The policy will affect about 215,000 social tenants, but at least 60,000 households in England will not be able to afford to pay rents at the market rate
The government’s erosion of social housing, turning it into residualised, American-style welfare housing, will be given a further boost with the so-called ‘pay to stay’ scheme.
‘Pay to stay’, set to be introduced in April 2017, requires that social tenants earning over £30,000, or £40,000 in London, move out of their social homes or pay local councils or housing association a market, or near market rent.
Better-off social tenants are being targeted, ostensibly, to free-up scarce social housing for more needy applicants. The government argues that social housing should be just for those in most need, although until comparatively recently social housing was available to all the community.
A shortage of social housing is the real problem: The total social housing stock now stands at about 4.4m – a loss of 1.5m homes since 1979 while the population has climbed by more than 10m people.
‘Pay to stay’ is the latest attempt by the government to reshape social housing as an ‘affordable’ housing sector, although rents being charged under this regime are far from ‘affordable’ to many.
Alongside, local councils are being forced to sell-off their homes through the Right-to-Buy and to pay for the ‘voluntary’ Right to Buy in the housing association sector.
Housing associations are being pushed towards providing mainly low-cost home ownership in future, and away from social housing provision, as prime minister David Cameron seeks to reverse the decline in home ownership since 2001.
According to a Local Government Association (LGA) study, the policy, currently being debated as part of the Housing Bill, will affect about 215,000 social tenants, or about 5 per cent. But at least 60,000 households in England will not be able to afford to pay rents at the market rate or take advantage of the Right to Buy.
The policy is expected to save £245m annually by 2019-20, ending a situation, argues the government, where higher-income social tenants benefit from taxpayer-funded subsidies of up to £3,500 per year.
SHOUT, the campaign to save social housing, contends that ‘high Income’ is a misnomer and that the proposals are an unfair tax on work and aspiration. The proposed £30,000 threshold is nearly £10,000 below average household income. And households earning the minimum wage and entitled to housing benefit will have to pay higher rents.
SHOUT challenges the government’s claim that social rents are subsidised, arguing that tenants pay economic rents already, and there is no more reason to charge them higher rents than they currently pay.
Implementing the policy will involve huge bureaucracy for social landlords and social tenants, and an unprecedented breach of the principle of taxpayer confidentiality.
Finally, SHOUT points out that, imposing a requirement to implement ‘pay to stay’ at a uniform £30,000 threshold throughout the country outside London, is contrary to the government’s commitment to localism and fails to recognise the very different labour and housing market conditions in different parts of the country.
Labour’s shadow housing minister John Healey said:
“This new research backs Labour’s concerns that this Tory ‘tenant tax’ could force thousands of working families from their homes.”
Kevin Gulliver is director of Birmingham-based research charity the Human City Institute, is former chair of the Centre for Community Research, and part of the SHOUT save social housing campaign. He writes in a personal capacity.
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