Author: monimbó

The Institute for Fiscal Studies says the government will put the clock back to 1948. Does this mean we aspire to be a developing country?
The question has been intriguingly asked by Aditya Chakrabortty in The Guardian. We already know from that remarkable book The Spirit Level that Britain is one of the most unequal of the ‘developed’ countries, and that UK levels of inequality are more characteristic of the global south. But Chakrabortty gives us many more examples. For instance, what advanced country would champion the widening of the A14 as a major piece of infrastructure investment, as Osborne did last week? And as he says, Britain now falls behind such third-world models (and I don’t mean that ironically) as Vietnam and Nicaragua in (respectively) maths skills and gender equality.
But this set me thinking about housing-related issues. First, as the media have also been making clear, we have become a nation of extreme debtors. UK credit card debt is not only the highest in Europe, it dwarfs that of the rest of Europe. As anyone who has lived in a developing country knows, inadequate wages mean that people survive by borrowing. And of course we aspire to inadequate wages too – as we know from the news that a new working person signs up for welfare benefits every five minutes. Don’t let’s rely too much on the welfare system though, as Osborne clearly wants to extinguish it. While developing countries like Brazil have created welfare systems where no adequate ones existed before, we’re busy destroying ours.
Of course, our over-reliance on homeownership is much more typical of a developing country than it is of an advanced west European one, and goes hand-in-hand with our propensity to borrow. Many southern countries would love to have a social housing system, especially one like ours where half the sector (the council half) no longer needs state subsidy. We’re eroding that too. In private renting, you could say that the ending of rent controls and the weak enforcement of standards already places us among developing countries, which tend to lack standards or else can’t enforce them. I remember once collecting money to help earthquake victims. I rattled my tin at one man who berated me for supporting countries which have no proper control of building standards. How soon before we reach this state ourselves?
Visiting London Boroughs coping with the ‘beds in sheds’ problem a year ago, it struck me how like dwellings in shanty towns they look. Many don’t even have toilets: they could be equally at home in a Mumbai slum. Unfortunately we’ve given up the common custom of ‘less developed’ countries of looking after older people within the family. However, as the Supporting People system collapses, we might need to relearn quickly the habits still practised in poorer parts of the world.
Another unfortunate feature of many developing countries is the absence of effective town planning systems. Cities tend to grow incrementally and look like down-trodden versions of Miami (not that Miami looks that great). If Osborne and Co return us to 1948 or thereabouts, will they wind the clock back far enough to repeal all the successors to the Town and Country Planning Act 1947 and the system it created, which used to be the envy of other developed countries, let alone developing ones.
There must be many more examples: I invite Red Brick readers to supply their own. Somewhere there must be a seasonal game in this. Except that this is no joke.
Chakrabortty uses a brilliant quote by Indian writer Shashi Tharoor, who says that India isn’t a developing country, in historical terms it’s a highly developed one in an advanced state of decay. Perhaps Britain’s decay isn’t yet as well advanced, but at the current pace it will catch up soon.

We haven’t seen the detail yet, but the Chancellor’s announcement on easing council borrowing caps seems to be much more about keeping the Lib Dems happy than about making any significant difference to numbers of affordable homes.

The plan is to increase borrowing caps by £300 million in total over 2015/16 and 2016/17, which means they will increase from a current £2.8 billion to £3.1 billion. In theory, this would be enough to build about 2,500 extra homes. Councils will have to bid for the extra borrowing capacity via their Local Enterprise Board. Under the plan, councils will make proposals to build new homes using the borrowing facility as part of their LEP when bidding to agree a Local Growth Deal with the Treasury. Ministers will then decide who gets the extra borrowing capacity, based on a value-for-money assessment. The government expects councils to put in public sector land, sell expensive housing assets and do deals with housing associations as part of their bids.

While this is good news, it’s pretty small beer for a sector that’s lost nearly 9,500 homes in the last 12 months through right to buy.  Right to buy is being pushed further – Osborne announced there will be ‘right to buy agents’ to help buyers complete their home purchase and he’ll provide £100 million to increase sales by improving access to mortgage finance. So we could easily see another 10,000 sales per year as a result. And this happens to be precisely his rather optimistic assessment for how many new homes his relaxed borrowing caps could produce.

The chances are that the Treasury has ensured that its forecasts of right to buy receipts balance out the additions to the borrowing caps, and the whole exercise is fiscally neutral. For some reason the Office of Budget Responsibility hasn’t been rolled out to validate (or otherwise) the Autumn Statement, so we can’t know for sure.

What is certain is that deals involving land, asset sales and partnerships with associations will all take time to put in place. A 2015/16 start date may be optimistic. The number of easy pickings for sales of ‘high-value vacant stock’ will be limited. Not many councils have potentially valuable empty properties hanging around like those recently sold in Lambeth, despite tabloid stories along the lines of ‘Is this Britain’s most expensive council house?’ The danger is that it will encourage ever more dubious schemes like the notorious Earls Court project which involve knocking down occupied homes in places with high land values.

The LGA’s response that the announcement ‘does not go as far as we would like’ seems tame given that they had just repeated their call for borrowing caps to be abolished.  CIPFA described the Chancellor’s move as ‘massively disappointing’ and the CIH said it was ‘far too modest and there is a risk that any gains could be offset by the requirement to sell high-value social housing and the expansion of right to buy’. Perhaps there is some good news in that borrowing caps are no longer sacrosanct, but a serious step is still needed either to abolish them or change the borrowing rules, or both, which could enable 60,000 more homes to be built over five years.

Which brings us back to the starting point. Unless the details when they appear offer something new, this looks like a bit of window dressing to give the impression of action when nothing much will happen and it won’t cost the Chancellor anything.  Above all, it was no doubt part of some quid pro quo for Nick Clegg, which will enable him to claim to his party that he’s delivered on a conference pledge, while at the same time he’s probably signed up to something much more disastrous elsewhere in Osborne’s autumn package.

In the week that the Scottish Government issues its white paper on independence it’s good to reflect on what they are already doing differently in housing, given that’s it been devolved to the Scottish Parliament for more than a decade.

First of all, while Whitehall cut housing investment by almost two-thirds after the 2010 spending review, Holyrood made rather smaller cuts. Initially housing suffered more than other capital spending, but the SG has been putting money back into the housing pot. The original three-year affordable housing budget for 2012/13-2014/15 was £630m, but it now totals just over £972m.  For the final year of the current programme, 2015/16, a total spend of £391m has been allocated, an increase of about 21 per cent on the average for the previous three years.

Scotland built over 8,000 affordable homes in 2009/10 but the figure slipped downwards to just over 6,000 in 2012/13.  The fall was less steep than England’s, though: from its peak in 2010/11 English affordable output fell by almost a third in only two years.  And Scotland has been meeting its target of building at least 6,000 affordable units annually.

Most remarkable is the continued emphasis on council building, which reached a recent record of 1,116 completions last year. This not only exceeded the programme’s target but was the highest level of council completions since the mid-1990s.  It also brings Scotland’s total very close to England’s – a country ten times as big. One reason is of course that Scottish councils suffer no restrictions on their borrowing, and prudential loans are a major source of funding (alongside grants and contributions from revenue).

The issue of cuts in grant rates has been a contentious one in Scotland, but the response has been very different. The SG set up a joint working party with social landlords to advise on grant rates, which recommended in July that they be raised across the board by £16,000 per unit. Remarkably, the Scottish Government accepted the recommendations in full. Grants have been raised, and some extra money put into the programme to keep it on target.

Of course, there is plenty still to criticise in Scotland: for example, housing association output has fallen steadily and Scottish associations are more vulnerable to welfare cuts and changes in the funding environment.  The Scottish Housing Regulator had to rescue three from near-insolvency in the past year.  Nevertheless, the minimum grant rate for associations is now higher at £58,000, or nearly three times English levels.  This reflects much greater government concern in Scotland about keeping rents at affordable levels.

What else is progressive about Scotland? Well, the housing bill which will end right to buy in three years time is now before the Scottish Parliament. Critics have said this is the wrong way to do it, that the delay will only encourage sales in the interim. But of course in Scotland the right to buy has already been ended for new tenants, and by 2017 at the latest it should be gone completely.  The SG says it is doing this to ‘safeguard social housing stock for future generations’, a wholly admirable motive.

Finally, of course, Scotland abolished the ‘priority need’ categories for homeless households at the end of last year.  Even so, homelessness has been going down in Scotland, albeit slowly, but the trend is opposite to that in England.

What more is promised if Scotland becomes independent? The white paper says that the bedroom tax will be scrapped and the roll out of universal credit will be halted. Benefits will rise in line with inflation. It says that ‘social housing remains an essential part of our system’.  It makes rather vague promises of ‘greater integration between our policies on housing supply and housing benefit support’.  There’s not much detail, but I must admit that if I lived in Scotland I know which way I’d be tempted to vote.

Despite almost universal objections either to the principle or to the practicalities, the coalition is determined to go ahead with its plan to force private landlords to check new tenants’ immigration status.  The measure is part of the Immigration Bill, due to enter its committee stage in the House of Commons on Tuesday.
The Immigration Bill and its impact assessment seem accurate in what they say about the scale of the scheme: nearly two million private landlords, many of them sole operators and half of whom do not use agents, will need to learn how to make immigration checks on around three million adults who enter new lettings each year.  Given the number of mistakes and the time it takes for the Home Office to make its own immigration checks, you’d think it would be rather less upbeat about how easy it will be for landlords to establish not only an applicant’s identity (which they already often do) but whether they are entitled to be in the UK as a long-term resident. The latter can be far more complicated and not obvious from the paperwork. The clearest warning of impending disaster came from the Immigration Law Practitioners’ Association:
‘We do not consider that the Home Office is in a position to take on a challenge of this scale. We urge caution. This project sets the Home Office up to fail. Again.’
When immigration minister Mark Harper was grilled on these issues by the Bill’s scrutiny committee last week, Pat McFadden MP put him under pressure about the difficult of dealing with less simple cases, for example where someone is entitled to an extension of their leave to remain in the country but they can’t get a reply from the Home Office.  A couple of days before, Katharine Sacks-Jones of Crisis gave a different example of someone escaping domestic violence who urgently needs somewhere to live with their kids, but whose paperwork is still in the ex-partner’s possession.
Harper either has remarkable faith in or is staggeringly complacent about the measures which the Home Office says will address these problems.  There will be an advice service for landlords with a target turnaround time of up to 48 hours and a ‘code of practice’ which landlords are expected to follow. If he thinks these will protect migrants applying for a tenancy, in the dog-eat-dog parts of the private rented sector in London and some other places, he is showing how little he knows of the reality of life in the poorer parts of Brent or Newham.  Perhaps there is a degree of irony in the Home Office assessment of ten minutes as the average time that landlords will take to check more complicated cases: it might take them rather less time than this to decide the prospective tenant is not worth the risk.
It’s unlikely that Mr Harper will take advice from Red Brick on this issue (though he could do far worse), but perhaps he should pay more attention to the views of landlord organisations. Several of them have expressed their fears that landlords won’t be interested in making checks in complicated cases, and in fact will have every incentive not to do so: first because it will take time and may delay a letting, and second because they face a fine of £3,000 if they mistakenly let a flat to someone not entitled to residence. The obvious consequence will be discrimination, not necessarily the result of racism but simply because landlords won’t want the hassle. The National Landlords’ Association said that if getting advice from the Home Office takes the promised 48 hours, ‘in many, many cases the property will have gone by then’.  They are worried that more tenants will have to go to ‘rogue landlords’ and be subject to exploitation:
‘This will leave vulnerable tenants forced into the arms of an underclass of rogue operators, who will not care and certainly won’t inform the immigration authorities.’
The UK Association of Lettings Agents said:
‘UKALA is deeply concerned that the bill’s requirements will further restrict access to housing for people from outside of the UK, or with non-standard requirements. Many areas of the UK have very competitive lettings markets and it is entirely conceivable that landlords will instruct agents to favour those tenants they perceive as ‘low risk’.

Labour has sensibly put down a new clause for the Bill which would require the government to pilot the scheme properly before it can be rolled out nationally. It is vitally important that, if the scheme is to go ahead at all, there should not only be pilots but that the effects on vulnerable people are properly assessed. But it would be even better for Labour to argue that the scheme in practice won’t have much effect in deterring ‘illegal’ migrants at all, since they are unlikely to try to get accommodation from regular landlords. Instead, it is pretty obvious that the measure will make life even more difficult for legitimate migrants who are looking for decent housing; the suspicion is that this is exactly what the government intends.

Not only have the Lib Dems rejected their own housing policies, they seem confused about what they mean. That’s the conclusion we are bound to draw from the past week’s debates in Glasgow.
It so happens that the Lib Dems had an excellent policy about investment in council housing which they adopted last year.  It’s set out in Decent Homes for All: ‘Liberal Democrats will abolish the “cap” on local authority borrowing for housing investment’. They had a similar unequivocal policy in the run-up to the last election.  The problem seems to be that they are scared to death of the consequences if these policies are actually implemented.
Nick Clegg successfully pulled the wool over delegates’ eyes at the Lib Dem conference, both by misrepresenting the policy and by claiming more for the watered-down version than it can possibly achieve.  Let’s looks at the watered-down one first.  It amounts simply to keeping the current borrowing caps on local authorities but allowing two or more councils to pool their borrowing potential.  The argument is that, given the rather arbitrary nature of the caps and the headroom they give councils, some who have more headroom than they need might be willing to give some of it up to help those who have far less. London Councils called for this last year in their report Meeting Londoners’ Housing Needs. Indeed in London it may help, especially if a borough giving up part of its headroom can get something in return, such as nominations on a proportion of the houses built.
However, to claim as the Lib Dems did in the summer that this could produce an extra 15-25,000 new homes seems highly unlikely for several reasons.  First, councils who are not yet fully using their headroom may simply be waiting to see how strong their finances look next year or the year after. Second, if any do decide to share their headroom, will they be able to reach agreement with adjoining councils on what they get in exchange? And third, since self-financing began in April last year, councils have made a total of just over 2,000 housing starts: would a reform as modest as shared borrowing caps really produce such a dramatic boost in their output?
Even wilder claims were being made about complete removal of the borrowing caps: that it might produce an extra 300,000 homes per year.  The amendment to the conference economy motion, which came from the Social Liberal Forum, was actually more sensible, calling for the ending of the caps and changes in the borrowing rules to facilitate ‘at least 50,000 homes per year for social rent’. This was rejected by Clegg and ultimately defeated, partly because delegates fell for his weaker alternative but also because Clegg said that it wouldn’t have much immediate impact anyway (yet strangely, the approved motion would!).
Roll forward a few days, and the otherwise conformist Communities minister Don Foster was suddenly saying that it is absolutely essential that the borrowing caps are scrapped. Shared borrowing limits should merely be the ‘first step’.  Did Don miss Monday’s economy debate, as Vince Cable was supposed to do? And will he pursue this ‘absolutely essential’ policy when he’s back in his department?
The other part of the Social Liberal Forum motion was about changing borrowing rules to conform with international norms, and this got a half-hearted approval on Monday as ‘party’ policy which evidently commits the coalition to nothing.  Even here, Clegg was confused and confusing.  According to the Guardian, he warned that ‘…if Britain “on a whim” followed EU definitions of public debt, so freeing councils to borrow, debt would then have to include taxpayer-funded liabilities such as in the banking system, meaning “debt would go through the roof”.’
This may have done enough to see off the dangerous lefties in the Social Liberal Forum but it was also nonsense.  For a start, the Treasury already treats its various financial interventions as a separate item in the accounts, not as part of its main measure of public debt.  Similar practices have been followed by other countries that have intervened in the banking crisis.
Banks like RBS and Lloyds are classed as public corporations anyway, so their debt isn’t included in international debt measures. But the truly frightening scale of these liabilities (originally £1.3 trillion) is regularly reported as a separate item in the UK accounts.
The point that Clegg may have been making is that UK debt on the main international debt measure, General Government Gross Debt, is higher at the moment than the Treasury’s figure which is based on Public Sector Net Debt. However, the Treasury is obliged to publish the general government figures and has done so for many years (the latest ones are here). These measures are the ones used in international comparisons by the IMF and other bodies.
Nevertheless, these issues are complex. If a proper study of the implications of moving towards international measures were to take place, it would be very important in clearing the way for a potential change that could benefit council housing (as well as other public corporations, such as those in the transport sector).  What is far from clear is whether this will actually happen as a result of the Lib Dem conference resolution. Will Clegg go back and insist that the coalition actually does such a study?

Demands grow for better standards in the private rented sector. The latest, a joint report from the LGiU and the Electrical Safety Council, calls for clearer powers for councils to introduce licensing and recoup the costs.  It follows on from a CLG Select Committee report, the Labour Party’s own policy review and a bill from Graham Jones MP, all calling for stronger enforcement powers.
The drivers for these reports are pretty obvious.  On the one hand, we have the exponential growth of the sector, doubling in size over a decade. Because of policy changes such as allowing councils to discharge their homelessness duties via private lettings, the sector is not only growing but also accommodates more and more vulnerable households.
On the other hand, we have the continuing problem of poor standards in a significant proportion of private lettings.  More than a third of homes fall below the Decent Homes Standard and at least one in five are unsafe, according to the latest English Housing Survey.  Despite a range of standards and regulations applying to the sector, a proportion of landlords fail to comply and staff resources for enforcement action have been hit by spending cuts.  The government announced extra funds for enforcement in July, but the £3m promised won’t go very far.
Yet in its crazed drive to force down net migration, the government is pushing ahead with massive new regulation in the sector which has nothing to do with improving conditions for tenants and indeed could worsen the plight of some of the most vulnerable ones.  In theory, private landlords will soon have to check that all adults moving into a house have the right to live in Britain, a task which is simple if the prospective tenant has a UK passport but which can be mind-bogglingly difficult if their proof is any of a couple of dozen other kinds of document.  Not only is this difficult, but it will have to be carried out by two million landlords making over one million new lettings per year. A consultation on the issue closed in August, and despite the hostile response the government seems determined to push forward.
It is difficult to know which is going to be more demanding: training so many people (nearly three-quarters of whom only manage one property), or ensuring that they actually make the checks.  That the Home Office is about to take this on given its own staffing cuts and with all the other pressures it faces on immigration is astonishing.  As the response to the consultation from the Immigration Law Practitioners’ Association says: ‘We do not consider that the Home Office is in a position to take on a challenge of this scale. We urge caution. This project sets the Home Office up to fail. Again.’
Yet the measure is almost certain to be included in the autumn’s immigration bill.  What will be its effects in the sector?  One possibility of course is that it will be widely ignored and poorly enforced.  The government will be able to tell the Daily Mail it’s taking action, and it might be months or years before its failure is exposed. Another though is that it might drive migrant households (or any who don’t have UK passports) further into the hands of those landlords who are least likely to ask questions of new tenants or comply with the required standards for their properties.
Yet a further possibility is that it will encourage discrimination, which will be easy to get away with given that landlords will at the same time be making financial and other checks.  As the Scottish Association of Landlords says in its response: ‘it will lead to discrimination against legitimate tenants whose residency status is in any way unclear or who are unable to obtain the required paperwork’.
The damage could be even worse if the government complies with its own ‘one in. two out’ requirement about new regulations.  The rule, created by the Business Department, means that the Home Office will have to find ways of cutting out two other forms of regulation to allow this one to start.  It is not yet clear how it will do this, although to some extent those dealing with the private rented sector can take comfort from the fact that it is the Home Office that has to meet the rule, not DCLG. They might have offered up existing regulations that affect landlords, thus making the whole thing even more bizarre.

Would Grant Shapps be capable of going to Brazil for two weeks and producing a convincing report on the state of its housing system? I suspect not. Yet a rather remarkable woman from Brazil managed to assess the housing issues we are facing in the UK not only accurately and succinctly but in decidedly human terms, after just a fortnight’s visit. Raquel Rolnik is not a politician, but perhaps British politicians on all sides could take some lessons not only from what she said but also from the refreshing way in which she said it.
Her preliminary report will be followed by a fuller one by next March. In little more than seven pages the present one is hardly likely to be comprehensive, especially as she devotes much of it to the ‘so-called bedroom tax’ (carefully phrased, pace Mr Shapps), which Steve is covering separately. The standpoint she adopts is aptly summarised in one sentence:
‘…the right to adequate housing compels Governments to look beyond aggregated general figures of supply and demand in order to place housing needs – and not housing markets – at the centre of the decision-making.’
Professor Rolnik is careful to explain how she sought to gain an impression of housing need in the UK, which she did not only by studying background reports but by talking to a fairly large number of people in housing need themselves. Some of these were victims of the bedroom tax, such as disabled people or single parents, but others were Gypsies and Travellers, Catholics from Northern Ireland, migrants from the EU and refugees and asylum seekers. A flavour of her approach is given by her conclusion on those penalised by the bedroom tax, who are often ‘on the margins, facing fragility and housing stress, with little extra income to respond to this situation and already barely coping with their expenses’.
As she says, the right to housing is not ‘about a roof anywhere, at any cost, without any social ties’. Nor is it about ‘reshuffling’ people according to how many bedrooms they have at a particular time. If we treat housing in that way we forget its vital role in keeping kids in school, helping people get jobs and sustaining communities that work.
That a professor from Brazil can speak in terms that resonate with people who work in or are tenants of social housing in the UK is not surprising, especially given her practical background and the fact that she talked to real people while she was here. But it’s a depressing contrast with the language used not just by Mr Shapps and the party he represents, but with the current political discourse in Britain, in which the needs of the most marginal groups now hardly figure at all.
Rolnik also has something to say about homeownership. Here she can speak with authority as Brazil (like much of Latin America) has a higher proportion of homeowners than Britain. Yet she far from venerates its importance. She says not only that the government has prioritised it ‘in detriment’ to other tenures but that it has been ‘taken over’ by the financial sector. Who could argue that either of those statements doesn’t apply to Britain since the 1980s?
A further factor that riles her is the cavalier way (although she is too polite to use that word) in which we squander public assets. Not replacing houses sold through the right to buy is one example. Flogging off public land for private development is another. Here is something else at odds with the Westminster discourse: someone who thinks there is a ‘public good’ which should be looked after, not simply handed over to private interests.
Shapps has convinced himself that Rolnik came with a political agenda. I think it’s more accurate to say that she came with a particular mindset: she knows all too well from her experience in Brazil that valuable public assets are created painfully and often in the teeth of obstacles like aversion to taxes and difficulties in collecting them, and corruption among those with access to the public purse. If the assets so laboriously established are in good shape and serving their purpose, why the hell would you flog them off? To do so merely shows a different political mindset, roughly summarised as ‘private=good and public=bad’.
Raquel Rolnik concludes her preliminary report by hoping that the full one will ‘continue the constructive dialogue’ established by her visit. So even in her last sentence she makes a point from which Grant Shapps could learn something. And the overall tone and emphasis of her report should be a lesson to all: there’s nothing like being obliged to see ourselves as others see us.

As a planning student in the 1960s The Death and Life of Great American Cities was one of my favourite books.  Despite Jane Jacobs’ dislike of town planners, it was difficult to disagree with her prescriptions for what a vibrant city should be, even if her rather libertarian views meant that when she called for mixed communities she didn’t want these to be provided through social housing.  It’s probably fortunate for her native New York that not all of her views took hold.  In a country that’s famously wary of social provision, the New York City Housing Authority still has 178,000 apartments for New Yorkers on low incomes, including over 50,000 in Manhattan. It also has over 90,000 leased units in the private sector.

New York University’s Furman Centre, which specialises in urban policy, has just published its regular report on The State of New York City’s Housing and Neighbourhoods. Perhaps surprisingly, this shows that most of the city’s population lives in apartments that are protected from market rent levels.  Two-thirds of New Yorkers are tenants, and the chart shows that while 16% live in public sector units, a further 45% have rents that are controlled in some way.  This leaves only 38% paying full market rents.  The size of the sub-market sector even seems to restrain rents overall: in the period 2007-11 (admittedly a time when US house prices fell by 20%), average rents in the city rose by only 8.5%.

This is not to say that rents in general are easily affordable – median rents have now edged up to 32.5% of incomes, with half of tenants having to pay more than 50% of their incomes in rent. The implications have been considered by the New York Times Magazine, which begins its story by speaking to the proprietor of a downtown grocery store. He explains how his customers used to come equally from rich and poor neighbourhoods, but that many poorer residents have now moved further out of town to find cheaper housing. While the area is still mixed, the mix is under further threat: if New York City is forced by the federal government to deregulate rents, as many in Congress would like, the result could be that Manhattan ‘would quickly become an island occupied solely by middle class and rich people’. 

The magazine makes the point that effectively there are two markets in Manhattan, one that is subsidised or regulated and one where rents can hit the stratosphere.  And some tenants in the former can, by accident, have healthy enough incomes to be able to afford full market rents yet they still enjoy regulated ones. But, however imperfect, the rent regulations first introduced in the 1940s have a key role in maintaining the social mix.  The article concludes with a question and an answer. ‘What happens if all the rich people are on one island and the poor but creative are somewhere else? It might just destroy the strange admixture that makes Manhattan so appealing in the first place.’

The read-across from New York to London may not hold up in detail, but perhaps there are some common warning signs.  London’s tenure pattern is different: it is almost equally split between homeowners and tenants.  Of the latter, just under half are social tenants.  And of the private tenants, about one-third receive housing benefit.  In other words, in round terms about 30% of Londoners have rent-controlled or subsidised housing, whereas for New Yorkers the proportion is about 40%.

Of course, there are all sorts of problems in comparing two cities with different histories and economic contexts, but New York and London undoubtedly have issues in common: pressures from population growth and migration, ethnically diverse populations, and large rented sectors (compared with the rest of either the US or the UK) catering for more mobile populations and widely ranging income levels.

So far, both cities have retained their mix of incomes and (as the New York Times points out) this is crucially dependent on the housing mix: if more of the stock is sold or rented at full market rates, poorer people will move out and community diversity will be lost.  New York has the advantage that a higher proportion of residents still enjoy sub-market housing costs. In London’s case, not only is the proportion already lower but a range of policies are making it worse: selling social stock or converting it to market or near-market rents, restrictions on local housing allowances and other features of welfare reform, and the failure to build enough new social housing.  Given the evidence that lower-income households are already being forced to leave inner London, the case for looking at ways to restrain private sector rents – as well to maintain the supply of social housing – has never been stronger.  The fact that coalition politicians are either indifferent to the implications of their policies for the capital city, or even actively welcome them, is deeply depressing.  Perhaps selected chapters of Jane Jacobs’ great book should have been on their holiday reading lists.

It’s surely not coincidence that within the last couple of weeks we’ve had headlines in the Daily Mail blaming immigrants for the housing shortage and the Times front page calling for a curb on their claiming benefits (including housing).  While you can read articles debunking each of these here and here, few of the people who’ve noticed the Mail or Times headlines will bother to check the facts.
We don’t know if the government was behind these newspaper stories, but we do know they are busy stirring up anti-migrant feeling with their Go home or face arrest adverts.  The ending next December of the current restrictions that apply to Bulgarians and Romanians is being hyped as a potential disaster despite little evidence that many people from either country are poised to come to the UK.  But there is enough manufactured risk of this happening to require David Cameron to promise a ‘clampdown’ on recent migrants accessing social housing within two years of their arrival, even if the latest census figures show that two-thirds of migrants who arrived in the last decade are in private lettings, and common sense should tell him that within two years hardly any will qualify for social housing.
The plans to force private landlords to make immigration checks (on over 1.2 million new lettings per year in England alone) are clearly as much about deterring legitimate migrants as they are about catching undocumented ones.  The government impact study doesn’t even consider the possibility that the new rules might force legal migrants into the hands of unscrupulous landlords who are less likely to bother with the checks.  Of course, the government says it is tackling the bad landlords through its beds in sheds initiative, but the press coverage it generates invariably links the campaign to removing illegal immigrants, rather than highlighting action to help the plight of those forced to live in such poor conditions.  And far more migrants are living in dodgy conventional housing than are consigned to beds in sheds.
In a thoughtful blog this week, Alex Marsh asks whether ‘aggressive intolerance’ has become a substitute for an aggressive housing policy.  He reminds us of something that Red Brick pointed out in response to a speech by Theresa May last year, that most housing demand is driven by the indigenous population.  Yes, it’s true that net migration has a significant long-term effect, but if migration were to stop completely tomorrow we still wouldn’t be building anywhere near enough houses to meet the country’s needs.  And as Alex says, the impact of immigration on the housing market is ‘as much – if not more – about super-rich individuals purchasing top end properties as an investment, thereby inflating house prices’ as it is about low-income migrants in the private rented sector.
As he goes on to say:
‘…the poisonous nature of the immigration debate allows an alternative “common sense” explanation for the housing problem to take hold. If you venture below the line on just about any online post relating to the UK’s housing problem – which, in general terms, isn’t something I’d recommend – it does not take long before a commenter will state that the origins of the housing crisis lie in uncontrolled immigration: if only we shut the borders and sent all these undesirable foreigners home then there would be plenty of homes for all the British people who have the right to live here.’
No one in government has said this, of course, but they don’t need to.  There are plenty in the media and elsewhere that will interpret a ‘clampdown’ or Cameron saying (in March) ‘new migrants should not expect to be given a home on arrival’ as the signal to blame immigrants for the housing problem and create the new ‘common sense’ that Alex talks about.
Marsh suggests that housing researchers need to more actively expose what the real drivers of housing demand are and force politicians to engage with the issue.  This might help, but it’s difficult to see it having much effect by itself.  We badly need the Labour front bench both to keep on talking about the failure to build enough houses and to say why they are really needed.  It’s convenient for government when they haven’t solved a problem to blame the victims (or the last government).  However, in this case the real cause of the housing crisis is pretty obvious, if people can only be convinced to look beyond the headlines – and if the government’s use of the race card is exposed as being just that.

Two recent reports readdress the proposal that higher earners in social housing should pay more rent. What should happen next?
Pete Redman’s report, House-Keeping, for the Centre for London, builds on earlier work that the centre published, called Home-Work. Both pieces argue that higher-earning tenants should pay higher rents. The crucial difference from the government’s proposals, set out in the Pay to Stay consultation in June last year, is that the increases would be phased in above a quite low income level, rather than applying in a single leap once income passes £60,000.  Apart from arguing that this provides less of a disincentive to earn more (since the rent increase kicks in gradually), Redman also calculates that the extra income will be more significant and lead to greater reinvestment in new housing.
The Centre for London proposals are controversial but at least they argue from first principles and are evidence-based. The latest paper on the issue from the government is, however, much more disappointing, in two respects.  It’s a Summary of Responses to the DCLG’s Pay to Stay consultation, which also outlines what the government plans to do next.  The first disappointment is that many in the sector are reported to have gone along with the proposal to charge higher rents to tenants earning over £60,000, which is surprising given the much-discussed practical obstacles and the potential costs of collecting relatively small amounts of extra income. The second disappointment is that the government doesn’t seem to have heard the practical objections that did arise, and is simply marching forward with its plans in their earlier form.
In particular, although it mentions the idea of phasing in higher rents as income increases, it rejects it, sticking to a single £60,000 income threshold. Above this market rents will apply if the landlord chooses to implement the scheme (which remains voluntary). This is despite the fact that the government’s estimates of numbers of tenants with these high incomes have fallen.  Originally it was thought there were between 12,000 and 34,000 tenants earning more than £60,000; now it’s down to between 11,000 and 21,000. (It now seems quite likely that many landlords will realise they have so few higher earners that the scheme is not worthwhile anyway.)
One of the main objections to all this is that it adds to the growing incoherence of rent policy in the social sector that Red Brick has discussed before.  We could soon have a situation, particularly in London, where market rents are being charged to ‘high’ earners, while most social tenants pay rents that are about half market levels, but at the same time a growing minority who are poorer than the average pay up to 80% of market rents because their homes have been let at ‘affordable’ rents. How sensible is that?
And this is only one aspect of the incoherence of rent policy: we haven’t mentioned the arbitrary nature of the bedroom tax or overall benefit caps, or the sad attempt at an overall policy outlined in the Spending Review, where rents for similar properties will continue to vary widely between landlords because Labour’s policy of rent convergence in the sector is being halted before its aims have been achieved.
There is an urgent need for a proper review of rents policy, proceeding from a policy discussion about affordability and what rent-setting is intending to achieve.  The issues were summarised earlier this year in a CIH publication We need to talk about rents.  We do need to talk about rents, and it needs to be a more coherent discussion than the one in which the coalition government is stutteringly engaged.