Tag: Affordable housing

Categories
Blog Post

The role of Government grants for affordable housing provision

Those on lowest incomes face rising costs without new provision, long-term grant funding for new homes is needed now more than ever.

The rising inequalities associated with the lack of affordable housing are becoming hard to ignore. Whether a tenant or a homeowner, housing expenses take up a large part of household’s earning each month and hence the pressure rises on political leaders to do something about it.

The latest ONS data[1] reports that “households whose income is in the bottom 10% could expect to spend more than two years of disposable income on the upfront costs of an average house in London, the South East and the East of England” and “could expect to spend more than 70% of disposable household income on mortgage repayments for an average property in England”. On the rental market, households in the bottom 25% of the income distribution could expect to pay more than 30% of their income on the cost of renting an average property.

Double or quits report highlights the need for long-term grant funding

Building housing that is affordable is not straight forward. As with other types of social infrastructure, positive externalities may be hard to capture, and this justifies government subsidies into the supply of affordable housing. Government grant is essential to incentivise the provision of affordable housing tenures.

Since the introduction of the Housing Act 1988, the Government has largely provided grant on a short-term basis, mostly aligned with the political cycle. This short-term approach to grant funding leads to high levels of uncertainty and cyclicity on the housing market. I highlight this in a recent report called Double or Quits: The influence of longer-term grant funding on affordable housing supply. It was commissioned by the Consortium of Associations in the South East (CASE)[2], The National Housing Federation[3] and Shelter.

The report finds that extending the length of capital grant, all else equal, would add certainty in the development process and reduce development cycles. This in turn may lead to more housing provision.

Grant funded affordable housing has been on a downward trend

Double or quits starts off by conducting an extensive overview of the grant arrangements and outputs over the last three decades. Up until the late 1980s, local authorities were the main provider of affordable rental accommodation, when grant for affordable housing took a downward trend[S1] .
In the last three decades, housing associations, or so-called registered providers (RPs), have been the main players in the affordable housing provision. RPs use capital grant to bridge the shortfall between the total cost of construction including private borrowing costs and revenues from the, so called, cross-subsidy[4].

The Affordable Homes Programme (AHP), which has been the primary mechanism by which Government has funded new affordable homes since 2011, has provided funding on a three- to five-year basis. Table 1 shows the various capital grant schemes available since 1991. Each colour represents a grant cycle – from the beginning of the grant to its expiry. It is clear that towards the end of each grant programme, the output increases as the grant has to be spent by the cut-off date. 

Figure 1: Private Registered Providers’ Homes England / GLA funded affordable completions

Source: Ministry of Housing, Communities and Local Government (MHCLG), 2020.

Development for social rent has been on a rapid decline since 2011

Affordable housing completions can be subdivided into four main tenures, as defined by the government, social rent, affordable rent, shared ownership and intermediate rent. Figure 2 shows the affordable housing completions by tenure for England between 1991 and 2019. 2010-2011 marks an important shift in the provision of affordable housing with the introduction of a new tenure – affordable rent. Completions of social rent have rapidly declined since 2011, from around 40,000 units per year to less than 10,000.

They have been replaced by a new tenure[S2] . While the average grant per dwelling has been around £50,000 between 2006 and 2011, covering about 40% of total construction costs, it has dropped by more than half between 2011 and 2018. That led to housing associations delivering from around 50,000 social rent and shared ownership units in 2011 to less than 6,000 in 2019. The latest figures by the Ministry of Housing Communities and Local Government report total affordable housing completions of 57,185 as of the end of 2019, half of which are affordable rent.

Figure 2: Affordable Housing Completions by Tenure for England

Source: MHCLG, 2020.

Significant rise through developer contributions obtained through Section 106 Agreements

Since around the same time as the decline in social rent completions, most of which are delivered by housing associations, in 2011, there has been a huge rise in the share of completions associated with Section 106 (S-106) planning agreements. This is evident in Figure 3 below.

Planning obligations under Section 106 were introduced in the Town and Country Planning Act of 1990. They are ‘developer contributions’, similar to highway contributions and the Community Infrastructure Levy, partially provided for affordable housing. This means that there has been a shift in the sourcing of funds for affordable housing provision. Now, only about 50% of the funds come from the grant provided by Homes England (HE) and Greater London Authority (GLA).

The reliance on private development to deliver affordable housing through S-106 contribution has been greater than ever. This has been enabled through the substitution of social rent by affordable rent and shared ownership. The striking picture depicted in Figure 3 makes clear the direct positive relationship between affordable housing supply and market housing supply. If, following a slow-down in economic growth, development activity drops by, i.e. 30%, the provision of shared ownership and affordable rent may drop by a similar proportion, since 30% less S-106 provisions may be made.   

Figure 3: Share of Completions by Tenure as Part of Section 106 (S106) Agreements

Source: MHCLG, 2020. Data for England.

Lack of predictability of grant big issue say developing housing associations

Given the trends described above and the reliance on the market to supply affordable housing, the report goes on to investigate how increasing the length of the housing grant to 10 years could affect the provision of affordable housing by conducting structured interviews with 13 Chief Executives or development directors of housing associations.

The lack of predictability in grant provision may lead to a more cautious approach by housing associations when it comes to building their development pipelines and limit the number of affordable homes they deliver. The pronounced peaks and troughs in delivery associated with the short grant cycles, with completions skewed towards the end of Programmes, have knock-on consequences for development costs, build-quality and the productivity of the housebuilding industry.

The report finds that a ten-year Affordable Homes Programmes would enable housing associations to purchase more sites without planning permission and take on larger and more complex sites. This may lead to reducing overall construction costs and passing the savings on to the homeowners or tenants.

Land-led development by housing associations would become more prevalent

Housing associations will be more likely to invest in their in-house development teams and intensify relationships with private developers, house builders, land managers and local authorities, including through joint ventures. This can lead to consolidation on the market and economies of scale in the production of new affordable housing.

Furthermore, a move to long-term funding would also increase housing associations’ ability to fulfil deliver affordable housing counter-cyclically. It would do so by accelerating the trend for greater levels of land-led development, whereby housing associations act as the lead developer on sites rather than acquiring homes from private developers via S106.

This would enable housing associations to build up longer and more consistent pipelines of development sites, which would help avoid some of the pronounced peaks and troughs in delivery that have been associated with previous Affordable Homes Programmes.

Resilient funding provisions for affordable housing should be a high priority for Government

Due to the strong dependence of housing development on economic cycles, as outlined above, the risk of taking a market approach to affordable housing is that affordable housing supply may become more volatile and pro-cyclical.

As we are experiencing in the current Covid-19 economic downturn, having a safe and affordable place to live is a key necessity for every human being. It is in periods of downturn, that households are more likely to lose their job, become evicted and struggle to afford housing. Having a resilient provision of affordable housing, for those most in need during downturns, should be high on the priority list of the Government.  

<strong><span class="has-inline-color has-accent-color">Dr Stanimira Milcheva</span></strong>
Dr Stanimira Milcheva

Dr Stanimira Milcheva is an associate professor in Real Estate and Infrastructure Finance at University College London. Stani’s research is broadly in the field of real estate and infrastructure finance. She also works on topics related to affordable housing.

TWITTER

[1] Office for National Statistics (2020), https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/alternativemeasuresofhousingaffordability/financialyearending2018.

[2] CASE is a group of 10 major housing associations providing affordable homes in the South East of England. Collectively, members own more than 400,000 homes across the country, with over 140,000 in the South East. The members of CASE are: L&Q, Metropolitan Thames Valley, Moat, Optivo, Paradigm, Radian, Sovereign Housing Association, The Guinness Partnership, The Hyde Group and West Kent Housing Association.

[3] The National Housing Federation is the voice of housing associations in England. Its members provide 2.5 million homes for 6 million people.

[4] Cross-subsidy is model in which the profits from the sale of market housing are used for the construction of affordable housing, including tenures like social rent.

Categories
Blog Post

Rescuing the Affordable Housing Commission Report from the chaos of Covid-19

It is the misfortune of the Affordable Housing Commission to release their report in March 2020, just as Covid -19 took hold. Not only did the report get buried by more pressing news, but the Commission also had to rush out a Covid-19 supplemental report in July 2020.

We need to rescue the report because it offers a great analysis of the housing crisis and realistic policy proposals. This is exactly what you would expect from a Commission headed by Lord Best, one of the sharpest minds in UK housing and supported by the left leaning Smith Institute.

The main argument is the last 20 years has seen the continuing decline of social rent housing, and the doubling in size of the Private Rented Sector (PRS) up to 22% of current housing. There are now 1.5m private landlords. Whilst, the social rent sector has continued to decline. The problem is that people who need the security of social rent sector face the insecurity of the PRS. Those on a low and insecure income, elderly, the ill and those with children should not be living in a sector where you can be required to leave with just a couple of months’ notice. For instance, a quarter all households with children now live in the PRS compared to 8% in 2004.  People are staying longer in the PRS, often into old age. The Commission describes this as a ticking time bomb, as an increasing number of older private renters will find that they can no longer pay the rent when they retire.

The commission found that 23% of private renters are paying more than 40% of their income on rent, which is creating poverty. A Nationwide Foundation survey in 2019 found that a third of private renters had less than £39 per week to live on after they had paid essential bills.

In London the difference between social rent and private rents is the greatest, driving many below medium income into poverty. In the area of Bermondsey, south London where I work 50% of ex –council homes are now rented out, with private renters paying nearly four times more than their council neighbours and having to find a deposit of around £2,000.

The other effect of high rents is that it stops renters from building up the funds to escape into owner occupation. Bob Colenutt estimates a third of people born in the 1980’s and 1990’s will never be able to afford to buy their own home (Colenutt 2020). The average deposit needed by a first time buyer is London was a staggering £146,757 in 2019. Also the Commission highlights that the explosion of Buy to Rent mortgages has helped to force up house prices. Even George Osborne, the most political of Chancellors, recognised the need to slightly dampen down the increase in Buy to Let.

Within social housing, there has been a trend towards higher rent ‘affordable’ homes, rather than genuinely affordable social rents. Higher rents are seen as the way of spreading government money more thinly and building more ‘sub-market’ homes. Government subsidy has dropped by a third since 2010 and housing associations have moved 100,000 properties from social rents to higher affordable rents. The problem, as noted by the Commission, is that for low earners higher rents mean more poverty.

The Commission argues for a re-balancing of the housing market by increasing social rent housing, to provide an alternative for those for whom PRS is unsuitable. The Commission accepts that it will take 25 years to rebalance, and proposes that we start now so that a child born today should be able to live in an affordable home when they are 25 and want to live independently.

To achieve this, 90,000 new social rent and 55,000 shared ownership/ intermediate rent homes are needed each year to address the overall shortage of 3.1m social rent homes identified by Shelter

This will require an increase in government expenditure from 1.9% to 3%, which is £12.8 billion per year. To put this into context the housing benefit bill was £25 billion in 2016 and £1 billion was spent on poor quality temporary accommodation for homeless people in 2019, but neither expenditure resulted in any new homes. The cost of Help to Buy, aimed at helping first time buyers, was £10 billion in 2013 and there is a debate about whether the scheme added to supply or merely forced house prices up.

The Commission does argue for PRS rent caps, the end of Section 21 evictions and a landlord registration scheme to give some protection to those remaining in the private rented sector.

The Commission also calls for local authorities to be given discretion over the selling of their council homes, in the context of the intensity of housing need in their area.  

In a Zoom meeting with LHG members, Thangam Debbonaire, Shadow Secretary of State for Housing, was clear that this is too early in this Parliament to make spending commitments, especially as the full effects of the Covid-19 recession are not known. However, this report seems to set out a good general direction of travel.

<strong><span class="has-inline-color has-accent-color">Andy Bates</span></strong>
Andy Bates

Andy is on the Executive Committee of the Labour Housing Group and is a member of Old Southwark and Bermondsey CLP.

His is an advocate of residents collectively managing their own homes. Andy is a JMB Manager at the Leathermarket JMB. Southwark’s largest resident-managed housing organisation covering over 1,500 homes.

TWITTER
Categories
Blog Post

Making land deliver

Last week saw the launch of ‘Making land deliver’, a new report from Network Homes proposing three big ideas to reduce land costs for providers of social and affordable housing. I took part in a panel discussion along with the report’s co-author, Reuben Young, Rico Wojtulewicz from the House Builders Association and Cllr Shama Tatler from Brent.

There is no doubting the importance and timeliness of the land reform agenda, and on this our panel was unanimous. Since 1995, the value of land owned by UK households has grown by an astounding 583%, while the combined value of the assets overlying land (i.e. buildings) has risen at less than half this rate. We are effectively channelling ever more of our national wealth into the hands of those who own a fixed supply of land. This represents a significant challenge for any government hoping to build, build, build its way out of a Covid recession.

 ‘Making land deliver’ suggests a three-pronged attack on the land value problem:

  1. Allow local councils, Homes England, and the Greater London Authority to compulsorily purchase land at existing use value.
  2. Consider social value and market value when selling public land.
  3. Reform the system of developer contributions to affordable housing.

Network Homes are right to look to the rules on Compulsory Purchase Order compensation for a mechanism to moderate the land market – an issue discussed in detail elsewhere on this blog. Removing ‘hope value’ from CPO compensation awards would tackle a critical barrier to solving the housing crisis in England and Wales.

However, I would caution that Network Homes’ specific call for compensation to be reduced to ‘existing use value’ is likely to conflict with Protocol 1 of the European Convention on Human Rights, which rightly requires compensation at market value. Instead, the UK should simply align itself with other ECHR signatories including Germany, France and Netherlands, by excluding potential development value from definitions of ‘market value’ for CPO compensation purposes. Removing ‘hope value’ would have the effect of reducing awards to levels closer to ‘existing use values’, while still fairly compensating landowners.

Secondly, public bodies considering land disposals should consider social value as well as market value. The government’s Public Land for Housing Programme so far boasts a build out rate of just 15% over the decade that it has been running, and just 6% of the homes planned for these sites will be for social rent. Reviewing and clarifying ‘best consideration’ rules to ensure social value is paramount in decisions about how to use public land is an obvious win.

But the really fresh thinking comes in the third proposal: to replace the Section 106 system for delivering affordable housing on market-led schemes in England with a new, ‘un-gameable’ and non-negotiable system of developer contributions. It works like this:

  • Councils set an affordable housing tax rate for all development in their area.
  • Developers submit a Gross Development Value, on which they will pay the local tax rate.
  • That GDV is used to set the price at which the council can buy homes on the scheme on completion for use as social and affordable housing.

A developer could submit a ‘pessimistic’ GDV to pay less tax, but would then be required to sell homes to the council at ‘pessimistic’ values. This balancing of incentives is the beauty of the proposal. However, there are some thorny issues to work through.

Firstly, this system appears to leave developers in control of the type, size and design of the homes they will build, with councils having only the right to purchase those homes at a pre-set price at the end of the process. There is no guarantee that developers will build the right homes for meeting local housing need, or even that they will meet minimum space standards for social housing. True, councils could spend their tax revenues on delivering the right homes elsewhere – but this relies on Network Homes’ first two recommendations to provide an alternative source of land right-priced for social and affordable housing.

Secondly, the intention to balance power between developers and councils through this proposal may be undermined by the broader planning system. Could a council find itself under pressure to purchase homes of the wrong type or at the wrong price to prevent sites stalling in this system? If that council was worried about how to satisfy its Housing Delivery Test and so avoid losing its planning powers, perhaps. This could be resolved by capping the price which can be paid for affordable housing, for example using plan-stage viability assessments when allocating land.

Despite my quibbles, new thinking from social housing providers is extremely welcome here. Network’s ‘Making land deliver’ follows on the heels of its 2019 report into barriers to social rent delivery for HAs. Both reports provide valuable insights from the front-line of housing delivery, and crucial back up for non-practitioners like me who are campaigning on these issues. I would absolutely encourage other social housing providers to share their experiences and ideas.

<strong><span class="has-inline-color has-accent-color">Rose Grayston</span></strong>
Rose Grayston

Rose has 10 years of experience in providing policy, research and strategic communications support to progressive campaigns and their leaders. 

She has managed and led successful campaigns to reform English planning rules to incentivise the delivery of affordable homes, to reduce borrowing rates for local authority house-building, and to build political and public support for reform of England’s broken land and house-building systems. 

TWITTER
Categories
Blog Post Uncategorized

Boris Johnson’s silence on ‘Affordable Rent’. Why the secrecy?

Once again Boris Johnson has refused to answer important questions about the ‘Affordable Rent’ programme in London.  Written questions by Nicky Gavron AM have failed to elicit informative or even intelligible answers to key questions such as the rents to be charged.

Continue reading “Boris Johnson’s silence on ‘Affordable Rent’. Why the secrecy?”
Categories
Blog Post Uncategorized

RTB: not ‘one for one’ and definitely not ‘like for like’.

Yesterday’s publication of the consultation document (and the draft impact assessment) on the Government’s plans to increase the discounts available for the Right to Buy and for ‘one to one replacement’ with affordable homes is about as cheering as the pre-Xmas homelessness figures.
In many ways it’s a clever offer, or a clever bit of spin, in that it appears to deal with previous complaints about the RTB, and especially the lack of replacement of the homes sold, which meant that future generations of potential tenants effectively paid the price for sales.  It remains to be seen whether the proposed rise in discounts – to an upper limit of £50,000, an effective increase from 25% to 50% – will ‘reinvigorate’ the RTB as much as the Government hopes.  They estimate that some 300,000 tenants are eligible for the RTB and have the financial means to exercise it.  But many houses and the more attractive homes have already been sold and there is huge uncertainty over future property values – we are all more risk averse than we were.
A proportion of the additional receipts will be channelled back, either nationally or locally, into further housing provision.  But this will meet only a share of the cost of replacement, which will be variable between regions.  If the additional RTB proceeds only meet part of the cost it cannot be said that the new scheme itself achieves one for one replacement.  Replacement will require the use of other existing resources – land, borrowing capacity, local affordable housing funds (eg from s106 deals) and New Homes Bonus.  These should already be committed to affordable housing provision.  At best this seems like double counting and is more like a sleight of hand.
As a nationally conferred right, RTB sits uncomfortably with the Government’s commitment to ‘localism’.  Few if any local choices are available within the scheme and, given that local authorities are supposed to be in the driving seat of new housebuilding, the Government is reticent about placing the responsibility for replacing the homes sold at the local level.
Councils will not have any choice when it comes to deciding what type of replacement homes should be provided.  By central dictat they will be ‘affordable rent’ and not ‘social rent’.  Given that all of the homes that will be sold will be social rented, even if you accept the ‘one to one’ replacement argument it cannot be said that they are ‘like for like’.  The exclusion of the option to provide social rent is another step in its removal as a form of tenure and its substitution by the much less affordable and much less secure ‘affordable rent’ product.  CLG’s assertion that the provision of ‘affordable rent’ to replace RTB sales will ‘ensure that our ability to meet housing need is not impaired’ is highly questionable.  The misuse and indeed abuse of the word ‘affordable’ is getting worse every day.
The consultation runs until February and it is planned to introduce the new discounts through secondary legislation in April 2012 or shortly after.

Categories
Blog Post Uncategorized

'Rents will fall and no-one will be made homeless'. So what happened, IDS?

Government Ministers have consistently argued that the changes in local housing allowance would lead to reduced rents in the private rented sector and would not lead to more homelessness.
Labour MP Karen Buck spoke at the launch of the NHF’s Home Truths report this morning, and writes exclusively for Red Brick below.
Guest post by Karen Buck MP, Labour MP for Westminster North
A year ago, Iain Duncan Smith said in the House of Commons debate on Housing Benefit:
“The purpose of these (HB) changes is to give a real impetus to getting the rents down to make affordable housing more available in some areas…… Through the emergency Budget and spending review, we proposed a set of housing benefit reforms designed to bring back under control a system that has been out of control. I accept that the responsibility of Government is always to get the balance right as we protect, incentivise, and ensure fairness in the system. Critically, for housing, that means getting the rents down….. There should be no need, with the discretionary allowance, for people to be made homeless. That is just the nonsense with which Labour Members want to scare everybody.”
One year on, we now know that the mean rent increase in London was around 12%.
We are facing an unprecedented crisis of supply and affordability. This has not all occurred since May 2010 – and some of the present problems have roots in the decision to
switch subsidy from ‘bricks and mortar’ to personal subsidy three decades ago. Still, recent developments have intensified the problem acutely.
Over the last year, homelessness has risen sharply, reversing a fairly steady medium term decline. The recent pattern by which homelessness/temporary accommodation has been diverted via the prevention and relief of homelessness strategy is faltering, because families are reluctant to abandon future security as the PRS becomes increasingly unaffordable. (Meanwhile, there are over 100,000 households to whom local council accepted homelessness duties but then diverted them into the private sector who will be
at risk of re-presenting as rents rise and benefits fall).
The central issue remains one of the supply of affordable homes, especially for rent, but whilst we are seeing the final wave of new supply coming through as a result of the Labour government’s investment, the future looks less hopeful because of the Orwellian ‘affordable rent’ model and housing benefit cuts.
‘Affordable rents’ as the means of filling the grant gap mean not just places like Westminster become unaffordable – an ‘affordable rent’ set at 65% of market rents would require a household income of £65k to cover the cost without benefit – but so do poorer
places like Haringey and Newham. In Haringey, a rent set at 80% of local market rents would require a household income of £31k for a 1 bed flat, and in Newham a 2 bed flat would require a household income of £27k. This at a time when the median income for social housing tenants is £12k.
The Household Benefit Cap and Housing Benefit cuts, meanwhile, are estimated in a recent report by London Councils to leave 133,000 households unable to pay their current rents.
Even if this proves to be an over-estimate, staggering numbers of households face a dramatic shortfall in their income and are at risk of upheaval and homelessness as private rents continue to soar. Boroughs with lower housing costs can anticipate a sharp increase in numbers of incomers, many with high service and support needs.
It is worth noting that unemployment, the freeze in real wages and rising housing costs have already contributed to a rise in the number of private sector Housing Benefit
claimants, especially in the suburbs- the London Borough of Redbridge, which includes part of the constituency of the Secretary of State for Work and Pensions, saw a 65% increase in Local Housing Allowance claims in a little over a year, the largest increase in the country. Some of the areas facing the biggest cost pressures are not the Knightsbridge’s and Mayfair’s of popular myth, but places like Hillingdon and Croydon, whilst Newham will be amongst the places worst hit by the overall Benefit Cap.
Supply may be the solution over the medium and longer term, but in the very short term we need DCLG and DWP to sort out their differences and develop an integrated approach
to housing need and homelessness before they escalate.

Categories
Blog Post Uncategorized

Housing Voice launches National Affordable Homes Inquiry

The affordable homes alliance Housing Voice has launched its National Inquiry into the affordable homes crisis and will hold its first regional hearing at Exeter University on 9 December.
The aim of the Inquiry is to gather the views of civil society through oral
hearings, submitted evidence and an online survey.  It aims to publish its report
around May next year.
Housing Voice is supported by Citizens Advice, CDS Co-operatives, Child Poverty Action Group (CPAG), National Housing Federation, National Union of Students (NUS), Sitra – the charity for supported people, TUC and UNISON.
Chaired by Lord Whitty, Housing Voice aims to champion the need for more affordable homes to buy or rent. With the shortfall in housing projected to be 750,000 by 2025, the average house price more than 8 times the average salary, more than one 1.6 million households on waiting lists, the average age of a first time buyer being 37 and rents in the private rented sector continuing to grow faster than incomes in many parts of the country, Housing Voice believes NOW is the time to tackle the affordable housing crisis.
For information about supporting organisations, how to submit evidence and the regional
evidence sessions, go to the website at http://www.housingvoice.co.uk  There is also an online survey.

Categories
Blog Post Uncategorized

Affordable housing and the Ministry of Truth

Even 18 months in, this Government’s most commonly-used phrase is ‘the mess we were
left by the last administration’.  It’s beginning to wear thin, especially as the imminent new recession is clearly the result of events and actions that have taken place since Cameron entered No 10.
It is no surprise that any good news is not credited to the last Government.  And one area where there has been a bit of good news is in annual housing completions.  What is absolutely clear is that these are the legacy of Labour and have little if anything to do with Messrs Pickles and Shapps, whatever they say.
The number of social rented homes added to the stock in 2010/11 (therefore started under
Labour) was 39,170 (of which 30,780 were funded through the Homes and Communities Agency), continuing an upward trend that started in 2004.  In addition there were 21,460 additional ‘intermediate homes’ including intermediate rent and low cost home ownership.  Total additional ‘affordable’ homes topped 60,000 and the mix between social rent and intermediate homes of roughly two-thirds to one-third seems about right when judged against needs.
Of course even this scale of output is not enough, but the trend was in the right direction despite the recession.  The Labour Government had realised that the most effective way to get growth in the economy and meet needs in the community at the same time was to boost housing construction.  60% cuts in the programme showed that the Coalition did not share this analysis.
The legacy of this Government in 2015/16 will look very different.  They will bust a gut (and housing association finances while they’re at it) to try to keep the total affordable figure as high as possible, but the sub-headings will look very different.  The new, mis-named, ‘Affordable Rent’ programme will be there, at rents of up to 80% of market rent and possibly averaging about 65-70% depending on the outcome of the negotiations between associations and the HCA after the intervention of many councils trying to keep rents down.
The figure for ‘social rent’, let within the current ‘target rents’ policy, will inevitably plummet.  From the patchy information available, there appear to be virtually no social rented homes in the ‘affordable housing’ contracts awarded by the HCA so far, so new social rent homes will only become available from planning gain schemes, councils building directly, and the few councils who have refused to have anything to do with ‘Affordable Rent’.
The picture on the ground – social rented lettings coming through to homeless people and
people on the waiting list – will be even worse than the new build programme implies.  A proportion of social rent lettings (no-one knows how many yet) will be stolen from the social rent pool and put into the ‘Affordable Rent’ pool to help pay for the programme.
The Government will continue to mask the real implications of their policy with bluster.  They will use the figures for ‘affordable housing’ and ignore the importance of social rent to people on low incomes and to the policy of encouraging people into work.  They will continue to claim that the same people will benefit from ‘Affordable Rent’ as benefit from ‘social rent’ despite the fact that people on the ground know that this just isn’t true in most parts of the country where market rents are high and rising rapidly.  To add to the confusion, they will continue to say that ‘Affordable Rent’ is ‘social housing’.  Orwell’s Ministry of Truth would be pleased by these efforts.
The debate needs to shift from numbers alone, important though they are, to the genuine affordability of the homes coming out of the programme.  The idea being worked on by the London Labour Housing Group, defining a London Living Rent as a benchmark by which to assess whether rents are affordable or not, is attracting a lot of interest.  Like the London Living Wage when it started, it would not be a technique for directly controlling rents but a campaigning tool which will have influence over rent-setting policies in the longer term.
The Government, the HCA and the housing associations who have signed up to HCA
contracts remain extremely coy about the rents they will charge for ‘Affordable Rent’ homes – one housing association board member I know says their officers even refuse to tell the board because of HCA confidentiality rules.
But the information will eventually come out and the ‘affordable’ in ‘Affordable Rent’
will be seen to be a complete con.  And it will fall to the next Labour Government to deal with ‘the mess we were left by the last administration.’

Categories
Blog Post Uncategorized

Boris Johnson's sleight of hand. Smoke and mirrors (part 2)

Nicky Gavron, Labour’s London Assembly housing and planning spokesperson, has called on Mayor Boris Johnson to come clean over claiming credit for 16,000 affordable homes that will never be delivered.  Nicky has today written to Richard Blakeway, the Mayor’s housing adviser, to explain why he has apparently double counted around 16,000 affordable homes.
Blakeway said this week that “around 54,000 completions” are expected over the “next four years” (2011-15), apparently including 16,000 affordable homes that will already have been counted towards the Mayor’s target of 50,000 homes by 2012.
Nicky wrote: “I am extremely concerned at the way the mayor’s office has apparently
double counted this information. At best it is a lazy, yet very important, error. At worst you have blatantly misled Londoners on your housing delivery.”
She went on to say that the misuse of statistics “undermines the challenges we face, and this apparent sleight of hand does nothing to reassure Londoners we are delivering what the city needs.”
Nicky commented: “The mayor needs to be beating targets, not cheating them. He’s already broken his election pledge to deliver 50,000 homes by 2011. It now looks like he’s trying to claim credit twice for thousands of extra homes.”
Richard Blakeway wrote in the Guardian on Thursday 1 September, “the mayor is on course to deliver 50,000 affordable homes by April 2012 …. The pipeline of affordable
housing for the next four years is also strong, with around 54,000 completions expected”.
In April, Alan Benson, head of housing at the Greater London Authority, told the London
Assembly’s housing and planning committee: “About 28,000 homes … are in the pipeline to be delivered. We will deliver about 16,000 of them by 2012. The rest will be delivered in the following year, 2012/13. There is a substantial pipeline of homes in development currently, on site, which will deliver over the next couple of years, which the Government is committed to funding and which are an entirely social rent/intermediate mix as we know it.”

Categories
Blog Post Uncategorized

Beautiful places also need affordable homes

Lindisfarne community prioritises affordable homes

As you arrive into the village from the causeway out to Lindisfarne, there is a ‘welcome’ notice board.  It records the history of the island in timeline form.  All the key dates are there, the arrival of St Aidan in 635AD, the death of St Cuthbert in 698, the arrival of the Vikings in 793, and all the rest.
And, given equal status, are the key dates for ‘affordable housing phase 1 completed’ and ‘affordable housing phase 2 completed’.

Simon Schama might not agree, and David Starkey certainly won’t, but that’s what I call a balanced view of history.
Like other areas in rural Northumberland, Lindisfarne has suffered from rocketing house prices, driven by the second homes boom, and rapid rent rises, driven by shortage and competition from the holiday lettings trade.  Local people could not afford to buy or to rent on the island, the school closed, and the traditional community was dying.  Showing great foresight and determination, the islanders formed the Holy Island of Lindisfarne Community Land Trust (CLT), which raised charitable and community donations to fund the building of a small but vitally important number of homes for social rent.
Later, other small developments were financed by the Housing Corporation/Homes and Communities Agency.  The landlord of the Crown and Anchor pub put it simply – “Getting one of these new homes means we’ll be able to stay put, carry on running  the pub and be a part of the local community.”  The homes will be available for low rent occupation in perpetuity, irrespective of future land value rises.
This inspirational story contrasts with this week’s report from the Countryside Alliance concerning the death of rural communities around the country caused by the shortfall in affordable homes.  According to the group, almost 80,000 affordable homes are needed each year in rural areas but just 17,000 were delivered in 2010/11.
The report, ‘The critical shortfall in affordable rural housing in Britain‘, argues that rural housing remains less affordable than in urban areas due to average wages being
£4,655 lower than the national average.
As the Lindisfarne example shows, to survive rural communities need to prioritise low cost housing for rent.  As in the cities, the market simply cannot do the job that communities need without positive intervention.