Blog Post

Guilt by Associations

Leading housing associations are losing their integrity as charitable organisations. They continue to trade on a set of myths about the sector that no longer hold true – writes Suz Muna.

Housing Associations Build Social Housing

Associations are increasingly indistinguishable from private developers and landlords, and their activities are increasingly focussed on market-level rents and sales. The result is that the interests of tenants and leaseholders trail in the wake of the board’s need to generate large surpluses and satisfy their lenders.

Associations generate larger profit margins by developing for market sale and rent than from any other activity. Inevitably, the profits are greatest in London where house prices are higher. The boards of Associations increasingly gravitate towards construction, and especially in the South East. They are aided and abetted by government policy, regulatory institutions and finance houses.

Analysis of the sector shows that there has been a considerable shift in its stock profile over the last few years. For example, in 2019 the category of housing with the largest percentage of growth was in market sale (non-social leasehold), jumping almost 16% (8,500 units) on the previous year.

The change in profile over a seven year period spanning 2012 and 2019 illustrates a sharp jump in Low Cost Home Ownership (LCHO) units, and a corresponding decline in supported housing. The ring-fencing of grants under the Supporting People programme ended in 2009.

Stock profile changes include conversions from the more secure types of tenancy with cheaper rents attached such as social rent which is capped at 50% of market rents. Often these are converted to less secure tenancies with higher rents.

Property lawyers Savills captured this trend in May 2019 when they noted that “the amount housing associations generated from new open market home sales increased 16% (£221 million) to £1.61 billion between 2016/17 and 2017/18, with 37,000 homes for sale contractually committed to be built in the 18 months from December 2018”.

Housing Associations Fund Their Activities from Rents

This is a myth that should be busted, not least because it implies a stability that is absent. In fact, house building in particular is funded through debt leveraged on existing homes. The Regulator for Social Housing anticipates that debt of £42 billion will be added to the sector’s debts over the next five years. And ratings agency Standard & Poor predicted that the need for housing associations to rely on debt to fund their activities will increase not decline in the future.

Housing Associations are Governed by People with a Commitment to Social Housing

One trend drives another. The focus on development means that associations deliberately attract board members with backgrounds in equity and finance, squeezing out those with any genuine commitment to, or experience of, social housing. The exceptions are occasional hand-picked and often financially reimbursed ‘tenant board members’ with no democratic mandate.

Many housing associations publish brief biographies for their board members. What these show is just how widespread board-level involvement has become by people whose careers span financial services, planning, development, property markets, private finance initiatives, and insurance industries.

There also exists a golden circle whereby the housing association and housing sector institutions populate each others’ boards. One Housing Group, St Mungos, Clarion, Paradigm, and Onward Housing for example, are all led by ex-employees of the Regulator of Social Housing. The Chair of Peabody’s board, Lord Kerslake, previously headed the Homes and Communities Agency.

The corporate plans developed by associations inevitably reflect the highly commercial interests of its board members, and the vicious circle is complete.

Associations Have Inclusive Cultures

An inclusive culture would in fact be a terrible hindrance to an ambitious housing association, and frowned upon by its institutional backers. To help ensure that associations are unchecked in their commercial direction of travel, they are moving away from democratic influence by tenants and residents, preferring methods of engagement over which the landlord has almost exclusive control.

Tenant and Resident Associations (TRAs), the most democratic of engagement models, are being replaced by Tenant Scrutiny Panels whose members are appointed by the landlord. This is akin to the derecognition of a trade union in favour of an employer appointed staff council – something that many associations also seek to do.

The Greater London Assembly noted in 2018 that the Grenfell Tower fire had “brought into sharp focus the lack of effective mechanisms for social housing residents to have their concerns addressed and to hold their landlords accountable for property standards and management.” The Assembly also noted that TRAs were being actively undermined by having recognition by the landlord made contingent on adoption of the association’s model constitution.

What these trends produce for tenants is inadequate repairs and maintenance services, high rents and service charges, anti-social behaviour problems, discrimination against those with disabilities, unsafe homes, and the cladding scandal. Despite huge leaps forward in communication technology, alerting the landlord to a problem is becoming increasingly difficult, and attempts to find a resolution too often feel like a war of attrition.

It Doesn’t Have to be Like This

It is all too clear to the tenants, residents and staff of housing associations that this sector has undergone a fundamental transformation, but that public perception has yet to catch up. It is wealthy, powerful and almost wholly unaccountable. Remedy is needed in the shape of much firmer, independent scrutiny and regulation, rent controls, and a supply of genuinely affordable housing through local authorities.

The Social Housing Action Campaign (SHAC) is a democratic, voluntary network of tenants, residents, and workers in housing associations and cooperatives. It campaigns to improve the lives of those who live in HA accommodation and reduce the commercialisation of the sector. SHAC is keen to build links with Labour councillors and MPs with an interest in housing. It is developing a political representatives network and would welcome contact via [email protected].

<strong><span class="has-inline-color has-accent-color">Suzanne Muna</span></strong>
Suzanne Muna

Suzanne Muna has worked in housing for the last 20 years, serving continuously as a trade union representative alongside her paid work. She is secretary of the Social Housing Action Campaign, a trustee of the Public Interest Law Centre, and a member of the Unite Housing Workers branch committee

11 replies on “Guilt by Associations”

Housing associations are PRIVATE Registered Providers …

By being PRIVATE companies they hold no PUBLIC duties such as a duty to house or rehouse even if the prospective tenant is legally homeless.

Can we please stop calling them housing associations?

We could call them charitable but then the largest charities by way of income are the misnamed PUBLIC schools such as Eton, Harrow etc.

Then again it is not just PRIVATE Registered Providers who are acutely commercially focused and have nothing resembling ‘social ethos’ (whatever the hell that means!)

Registered Providers – the correct name for council landlords and who are the only PUBLIC sector housing provider now sees almost all councils have their own PRIVATE landlord companies called Local Housing Companies (LHC) and many try to claim LHC outputs as council housing when it is not even SOCIAL housing …!!

Does anyone remember the US TV series Soap with Billy Crystal by the way?

Excuse the flippancy but this is much more than semantics. It is a case that every 3 bed property at the social rent level when fully occupied is a NO DSS property. As are many 2 bed PRP properties at social rent and the overwhelming majority of 2 bed AR PRP (and RP) properties are No DSS properties too. We have a major crisis of afforfability caused by the affordable (sic) rent regime that has seen PRPs convert over 200,000 former social rent properties to affordable (sic) rent properties for an average 47% increase in rent overnight … sorry over a weekend as the SR paying tenant leaves on the Friday and the new tenant on the Monday is the AR paying tenant in the exact same property paying 47% more and not even a new lick of magnolia emulsion for that offensive ‘screw the tenant / sweat the asset’ regime of PRIVATE Registered Providers (aka housing associations)

Some PRPs this sees the rent treble over the weekend as the case of a Clarion 2 bed in LB Bromley increasing from £112 to £335 over a weekend (2017/18) – and that also means the AR model attracts greater housing benefit than the ‘nasty bastard’ PRS landlord can get in LHA …

…Oh hang on … Past regulators now being on PRP boards … the same regulators who allowed this asset sweating and f*ck you tenant regime to go largely unregulated are npw on the boards of the larger PRPs.

Please excuse my temerity for such a coincidence

Some selective use of statistics in this piece to push a fairly poorly thought through argument. Is Suz Muna in favour of less social housing being built?

Housing associations have to live in the real world; work in the market as it is and, as a result, have to cross-subsidise affordable homes and leverage their borrowing to develop new homes. Without this approach, far, far fewer homes would be built exacerbating what is already a crisis.

SHAC is certainly in favour of more homes, but the housing crisis is not touched (in fact it is getting worse) unless the homes are at affordable prices – affordable being based on average workers wages, not relative to the housing market as govt definitions of ‘affordable’ and ‘social’ rents are currently.

You say I have used stats selectively, but where is the evidence that HAs are cross-subsidising (genuinely) affordable homes. In fact, according to CIH data, HAs have been responsible for a net loss of social rented housing from the sector.

The solutions involve (1) Rent controls (2) Large scale council house building (3) much greater regulation of HAs (4) tenant and resident involvement as a right, not under the control of the HA executives.

Happy to discuss these issues further with anyone from the HA sector who wants to engage with us!

Compare this direction of associations to traditional building societies. Even the boards of (still) mutual societies are stuffed with similar people to that of housing associations. Have never seen a BS board that has a borrower on ‘board’

Clarion housing have some Nasty people working for them. One is Natalie hone. Telling me that clarion can take legal action against me for having wildlife visiting my own garden. If it’s causing a nuisance To the other Tennant’s. This is ridiculous. the truth is you can’t control where wildlife go.this goes to show that clarion think they own the planet.these housing association’s keep building homes and flats on green belt and woodland destroying habitat just to make money. Wildlife are bound to go in people’s gardens .I got in touch with my local MPS secretary she said if they do take me to court she is coming with me plus I am going to see how much it costs for a set fee to seek advice from a solicitor and get advice from citizens advice bureau. Clarion housing are not very nice to their Tennant’s anyway. They just love threatening them over something not written in the tenancy agreement. I hope they get shut down. Plus I’ve got problems with my mental health.

Excellent article and very timely. I do not think the issues highlighted here are restricted to the large HA’s. The themes highlighted here permeate down to middle sized HA’s and possibly smaller organisations.

Have to agree with CS. This article shows little understanding of the sector and the politics of the last 10 years. And is just incorrect in some of the sweeping statements made.

Clarion? Clarion? Sweet baby Jesus, due to legal reasons I cannot elaborate – if a certain someone working from same company is reading she’ll know why! To be attacked by a tenant due to rebuttal re sexual unwanted attention OMG…. Off I went down that dubious road called *support*. Biggest mistake when sides taken (but I hold aces) for further legal address. I instigated a court injunction, please do not mention the police (?) no assistance whatsoever. 2nd hearing via telephone call from Court – now the assailants ‘pal’ gave me word for word as to the ‘ support’ person (female) advising this Clarion’s tenant as to certain preparation & sympathy with assaliant despite my been here almost 9yrs prior to other moving in. I currently feel like I’m living in a care home due to everything from washing machine, hoover, toilet flushes, & then some bothering this narcissist – bit strong, but I won’t offend the reader with bad language.
Now an UNDERTAKING by both despite my instigating the legal route.
My data breached by the *support* person as with downright LIES from a narcissist. This being dealt with via PA from my local MP as with a higher Court. Clarion mentioned on trustpilot, Reddit as with Clarions staff past & present posting unanimously as to how they ‘really’ feel/treated by Clarion. The customer service dept is atrocious, & currently I’m awaiting address on a leak for over 5yrs. Environmental health now involved. If I could walk the streets as with risking my life, I would. I have a nice home but, unfortunately my health an obstacle. If I could, I’d rip Clarion to pieces due to the obnoxious treatment I’ve been subjected to – Clarion, if you’re reading, you know who I am and, I’d starve in order sourcing a reputable Lawyer & PROOVE event’s of the 14th February 2020 @15.15pm.
This can of worms opened by **”**** now I sincerely hope a full APOLOGY given in open Court.

Thanks for this article!
Part of the set-up now is heating systems that can be extremely expensive to operate, like some heat networks (district heating) and heat pumps. Private operators can be making a killing (literally – there are thousands of deaths from fuel poverty even without a pandemic) while HAs say they can do nothing about it because of the quality of their initial contracts with the owners of estates they have leased a portion of as part of the requirement to allocate some of a development to so-called affordable rents. A home is not affordable if you can’t afford to heat it.

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