Red Brick

The growth in the mobile homes sector over the past few years is a reflection of the pressure in the housing market.  Many residents like the lifestyle that comes with it and the normally rural or seaside location.  For people who are priced out of buying in the housing market, a mobile home can represent an affordable option better than paying rent.

The contrast between the euphoria of the Olympics and the riots that were in full swing exactly one year ago could not be greater.  It’s hard to believe this is the same London and the same Britain.

By Monimbo
How much of the recent growth in private renting is being fuelled unintentionally by right to buy sales?  And what impact is this having on the housing benefit budget? This question was posed here last month by Paul Dimoldenberg, based on the evidence he turned up of almost 40% of properties sold under the right to buy in Westminster having ended up in the hands of private landlords.  As he pointed out, this means that money is being spent not only on funding big discounts for the original purchasers but then year-in-year-out on the local housing allowance payments to the many low-income tenants now housed in them, who otherwise could have been in council lettings.

The main reasons for opposing the Government’s proposals to charge more rent to social tenants with high incomes – the so-called ‘pay to stay’ policy – are practical, and the CLG Consultation Paper is seriously deficient in its consideration of the bureaucracy and cost involved in managing such a system.
In short, the plan is to allow social landlords to put rents up if a tenant (or the two highest paid individuals in a household) earns above a threshold of income, which might be £60k, £80k or £100k or even some other figure. 

Following on from Tony’s post yesterday that it is the collapse in construction activity, and especially housebuilding, that has driven the economy into a third successive quarter of negative growth – the Osborne recession – it is interesting to note more people on the airwaves arguing that housebuilding is the best way get the economy moving.  For example, economists Kate Barker and Vicky Pryce on last night’s Newsnight.
There also seems to be a greater recognition that housebuilding can be got moving more quickly than other infrastructure projects such as railways and roads.
It is hard to exaggerate how dire things are in construction.  In his review of construction forecasts, Brian Green on Brickonomics shows how all the leading experts and trade bodies are adjusting their forecasts downwards, and from an incredibly low base.  His summary is that: ‘The weakening economy and lack of resolution in the Euro zone have led the expert forecasters to doubt the ability of the private sector to pick up the slack as public spending cuts reduce demand in construction.’
This week, in a timely review of the housebuilding industry published for Shelter, FTI Consulting, advised by Kate Barker, asked searching questions about the industry and why supply is so inelastic.  It looks at all the key factors that determine housing supply, the broad relationship between housebuilding and the wider economy, and the crisis conditions we have been experiencing since 2008.
Their analysis leads to an unpalatable conclusion that the issues facing the housebuilding market are not just related to the current crisis but might be even more deep-seated: ‘…while action to address market failures and limit the unintended consequences of government action may well lead to an improvement in supply, it still may not deliver from the market the level of house building that is required.’ 
And it raises an essential point: ‘These fundamental and inherent issues about the nature of the house building industry and the housing market raise questions about the appropriate role of the state in facilitating an economically and socially optimal level of supply.’
The report unfortunately shies away from directly trying to answer the question – saying it is beyond its brief – but makes a number of sensible suggestions for policy that might make a modest improvement in the way the market functions.
They are right to call for a re-examination of the role of the state in housing provision.  On Guardian Housing Network recently, also available on Red Brick, I argued:  ‘It will take many years of economic recovery to re-establish a self- assured housebuilding sector. Even then, there is no economic reason why the output from profitable housebuilders should coincide with our national aspiration to build homes.’
It is a relatively straightforward historical point: over the long term, the private sector has never built the number of homes that the nation requires.  Since WW2 it has been surprisingly consistent in delivering around 150,000-175,000 homes a year, and it should be our policy ambition to get back to those kind of figures from the current disastrous lows.  Housing associations have become bigger players and their output is important, but increases in recent years have been marginal in the overall scheme of things.
Total output (across all tenures) reached 350,000 in the 1950s and over 400,000 in the 1960s because there was political will at the centre and because local authorities made a huge contribution (issues of quality are for another day).  As councils slowed down after the 1976 IMF intervention, and shuddered to a halt after the election of Thatcher, the slack was never taken up by either the private sector or by housing associations.
In the future, even if the planning system is improved, even if finance is more secure, and even if more people can get mortgages, there is no reason why the market will deliver the socially optimal output: it will produce the homes that can be sold and not the homes we need.  To answer FTI’s question, the role of the state is not just to tackle the barriers that prevent the industry functioning better but to address the gap between what the market is capable of delivering and what society wants.  Of course, over time the industry may adapt and improve and cut costs.  But as FTI point out in their report, even under excellent conditions, from 1999-2004, when both house prices and mortgage lending levels were increasing, private housing output remained almost stagnant.
Councils remain the key agents in this.  I have reservations but the Government has given them the primary planning role.  There is little choice but to push them to become effective facilitators of housing development.  But to get to where we want to be, Councils also have to build again, and on a large scale.

Monimbo
The National Tenant Organisations have embarked on an interesting exercise to test tenant opinion on a range of issues about housing policy, many of them about changes which the government has already made or clearly plans to do.  It asks for views on issues such whether tenants with higher incomes should pay higher rents, the fairness of increased right to buy discounts, and the effects of welfare reform.
The NTOs are hoping for a range of replies from tenants’ groups and bodies that work with tenants.  It will be good if they receive a big response and the bigger it is the more interesting the results will be.
I’m particularly looking forward to the response to a question that effectively asks for views on the government’s pay-to-stay proposal, which is still out for consultation.  I’ve been surprised that straw polls of housing professionals show support for the idea, as it seems to me it is questionable on both practical grounds and because of the implications for the sector as a whole.  Given that social landlords only collect income data – if they do at all – at application stage, how are they going to track down all their tenants who are not receiving housing benefit and administer means tests on them?  And presumably not only do that once but repeat the exercise at regular intervals?  To ensure everyone is treated equally, they will all have to be asked for similar proofs of income.  The cost in training staff to do this and the time required in writing to and visiting one million tenants is surely going to be many times the cost of any potential savings?  It is going to be interesting to see if tenants’ organisations are more switched on to these snags than housing officers evidently are.
Another question asked in the NTOs survey relates to the real reasons behind proposals such as pay-to-stay and the enhanced right-to-buy, as well as several more of the government’s recent policies. The survey asks what should be the future role and purpose of the social rented sector – should it be an ‘attractive sector of choice’ or a ‘tenancy of last resort’?  In an interesting short book published by Shelter in 2009, The Future of Social Housing, Mark Stephens posed a similar question, looking at the different experiences of social housing sectors in different countries.  He suggested three (rather than two) possibly roles for social housing. One is the commonest in the northern European countries: he calls it the ‘affordability’ role but it equates with an ‘attractive sector of choice’ because its purpose is to compete on similar terms with private renting and even owner-occupation.  Another is to be an ‘ambulance service’ (or tenancy of last resort) as in Ireland, the US and Australia, whose social sectors are much smaller than Britain’s. Stephens puts the English sector between the two, as a ‘safety net’ (and by implication the same would apply across the rest of the UK).
But it’s not only in Britain that debates about the purpose of social housing are taking place, given pressures to reduce subsidies and either charge higher rents or concentrate on housing those on the lowest incomes.  In some cases like Sweden and Austria the outcome so far has been to maintain the sector’s wider ‘affordability’ role.  In others, such as the Netherlands, there is pressure for the (very large) social sector to target lower income groups.  If the debate is resolved in a particular way it doesn’t mean there are no ensuing tensions.  For example, in both Sweden and Austria there are marginalised groups like migrants who struggle to get access to social housing, and in Sweden and France there are now ‘sub-social’ sectors catering for such groups and providing less security.  In the Netherlands, tenants who gain their house using a ‘priority card’ because of their housing need might well end up in a poorer neighbourhood than someone allocated a house through the waiting list.
So the ‘safety net’ role is perhaps a typical British compromise that attempts to get the best of both worlds – providing secure and attractive homes but without excluding the neediest groups.  It is clearly under threat as the sector continues to decline and many who would like to enter it can’t do so.  If tenants opt in the NTOs survey for an ‘attractive sector of choice’ they will (rightly) be challenging any further shift towards social housing becoming an ‘ambulance service’.  It will be interesting to see if the government pays attention.
But it will also be important for the NTOs to show how a vision for social housing can balance creating or maintaining an attractive sector with a continued role in housing the most vulnerable.  This is a challenge for housing organisations, too – and of course for the opposition front bench in developing its new housing policy.  Although it doesn’t provide all the answers, boosting supply is clearly one of the biggest priorities. A sector that – in the course of this year – will provide fewer tenancies than private renting is rapidly ceasing to be available as an ‘attractive sector of choice’ for many on the outside who would like to make that choice but simply aren’t able to.

With her background at Shelter, Louise Casey understands the power that a strong case history can have in humanising and illustrating a complex policy issue.  But her report on interviews with 16 families, in her current role as Head of the Government’s ‘Troubled Families’ project (or Troubled Families Tsar if you prefer), published this week, leaves a bad taste in the mouth.
The problem lies not so much in the project itself, which builds on the previous and successful work on family intervention, but in the spin and the dirty politics that lie behind it.  A potentially useful programme is being dressed up for media consumption to make a point.
We have commented before that Ministers seem absolutely determined to portray these ‘troubled families’ in a particular way, to caricature them as depraved not deprived.  That way they hope the public will conclude that all we have to do is address the personal behaviour of a tiny minority, heaping the blame on the so-called dependency culture rather than poverty and failing services.
The original estimate of the size of the problem, which led to the adoption of the oft-repeated ‘120,000 families’ figure, was based on 2004 data which took a much wider view of indicators of multiple deprivation, including poor housing, no qualifications, mental health problems, disability, and inadequate income to cover basics.  The criteria for the selection of families are now much more targeted at involvement in crime, risk of going into care, school truancy, and domestic violence, factors that have very little to do with the original 120,000.  This has been expertly exposed by Jonathan Portes and by Fullfact.  As   New Statesman says ‘This zombie statistic refuses to die’.  
The excellent Fullfact have challenged the way CLG spins the 16 as being somehow representative of the 120,000, which they aren’t, and then spins the 120,000 as being  somehow representative of a whole underclass, which is misconceived.
It looks like the project itself is being steered away from families experiencing multiple deprivation (which might require public resources to resolve) towards the Prime Minister’s idea of neighbours from hell (and he has experience given what we have discovered about his neighbours in Chipping Norton), and towards Eric Pickles’ notion of people we should understand less and condemn more.  Gone are the criteria relating to poor housing and disability and low income.  And nowhere is there reference to the fact that existing Family Intervention Projects have been subject to cuts so there are fewer services not more.
Casey’s report on the selection of 16 families is undoubtedly grim.  The stories of violence and abuse are shameful and disturbing.  As always, there are a few families that fit the Shameless stereotype and you do wonder what young people are being taught about contraception.  But ultimately the report reads like a script from the loathsome Jeremy Kyle Show: pointing at the Chavs and moralising about their sub-human behaviour.  Despite being mainly in the families’ own words, it feels like it has been put together by a redundant News of the World journalist.
I couldn’t get past case study 7 and jumped to the end.  Here we find an assessment of the evidence that is largely balanced and occasionally insightful.  But most journalists didn’t get that far and so more lurid headlines are generated.  ‘Criminal culture at the heart of feckless families: Shocking report lifts lid on incest, abuse and spiral of alcohol abuse’ said the Daily Mail.  No wonder that Zoe Williams in the Guardian concluded: ‘I believe the ulterior motive is the demonisation of the poor’.
The problem with the whole underclass theory is that many of the behaviours that are identified are classless.  Undoubtedly they have a much harsher impact, and are a lot harder to resolve, when the family is also badly housed, poorly educated, and very poor – but that is the bit the Government doesn’t want to recognise.  Having a child with ADHD, or a parent with mental ill-health, as many of the 16 families have, would devastate most middle class families with good incomes.  Alcohol and drugs can have a huge impact on even the wealthiest families, witness the Rausings; but children from wealthy homes don’t normally end up in the disastrous care system.  Sexual abuse and violence have been perpetrated by the most religious as well as the most godless.  And as for incest…..
The problems faced by the 16, or the 120,000, and indeed many more families, are rooted in poverty and bad housing whatever their individual pathology or personal failures.  The latter will not be treated without also treating the former.