Ten steps to a housing crisis

Originally posted on October 14 on Inside Edge 2, my blog for Inside Housing

How does somewhere that was built to solve the housing shortage end up being in the middle of one?

The place in question is Peterborough in Cambridgshire but events there in the last month resonate well beyond the city. Seen admittedly from the outside, this is the UK housing crisis in ten steps.

1) Build a new town

Peterborough was designated as a new town in 1967 to accommodate population overspill from London. Four new townships were added to what was already a Cathedral city, boosting the population from 83,000 to 190,000 over the last 40 years. The key, according to the former head of the development corporation Wyndham Thomas, was the acquisition of land at existing use values with debt repaid from finance generated by increased land values.

2) Watch the population grow

Housebuilding has failed to keep pace with a rising population in the south and east of England in general. In the case of Peterborough in particular add high levels of immigration. Cities Outlook 16, the regular survey by the Centre for Cities, shows that Peterborough was the third fastest-growing city in the UK for population with an annual growth rate of 1.5% a year between 2004 and 2014. The housing stock grew by the fourth fastest rate in the country between 2013 and 2014 but the rate was 1.1%.

3) Stop building new towns

Peterborough was part of the third wave of post-war new towns in England alongside Milton Keynes, Northampton, Warrington, Telford and Central Lancashire.

Despite endless talk of ecotowns and garden cities no more have been built since. Political paralysis and fear of anything that implies building on the green belt are key reasons why not. Peterborough was one of 40 towns and cities that the 2014 Wolfson Prize winner suggested should double in size to provide 3.5m new homes. In almost the same moment that the prize was awarded former housing minister Brandon Lewis popped up to rule it out in favour of government plans that have led (perhaps as intended) nowhere.

4) Sell off social housing

Introduce the Right to Buy without building homes to replace the ones sold off (recent dubious claims notwithstanding). By the time Peterborough Council transferred its housing stock of 10,000 homes to Cross Keys Homes in 2004 it had already sold more than 6,000 under the right to buy.

5) Watch homelessness rise

Peterborough accepted 442 households as homeless In 2015/16, an increase of 68% in the last two years. Of those, 121 were in temporary accommodation, including 48 in bed and breakfast. The city was one of only two places outside London to receive ‘beds in sheds’ funding in 2012.

And Peterborough is not the only former new town with a big homelessness problem. Milton Keynes is reportedly renting a converted office block of 110 flats in Luton to house its homeless families. It says the £7.8m a year cost is half what it would be spending on bed and breakfast.

And this is part of a much bigger problem of homelessness being exported from one place to another. Peterborough is one of the places that councils from London and nearby Cambridge look to solve their problems.

6) Leave local authorities to cope

Until they don’t. John Holdich, the Conservative leader of Peterborough council, says the situation got even worse over the summer: an average of 60 to 90 people a month approached it as homeless in 2012 but that rose to 150 in August 2016. At the end of June it had 30 families with children who had been in bed and breakfast accommodation beyond the six-week legal limit.

Peterborough blames the spike in homelessness on the introduction of universal credit and the end of direct payment of housing benefit and higher taxation of landlords.

That’s led to a war of words between the Tory council and local Tory MPs. Stewart Jackson MP blames mismanagement by the council and its ‘pretty useless’ leader. Local landlords (including one who is the Tory leader on Stevenage council) back the council and say they are increasingly reluctant to let to tenants on benefits (although the LHA has been paid to tenants since 2008).

Holdich hit back at Jackson:

‘One of these days our MP will accept some responsibility for the actions of his government which led to unintended consequences.’

7) Find short-term fixes

At first the council used Travelodges in the city to cope. Up to 40 families at a time were staying in them at a cost of £294 to £588 a week and by September and the council ran up a bill of more than £1m.

The council’s has instead signed a three-year contract with Stef & Philips, a North London estate agent turned ‘provider of social housing solutions’, to use the private rented St Michael’s Gate estate as temporary accommodation. The 74 homes will be increased to 98 and the council will pay £966,337 a year.

8) Evict people to tackle homelessness

Except that there are already families living at St Michael’s Gate who will be made homeless as a result. Caroline Worth and her partner and baby daughter are among those who say they’ve been given until the end of October to leave. Pensioner Michael Dingeldein has lived there for 21 years.

Stef & Philips will manage the properties but the company that owns them and is carrying out the evictions rejoices in the name of Paul Simon ‘Magic Homes’. The two firms appear to share a director.

The crazy prospect of making people homeless to tackle homelessness is what hit the national headlines last week but the situation is actually even more crazy than that.

9) Pay more for ‘social’ housing

Peterborough is coping with a situation that is the result of years of government policy: failing to build enough homes in general; failing to build enough social housing in particular; and selling off council houses without replacing them.

So the council has to rely instead on ‘social housing solutions’. The rents will obviously be higher than for actual social housing but it seems they will also be higher than the existing tenants at St Michael’s Gate are paying.

And it gets even crazier. In a blog justifying the decision, John Holdich says the council has no choice. In a crazy way it’s hard to argue with his logic. If Peterborough didn’t sign the contract, he says, the tenants would still be evicted and it would still face the temporary accommodation costs, but the St Michael’s Gate tenants would still be evicted and another council would use the homes for its homeless families:

‘The reality is that we are stuck between a rock and a hard place. Whatever decision we make Stef & Philips will still require the current tenants to leave to be able to offer the properties to our council or another council for homeless families.’

10) Cope with more homelessness

What happened next was inevitable. On Thursday nine tenants who are being evicted so that Peterborough council can house its homeless households applied as homeless to…Peterborough council. Is it beyond the bounds of possibility that they could end up back at St Michael’s Gate in temporary accommodation?

The council has already signed the deal for St Michael’s Gate. However, it meets next Wednesday (October 19) to consider an opposition motion to call it in. Stewart Jackson is holding a public meeting on Friday.

There could of course be local nuances I’m missing but what a mess. Here in 10 steps is how a city that was meant to solve the housing crisis instead came to symbolise it.