Tuesday, 29 July 2014

The move back towards mono-tenure housing schemes will create a new generation of welfare-dependent ghettos

Is the housing sector sleepwalking its way into making a huge mistake? I ask because there seems to be a new consensus emerging that it’s now OK to go back to developing 100 per cent rented housing schemes.

In my view this risks creating a new wave of stigmatised estates. Haven’t we learned anything from the past? Yes, this downturn is special. It will certainly change the relationship between housing and private finance. But in many respects, we have been here before.

In the early 1990s, after the last housing market crash, the government boosted the Housing Corporation’s development programme. The result was the housing market package, which involved buying up failed private developments, and a big increase in housing association new build.

This extra spending, it was implied, would be followed by cuts in future years. The message was clear: get on with it fast. Sound familiar?

The consequences of that last ‘build now, think later’ strategy became clear in the ensuing years. In 1997, a ground-breaking Joseph Rowntree Foundation report by David Page, Building for communities, demonstrated how new housing association estates were becoming ghettos of welfare dependency because they were being let entirely as social rented property to those classed in housing need.

Mr Page was vilified by housing associations for his work. This was the kind of thing associated with council estates, not these shiny new housing association places, they argued.

Well, here we go again. Unless we are careful, stigmatised estates are about to come back into fashion - a retro trend that frankly stinks.

All the evidence is there to show what a bad idea this is. Mono-tenure social housing estates are a flop. They don’t help people get work, they don’t help people avoid crime, and they don’t help children’s prospects. They are a very bad use of public money.

We would like to think that the housing sector is busy learning from what happened last time round. But I don’t get that feeling. Mr Page’s report is out of print. Copies are so rare they are now available on Amazon for up to £175. Not exactly mainstream reading.

Yet his work helped lead the way to a real housing world success. Mixed tenure became the norm on new developments. OK, too little was done on existing estates. But new schemes were not to be 100 per cent council-nominated, social rented any more.

New affordable housing was for sale as well as for rent and was often mixed in with market housing.

Now everything has changed, some say. We can go back to separating social housing from homes for sale.

Private developers can’t be expected to provide a proportion of affordable units because this isn’t viable any more, the new segregationists say. The planning gain model is broken.

If I were a house builder I would love the public sector to think this. I would get the affordable percentage requirement reduced in my section 106 agreements, gain planning consent on this basis and then sit on the site until land values lift. Then I would develop with far fewer affordable units than I would have been expected to provide before 2008. Suckers!

Meanwhile, hardly anyone has objected to lenders pulling the plug on shared ownership - even though the government now owns some of these banks and house prices and mortgage costs are now both more affordable.

Worst of all, some think a return to council housing is the answer. Luckily, the Budget put far less money into this idea than was trailed. But even if new council houses are to be eco-friendly, if they are all for social rent then their sustainability credentials will be limited. Some crazily believe that 30 or 40-unit council schemes won’t cause a problem. But ghettos come in many sizes. Look at the edge of many villages.

We must remember that the group whose job prospects benefited least from the boom years was social tenants. Many were given the supposed refuge of a secure tenancy during previous recessions. But too few got back into the workplace when things picked up - and many raised children who assumed this was normal.

There was - and there is - an umbilical link between granting social tenancies and reducing a household’s prospects. This is particularly true in communities with a concentration of social tenancies.

New affordable rented housing is fine, but providing it by herding people together on social housing estates is not.

In any case, councils haven’t had development staff or skills for years. And new council housing adds to national debt. For that reason alone you would think that anyone who wasn’t a hardcore municipalist would think twice about this.

By the time a council has actually found land, received planning permission and recruited the staff needed, there will be a new government implementing the ‘era of thrift’.

The whole idea is a huge distraction from what is needed: an immense effort to get back to mixed tenure and mixed income development. If councils can deliver that, fine. But right now social housing people seem to want to return instead to their comfort zones - tried, tested and failed approaches from the past.

Mixed tenure may not suit grant-hungry development directors, or council/arm’s-length management organisation empire builders. But these people are not the ones who will have to live in the new ghettos. It’s not too late to learn the lessons from last time round.

TIm Dwelly is director of Live/Work Network