Giving people fixed term social housing tenancies and moving them on if their circumstances improve is a concept stirring up much debate.
It’s entirely valid to ask if it’s right for every tenant to pay the same low social housing rent, even if some people’s circumstances have improved. But forcing more affluent tenants out of social housing will only slightly increase the number of affordable homes available to let and does nothing to increase the supply of affordable homes. Those of us dealing with the 1.8 million people waiting for social housing need bigger, quicker solutions today.
Economically diverse neighbourhoods are the key to thriving, self-sustaining communities. Working, aspirational households provide important role models for their less affluent neighbours. Force them out of estates and we risk creating ghettos of workless poor, with little incentive to better their situation for fear of losing their home.
If the government is serious about solving our housing crisis, encouraging people to work hard and reducing central government red tape, reform is needed. Instead of pushing working households out of social housing, we should make the most of their success.
Housing providers are often closest to our tenants. We have local knowledge about what people can and cannot afford. Restoring the right of housing associations to set rents would enable a more flexible rent charging system. The better way would be to allow housing associations and councils to set a higher intermediate or market rent to tenants whose circumstances have improved. This would bring in more rent, which could be used to build more affordable homes. It would give better off tenants the choice of moving on or paying a higher but fairer rent, and maintain mixed communities.
Mick Sweeney is chief executive of One Housing Group
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Readers' comments (17)
Anonymous | 13/08/2010 1:16 pm
Well said.
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Alpha One | 18/08/2010 12:02 pm
There are some good ideas here, but I think fundamentally there has to be a cut off point, where a person earning a certain wage or more must either buy the home or move on.
Yes, it's right to help people back into work, so increase rents slowly, until they are at market levels. However, at some point you have a person living in a property they could easily afford to buy, but won't and thereby taking up a place that could go to someone more in need.
Far from encouraging people to do better, this just allows them to stagnate. By encouraging them to move on to bigger and better properties they can buy, you encourage them to aspire to greater things.
For all the rhetoric the left spouts about not understanding the way tenant's think, they could do with a few lessons in psychology themselves.
You create an incentive for people to do better and move on and they will aspire to it. But it requires support at every single level, and that doesn't necessarily mean greater state interference, if anything it means less.
We need to work on freeing schools from red tape, the dead hand of government and unionised teachers who believe in methods of teaching that don't work, so children can better themselves.
We then need a system whereby those who can work are encouraged to find work rather than languishing on benefits, and given support, training and assistance to get back into work and, most importantly, to stay in work.
We then need a system of housing that supports those in need, but gives a gentle encouragement to them when they no longer need that support to move on, or buy out the support (thereby giving back).
It's going to take time, but I think this government can pull most of it off. They just have to tune the leftists out, and do what the PEOPLE of this country want done.
The whole system of government needs reform, this is but just one piece.
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Sidney Webb | 18/08/2010 1:07 pm
Alpha - you will agree then that when a homeowner improves their position that they be forced to buy a more expensive home so that the cheaper homes are available for the improving tenants to buy?
Also Alpha - Would you support an individuals right to choice?
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Mick Sweeney | 18/08/2010 5:05 pm
Alpha One
I would be relaxed about someone staying in a rented home if they paid a market rent when they earned a decent wage. I'm reluctant to deny their freedom to choose. If they are in private rented accommodation they would not be forced to move, although I accept the landlord could not renew their tenancy, which would be unlikely if they were good tenants. They wouldnt be denying a social home to someone in need, as most associations would use the additional income to help build new homes. So we keep mixed communities, the better off pay a fair rent, and we get to build more homes. Everyone wins and no one is forced to move
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Sidney Webb | 18/08/2010 5:41 pm
Mick - what does the person do when the decent wage runs out? Most jobs these days are short-term contract owing to the past 30-years of creating a flexible jobs market.
Do you allow them to stay in their affordable secure home if they have not had a decent wage for more than two-years for instance?
Do you give them a priority to return if thier decent wage falls within the following 6-months?
How do you make a fair balance for removing someone from their secure affordable home, that takes into the potential realities of an insecure and low wage economy?
Also, how do you ensure that the person moving from near decent wages to slightly decent wages has a property that is affordable to buy, or do you imagine them going into private rent first, forcing them from self sufficiency back into benefit dependency?
The whole idea makes good DM headlines, but the living realities are somewhat different.
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Mick Sweeney | 18/08/2010 5:57 pm
PSR
In principle I think the rent paid should be linked to salary/ wages earned. To keep it as non bureaucratic as possible there could be three rents, affordable, as now; intermediate( say 25% below market rent) and market rent.it would depend on local circumstances accross the country, but those on bottom quartile wages would pay the affordable rent, those on third quartile wages would pay the intermediate rent, and those on above average wages, top and second quartile would pay the market rent.
If tenants circumstances changed for the worse, their rent would be reduced. This is something we have all been trying to achieve with shared ownership, allowing shared owners to staircase down if they find themselves in worse financial circumstances.The same should apply to tenants.
I dont think in my system anyone would need to be "removed from their secure home" as their rent would be related to their income.
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Sidney Webb | 18/08/2010 6:16 pm
What would the cost of the continual income assessment be and who would pay for it?
Would there be set points like with Tax Credits where everyone has to prove that they deserve to have the rent level that they have?
If RSLs really want to get into intermediate products there is nothing preventing them. Why the wish to convert existing affordable tenancies? It does not create additional stock in itself.
I recognise you state that profits could be re-invested, but how many years would it take of the extra 25% rent to fund the development of the required number of homes to meet demand?
What do your tenants say - have you asked them? I can not imagine your tenants on the Isle of Dogs agreeing to convert to market rents.
How does it benefit the country to prevent individual improvement?
Effectively this would extend the benefits trap to above average income level earners as they too would experience claw back for every pound extra earned. Its bad enough struggling to be clear of the benefit pool with the various tapers sucking you back down, but then under your proposals you'd be hitting them with massive rent rises just when they thought they were clear and able to enjoy the fruits of all their hard work.
Apparantly, high earners (you may undertand this easier) objected to having extra taxation claiming that it was a disincentive to seldf improvement and that it was wrong to take back what they had earned. How then can you propose a rent-tax multi threshold that would follow the same principles but effect the lower to middle earners? Would you accept a 75% tax band for instance, in the interests of the nation?
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Mick Sweeney | 19/08/2010 11:06 am
PSR,
This isnt about preventing individual improvement; its an alternative to the suggestion mooted by David Cameron that tenants whose circumstances improve should have to give up their tenancy.
Look at it this way. take a one bed flat, London affordable rent £80 a week. If you are on the minimum wage £240 a week you will be paying about 30% wages in rent.
If your wage increases by 50% to £360 pw you would pay an intermediate rent at £120 p.w., still about 30% of your wage
If you get the average London salary of £25K pa or more,you would pay a market rent of £150 pw, still about 30% of your income
This is fair to tenants and doesnt take away incentives to improve.
The extra revenue would be used to borrow more to build more affordable homes
I'm sure our tenants would agree thats fair. If Govt. allows us to do this we will consult
Cheers
mick
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Chris | 19/08/2010 11:58 am
What you are proposing Mick is akin to a tenant tax.
Now if everyone were to chip in 30% of their income to pay for housing that would create a tremendous pool of cash, but I can't see that one flying. Would you be prepared to contribute your 30%?
The pricing needs to be upon the product. In terms of housing, where the pricing is beyond affordability then this can be supported through welfare payments. Control on pricing and supply ensures that welfare payments remain affordable and thus the nation funds poverty relief not just social tenants. Your proposals would see affordable housing met through a tax on tenants. That is inequitable and wrong.
PSR's point that you would be extending the benefits trap is correct. I also would be interested to hear the views of your Isle of Dogs' tenants upon your proposals.
Also - how many affordable homes with 3-beds of larger did you build lst year Mick, and how many have you in the pipeline for this year? Now estimate how many extra you would build if you could charge your tenants on the sliding scale you suggest - or would it just go on a nicer carpet for the executive floor at Chalk Farm?
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Mick Sweeney | 19/08/2010 12:09 pm
Christopher,
It cant be a tax if we are talking about paying a rent, be it subsidised affordable, a bit less subsidised intermediate, or market. And this would be instead of ending tenancies for the better off dont forget.
Our 2009/10 larger homes target was 235, and we built 507
Cheers
Mick
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