Housing Day: This spiralling crisis will take a generation to fix

Social housing organisations are part of the fabric of communities – but they can only do so much

 

Today is housing day, when those organisations and people who work to house the nation take stock and celebrate successes as well as highlight the nation’s growing housing problems.

The social housing sector

More than 3,000 social housing organisations — local authorities, housing associations, and community-led co-operatives and trusts — work 365 days per year to meet housing need, tackle homelessness, confront poverty and try to boost often fragile local economies in cities, towns and villages through housing investment.

Employing more than 200,000 people, these housing organisation are part of the fabric of the nation’s communities. Together with housing provision and services, they are significant social financiers, employers, traders and community investors.

The work and impact of the social housing sector do not always receive the positive acclaim they deserve. Too often over recent years they have been accused by government and the right wing media of fostering an unproven ‘dependency culture’ and being on the side of the ‘skivers’ rather than the ‘strivers’.

Thankfully, this rhetoric has receded following the fall of the Cameron-Osborne partnership at the top of government, although welfare reform — a driver of homelessness, rough sleeping and destitution — remains a government policy centrepiece.

The housing crisis

The scale of the housing crisis that confronts the nation and the social housing sector is vast; deep and long in the making and requiring a generation to fix. The crisis has come about because of long-term under-supply of affordable housing, rising housing needs and a growing population.

The last six years have seen the lowest level of house-building since the early 1920s. The number of homes built per head of population, at 2.2, is less than one third of that achieved in the 1960s and 1970s. In fact, insufficient homes have been built to house the population for forty years.

Since 1979, England’s social housing stock has been depleted by 1.5m homes through the Right to Buy, other sales and demolition. Over this same period, public subsidies were transferred from economically rational and efficient bricks and mortar investment to those that contribute to rent payments.

A £25bn housing benefit bill is the result with one third of this lining the pockets of private landlords. The government’s answer? Cutting social housing rents, which are already much lower than private rents, further curtailing the investment capabilities of social housing organisations.

The private rented sector, having doubled in size in the last ten years and now larger than the social housing sector, increasingly caters for people in housing need. Private renting costs the taxpayer much more than providing social housing. The difference in the weekly housing benefit claimed by the average private tenant approaches £2,000 higher per year than for the average social tenant.

The affordability of home ownership and private renting has worsened, at a time when there are fewer social homes due to the Right to Buy, patchy replacement of sold homes, and lower levels of government bricks-and-mortar investment.

On the housing demand side, housing waiting list numbers are persistently high, with about 5m people registered despite the Localism Act 2011 allowing local councils to establish more rigorously limiting access criteria, effectively excluding many needs groups.

And demand is set to go on increasing. The latest government projections suggest that the number of households in England will increase by a quarter over the next two decades — an extra 5.3m households who will need housing. This is an astounding prediction after ten years of already rapid growth in household formation.

The conflation of rising housing needs and demand with insufficient supply point to a housing crisis that won’t get better anytime soon despite the continuing efforts of the nation’s social housing sector.

Even so, happy housing day.

Kevin Gulliver is Director of Birmingham-based research charity the Human City Institute, writing in a personal capacity. Follow him on Twitter @kevingulliver

See also: Right-to-Buy is gutting social housing: replacement building fell a quarter in 2015/16

One Response to “Housing Day: This spiralling crisis will take a generation to fix”

  1. Geoff Beacon

    Wikipedia says of the 1947 planning act…

    “The Act established that planning permission was required for land development; ownership alone no longer conferred the right to develop the land. To control this, the Act reorganised the planning system from the 1,400 existing planning authorities to 145, and required them all to prepare a comprehensive development plan…
    The Act provided that all development values were vested in the state, with £300,000,000 set aside for compensation of landowners. Any land would be purchased by a developer at its existing-use value; after permission to develop was granted, the developer would be assessed a ‘development charge’ based on the difference between the initial price and the final value of the land.”

    We still have planning permission under the control of planning authorities but now the landowner now gets the development value. The capture of development value by the state has long gone. Planning authorities are under all sorts of influences (nimbyism and worse) which mean the supply of permissions is restricted. While we are not short of land in the UK, there is a restricted supply of development land – land with planning permission. Much of the development land is kept in land banks to be used when the price is right for the land bankers.

    This restricted market inflates the cost development land enormously. A plot of land big enough for a house costs £500 at agricultural prices. Within 50 miles of London that becomes £100,000 or more when planning permission is granted. The left-overs from the 1947 act are causing enormous unfairness by inflating property prices, taking from the property poor and giving to the property rich. More simply: that’s taking from the poor to give to the rich.

    Sadly there is little chance of returning to the value-capturing aspects of the 1947 Act any time soon. So what about an interim measure such as plotland development where individual owners can capture the value of their own development. Previously to 1947, plotland development was much easier – I grew up on in a house my father built on a plot he bought.

    We have just formed the Sustainable Plotlands Association to follow this idea, which may be a relatively quick way of making housing very much cheaper. (The current Government’s custom build register may actually help!) We are working towards a national campaign but in the meantime see …

    Plotlands: A shock for the housing market (http://www.brusselsblog.co.uk/a-shock-for-the-housing-market/ )

    York Plotlands Association (http://yorkplotlands.uk/)

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