Security breach (part 2)

From: Inside edge

06/06/2011

A report based on international experience raises fresh doubts about whether fixed-term tenancies and the other social housing reforms will work.

A study of security of tenure in social housing commissioned by Shelter from Heriot-Watt University concludes that plans for fixed-term tenancies are based on a model has been ineffective at best.

New South Wales in Australia introduced a fixed-term regime in 2006. The aim, much the same as here, was to make the most effective use of scarce resources.

The system offered tenancies of ten years (anyone with ongoing needs that were unlikely to decline over the next five years), five years (needs likely to persist at some level over the next five years) and two years (transitional needs likely to decline over the next two years or cases where there is some prospect that financial circumstances will improve within five years). About half the tenancies granted were for five years, 25% for two years, 20% for ten years and 5% for other periods.

It’s backed by all sorts of guidance on issues such as the treatment of different sorts of households, the procedure for renewing the tenancy at the end and how much a tenant’s income had to improve before they would be judged ineligible.

As at March 2011, only two-year tenancies had been reviewed, for obvious reasons, and the vast majority had resulted in a decision of ‘continuing eligibility’.

Figures obtained by the NSW Tenants Union from 2008 show that only 28 (0.8%) out of 3,514 reviews of two-year tenancies had resulted in an ‘ineligible’ decision. It concluded the policy had actually increased disincentives and that if it not been implemented ‘a greater number of tenants might have found work, increased their incomes, become sufficiently secure in their employment and moved out of public housing on their own volition’.

The study by Suzanne Fitzpatrick and Hal Pawson looks at the international experience in the USA, Canada, Australia, Germany, Sweden and Hong Kong. They conclude that the coalition is trying to move the English system from a ‘safety net’ model to the ‘ambulance service’ model used in the first three, with households asked to move to market housing when the ‘emergency’ is over.

The international alternative to fixed terms to to scale rents according to income or charge supplementary rents. A system like that seems to work well in Hong Kong, a surveillance society where tenants see regular income and rent reviews as a normal and fair obligation, but rather less well elsewhere, where it can reduce incentives to get on, increase residualisation and ramp up administrative costs.

Asked how the reforms proposed in England, countries that already had an ambulance service model saw them as least controversial (the Americans thought it was lifetime tenancies that were extraordinary) but there was worry from the Canadians about the idea of evicting someone after a fixed term rather than making them may a higher rent.

In Germany there would be an ‘outcry’ and people would not understand why tenancies were only for two years, in Sweden the reforms would be seen as ‘brutal’ and as wrecking neighbourhoods and in Hong Kong they would meet ‘very strong resistance’ and be dropped by politicians.

Fitzpatrick and Pawson conclude that the New South Wales experience of fixed terms is ‘calling into question to efficacy of a policy which is fairly similar to that now proposed in England’.

More generally, they say that ambulance-style social housing implies a highly stigmatised and residualised social sector and very weak incentives for tenants to improve their circumstances.

And they have a warning about the move to localism from Germany and Sweden, where increasing autonomy for social landlords has led to many of the poorest and most vulnerable people being excluded from social housing and pushed towards the private rented sector with less security and legal protection. This ‘demonstrates the importance of retaining national frameworks, such as the reasonable preference criteria and the statutory homelessness legislation, if we wish social housing to play a key role in meeting housing need’.

That’s only a brief summary - you can download the full report here - but it’s surely food for thought for their lordships as they prepare to debate the housing reforms when the Localism BIll comes up for its second reading in the upper chamber this week.