Posted 17.12.14
This article by housing consultant Simon Graham appeared in the latest issue of Campbell Tickell's CT Brief.
Million Homes, Million Lives argues that if housing associations had channelled the money invested in commercial activities into building more social housing, 18,500 more social homes could have been built since 2009.
The organisation also says that if housing associations had stuck to merely doubling their profits instead of investing in other commercial activities, tenants' rents could be £500 less per year.
For an organisation with strong connections to Conservative Party policy thinking to accuse the sector of making excess profits is a staggering rewrite of recent social housing history.
It was the Conservative-dominated government's own policy to encourage housing associations to raise tenants' rents to help compensate for the coalition's massive cut in grant funding from 2011. The government also strongly encouraged housing associations to act more commercially.
The whole purpose of the policy was to increase housing association surpluses, so they could still build 'affordable'homes despite the huge reduction in grant.
The funding rules for the 2015-18 affordable homes programme mean that virtually no new social housing at lower rents can now be built.
Housing associations are pushed even harder towards letting all new build homes at the maximum 80% of market rent and converting more social homes to affordable rent.
The big housing associations that have backed away from the programme have done so partly because they do not believe it is either fair or sensible to impose such high rents on people they know will struggle to pay.
Local authorities, under immense demand pressure, have continued to nominate households in the deepest need to housing association homes built for affordable rent, despite pleas for them to nominate more people who actually have some hope of being able to afford the rent.
What is missing in this sterile debate is any acceptance that the government's own policies have led to this situation and any portrayal of how increased surpluses are actually being used.
The biggest housing associations are using their surpluses to increase development, and they are doing it in a way that allows them to build more lower-rent homes than they can under the government's formula. By working outside the system, these associations are also able to let the homes to people who can pay the rent with less recourse to housing benefit.
Far from moving away from their original mission, housing associations are innovatively making sure it can still be delivered. The government and its acolytes should be praising the sector for saving the nation money. It's been a fantastic response to a nasty policy, which actively increases the poverty trap for those it purports to help.
The current attacks on the sector are disingenuous and if the Treasury seeks to grab these surpluses, housing associations will be forced to cut their development programmes which is, of course, counter to the government's professed desire for more new homes.
Issue 16 of CT Brief can be downloaded via this link.
