which are privately owned or rented, some of which are rented from the council or a housing association. De-concentrating deprivation, from both ends, can work wonders.
The first two proposals are basically technical. The third, though, would be a major break from post-war practice, and politically controversial in affluent areas who have traditionally resisted any provision of social housing. Well, tough. The lesson of the past few decades is that social housing can help solve the problem of housing need, but if we concentrate it all in small inner-city areas we are storing up huge problems for the future. The rich may feel like they can escape these problems, but experience suggests that concentrated poverty, deprivation and crime impose costs on our whole society. A common-sense approach to accepting smaller levels of social housing in more areas of the country will ultimately benefit everyone.
