Ed Turner is a lecturer in politics at Aston University, at the Aston Centre for Europe, and is deputy leader of Oxford city council
The government’s consultation “A fairer future for social housing” says that “social housing – affordable and stable – should act as a springboard to help individuals make a better life for themselves”. Yet the result of this announcement will do the exact opposite – it will ensnare individuals in poverty, create ghettos of deprivation, and prevent future generations getting access to proper affordable housing.
The centre-piece of the government’s proposals is an end to “security of tenure” whereby, often after an introductory period, a social landlord (be it a council or housing association) makes a tenancy permanent, subject to adherence to satisfactory conditions.
Tenancies can sometimes be passed on to others resident in the property (such as children). The government proposes that, instead, councils and housing associations should be able to grant tenancies as short as two years.
Two major problems arise from this:
• Social housing will become the preserve of those who have recently faced acute housing problems, and when people start to improve their situation, they will need to move out. Alongside the housing benefit changes – which according to Shelter will lead to concentrations of poverty – social housing will become the preserve of those in severe difficulty.
Rather than promoting mobility, this will entrap people at the bottom of the pile, who will find themselves surrounded only by the very poorest; and
• As David Orr, chief executive of the National Housing Federation, argued: “It’s difficult to imagine a more powerful disincentive to do well than the threat of losing your home if you start earning too much.”
This change will create a raft of perverse incentives, further trapping tenants in poverty.
The government’s changes will destroy established, supportive communities of social housing, instead making it the “tenure of last resort”, where only the very weakest live: a process sometimes known as “residualisation”.
The other major change is the decision to allow rents at 80 per cent of market levels for new tenants. Since these tenants are likely to be in considerable need, the additional cost will be mostly borne by housing benefit, as David Cameron has admitted.
Many people aspiring a social tenancy, notably those in low-paid work, will be reluctant to take on one of higher rental tenancies, so instead tenants on full housing benefit are bound to be concentrated in them, reinforcing the “residualisation effect” mentioned above.
Although the government says it wants to promote mobility in the social housing stock, few tenants will want to sacrifice a lifetime of affordable tenancy for a time-limited or vastly more expensive one, so new tenants in areas where the housing association or council has retained lifetime tenancies or kept rents at a genuinely affordable level will be most reluctant to move. The policy will therefore achieve the exact opposite of what is intended.
The move to 80 per cent of market rents for new social homes will also have major repercussions for the construction of new social housing. Currently, local authorities require a proportion of new homes to be “affordable”, and this is enshrined in their local plans. The requirement is carefully weighed, and judged by a planning inspector, to ensure it is reasonable and reflects market conditions.
But now the rents on these new homes will be twice as high as previously expected, so either housing developers will end up with a greater profit margin (a nice windfall, but one which is paid for by new social tenants and the housing benefit bill) or local authorities will have to redraft their planning policies, with a period of uncertainty while they are doing so.
The government also plans to remove the right to tenancy “succession”. Quite apart from the disruption caused to communities where the family members of tenants have put down roots, is it really the government’s wish that upon death of a parent, someone is greeted not with condolences but with an eviction notice?
Making people homeless because of the death of a parent or someone for whom they cared is hardly the best way of helping an individual “make a better life”, as the paper says it intends to do.
The government is right: this is a radical reform of social housing. It is a radical erosion of the vital pillar of the welfare state, which is badly designed, will entrench poverty and deprivation, blighting the lives of individuals and damaging communities. A rethink is desperately needed.