Social housing needs a ‘New Deal’

Kevin Gulliver argues that the social housing system needs to be re-hauled under a ‘New Deal’.

Kevin Gulliver is the director of Birmingham-based research charity The Human City Institute and chair of the Centre for Community Research but writes in a personal capacity; his interests are social and economic policy, especially relating to housing, health, communities and inequalities

First the good news: social housing was a key issue at this week’s Labour Party conference with Ed Miliband pointing to an expansion under a future Labour Government.

The bad news is that the coalition’s language about who ‘deserves’ and doesn’t ‘deserve’ social housing was echoed by the Labour leader. The direction of travel for Labour in housing policy should now seek to go beyond this narrow and dispiriting debate and embrace a wholesale renewal of social housing as part of a visionary yet realistic new housing policy. Social housing needs a ‘New Deal’.

Let’s not delude ourselves that home ownership is going to revive any time soon or that the private rented sector offers an affordable alternative. Recent reports reveal a retrenching yet persistently unaffordable home ownership market, inflated demand and rents in the private rented accommodation, with accompanying rent hikes, and ballooning waiting lists for social housing. Homelessness has increased by nearly one fifth since the coalition came to power.

An expansion of a flourishing social housing sector that places fairness and affordability at its core is the only viable alternative to meet UK housing needs. And the case for expansion using mainly public finance is compelling even against the backdrop of high public debt.

People would willingly move into social housing if more homes were available at more affordable rents. This will require greater levels of public subsidy in bricks and mortar to improve affordability over time and reduce the housing benefit bill, which has increased fourfold over the last two decades to stand at more than £20 billion annually to meet repayments to the financial sector through social housing’s version of PFI.

Public investment would represent a good deal for the taxpayer. It would provide much-needed employment in the construction industry and supply-chain with reduced benefit pay-outs and increased tax revenues.

New social house building would also aid tenant mobility – in both social and geographical aspects – which has stalled; not because of the lettings practices of social landlords, or conscious concentration of disadvantaged households, but because of wider demographic, labour and housing market trends. Increased mobility in social housing would aid both economic development and improve the life chances of tenants.

A ‘New Deal’ for social housing would also require fostering an improved reputation. A renewed commitment by social landlords to their historic social purpose is urgently needed. The consumerist ethic imported by many social landlords in recent years, abetted by regulators has replaced the transformative, public value approach of community-based social landlordism. This trend must be reversed to the benefit of communities and civic society.

Alongside this recalibration of purpose, social landlords, within a new macro-framework created by Government,  need to devolve control of housing and communities to tenants through the creation of a new generation of tenant management organisations, co-operatives and community mutuals to enhance local democracy, bolster social capital, widen asset ownership and improve life chances.

Equally, narrowing the wealth gap between home owners and tenants, estimated at £100,000 on average, to create an ‘asset-owning democracy’ would increase the attractiveness of social housing. This could be achieved by the creation of asset accounts for all social tenants aggregated into a social investment bank managed by a tenants’ mutual.

This social investment bank would lend to social landlords to build new social housing and neighbourhood infrastructure. This would provide a virtuous cycle of investment by using tenants’ collective asset accounts to invest in their communities so creating employment in fragile local economies and enhancing the quality of disadvantaged neighbourhoods.

Taken as a whole, the ‘New Deal’ for social housing would shift portrayal of the sector from ‘welfare housing’ and a tenure of last resort. Rather it would stress capital investment from public sources to create national assets for the long-term, enshrine affordability, boost job creation, and expand mutualism and community renewal.

See also:

Housing will define the London Mayoral electionSteve Hilditch, September 12th 2011

On housing, while Ed has got it wrong, Boris has the answerVidhya Alakeson, June 13th 2011

Why isn’t Boris coming up with any solutions to London’s housing crisis?Jenny Jones AM, September 9th 2011

Government spin on so-called “rich” social housing tenants exposedKevin Gulliver, June 6th 2011

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