The Importance of Being Earnest

Social landlords have often been left open to the charge of being too quiet on the issues that affect their customer base. In the interest of self-preservation it may now be necessary to become a bit more vocal.

The social housing sector is often caught between a rock and a hard place. We operate in, provide homes for and work with, those on the margins of society. However we are also compelled to work within a highly political context. Not only dealing with whims of Central Government, contradictory policies from different departments. But also muppets who have epiphanies on inner city housing estates in Glasgow (who then go and miss the point of said epiphany). And that is before the minefield of dealing with a myriad set of Local Authorities and councillors with their own agendas. As a consequence we tend to be a bit vanilla in our criticisms of Government.

A couple of pieces caught my eye earlier this week.  The first involving Isabel Hardman and how we as a sector can get more of an influence in westminster.  Noting that moaning about a policy and then using it isn’t the best move.  And that as a sector we have an image problem with the ‘Right’.  The second was from Hannah Fearn noting that too much power lies with social landlords and not enough for their tenants.  Whilst I don’t agree with all her points I am firmly with her on the statement that we should serve best our tenants, not Government.  Key to both these pieces is that they reinforce the problem for our sector.  In an attempt to be all things to all people (politically speaking) we become not much of anything.  Or worse still, we piss off all sides.

The current set of welfare reforms have never been about just getting people into work. They are cost cutting measures, part of a long-term move to reduce state support and intervention. In short, they are a neo-liberal wet dream. The problem with such fantasies is that they are often only workable for the people who dream them up. It always narks me that those who make ‘tough decisions’ have probably never really had to make a tough choice in their personal life. Well I guess if you include the horrific decisions to be made over chilli humus or quiche then maybe, but you get the point.

Yet despite the impact the reforms have on our customer base we have always been too focused on the direct impact of the changes on our bottom line and not openly angry about indirect ones.  At least not uniformly. For me this is all the more bizarre because from a housing point of view we are paying for these reforms (and associated cuts in budgets for Local Authorities) 3 times over. 1) In higher rent arrears as more draconian sanctions cut benefits for a larger group of people, who then can’t pay us. 2) Because we then have to pay for interventions to help assist those having to deal with the fall out of ‘tough decisions’. 3) We then have to pay for schemes that provide a service formerly under the auspices of local authority but jettisoned due to budget cuts. As a sector we appear to have failed to be convinced by the moral argument to publicly oppose the reforms, at least en masse. Maybe a financial one will do the trick?

There are a few that have been systematically quantifying the impact of the reforms and being very vocal about their impact.  Real Life Reform, the JRF and the LSE have all produced research pieces showing the detrimental impact of the reforms.  SHOUT have also been very active in promoting the case for more social housing and the negative impact of the current Government’s policies. But as a sector we have more often than not done the equivalent of tutting, going “too bad” and moved on.  The consequence? Just look at the figures.  The number of social homes is at its lowest for years. Capital grant is at its lowest point for decades. The number of households relying on food banks is rising, as is the number of working households claiming HB. We have gone through 3 (or is it 4?) housing ministers since 2010. Frankly that paints a picture of being crap at influencing.

The Benefit Cap and right to buy policies are popular but when people learn more about the ins and outs of many of the welfare reforms support falls (as G.I Joe always said, knowing is half the battle…). We have a Government that relies on soundbite policies delivered to an uninformed public to drive through its agenda. It is part of our duty to address this imbalance when those policies affect us and the communities we ultimately serve. But maybe that’s just me being a bit naive.

Regardless of who wins the next general election we need to look at our approach to influencing.  We need to be better at understanding how housing influences (and is influenced by) changes in other policies areas.  We need to be better at supporting our tenancy base in its battles against the unintended (and intended) consequences of poor policy decisions.  We must accept the fact that in the game of politics passivity is not an option.

You can follow me on Twitter here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

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The Power of Nightmares

If you haven’t managed to I strongly recommend taking a look at a couple of documentaries by Adam Curtis.  The first provides the name for this blog, The Power of Nightmares, the second is Bitter Lake.  Both focus on the power of meta-narratives that seek to explain the world we live in.  Both highlight the often unintended consequences of doing so.  Particularly in Bitter Lake which links the over-simplification of worldviews to the spiralling violence in the Middle East.

Whilst a Neighbourhood Office can be pretty frenetic at times I would balk at comparing it to the various swathes of carnage ripping up parts of the world far away from our shores.  However the central messages from Mr Curtis and his dark, compelling and surreal documentaries ring true for social housing.  For years politicians have used highly negative narratives when looking at the welfare state and social housing.  Providing a justification for dismantling one of the central support systems for the general public.  Where once was assistance is now dependency, where once was a council house now stands a privately owned building sold for a lot more than it was lost for.  Benefit claimants are shirkers, not people.  So the story goes.

Within the pervading political explanations of the modern world is a set of basic assumptions.  And as with Bitter Lake these assumptions, which in turn have driven policy, have led to unintended outcomes.  The emergence of Neo-liberalism from pariah to main stay of both political thought and economic policy brought about a seismic shift in housing tenure. Home ownership has come to dominate the UK Housing market. With this domination a set of ideals, of pre-scripts, have become buried within our nation’s psyche.

Table Numero Uno – Trends in tenure, 1980 to 2013-14

Trends in tenureWe are one of only a few countries in Europe where a property is seen as a money-making endeavour above other beneficial factors of home ownership. Where buy-to-let small-scale landlords have been positively encouraged. Programmes like Homes Under The Hammer or Location, Location, Location typify our approach to housing. We believe house prices will always increase for short-term profit. Yet somehow housing will remain affordable for our children. This is a lie and a dangerous one.

At the same time we have been fed a myth that living standards will always improve. That consumerism is a good thing. That the wheels of the economy will keep on turning and benefit us all. The fact that our current recovery is based on, and now threatened by, ever-increasing individual debt as credit replaces cash savings is ignored. Roll the dice baby, papa needs a new pair of shoes.

The latest Conservative Party policy announcement beautifully illustrates the point. A scheme that provides cheaper home ownership, via public subsidy, at the possible expense of actual affordable (social) housing for the most in need is only possible where the pervading narrative is utterly warped from the reality it seeks to explain. It is about housing, stupid. The utter lack of it. The continued loss of social housing via right to buy. The inability for those of my cohort to even begin to countenance the prospect of buying due to the inherent costs.  Some half-baked initiative to help schmucks like me is akin to pissing in the fucking wind when the mess that is our housing system is seen in its entirety.

As Colin Wiles has noted yet another demand side initiative is not the answer here.  More needs to be done on the supply side.  And with the Private sector so utterly unable to meet pent-up demand approaches like Starter Homes and Help to Buy miss the point.  But given the worldview in which they have been formed, where the state cannot provide the solution, it is perhaps hardly surprising.  What we need is a Government that will reverse the drop in social housing and invest in housing and infrastructure, properly.  Alas I do not see this coming from the boys in blue.

Graph Numero Due – Households aged 25-34, by tenure, 2003-04 to 2013-14

25 to 32 Housing TenureOf small comfort is that housing is now seemingly on the agenda for politicians. However looking more closely at the policy announcements there is still reason enough to be glum. In a week where The Green Party fluffed its lines, where Labour promised 200,000 new homes built a year by 2020.  The Tories for their part have stated they are on course to do this by 2017. The focus is overwhelmingly on home ownership. Social housing is merely an aside. Indeed the Conservative Party has been so consistent in conflating social housing with its wider affordable housing provision aims I think they see schemes like Help to Buy, in their eyes at least, as an acceptable form of social housing (see equation below).

Social Rent = Affordable Rent
Affordable Rent = Affordable Housing
Affordable Housing = Cheap home ownership.
Providing cheap home ownership = Providing social housing(ish)

The policy announcements of this week are a start but they are nowhere near enough. Nice sound bites and vague promises around how much housing will be built. Or in the case of Brandon Lewis an absence of targets (guess you can’t miss them if you don’t have them…). Are all well and good but the lack of a coherent approach to housing policy has left this country in a very large pickle. Just got to hope we will eventually wake up.

If you feel so inclined you can follow me on Twitter here or find me using the Twitter handle @ngoodrich87, you can view the rest of my blogs here.

A Public Service Announcement

Every now and then an article comes along that, a bit like Top Gun, takes your breath away (oh my, that volleyball scene…). Whilst I doubt Mike Iszatt will ever be my Goose, or even my Iceman, after reading his article I did feel the need, not for speed but to counter his piece.

The article’s opening salvo was to question whether our glorious country will become a nation of housing association tenants. Well actually what he meant was whether this would happen to the lovely, leafy Borough of Broxbourne in Hertfordshire (I didn’t know where it was either, used those adjectives to pad this out a bit). And by that he meant it appears that a number of new developments have quite steep proportions that must be set aside for affordable homes. So, to allay Mr Iszatt’s fears about the UK becoming one big social housing love-in I feel it is my public duty to highlight some facts and fun tit-bits.

1 – We are losing social housing, not gaining it

Between 1981 and 2010 the UK pretty much saw a net loss of social housing every year. Every year. A slight upturn in 2010 (go figure…) has hardly reversed the long term decline in those who rent from Housing Associations and Local Authorities in Great Britain. At the same time private ownership and private sector renting has blossomed. Don’t worry Mike I think we’re safe from becoming a nation of housing association tenants just yet. If you want the figures just nip over to the DCLG website and look at the live tables.

Dwellings by Sector

2 – Whilst all social housing is affordable housing not all affordable housing is social

Just like that fact that whilst all Catholics are Christians but not all Christians are Catholics the merry-go-round regarding social housing terminology keeps on spinning faster. It is a deliberate misuse of wording to conflate a large package of measures in order to hide the inexorable fact that we are haemorrhaging truly social housing in this country. Alas Mr Iszatt also appears to be suffering from this affliction. Quite often when he states Affordable, he means social. Again the DCLG have produced some figures which highlight why choosing your words carefully. @Churchiechat might also be able to enlighten you.

DCLG Live Tables 1009 Additional New Build and Acquired affordable homes (England)

Dwellings by Sector new

3 – Waiting lists are sign of a larger problem

As someone who works in performance, whose very job is to look at performance trends and delve into data your cavalier approach to waiting list figures is utterly shocking. Causality v correlation my friend, they are tricky thing. Waiting lists are generally an indicator of wider structural issues not just people being sneaky little so and so’s. If the private market is providing for the masses there won’t be too much demand for social housing. The problem for Broxbourne, and the UK in general is that it isn’t.

House prices are rising way above wages and for many home ownership is out of reach, even private renting is a struggle. Based on a quick look on Zoopla the average value of a property in Broxbourne is a whopping £391,867, for the rest of England it is £279,985. A £60,000 cap on an applicant’s yearly income seems pretty reasonable in this light. Particularly because if you were looking to buy £60,000 will only enable you to borrow in the region of £200,000 (provided you have a deposit of £10,000). I can see why people might want to be on that housing list. Yes some housing lists may need a bit of a spring clean (double counting of applicants isn’t unheard of) but still focus on the main issue. You know, the complete failure to build enough housing, of all tenures to meet the demand.

4 – Councils provide very little grant funding to housing associations

Yes some Councils do provide capital grant to housing associations in order to ensure the building of social housing within their localities. But on the whole capital finance comes from the DCLG via the Homes and Communities Agency or from the private sector. However Councils do provide a very large sum of money to us via housing benefit. Though this is ultimately paid for by central government coffers (in the end), Local Authorities merely act as the middle men. However, I fully agree with you that this should be reduced. Given that one of the largest growing group of claimants of housing benefit is those in work (see graph below) I guess I have your support for a living wage for all UK workers? What about a reversal in the 60% cut in capital funding for social housing builds since 2011? More houses means lower rents, means less housing benefit being paid. What you say Mike? We might even get those pesky housing waiting lists down.

Housing Benefit Claimants in Work

HB Claimants in Work

Source: Single Housing Benefit Extract (SHBE), Department for Work and Pensions

5 – What on earth does your last paragraph mean?

At one and the same time you seem to lament and support Right to Buy. Bemoaning council housing being sold off cheaply but then stating the private sector is doing a good job? I find this paragraph odd because A) your party, the Conservatives introduced the policy and is trying to extend it to housing associations. And B) it makes no fricking sense, literally what are you trying to say?

Anyway I hope I have cleared a couple of things up. If you ever need some help on things to do with housing just holla. Failing that, there are some lovely chaps and chapesses at the National Housing Federation or Chartered Institute of Housing who would be more than willing to help. Toodle pips.

If you feel so inclined (I wouldn’t advise it, you will be disappointed) you can follow me on Twitter here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

Das Capital

Right to Buy, the Russians acting like an empire (again), big hair, leggings and electro music being popular amongst the ‘yoof’, a Government pushing policies that continuously undermine those further down the food chain.  You’d be forgiven for thinking this is the 1980s with Thatcher in her prime.  Regrettably it is 2015 and it’s an election year.  Whilst Cameron and co may be stopped I can’t do a lot about the fashion choices and poor taste in music amongst the hell spawn younger than even I, sorry.

As if it needs spelling out Right to Buy is a bit like kryptonite to our beloved sector.  It is the perfect political weapon to decimate social housing.  In a country obsessed with home ownership and asset based capital it is a highly potent mix of aspiration and access to cold hard cash.  It’s better than Help to Buy, it’s better than Shared Ownership and pretty much every other initiative designed to assist those with lower incomes acquire a property.  Why?  Because you can buy the property you are currently living in, in the neighbourhood where you have built up substantial local networks.  More importantly you can do so for a fraction of the cost of even the best low cost home ownership products out there.  Though frankly as a sector we have been bumbling through the provision of those products for years.  Even better you can sell it on for large profit after a few years, especially if you are in the right part of London and the South East.  It’s the postcode lottery (the good kind, not the one where your local hospital is shit).

Unsurprisingly it is bloody popular.  The figures below show just how many people have bought their council/housing association property through Right to Buy (and it’s watered-down cousin Right to Acquire).  So it is no surprise that the announcement last week that Right to Buy may be extended to include Housing Association properties has caused nothing short of alarm.  Though nowhere near its heyday peak of the early 1980s allowing Housing Association tenants to purchase their home under Right to Buy will give the figures below a significant kick up the bottom.

On a side note for a beautifully biting critique of our reaction as a sector and attempts to nullify other policies of the Coalition I do suggest you read Rob Gershon’s piece in 24 Dash.  The chap has a wonderful way with words.

Depressing Chart 2 – Right to Buy Sales – England

Right to Buy SalesIn addition to decimating social housing stock (see depressing graph 2 below) Right to Buy provides piss poor value for money to the tax payer.  As a policy it has the dubious honour of being paid for by the taxpayer twice.  The first time to build the property then, after it has been sold, we pay again as the property is rented back by the Local Authority that sold them, at higher rents.  For a (slightly) oldie but goldie report on this utterly stupid situation please see Tom Copley’s report.  His report, a year old today (Mazel Tov my friend) highlights the cost of Right to Buy in London, but it is a situation likely to be repeated up and down the UK.  You know this, I know this but does the general public care?  Probably not.

Depressing Chart 2 – Dwelling stock by tenure, UK, 1980 to 2012
Dwellings by Sector

As Colin Wiles notes (I really do need to write my blogs quicker) Right to Buy is bollocks on a number of levels.  It is an ideological weapon to suit the needs of those who wield it, a means by which to rid the country of a housing sector that has no real place in the vision of the UK held by those in Government.  Interestingly, for me at least, Right to Buy’s second lease of life raise a number of questions in relation to the long term direction of our sector.  Is this another nudge towards going it ‘alone’?  How would it work if housing associations were allowed to buy their way out of historic debt/grants?  Will this serve to discourage future uptake of grant (no grant, no strings, no Right to Buy)?

So what do we do?  Fight the inevitable an uphill battle, because in essence we need to convince the general public that social housing is worth fighting for.  But more critically that they should sacrifice the opportunity to make a quick buck in order to maintain it.  Telling the Treasury to keep its dirty mitts off the Right to Buy sales receipts would also be worth doing.  Cheeky sods.

If you feel so inclined (I wouldn’t advise it, you will be disappointed) you can follow me on Twitter here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

Big is beautiful (again)

The social housing sector is a diverse beast, a myriad collection of the unique, the ambitious and frankly the downright bizarre. From smallscale Almshouses, to Large Scale Voluntary Transfer organisations (LSVTs) and increasingly complex group structures, the sector has a very divergent selection of organisations that operate within its boundaries.

Does it matter? Not really. What does matter is that the mantra that big is beautiful is back. Though in reality this notion has never really left us. Mergers have been a constant part of the sector for decades. It is however the set of circumstances that currently face social housing that may give renewed energy to the get big or get going brigade. Typically it has been times of cuts in, or significant changes to the administration of, funding that have seen spikes in mergers and group structures. The brave new worlds of 1974 and 1988 (private finance) saw a huge rise in mergers, followed by a jump in group structures in the mid 1990s. This has subsequently been followed by a further jump in mergers in the early to mid 2000s, just ‘cos.

And lo and behold capital funding is again getting rare, as rare as Grant Shapps not making an appearance in the media rare. Previous posts have covered this new reduction in funding. But the bleak stats require repeating. Even more so due to the fact that a number of major players have both publicly and privately turned down government funding. Bromford came out swinging, in the stylish, tech-savy way it is now known for. London based housing organisations’ snub of Mayor ‘Cor isn’t he crazy he’s not like the other Tories’ Boris Johnson has been a more private affair. The reason for the rejections? Too little wonga has been offered and the strings attached too stringent. For a number of landlords the sums increasingly just don’t add up. This has left the Mayor of London’s Office scrabbling around like a desperate ex trying to patch things up. “I’m sorry I cheated on you, we can still be awesome together, please take my money and build stuff with it”.

Of course it wouldn’t be housing blog without mentioning welfare reform. It is, potentially, a significant factor in moving organisations towards merging as it does create a slightly awkward operating environment. This in combination with lower levels of capital funding, and reduced bank lending.  Something not unnoticed by the ratings agency, Moodys. Who, in addition to the helpful advice of ‘partner up people’, did warn of potential issues around existing and future funding arrangements when doing so.

So what do we do? Well at the moment around 90% of stock in the social housing sector is owned by just 20% of the largest landlords. That means there are a lot of smaller players out there, though for how much longer remains to be seen, particularly as the number of housing associations is steadily decreasing. In 2012 there were around 1,500 organisations compared to just under 2,000 in 2002. With only 40% of the expected welfare cuts currently in play (the other 60% conveniently scheduled for after the next general election), more pain is on the way. Finding sugar daddy/momma is therefore an increasingly attractive option for smaller associations.

There will be those who argue that small organisations still have a place in the post apocalyptic housing world we are entering, and I do have sympathy with that notion. It is still debatable as to whether economies of scale are actually achieved by mergers. But you cannot keep on levering in dollar without increasing your portfolio. You can only get so much money with your existing stock. As your stock ages overheads will steadily increase, your ability to fund new projects will decrease and eventually towel throwing-in time will occur. This is a situation faced by many smaller organisations in the sector. Better get out that slinky black number and hope someone is interested.

It isn’t all doom and gloom, the sector has always been remarkably resilient. If (and it is a big if) Labour win the next election then it is likely funding will increase. Other countries, Holland in particular, have shown how a post capital funding world could look like, albeit in a highly unique situation. I doubt such collectivist action will ever happen here but a gal can always hope. Also it would be best to avoid going the route of the Dutch housing association Vestia. The derivatives market is best left to the boys in the city.

I will leave you with a quote from a very informative Think Tank policy paper on the future of the sector. It does slightly mirror my thinking on the sector and very small scale organisations in particular.

“…there are far too many of them. You’ll see three councils coming together to share services, yet in the same area there might be 20 housing associations working independently of each other. It doesn’t make sense.” (Chevin et al. 2013).