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The death-knell for council housing – again August 18, 2006

Posted by Brickonomist in History of social housing, Local government, Party politics.
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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.

Changing the overcrowding standard July 19, 2006

Posted by Brickonomist in Homelessness, Housing need, Local government, Overcrowding.
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The statutory measure of overcrowding in England is a bit of an anomaly. From Tackling Overcrowding in England: A Discussion Paper:

Although the intention of the legislators in 1935 was that the standards should be regularly updated, they have in practice been carried over unchanged into the 1985 Act. They are as a result now well out of line with contemporary expectations. For example a couple with a boy aged 15 years and a girl aged 13 years in a one-bedroom flat would not be statutorily overcrowded because the father and son could share one room and the mother and daughter the sitting room (or even the kitchen).

This hasn’t in itself increased the number of overcrowded households – that’s driven by the availability of accommodation that is both suitable and affordable – but it has reduced the recognition and assistance available to people in overcrowded homes. Changing the standard might give overcrowded households more priority when it comes to accessing social housing, as opposed to homeless households who might be living in housing that’s at least big enough even if it is temporary.

With the publication of this discussion paper it does look as though the government really wants to tackle overcrowding. The main solution will still have to be building more larger affordable homes, but changing the standard should at least go some way towards removing a major distortion in the system for allocating social housing.

Housing and hatred in Barking and Dagenham July 8, 2006

Posted by Brickonomist in Housing need, Local government, London, Planning.
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Here’s another article focusing on the housing crisis as a key factor behind the recent electoral success of the racist British National Party in Barking and Dagenham. It suggests that the ease with which the BNP whipped up resentment over asylum seekers and other ‘outsiders’ apparently jumping the queue (sometimes, it was claimed, with the help of cash grants from neighbouring boroughs) for social housing is a bit of a puzzle, as there are only a handful of asylum seekers accommodated in the council’s housing stock. Charles Fairbrass, Labour leader of the council, suggests people are attributing shifts in the housing market to council policy:

There is a growing black middle class in London and many of them want to get on the property ladder. Because we have some of the cheapest housing in London, they choose to buy here. And when they buy ex-local authority property, people often assume that those properties are still local authority and they’ve been allowed to jump the queue.

I wonder if the movement of homeless households around London has something to do with it too. After all, according to the numbers in Figure 3.6 here, fully one third of the ‘privately rented’ housing in Barking and Dagenham is actually inhabited by homeless households who are being put up in rented accommodation while they wait (often years) for a permanent home. Many if not most of these households will be non-white, and many have probably been placed in Barking & Dagenham by other councils. This could well be perceived by locals as an influx of ethnic minorities into the borough’s social housing stock.

All this benefits nobody except the BNP and the (blameless) private landlords who get to collect extra-high rents (mostly funded through Housing Benefit) from their homeless tenants. The main solution has to be to increase the supply of permanent social housing to provide a decent permanent home to all those who need it.

Memory of a free festival June 22, 2006

Posted by Brickonomist in International, Local government.
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Not the kind of thing you expect to see on DCLG research pages:

The Free Communes Experiments: Lessons for policy in England

Oh wait, it’s just about freedoms and flexibilities for local government. Unsurprisingly, one of the main lessons is that just because one department decides it’s a great idea to devolve more power to councils doesn’t mean they all do:

A key lesson of the FCEs is that it is important to secure the full commitment of all of the central government departments to which local authorities need to apply for flexibilities and freedoms. Without this it was difficult to achieve ‘joined up working’ at local level and for communes to secure the flexibilities and freedoms that they needed. (Similar lessons have emerged from the first round of LPSAs). It is therefore important that the Treasury, Department of Health and Department for Education and Skills and others, not just the DCLG, are fully involved in and committed to any future attempts to allow authorities new freedoms.

This most centralising of governments is going to take some convincing that “hands off” really is the best policy.