Promised land

Originally posted on August 3 on Inside Edge 2, my blog for Inside Housing

Did Genesis choose the wrong book of the bible when it went through its rebranding exercise?

Reading this week’s Inside Housing, and especially the interview with chief executive Neil Hadden, an Exodus out of social housing looks a possibility in the wake of a Budget that signalled that grant will be ‘refocused’ towards home ownership in the Autumn spending review.

Except that this latter-day Moses seems to see a future as a private landlord and developer as the land of milk and honey. He is right to see the Budget as a ‘massive watershed’ and right to see that the government is no longer interested in social, or even ‘affordable’ housing. Rent cuts, the extension of the right to buy, compulsory pay to stay, reform of section 106 to benefit starter homes and possible extension of fixed-term tenancies all shout that message. The spending review only seems set to confirm that the plan is to cannibalise what’s left of affordable housing to boost home ownership. The question is how housing associations should respond.

In a very real sense, they already are. Development for outright sale and market rent, conversion of relets to ‘affordable’ rent and even temporary holiday lets are now commonplace. Not everyone will agree, but they are all strategies to retain and cross-subsidies associations’ core purpose of proving homes at sub-market rents in a world with less grant. L&Q has already moved beyond grant in its development programme while retaining a commitment to ‘genuinely affordable’ rents. IH also reports this week that ‘tens’ of housing associations are taking legal advice on deregistration, though their precise motivations are unclear.

What that shows it’s not always clear where to draw the line between the social and the commercial. But wherever the line is drawn, Genesis seems to be crossing it. Genesis will not just be ending development for affordable and social rent in favour of a mix of shared ownership, market rent and outright sale, but also looking at every void property to see if it should switch its tenure or sell it. Hadden explains: ‘We are not able, or indeed being asked [by government], to provide affordable and social rented accommodation to people who should be looking to the market to solve their own problems.’

Asked if that means Genesis will no longer be providing homes for people on the lowest incomes, he says:

‘I could be really harsh and say that won’t be my problem. My problem will be to supply new housing at different price points in locations where the economics of those schemes stack up. Because of where we work, the demand will be there for those properties.’

And, asked if Genesis will still be a housing association in this new world, he says: ‘We could become something different. I don’t know where this will lead… There are great opportunities opening up to reduce some of the regulation we go through.’

It’s hard not to see that as a reference to the proposal by Policy Exchange for ‘free’ housing associations in a report last year that was co-sponsored by Genesis. This argued that associations could build more homes unencumbered by £45 billion of historic grant and the system of regulation that goes with it. Instead of grant, the government would provide equity funding for development for outright sale and affordable rent.

For Neil Hadden, the move by Genesis is a pragmatic response to the current environment, being at ‘the forefront of change’ rather than putting your head in the sand. However, as Steve Hilditch blogs for Red Brick, it’s hard not to wonder what the people who set it up would have made of this and what regulatory obstacles that could still lie in its path.

According to the history of Genesis on its website:

‘In 2011, Genesis Housing Association had 1,600 staff and managed over 30,000 homes. But looking back to the very beginnings of our Association, in 1965, it had nothing. At this time, housing in London was at crisis point. Overcrowding was extreme, conditions were often very poor, and the most disadvantaged in society had the greatest difficulties in finding a home.

‘But bad as it was, the individuals who would become its founders could see that it didn’t have to be like this. That families, the elderly and disadvantaged, deprived of one of their most basic needs could be given a light at the end of their tunnel. And these people did something; they stepped in and made a difference to the lives of many, both at the time and with a legacy that carries right through to the present day.’

In 2015, as it prepares for the 50th anniversary of its forerunner Paddington Churches Housing Association, Genesis appears to have concluded that it does have to be like this. Back in 1965, there was no government grant for housing associations either (that did not arrive until 1974).  What became Genesis instead relied on small grants from Shelter to enable Paddington Churches to employ a full-time paid manager and to create Springboard in Essex.

And this official history of Genesis sums up the history of housing associations as ‘centuries of helping those in need’:

‘However planned and structured, over the centuries, social housing has developed for a single purpose, to help those most in need. In its many forms, it has always strived to balance social injustice and inequality, address problems of poor housing, and help vulnerable people to improve their lives.’

Genesis could still make a case that shared ownership and market renting with family-friendly tenancies serve a social purpose. Interestingly, Neil Hadden doesn’t do that in the IH interview (though in the full version published since I posted this blog he argues that its care and support side is one way it will ‘keep hold of its social purpose’).  But this link with need is precisely what Genesis now seems intent on breaking. Will others follow it into the promised land?