Something to shout about

Here’s hoping today’s launch of the SHOUT manifesto can be the start of a new era for social housing.

Anyone who’s read this blog will know that I support the campaign but the launch got me thinking in a deeper way about exactly what we mean by ‘social housing’ and why it is ‘under threat’.

The starting point is of course the way that the coalition has deliberately blurred the distinction between social and affordable rent. Only last week George Osborne’s Mansion House speech and Kris Hopkins’s press release on the latest affordable housing figures provided two classic examples. The latter even managed to mix up the stats on social, affordable and all homes.

On twitter I called it a ‘triple blur’ but Tom Murtha, one of the people behind SHOUT, came up with the much better metaphor of the ‘three-card trick’. I love the way that conjures up images of Osborne and Hopkins as shady operators inviting credulous punters to ‘find the lady’ while keeping a wary eye out for the police. For a more serious analysis of why the distinctions matter, not just in the construction of new homes but in the conversion of existing social rent homes to affordable, see this blog on Red Brick.

However, the blurring did not start with Osborne and Hopkins. In terms of the letter of the law, it could even be argued that they are correct when they mix up ‘social’ and ‘affordable’. The Localism Act follows Part 2 of the Housing and Regeneration Act 2008 in defining social housing as both ‘low cost rental accommodation’ and ‘low cost home ownership accommodation’ that are ‘made available to people whose needs are not adequately served by the commercial housing market’. Low cost rental means at a rent below the market rate. Low cost home ownership means shared ownership or equity percentage arrangements. Strictly speaking then, ‘social housing’ includes not just affordable rent and shared ownership but even the shared equity element of Help to Buy.

Except of course that virtually everyone in housing believes there is a clear distinction between social rent and affordable rent let alone shared ownership and shared equity. Social rents are affordable in relation to incomes whereas affordable rents are merely rents at below market levels and may therefore be completely unaffordable. Social housing tenancies offer the security that turns a house into a home rather than a short-term let.

However, there are and always have been more grey areas. On rents, for example, the earliest council housing was generally only affordable to more affluent workers. The target rent regime is far from perfect: the current formula means that rents are rising faster than earnings and have been for years. There is also huge variation around the country: ‘affordable’ rents are not always ‘unaffordable’ and in some areas private rents are actually lower than social rents.

The crucial point for me is that social rents are set by a formula that includes earnings where affordable rents are merely a reflection of ever more unaffordable house prices and rents in the private sector. In whole swathes of the country, and especially in the South East, they will only be ‘affordable’ to working tenants if they can claim housing benefit.

Does that matter if housing benefit is ‘taking the strain’? For all kinds of reasons, yes it does: work incentives will be blunted; the housing benefit bill will rise at a time when it is already under pressure; inevitable cuts will leave tenants with increasing shortfalls; and the evidence seems pretty clear that it offers worse value for money over the long term.

On tenure, social landlords were using introductory and probationary tenancies for years before the Localism Act allowed them to use flexible tenancies. And security of tenure has only existed since 1981 and was enacted not by a Labour government but by Margaret Thatcher (though it was a bi-partisan policy to implement what was already seen as de facto security because council landlords were publicly accountable bodies).

However, starved of investment and denuded by the right to buy, social housing is very different now than it was then. Alongside a major programme of investment and the removal of restrictions on council borrowing, plus an end to affordable rent, SHOUT also argues that:

• Social rented housing should be viewed as a tenure of equal status to others. It meets needs that other tenures cannot and is a tenure of choice for millions of people. This choice should be acknowledged and supported.
• National and local politicians should be encouraged to take the lead in affirming the positive value and purpose of social rented housing, and challenging the demonisation and stigmatisation of social housing and social housing residents.

Kate Davies addressed some of these points in a recent Guardian Housing piece that condemned the stereotypes but was also dubious about ‘social housing professionals queuing up to express their love of social housing’.

‘I find the demonisation of social tenants obnoxious,’ she said, ‘but I also shudder at this crude promotion of council housing as an idealised workers’ paradise. Let’s be absolutely honest about the facts.’ Her point I think was that we should present social housing as it is rather than reach back nostalgically to the past: celebrate the achievements of aspirational tenants who want to move on while accepting that ‘it provides a safe haven for vulnerable people, and this is the real value of social housing today’.

I found myself agreeing with some of what she said, challenged by some of it but still troubled by the implications of accepting that social housing should be limited to what circumstances have made it. Go right back to the Localis report that influenced the coalition’s housing reforms and you’ll find it advocating social housing only for the most vulnerable and near-market rents for everyone else; go to where the reforms went furthest, in Hammersmith & Fulham, and you’ll find new criteria for the waiting list that are so restricted that it fell to just 700 and Conservative councillors saying that this proves there is no demand for social housing.

Take a look, for example, at the prospectus for the Estate Regeneration Programme published by the DCLG last week. The aim is to redevelop existing estates at a greater density to provide more homes. It sounds a good idea in principle as does replacing tower blocks with terraced streets. The prospectus does also distinguish between ‘social’ and ‘affordable’ housing. However, there are no stipulations as to the split between them and between homes for rent and for sale. As one of the specific objectives is to maximse the output of homes for the minimum amount of public loans available, it’s not hard to see the danger of Hammersmith & Fulham-style regeneration of existing estates with little or no social housing.

It seems naïve to imagine that the clock can be turned back to before the Localism Act and still less to 1979 or 1945. With investment in short supply, it may well be that higher rents and flexible tenancies will be an important part of the housing and regeneration mix. However, they will continue to be regarded with suspicion unless government and landlords make a clear commitment to the future of social renting rather than collude in its slow death. With that commitment to genuine affordability in place, intermediate (definitely not ‘affordable’) rents could come to be seen as an important option for tenants who can afford them just like low-cost ownership is for those who can buy. The new ideas put forward by Generation Rent yesterday could come into play too.

With that, plus the all-party support seen at today’s SHOUT launch, could the way then be clear to reclaim the broader meaning of ‘social housing’? As a range of options to rent and buy a home for the millions of people who the market has failed rather than an A&E department for the poorest and most vulnerable? That really would be something to shout about.