Driving a hybrid

Originally posted on June 10 on Inside Edge 2, my blog for Inside Housing

What is the future of social housing? Does it even have a future?

Those were the big questions posed at a conference in Birmingham last week organised by Housing & Care 21 and the University of Birmingham. The answer to the first one revolved around a concept drawn from the academic literature: hybridity, or the ability of organisations to operate in the triangle between public, commercial and community interests. As to the second, yes… but it depends.

Hybridity is never going to cut it as a simple way to explain to people what social housing is (surely a big problem with the idea) but it does do a reasonable job of mapping out the terrain in which housing associations find themselves: mixing the social with the commercial, dependent on yet independent from government and confused as to whether they have tenants, residents or customers.

But the question posed at the start of the conference by David Mullins of Birmingham University is whether it will be good or bad hybridity. As social housing gets rethought through pooling, cross-subsidy and mix, isn’t it also time to rediscover tenant involvement? And to rebuild the grassroots by filling the gaps left by associations with smaller organisations?

The first session I went to asked the question: is social housing on the critical list? James Gregory of Birmingham University said the answer depended on what we want from it. Hybridity could offer a solution with a return to a broader conception of ‘social’ and a more mixed approach.

Next up was Kate Webb, who explained the rethinking that’s going on at Shelter following the Housing and Planning Act. How did that legislation go so under the radar politically among MPs despite all the other recent government u-turns? And what conclusions should we draw from opinion polling suggesting that people value social housing in the abstract (as citizens) but not for them or their family (as consumers)?

And are we guilty of lazy thinking? If you argue for needs-based allocations by the same logic do you also have to accept the end of security of tenure and other similar reforms?

The Conservative perspective came from Waltham Forest councillor John Moss. ‘Social housing is part of the welfare system so it should be based on need,’ he said. ‘And help stops when you don’t need it.’ Housing associations were now property developers with (inefficient) management arms attached.

I spoke in a session on mixed communities, looking at how the ideal has evolved over time from the slums of the 19th century to Bevan’s ‘living tapestry’ to the Housing and Planning Act taking social housing out of the mix. What’s interesting I think is that what we think of as ‘social housing’ is a relatively recent phenomenon.  The term itself has only been used since the 1980s and for long periods before that the poorest households were excluded from council housing.

Pat Brandum of Savills broadened out ideas of mix to include not just housing as a tenure but sustainable urbanism as a whole: the retail, parks and other facilities that make up communities and good management as well as good design. She quoted success stories such as Castle Vale but those had cost and she didn’t see where the money was coming from.

In complete contrast Richard Ronald of the University of Amsterdam looked at the housing situation in his home city. As recently as the late 1990s, half of the housing stock in the city was owned by housing associations and half of the private rented stock was rent controlled. Things had almost reached the stage where there weren’t enough poor people to house, he said.

Since then Dutch governments have encouraged privatisation, helped by an EU ruling following a complaint by private landlords that associations should restrict allocations to the poorest 10 per cent of the households. Following the ‘Brutering’, the deregulation of the sector in 1995 in return for the end of subsidy, associations have become more commercial, developing more for owner-occupation and selling more stock.

The Netherlands offers an obvious example of hybridity that has gone much further than in the UK- but also a warning of what can go wrong. In the final session Dutch housing expert Rudy de Jong summed up the post-Brutering policy as ‘earn what you can to spend where you need it’. If that sounds very much like being commercially minded for a social purpose, then beware of what came next: fraud, huge losses on derivatives trading and Maseratis as company cars (see my Inside Housing feature last year for more).

So what went wrong? In terms of the politics, he said the politicians lost interest after the end of subsidy, mutual distrust increased and the move to housing lower income families meant a loss of middle class support. The result was an austerity tax imposed on associations. In terms of the market, there was moral hazard as huge losses at one association (Vestia) had to be paid for by the sector as a whole. Hybridity complicated the business case for associations as they shifted from long-term, low risk activities to short-term, high risk ones. In terms of communities, associations lost touch.

And how can that be fixed? The key issue, he argued, was governance, which had to follow accountability. A hybrid system could not work in the public sector or the private sector alone but had to work within civil society.

Back in England, Pete Redman of Traderisks argued that the relationship with government is by far the most important one in the hybrid triangle of state, market and community. He warned of the dangers of paying back grant as in the Netherlands and as advocated by some English associations. With no political relationships, governments would find it all too easy to blame associations for their housing problems.

His analysis suggests the growing importance to associations of the surplus on their social housing stock whereas the surplus coming from diversified activities is virtually zero. On current trends, he said, even after the 1% rent cut (the English equivalent of the Dutch tax), associations will deliver enough surplus from their own stock to pay for new social housing by 2034. The crucial issue was to use that wisely to reinvest in sub-market housing rather than get distracted into other activities.

Anita Blessing of the University of Birmingham described her work on funding for affordable housing works in the United States, with the Community Reinvestment Act encouraging banks to invest in their home cities. And Steve Stride of Poplar Harca argued that hybridity holds the key to regeneration, protecting social housing by the value delivered by new development, and looking beyond housing to the community as a whole.

That’s just a flavour of a fascinating conference and only reflects the bits I was at. Other sessions covered the private rented sector (has it become the new social housing?), housing for older people (can social housing really be social unless it tackles age discrimination?), what innovative alternatives are out there (community-led schemes and self-help housing) and the view from the West Midlands.

In summary, if social housing has a future it seems inevitable that it will be a hybrid one. Along the way, crucial questions about allocations, rents and surpluses will have to be confronted. So too, in the wake of the Housing Act and forced sales, will housing associations have to rebuild their relationship with local authorities.

But hybridity brings risks as well as opportunities and even within this conference there were contradictory versions of what it means. The crucial thing for me will be to recognise that it is about more than just straddling the social-commercial divide and the quest for ‘efficiency’ via mega-merger. Associations may like to style themselves ‘independent businesses’ with ‘customers’ but accountability to tenants and the community has to be in there too.

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