Time for new thinking on social housing
Last month, the Government published its long-awaited Social Housing Green Paper. Initial reaction in the housing sector was mixed, with many highlighting the lack of any new funding to build more social homes. Such criticism found an answer today in the Prime Minister’s announcement of £2 billion in new, long-term funding.
In combination, the Green Paper and this investment present a big opportunity to put forward fresh thinking about social housing.
As one housing association chief executive remarked to me last week, the most important thing about the Social Housing Green Paper is the fact that it exists at all. Housing professionals are cautious of some of the proposals, new league tables for social landlords, for example, and warmly welcome others, such as tackling the stigmatisation of our tenants, a scourge we must work together to address.
But seeing such a strong emphasis on social rented homes and those who live in them is a major shift. Whereas previous government policy promoted home ownership at the expense of social housing, the Green Paper rightly argues social homes play a vital role in our society.
But seeing such a strong emphasis on social rented homes and those who live in them is a major shift. Whereas previous government policy promoted home ownership at the expense of social housing, the Green Paper rightly argues social homes play a vital role in our society.
It was the 2017 Housing White Paper that openly acknowledged the scale and significance of the housing crisis and the need to build 225,000 to 275,000 homes each year. It set in motion a shift away from a narrow focus on home ownership and demand-side reform in the Cameron years, in the form of Help to Buy, Starter Homes and extending Right to Buy.
In the wake of the Grenfell Tower tragedy, the latest Green Paper has taken this a step further. It demands a better deal for residents and closer involvement in the running of their homes, but also emphasises the importance of building more social homes.
As a Green Paper, it’s light on specific policy proposals, but in combination with the Government’s new long-term rent settlement for social landlords, the reintroduction of grant funding for social rent homes, and now an additional £2 billion in funding for affordable associations, we are seeing a significant change.
Now is the time to put forward fresh ideas on social housing and to demonstrate the benefits of flexible and dynamic policymaking that will help to deliver more.
Housing associations are well-practiced at innovating in a constrained policy environment. Since the axe fell on much of the government subsidy for social housing, we have adapted significantly.
Members of the G15, a group of London’s largest housing associations, have leveraged their borrowing abilities and strong balance sheets to become some of the largest builders in the capital, delivering around a quarter of all new homes. By cross-subsidising affordable homes through building homes for market sale, many housing associations have become less reliant on grant funding. All profit from these sales are used to deliver more affordable homes and provide services that residents value most.
But like all home builders, housing associations are constrained by factors including land supply, planning policy, construction labour availability, market risk and borrowing limits.
Innovative partnerships can help to build more homes. In the capital, we have worked with the Greater London Authority to develop a much more flexible approach to funding. Since April 2017, the Mayor has agreed nine strategic partnerships with housing associations to channel grant funding into affordable homes in a more dynamic, less bureaucratic way.
Working with local authorities is also crucial in solving the housing crisis. By combining our strengths, we can build more together, unlock council-owned land and Right to Buy receipts, and support local authority housebuilding.
Innovative approaches to partnerships have allowed government to today commit £2 billion over the next 10 years to strategic long-term funding deals.
This is the first time that government has agreed housing funding programmes that span across spending review periods. Subsidised housing will always require subsidy, and we hope this is the beginning of a new, long-term relationship between government and the housing sector.
In response, the housing sector will continue to innovate. Long-term certainty on funding will allow us to work with our supply chain and landowners to build more homes; with training providers to offer more construction training opportunities; and with off-site-manufacturers to help modernise the way we build. It’s this sustained collective effort that’s needed to take on the housing crisis and provide more affordable homes for those who need them.
Paul Hackett, Chair of the G15 group of London’s largest housing associations
This blog is the third in a series of editions of The Reformer on housing policy.