A vision for social housing: for developers and local government

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In the wake of the Grenfell Tower disaster, the housing charity Shelter put together a commission which looked into the future of social housing in the UK. On 8th January 2019 it published its report which largely condemns current attitudes to social housing. It calls for Government and society to recognise it as a refuge for the less fortunate, rather than the pejorative belief that is it for the less diligent.

Their report was compiled by a panel of industry experts and recommends that the Government embarks on a 20-year programme to deliver 3.1 million new social homes. This spurt of building would attempt to redress a huge decline in social housing over the past 40 years which has left millions in insecure and unaffordable rented homes – with home ownership unlikely, and increasing numbers of people tipped into homelessness.

How did this situation arise? The report centres on the lengthy and often unprofitable process for gaining permission for, and then building, social housing. Specifically, it centres on the well-meaning but misguided Land Compensation Act 1961. This inflated land values by granting landowners an entitlement to ‘hope value.’ It is not profitable to purchase expensive land in order to build subsidised affordable housing. Pushing more money into social housing incentive schemes will only serve to make this venture less profitable as it increases the demand, and therefore the price, of this land. Thus, the Commission suggests that this Act is amended so that landowners are paid a fair market price for their land, rather than the price it might achieve with planning permission that it does not actually have.

If this Commission’s suggestions were adopted by the Government, it would require a cultural and practical shift in the approach to social housing. For developers, this would mean tenure-blind building which would eliminate so-called ‘poor-doors’ (separate entrances for affordable housing tenants). However, it would remain important for developers to be able to design their buildings in such a way as to minimise maintenance costs for tenants. Additionally, it would require increasing tenure diversity on large sites in order to meet housing targets. For local authorities there is likely to be an increased pressure on planning allocations as higher housing delivery targets will hold councils to account for the homes built in their jurisdiction. This would necessitate more planning consents in areas of high housing need.

A few local government officials have already stated their support for the report’s conclusions. Tom Copley, Labour’s housing spokesman at the London Assembly, has called for local authorities to provide thousands more homes for social rent and to scrap ‘Right to Buy.’ His comments are likely to be of interest to many councils in the capital – including Labour-controlled Croydon where there have been no new council homes built since 2014. Copley’s remarks illustrate the gulf between progressive social policy and what councils are delivering in London. However, some opposition to the Commission’s conclusions is to be expected. Councillor Mark Winn, Cabinet Member for Communities at Aylesbury Vale District Council, has argued that the national social housing crisis is not necessarily relevant at the level of local government. He has pointed out that Aylesbury Vale have recently concluded a public consultation on their social housing policy (closed on 7th January 2019) and are prioritising their local residents’ needs.

The measures illustrated in Shelter’s report could be a real opportunity both for developers and local government to take advantage of unused land and create homes for disadvantaged people. The commission calls on us to recognise shelter as a basic human need.

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