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Housing waits on a new minister – and the deal with the DUP

Below is my piece for the Guardian Housing Network yesterday. A new Housing Minister is yet to be appointed and we have to wait and see if the negotiations between the Tories and the DUP have any implications for housing and social security. Whatever the outcome of the deal, the DUP will have influence over what happens in future. So how might it all pan out?

I’ve always believed that one day housing would be a decisive factor in a UK general election. On 8 June 2017, however, once again, this issue was the dog that didn’t bark.
The Tories had nothing in their manifesto to suggest they are brimming with new ideas in housing. They put all their policy eggs in the housebuilding basket, with one exception – a commitment to halve rough sleeping and to “combat homelessness”. This is a worthy aspiration but there is very little actual policy to make it happen, and their track record to date has been awful.
The defeat of Gavin Barwell, former minister for housing and planning, as well as being London minister, is significant. In terms of housing policy, Barwell was a moderate relative to his predecessors. Some are hoping his re-emergence as Theresa May’s chief of staff will help housing, but his priorities in that job will be Brexit and her political survival.
With Barwell no longer an MP, the sixth housing minister since 2010, when appointed, will have to pick up the baton. There is little reason to suppose they will be any more effective – or long-lasting – than their predecessors. If the Tories are ever to appeal to younger people, the new minister will have to revisit the existing hands-off approach to private renting, make a reality of the promise to halve rough sleeping, and make the case to restore housing benefit for 18-21 year olds.
The future for housing depends on how long this parliament and this prime minister last. Some of us can remember the last time there were two elections in one year. Rather like May and Brexit, in 1974 Edward Heath called a single question election on who runs the country. The firm answer was “not you mate”. The short-lived February 1974 minority Labour government was surprisingly radical on housing. Sadly, May’s stopgap government won’t be.
Increased uncertainty has already hit confidence in the markets, with housebuilders affected more than anyone. If a hard landing out of the EU hits housebuilding and construction, the commitment to increase building to 250,000 a year by 2022 will be toast. Under scrutiny during the election campaign their promised relaunch of council housing turned out to be homes at unaffordable “affordable rents” rather than social rents.
Despite austerity, the Conservatives’ real policy under David Cameron and George Osborne was to pump vast amounts of money into shoring up the housing market – enough to fund Labour’s entire programme many times over – while neglecting the interests of renters and marching on relentlessly with devastating welfare cuts and freezes.
Most commentators have focused on the fact that the Tories’ new partners, the DUP, are socially very illiberal. Indeed, they are. Yet they are economically more progressive than the Tories, reflecting the interests of their Protestant working class base. Although the DUP’s 2017 Westminster manifesto has almost nothing to say on housing, it promises to resist changes to universal benefits and supports the triple lock on pensions. In the past the DUP’s approach to welfare has been far less punitive than the Westminster government. It has, for example, sought to mitigate the bedroom tax and has opposed the government’s funding cuts to supported housing. The party’s policy document says the case for investment in social housing is ”unarguable” and the DUP is committed to building 8,000 social and affordable homes by 2020.
So although the DUP focus will be on Northern Ireland rather than the rest of the UK, any influence the party has in housing might, contrary to expectations, be positive.
Meanwhile, a reinvigorated opposition will be able to build and work from a coherent housing plan (pdf). Perhaps next time we will finally be able to “release the hounds”.

 

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GE2017: At last someone talks seriously about housing

There may be good reasons – in particular murder and mayhem on our streets – but another Election has passed in which housing has been the dog that didn’t bark.
Sadly too late to have the impact it deserves in the Election campaign, Labour yesterday published its Housing Manifesto, enlarging on and extending the housing section of the main Manifesto put out a couple of weeks ago.
References to housing in the campaign so far have mainly consisted of the bandying about of some impressively large numbers. The LibDems played their trump card with the biggest housebuilding offer (300K a year), although their promise has been inflating as fast as their support has been falling. It quickly became apparent that the Tories have spent the last seven years muddling up their housing target (hundreds of thousands) with their immigration target (tens of thousands) and just promised again what they failed to deliver in the past.
The housing section of Labour’s main Manifesto was quite well received, and this fuller version deserves praise for tackling the issues in a comprehensive way. When it comes to housing policy, the word comprehensive is important: it’s not just a numbers game, it’s about getting lots of elements of policy right so it adds up to an effective strategy.
The document covers all the tenures. In home ownership it focuses help specifically on first time buyers, following up on the Redfearn review. It makes the important proposal to remove stamp duty on homes of less that £300K for two years, introduces permanently discounted FirstBuy homes, and restricts Help to Buy to first time buyers only. It implies that developers will qualify for Help to Buy only if they enter agreements on their building rates, which could be a game changing idea. And it borrows from Sadiq Khan in giving ‘first dibs’ to locals when homes go on sale.
Labour will also back existing home owners with a range of new initiatives. The safety net for low income home owners will be strengthened, long forgotten leaseholders will get new rights, and there will be new controls on variable rate mortgages. A new housing renewal programme is signalled alongside a new drive to insulate existing homes. There will be a review of housing options for older people wishing to downsize.
Building on the solid base of the Lyons Commission report, major changes to the operation of the housebuilding industry are proposed. The role of the Homes and Communities Agency will be strengthened, as will be the powers of local councils to assemble land at closer to existing value. We are promised the biggest council housebuilding programme for30 years. Help to Buy will be used as a bargaining chip to secure a wide-ranging agreement with the sector on output and standards in design and quality. There will be a review of the post-Brexit capacity of the construction industry.
To my great relief, Labour unambiguously promises a new programme of affordable homes for social rent, and the target will be to achieve 100,000 ‘genuinely affordable’ homes to rent or buy by 2022, which we have argued before on Red Brick is a sensible and realistic gearing up from the current abysmal position. Long term tenancies will be unbanned and right to buy will be suspended – to be reinstated only where full replacement can be guaranteed. More affordable housing will lead to housing benefit savings, which will be ploughed back to ease the worst aspects of the Tories’ benefits policy – like ending the Bedroom Tax.
There is a promise of a ‘consumer rights revolution’ for private renters. There will be new legal minimum standards with stronger enforcement and an extension of licensing. Three year tenancies will become the norm, with inflation-controlled rent rises. Lettings charges for tenants will be banned and councils will be encouraged to set up local lettings agencies in their areas.
Homelessness is seen as the most visible sign of the Tories’ failure. A target will be set to end rough sleeping in a campaign which will be led by the new Prime Minister in a Labour Government. There will be a gradual shift to a ‘Housing First’ policy seen to be effective in other countries. They will halt the plans to change funding for supported housing to avoid the closure of homeless hostels.
All in all, this is a decent attempt at a comprehensive new housing policy in less than 20 pages. It has gaps, undoubtedly, in particular it could have said much more about planning and it looks at homelessness almost entirely from the perspective of rough sleeping – only one element of the growing problem. It has weaknesses – for example not addressing the long term balance of tenures and glossing over regional disparities, and it has a touching sense of confidence which I don’t share that the Homes and Communities Agency can become the driving force behind housebuilding delivery.  And there will be many detailed  financial questions that need to be considered and answered.
Whether the document could have sparked a real debate around housing if it had been published earlier is open to question. Regrettably I can see very little converage of it today except in specialist media. It is an area where Labour is strong – Jeremy Corbyn and John Healey in particular – and the Tories weak and threadbare. I guess we will never know, but, win or lose, Labour has at least got its housing policy into a good place.

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The myth of the war between generations: the Tories punish them all equally

As campaigning was temporarily suspended today in memory of the murdered MP Jo Cox, many will recall her watchwords ‘There is more that unites us than divides us.’
There have been lots of phoney wars in this election, especially with the new Leader of UKIP/Tory Theresa May blaming foreigners and immigrants for most of our problems. One false dividing line is the so-called war between the generations. This morning on the Marr show, DWP Secretary of State Damian Green claimed that the Tories’ new social care for the elderly policy is about promoting ‘inter-generational fairness’.
It is fashionable (but wrong) to say that the older generation are having it easy at the expense of the younger generation. People over 65 have paid into the state system all of their working lives in a social contract that should mean they are looked after through their old age. Even now 1.6 million pensioners officially live in poverty according to Age UK. The issue is not inter-generational, it is that the few have got richer and the many have got poorer across all generations.
I do not suffer from the seemingly natural tendency towards conservatism amongst older people, nor do I share the nostalgia of many for an imagined better past. But these feelings have been exploited by the Conservatives. With their friends at the Daily Mail, they have convinced many elderly voters that they are on their side. The evidence is less convincing: it was Cameron’s ‘triple lock’ on pensions that established their pro-elderly credentials, but at the same time they were stripping away funding for social care and raising the pension age. Women have been hit very hard by deferring the pension age. There are also many people in physical and draining jobs – my Dad worked on building sites all his life and was exhausted when he retired at 65 – who will fall out of work in their 60s and spend years waiting for their pension, being subjected to the humiliation of seeking benefits in the nasty and vindictive climate created by Iain Duncan Smith.
The Tories were warned constantly about the damage being done to social care by their cuts. Cameron liked to pretend that austerity would be met by efficiencies and savings in the back room. This was never true and front-line services have been savaged, especially when they were not backed by specific statutory rights. The cuts in social care have had a serious knock-on to the NHS, due to (the rather unpleasantly named) ‘bed blocking’ – where people are not able to leave hospital because even short-term care is not available at home.
Many councils tackled the cuts by first removing low level services like garden maintenance and shopping. Low level they may have been, but for many these were a lifeline and the watershed between independence and dependence. Such services were often provided through local charities who offered volunteering opportunities for young people and some great inter-generational work was done. As the cuts deepened, even services for those most in need were pared back and scandals like the ’15 minute visit’ and poverty wages (many carers are not paid for the time spent travelling between appointments) became more common. Everyone agrees it is both better and cheaper to enable an older person to stay at home, and it is normally their wish to do so.
In housing, older people have been failed too. There have been far too few options for older people, whether tenants or owners, to downsize into more suitable accommodation, releasing larger homes for others to rent or buy. Although May’s current proposals will hit at home owners, the extraordinarily successful sheltered accommodation service run mainly by councils and new supported housing projects have been fatally undermined by changes in funding regimes.
dementia tax
So, having captured the grey vote, they think securely, the Tories feel they can now take it for granted. Their ‘triple whammy’ – ending the pensions triple lock, removing winter fuel payments for most, and requiring people to pay for care at home with their house – means they have lost any claim to be the pensioners’ friend.
Their social care policy is perverse. In many cases a family carer lives with the older person, doing much of the care but relying on council services a lot of the time. If these external care needs are high, the carer’s sacrifice will now be rewarded, when the older person dies, by having to sell the house to repay the cost of the care received. The carer, who may have devoted years of their life to this role, will be both grieving and having to oversee the sale of the home. They will in effect make themselves homeless, and in most  of the country they will not inherit enough to buy another home. It is a callous mind that could invent such a system.
The new system contains no incentive to enable an older person to remain in their home. If their care needs are high, for example if they have dementia but are physically able, their estate will be diminished to £100,000 whatever they do. They might as well go into an expensive care home. Yet Theresa May has the gall to say that her plan is ‘the best way to enable more people to stay in their homes because they won’t be worried about the cost of care because they will know that will be sorted after they have died’. She appears not to know anything about older people and how they see the world.
And remember, not one penny piece of the exchequer savings made by this policy will be redirected into support for young people, who are being punished at the same time with policies ranging from tuition fees to the removal of housing benefit for 18-21 year olds. Instead, the money will actually be used for the Tory priorities of reducing corporate taxes and taxes on high earners. As the Tories take it out on older people, the myth of the war between generations deserves to be exposed.
dementia tax 2

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Dissolution disillusion

In a splendid journalistic error*, the Times reported that Sir Eric Pickles is expected to be given a seat in the House of Lords ‘as part of Mrs May’s disillusion honours list’. It may of course have been a deliberate choice of words, as Eric contributed quite a lot to the failure of housing policy during his years in charge.
In and around his former housing brief, the dissolution of Parliament meant a deluge of last minute actions. Most important, the Homelessness Reduction Bill became an Act just in time. Red Brick’s line has been that the Act is very worthwhile but underfunded and has virtually no chance of succeeding in its basic aims in the high-pressure areas of the country, and especially in London. This is because every other aspect of Government policy, from the lack of supply of social housing to the dreadfully punitive changes in benefits, will lead inexorably to an increase in homelessness at the same time as local authorities’ ability to respond is reducing fast. The Act will need a lot of scrutiny as it is implemented, but for those who have the energy to read the whole thing, it can be found here.
The Communities and Local Government and Work and Pensions Select Committees managed to publish their joint inquiry report on The  Future of Supported Housing. They conclude that the Government’s proposed funding model for supported housing is unlikely to achieve the objective of establishing long-term and sustainable funding, echoing the unanimous view of the sector itself. Rather than relying on housing benefit or universal credit up to the local housing allowance level, with a top-up fund available for disbursement to councils, the Committees support the introduction of a Supported Housing Allowance which would reflect the diversity of the sector, with separate funding mechanisms for emergency accommodation and refuges.
The CLG Committee also published its report on Capacity in the Homebuilding Industry. Starting with the now unanimous view that ‘the housing market is broken’ the Committee sought to find out whether the homebuilding industry was capable of boosting housebuilding output to the levels required. Their conclusions suggest that it is not! They found the industry dominated by a small number of volume housebuilders, and that their commercial self-interest means they have ‘little incentive to build any quicker’. A far greater mix of builders and more competition is needed. They identify the speculative land market as a particular problem, with high prices leading to increased densities and less affordable housing, and recommend that their successors return to this issue. They want to increase the role of local councils and call for changes to the limitations on councils’ ability to borrow to build. Local authorities, they conclude, do not have the tools they need to make an effective contribution to solving our housing crisis. They support growth in housing association activity, but note that they ‘require greater certainty over their income from social rent’ and that ‘they must remain conscious of their charitable objectives’. They also caution about the growing skills crisis facing the industry and the dangers posed by the process of leaving the European Union.
And finally in this little round-up, the Public Accounts Committee published its report entitled Housing: The State of the Nation. Despite the slightly grand title, the report looks at two main issues – the ‘housing gap’ (England) and ‘getting more out of housing benefit’. The housing gap section has a familiar analysis of the huge failure in housebuilding compared to need, and its effects. Even if the Government meets its objective of 1 million homes over five years, it will not come close to meeting the actual level of need. The Committee criticises ‘The Department’s lack of ambition on such a fundamental issue’. The section on housing benefit complains specifically about the lack of information available ‘on the impacts and value for money of the roughly £21 billion that the Government spends each year on housing benefit’, and highlights in particular ‘the poor value for money obtained from the £8 billion or so of housing benefit with which it annually subsidises private landlords’.
With the Election underway, Labour has already made a number of announcements about its housing policies, including a commitment to providing 500k genuinely affordable homes during a Parliament and a raft of policies to improve standards in the private rented sector. It’s a good start, and we will try to look at all of the main Manifestoes as they are published.
 
*spotted by Private Eye

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Why I care so much about housing associations: they will be critical to delivering Jeremy Corbyn's housebuilding target

While Boris Johnson mutters inanely about mugwumps, Jeremy Corbyn has tried hard to raise the housing issue in the election over the last couple of days and has started to trail Labour’s manifesto commitment to build a million homes.
Despite the media fascination with Johnson’s clowning, I think Jeremy’s core point – Labour will build more homes and more social rented homes – has come across well.  It was good to see his real passion for the subject during his visit to Harlow today.
It seems any debate about housing during elections – the same happened in 2010 and 2015 – is dogged by deliberate obfuscation about what is being discussed. At PMQs on Wednesday, Corbyn’s question to Theresa May was met by the well-rehearsed stock answer that Cameron delivered so many times before – the Tories have built more council houses than Labour did when it was in office.
It happens to be true, but what does it tell us? It tells us that the Labour Government didn’t want councils to be major builders – it’s one of my main beefs with Labour during the Government years. Instead, the money was put into housing associations to provide social rented housing and shared ownership. Mrs May never addresses that. The only comparison that matters between the two governments is how many homes for social rent were provided by councils AND housing associations together. Here the Labour Government wins hands down and many times over.
Sadly, the same confusion dogged the interview at lunchtime between Andrew Neil and Jack Dromey on the Daily Politics. Neil is just about the only interviewer who asks intelligent questions about housing because he has bothered to look up the figures and learn the difference between starts and completions. But even Neil compared apples and bananas in his questions. Mr Corbyn, he said, has committed to 500,000 new council and housing association homes over a Parliament but the only evidence we have to go on is Labour’s record in office. And then, the switch – he quoted the figures for council homes only. And he repeated the point a few times – the Tories build more council houses than Labour, so why should we believe Corbyn’s commitment?  And that was followed by another confusion, as Sayeeda Warsi started quoting housebuilding figures for the UK while Neil was talking England (or was it England and Wales?).
The viewer sadly must be left completely bewildered, and I hope Andrew Neil will return to the issue again.
Fortunately, Jeremy Corbyn managed to be very clear in his speech in Harlow that the commitment is to build 500,000 new council and housing association homes over the next Parliament. I know it’s a mouthful, but truncating the commitment to ‘council houses’ removes the meaning. Most people involved with housebuilding know that it would be virtually impossible to reach a target of completing 100,000 council homes a year even by the end of the Parliament, and certainly impossible to do it each year starting this year. Even if the resources and borrowing powers were available, it would take several years to gear up, to assemble the land, design the schemes, procure the building contracts, and get started on site. It would be a very good thing to do, but it would not produce the homes fast enough.
So, meeting Labour’s target will be dependent on getting housing associations to provide the homes. They are in a much stronger position than councils to accelerate housebuilding and have a track record of being able to produce homes for social rent and for shared ownership. To meet the target, councils will need to be the planners and the strategists and housing associations will need to be the primary deliverers.
As readers will be aware, I have my criticisms of housing associations. But if a new Labour Government had a clear direction and policy, and made the resources and powers available, I believe housing associations would respond. Most will do so with great enthusiasm, but even those associations who (shall we say) aren’t keen ‘to do social rent’ anymore would follow the money.
John Healey has also been all across the media promoting Labour’s message and has published his new report on Housing Innovations being undertaken by Labour Councils. It’s a recommended read.

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It is critically important that housing associations rediscover their mission of meeting housing need

Below is the article I wrote for the Guardian this week on the changing role of housing associations, following a series of articles by the Guardian’s John Harris.

The article has caused a lot of interest, including nearly 400 shares and 130 comments below the line on the article, Twitter responses and personal messages of agreement sent to me. The chief executive of the National Housing Federation, David Orr, also wrote a response for the Guardian, for which I provide the relevant link below so people can make up their own minds.

The relevant links are as follows –

My article (see also comments submitted)

David Orr’s response

John Harris’ articles

Housing associations face storm of complaints over new-build homes
Leaking sewage and rotten floorboards: life on a ‘flagship’ housing estate
Guilt by association: the housing developments that went sour
MPs call for sweeping changes to housing association regulation

Housing associations are critically important, but have lost their way

Too many housing associations have focused on being developers. They have lost sight of their mission to provide good homes at genuinely affordable prices.

Housing associations vary a lot and it is not easy to generalise. Most small and medium-sized associations retain their overriding commitment to meeting housing need and to providing good services to their tenants and residents. But there is growing concern at the attitude of some – I emphasise not all – that have become developers first and foremost.
Ten to 15 years ago, associations started getting into private development as a way of generating surpluses, which could be added to the significant grant they received from central government to provide more social housing and affordable home ownership.
Now what was once the tail wags the dog. The primary interest is maxing numbers of new homes irrespective of who they are for and they have all but abandoned their mission to provide social rented homes for the poorest. One of the worst practices – encouraged by the government – has been to convert homes previously let at a social rent rate, typically 50% of market rates, into so-called “affordable” rent, at up to 80% of market rates, so they can make more money out of them.
In the early 2000s the work of housing associations was brought into the light by a new regulatory regime. Associations that had talked a great job for years were shown to have only “one star” services (out of three) following Audit Commission inspections. External scrutiny led to a fast rate of improvement and by the end of the decade, most had achieved three stars: a great example of regulator and regulated working together for the benefit of the customer.
Then, in 2010, the incoming coalition government abolished the regulator, abolished the Audit Commission, and slashed public support for affordable housing by 60% in the first year alone. The results were predictable: rapid commercialisation, a speedy departure from the traditional mission to house the homeless, a decline in service responsiveness, and a desire to switch every available penny into new development.
Why does this matter so much? Simple: housing associations are critically important institutions. They never replaced council housing, as was once intended, but they provided good homes at genuinely affordable rents and prices to people who could not compete in the housing market. Homeless and badly-housed people depended on them to deliver because no one else would.
There is some hope that London mayor Sadiq Khan will pull big associations back from the brink and make them relevant again. He is insisting on more genuinely affordable homes, including social rent, in new developments and is targeting his budget accordingly.
It is desperately important that housing associations – built on public subsidy and mostly charities – gear up to meeting housing need and providing high-quality services again. We also need a new generation of council housing. If we could get both these things, we would stand a hope of tackling the housing crisis.
Steve Hilditch

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Ambition to Build

Below is my contribution to the Spring Edition of Fabian Review, Ambition to Build. Labour has a strong set of policies which command a lot of support across the Party, but we need to do more to ensure that our strategy will meet the scale of our housing crisis.
 
To mark the recent 40th anniversary of the death of Anthony Crosland, I re-read his influential 1971 Fabian Pamphlet  ‘Towards a Labour Housing Policy.’, which led to a serious re-think within the Labour Party.
It made me conclude that, although Labour has developed a substantial set of housing policies which attract wide support, skilfully marshalled by shadow Secretary of State John Healey MP, I have growing doubts that they will meet the scale of the task, which is so much bigger than any of us could have imagined possible a decade ago. To meet the challenge, we must find more ambitious, radical and transformative solutions. Of the many areas to explore, there are five I would like to highlight here.
First – where will the money for investment come from? After 2010 the Coalition massively cut traditional housing investment – 60% in the 2010 budget alone. We are now building virtually no new social rented homes. Despite austerity, the Tories have propped up the failing housing market, throwing money at it in the form of subsidies, loans and guarantees. Yet most economists agree that their action on the demand side will increase prices in the longer term, intensifying unaffordability with little impact on supply. The main rented programme – so-called ‘affordable rent’ – was an abuse of language with very high rents.
Based on Treasury figures, a new Government reverting to Labour’s balanced 2010 priorities would have a bonanza of £32 billion available as subsidy for genuinely affordable housing including a major new programme of social rent. That is a transformative amount.
Secondly, and linked, we must finally end the Treasury conventions that discriminate against public investment. It’s an old story, but a good one. No other country in Europe accounts for public investment as we do. That’s why foreign state-owned companies can invest in our utilities when we can’t. Council borrowing for housing, which pays for itself by generating an income stream (rents), should be taken out of the main measure of public borrowing – as happens across Europe. Councils, controlled by effective prudential rules, could become major contributors to housing supply once more.
Thirdly, a century ago Winston Churchill called land ownership ‘the mother of all monopolies’, describing owners as benefitting from ‘enrichment without service’. Land values are not created by owners but by all of us. The public should share in land value appreciation, especially when planning permission – the process by which the community takes on the costs and externalities of development – is provided. Instead of selling land, public sector land purchase and effective value capture would give greater control over outcomes and moderate the high cost of land that underpins the housing crisis.
Fourthly, private renting is the last great unmodernised industry, with outdated standards and management. Labour should now go well beyond the 2015 ‘Miliband’ reforms. There is better understanding now of how other countries successfully regulate rents without undermining the market. Tenancies should be longer, grounds for eviction clearer and rules concerning harassment and illegal eviction tougher. Crucially, there should be a revolution in standards. Landlords should be licensed, with a crack-down on letting hazardous or non-decent homes. We don’t accept hazardous food or cars, why allow hazardous homes?
Fifthly, there is the whole question of rents and benefits. Out of control house values and dysfunctionality mean that intervention in ‘market’ rents is justified. The Tory policy of linking public rents to market rents is not rational. Instead, council and housing association charges should be linked to the collective cost of provision plus a return to encourage further investment. Subsidy is needed to get the homes built but then they will ‘wash their own face’ for decades to come. Rent setting should be open and predictable with tenants in comparable properties paying comparable rents. Vicious benefit caps, which penalise people with little or no choice in the housing market – should be ended. Over time the subsidy system should move ‘from benefits to bricks’ – supporting greater supply at lower rents, reducing the need for benefits.
That’s five for starters. So many other areas could be mentioned – including rights for homeless people, the crisis in estate regeneration, construction standards, the use of energy, and how to promote ‘yimbyism’ (yes in my backyard). It’s a debate to which we can all contribute.
Finally, Tory policies have been piecemeal, forged around soundbites. The more they mention strategy the less there is of it. Labour should develop a comprehensive housing strategy, with a strong emphasis on important regional variations, which takes a clear view of future investment needs and how they will be met, adopts a balanced view of tenure with fair treatment for renters and owners, and has as a core principle that there must be a decent housing solution for everyone, irrespective of their position on the income distribution.
Housing is central to the pursuit of equality, social justice, economic progress, health and well-being. We do not have to go on as we are. As Anthony Crosland showed all those years ago, other choices are available.
March 2017

A previous post on the legacy of Anthony Crosland – A Basic Right of Citizenship – can be found here, together with a fascinating comment from Brian Lund, who very fairly disagrees with some of my points. Brian’s latest excellent book – Understanding housing policy (Understanding Welfare: Social Issues, Policy and Practice series) is now available on Amazon and on Kindle.

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Don’t hold your breath, Theresa May tells homeless

A Parliamentary Question on homelessness today from Labour MP Siobhain McDonagh either caught the Prime Minister unbriefed or showed how totally complacent she is about the growing numbers of people being left without a home.
McDonagh’s question (view here) came from the Corbyn mould, being based on the experience of a constituent. She asked:

Last week, through no fault of her own, Amy and her young daughter became homeless. After months of looking for a flat, she finally went to Merton Council, who told her they could only offer temporary accommodation in Birmingham, 140 miles away from her job, from her daughter’s school, and from the friends and family that make it possible for her to be a working single mum. Can I ask the Prime minister, in one of the richest cities in the world, where Russian oligarchs and Chinese banks own scores of properties and leave them empty, how can it be right that a London-born, working family like Amy have not a room to live’.

And Theresa May replied

Well the issue obviously of housing in the London borough of Merton is one that the Honourable Lady and I worked on many years ago when we were on the Housing Committee together, and I recognise that she has raised a concern for her particular constituent. Obviously I won’t comment on the individual case, but what I will say is that what’s important is that overall the government is dealing with the issue of homelessness, we are ensuring that we are building more homes, we are giving more support to people to get into their own homes, but this is something that will take time as we ensure that those properties are available and as we ensure that we maintain the record that we have of providing housing support across all types of housing in this country.’

So Amy will have to wait. Given that she probably needs an affordable rather than a market home, she will have to wait a long time. Given that she probably needs a rented home, May’s ‘more support’ doesn’t apply to her. And as for the government’s record of ‘providing housing support across all types of housing’, it must have slipped her mind that most government support now goes to propping up the housing market while renters are subject to ever growing list of caps, freezes and exclusions.
The answer is doubly disappointing because this week there has been something of a focus on homelessness. The second overview of housing exclusion in Europe by FEANTSA – which was well reviewed by Dawn Foster for the Guardian Housing Network – showed how homelessness is rising and reaching a crisis point across Europe – except Finland, where new approaches are being tried – especially in big cities. The UK features badly, being near the bottom of the European rankings. This should be ringing alarm bells everywhere, but especially in countries like ours that are doing particularly badly.
Meanwhile,  the latest Housing Monitor from Crisis and the Joseph Rowntree Foundation reported that councils were finding it increasingly difficult to find accommodation in the private rented sector for a wide range of homeless people, from single people to large families, and that the roll out of Universal Credit and the next round of benefit cuts would make matters worse. It quotes one south of England council respondent as saying: “LHA (Local Housing Allowance) is staggeringly out of step with actual market rents, to the extent that there are virtually no properties… let at LHA rates. Coupled with landlords’ increasing reluctance to accept people on benefits, and unwillingness to offer anything beyond an initial 6 month AST (Assured Shorthold Tenancy), it is now all but impossible to place people into the private sector.
McDonagh tweeted that Theresa May’s response was ‘completely inadequate’. Given that Theresa May should also be aware that the Homelessness Reduction Bill (a worthy piece of legislation which will be overwhelmed by the reality of rising numbers as soon as it reaches the Statute Book) is due its Third Reading in the House of Lords tomorrow and will receive Royal Assent shortly, the phrase ‘completely inadequate’ is about as mild a term as she could have chosen.

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The mother of all monopolies

Even with the most knowledgeable of housing audiences, eyes tend to glaze over whenever the issue of land is raised. To most it is just a huge expense and a barrier to building more homes. Not many people understand how the land market in the UK operates and how it impacts not only the housing market but also the wider economy. I studied the ‘economics of location’ as part of my degree but I still put this issue in the box marked ‘too difficult’ or ‘might try to understand that one day’.
Fortunately, more housing people are looking at the issue these days and there is some hope that an effective land policy might emerge as a result. Last week I reviewed Duncan Bowie’s new book, which has a lot to say about land and planning for housing, and this week another highly relevant new book is published  by Zed Books called ‘Rethinking the economics of land and housing’ (also available on Amazon and Kindle) by Josh Ryan-Collins, Toby Lloyd and Laurie Macfarlane with the New Economics Foundation.
It’s good to know from some of the early reviews that the book is highly accessible given the dryness of the subject (mine hasn’t arrived yet – I decided it wasn’t the sort of thing I’d want to read electronically) but Toby Lloyd has written an excellent taster for the Guardian.
Toby starts by recounting the many housing policies that have failed to meet the promise of solving the housing shortage and traces their failure back to our inability to address the role of land in the economy.

Land is obviously important for housebuilding, but the land problem goes much deeper than our housing shortage. It lies right at the heart of many of the economic problems we face today. Financial instability, mounting inequality, debt overhangs and the puzzle of stagnant productivity are all direct results of our failure to properly account for and manage land in the modern economy.

He traces the history of land ownership and the role it has played in impoverishing people as any additional value that they managed to create from the land was quickly absorbed by rising rents. He looks at the various attempts to justify private land ownership as the driving force transferred from agriculture to housing and notes the importance of partial public ownership in maintaining land supply. He traces the development of boom and bust in housing and the importance of financial deregulation in creating the over-investment in residential property that we suffer from today.
Lloyd argues that land is inherently scarce and its control inherently political: the normal rules of supply and demand are inoperable and the market is inevitably both dysfunctional and volatile. We therefore have ‘to break the positive feedback cycle between the financial system, land values and the wider economy, and to capture more of the unearned windfalls private landowners currently pocket at the expense of society at large.’ That can only come through financial regulation, tax reform and more direct intervention.
Lloyd ends with the famous description by Winston Churchill of land ownership as ‘the mother of all monopolies’. Churchill’s speech – delivered in 1909 – is one of the great reads,  hugely ahead of its time and still relevant today.

Churchill (1909) complained of the ‘enrichment which comes to the landlord who happens to own a plot of land on the outskirts or at the centre of one of our great cities, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing.

Enrichment without service’ is still a primary feature of land ownership. More than a century after Churchill’s prescient analysis, the time has come for all of us to get to grips with the issue, and this book will help us do it.

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A basic right of citizenship

This week saw the 40th anniversary of the death of Anthony Crosland. He served as a Cabinet Minister in the 1960s and 1970s Labour Governments, including as Foreign Secretary (dying in Office in 1977), President of the Board of Trade, Environment Secretary, and Education Secretary, where he made great strides towards comprehensive education.

Normally regarded as a Gaitskellite revisionist, Crosland’s famous book The Future of Socialism, published in 1956, had a great influence on me when I read it in the 1970s. His central contention was that socialism should be about ‘ends’ not ‘means’; it should not be equated simply with the ownership of the means of production but should be judged by its contribution to ending poverty and improving the lives and prospects of ordinary people through the provision of the high quality public services across the board. His beliefs were put into practice as Education Secretary through his determination to replace Grammar Schools with a system of properly funded local Comprehensives, and as Environment Secretary in the 1974 minority Labour Government when he pursued a progressive housing policy.
Crosland also wrote a seminal Fabian pamphlet in 1971 called ‘Towards a Labour Housing Policy.’ (Herbert Morrison Memorial Lecture, Fabian Tract 410, available in the LSE Digital Library). This pamphlet was hugely influential at the time but it also has many resonances today.
Writing more than a year into the Heath Government, Crosland reflected on the 1964-70 Labour Government’s record – a huge building programme achieved, with increased subsidies that ‘helped keep council rents at reasonable levels’; increased help for new home owners through the Option Mortgage scheme and 100% mortgages, taking home ownership above 50% for the first time; increased help through improvement grants and the 1969 Act’s general improvement area programme; greater security of tenure and fair rents for private tenants under the 1965 Rent Act.
Yet, he argued, these achievements did not mean that Labour had solved the housing problem: far from it, major changes were needed to future housing policy. He referenced homelessness, overcrowding and insecurity; the too-slow action on slum clearance (despite also saying that ‘we have had too much of the bulldozer’); housing subsidies that ‘did not reach down to the poorest families’; and inequity between tenures: home owners received indiscriminate tax relief, council rents were a muddle with inconsistent practice around the country, there was little help with rent for private tenants, and furnished tenants remained outside the Rent Acts.
He started his assessment of future policy needs by stating the duty of government: to make sure needs are met and to tackle poverty and squalor.

‘It must be possible – indeed it is in our view a basic right of citizenship – for every household…. to have a minimum civilised standard of dwelling adequate for a decent comfortable and private household life.’

He then sets the need for government action against the failings of the free market:

‘(Our objectives) will not be met by the free play of market forces. A free market is wholly irrelevant to the most urgent problem, since the homeless and the over crowded are generally poor people who could not conceivably afford the market price of decent housing.’
So we cannot have a market solution to the housing problem. Some part of the building programme must be public: some part of the housing stock must be leased or owned at less than the economic cost: and the government must bear a final responsibility for the overall housing situation.’

So what did he advocate? Here are some of his practical policy proposals:

  • A third force between councils and owner occupation and a less marginal role for housing associations;
  • A strategic role for councils as well as their traditional role of building and managing homes, together with stronger metropolitan and regional planning for new homes;
  • Stronger default powers when councils fail to deliver homes;
  • A reorganisation of finance so that the most hard-pressed areas receive the greatest aid;
  • Greater involvement of community and neighbourhood organisations in the design of urban renewal;
  • Bring housing together with other aspects of urban poverty and deprivation.
  • Resist the Heath government’s plans to increase council rents: Labour should end the relationship between public rents and private rents – ‘there is no analogy here’; low rents essential to keep the pressure off the rebates system, otherwise the rebate scheme will have to cover even those on average earnings; Tory rents will lead to council housing making a profit and subsidising the Exchequer.
  • Welcome the extension of rebates to private tenants, but there should be strict regulations over the fixing of rents and the state of repair. Furnished tenants, excluded from the Tory proposal, should be fully included.
  • Tackle the unfair and indiscriminate subsidy to home owners through mortgage interest tax relief.

It was a strong programme then, and Crosland later went some way towards delivering it during his time as Secretary of State for the Environment. Extraodinarily, it has many echoes now 45 years later. And the fundamentals on which his policy platform was based – government subsidy to ensure many more homes are built, housing costs that were affordable without means testing, linking housing to other policy areas like social services, the economy and the physical environment, and the principle of equitable treatment between tenures – stand the test of time.
As a supposed revisionist in the 1960s and 1970s Crosland would probably be denounced as a leftie now, such is the distance that the political centre has moved in the meantime. But his practical and fair policy proposals, with just a little updating, were sufficiently prescient to guide us now.