Housing providers are pushing boundaries to address the challenges facing the sector, but they must tread carefully
Fit for the future
A year ago when Inside Housing ran a round table event on efficiency, one participant called for housing providers to ‘think the unthinkable’ to ensure their businesses were fit for the future. So have landlords accepted this challenge?
In Nottingham, the council’s decision to demolish 973 homes over the next three years has had a devastating impact on a number of residents, as we report this week. Although thousands of people will be forced to move, the net result will save the council £4.8 million over the next 30 years and, it claims, allow it to build more council homes. Those affected will say this is scant consolation, but other Nottingham council tax payers might disagree.
Then there is the plan by 10 as yet unnamed social landlords to list a total of 10,000 properties on the stock market through a real estate investment trust. It is hoped that this move will see investors value this new social housing company at an initial £500 million, potentially rising to more than £1 billion. These funds will be used to build more, much-needed, homes. The obvious downside is what happens if property share prices plunge and the pseudo-privatised company is worth substantially less than its social housing assets. Will the cold shoulder from investors make it impossible to build as many homes as planned? It also remains to be seen how relaxed the Homes and Communities Agency and lenders will be with this new model.
The wider point though remains: housing providers are thinking previously taboo thoughts in the pursuit of becoming more effective businesses. The trick here is going to be how to decide on what this means for individual organisations. Faced with councils’ enforced retrenchment, housing associations are tempted to try to fill the void on things such as anti-social behaviour prevention or training. But should they?
The point from the Chartered Institute of Housing, the National Housing Federation and Shelter in their housing report that ministers need to ‘significantly up their game’ on meeting housing need is well made. Social landlords have acknowledged that they need to do the same, but they have to choose carefully which games they play and those they pass.