Solutions for the future
With the social housing sector facing a period of turmoil, Inside Housing, in partnership with Places for People, brought together an expert panel to discuss how housing providers need to adapt to meet future challenges
Since the election of the new Conservative government in May 2015, the housing sector has seen one of the most significant upheavals in living memory. The 1% rent cut, Right to Buy for housing association tenants, introduction of Starter Homes, Pay to Stay, changes to secure tenancies - the list of new policies introduced over the last 12 months is almost endless, and has resulted in a massive rethink in the way that social landlords should approach their businesses.
Inside Housing and Places for People brought together 10 housing experts to explore how housing providers will need to change to remain relevant and effective in the future.
Ken Dytor, managing director of regeneration and development specialist Urban Catalyst, starts the discussion and explains his frustration at how, in terms of delivery, the focus is always on numbers, rather than delivering places people want to live.
“Let’s start delivering communities - from that the housing will come. If you create jobs, employment and deliver the social infrastructure, the housing will come with it,” he says.
Dave Power, group chief executive at 13,000-home One Manchester, nods in agreement with Mr Dytor, but states that it can be difficult to escape the discourse around numbers. “In Greater Manchester, there is a numbers-based agenda, given that population growth in Manchester has gone up around 20% in the last 10 years,” he says.
“There’s a high growth, particularly of the younger demographic, which requires a very different housing offer than currently there - a high degree of density, a need to look at urban design in the context of place, opposed to just numbers.”
Tony Stacey, chief executive of 5,700-home South Yorkshire Housing Association (SYHA), takes an alternate view, however. “I’d have to say yes, but. The ‘but’ bit is that the headline figure we need to treble housing supply is extremely useful,” he says. “After all, getting housing right up the agenda and getting people to understand the nature of the challenge of housing supply is a huge task.”
Paul Mains, group managing director at South Tyneside Homes - an 18,000-home arm’s-length management organisation (ALMO) set up by South Tyneside Council - says that striking a balance between housing growth and infrastructure-led development can be challenging. He highlights a nearby example - a new International Advanced Manufacturing Park, which is being developed in the borough, and is expected to lead to housing growth in the region of 5,000-8,000 units.
“It’s that chicken and egg scenario - how are you going to get people to move into the area if you haven’t got the jobs there?” he says. “The other side of the coin is that you’ve built this huge complex, with some really well-paid jobs in there, and the worry is that those people living in Newcastle and Durham will commute there instead of living in the area.”
Paul Hackett, chief executive at 28,000-home Amicus Horizon, emphasises that housing associations are “all about place” and that more needs to be done to communicate this message to local partners.
“It’s one of the unique things we bring - it’s about long-term stewardship of neighbourhoods, long-term investment and getting returns over the very long-term,” he says. “I don’t think that role has been well-articulated in the past. Obviously policymakers don’t necessarily understand how much housing associations can do, and there are some fantastic examples around the country of housing associations having a role in creating jobs and placemaking.”
Being judged on output is an inescapable part of the industry, says Darrell Mercer, chief executive at 35,000-home A2Dominion. “I know people don’t like to talk about numbers, but in the area we work in, demand vastly exceeds supply,” he says.
A lack of affordable housing is driving more and more key workers out of cities, in London especially, and Mr Power of One Manchester asks the panel whether there’s any scope for providers to work more closely with employers to ensure that their workers can live in the cities in which they work.
“We’ve had some tentative discussions with individual employers, but I think the reality for us is that there are very few employers who are significant enough to be able to make an impact,” replies Ruth Cooke, chief executive at 35,000-home Midland Heart.
David Cowans, chief executive at Places for People, says that the UK has never really made significant strides in this area because, unlike in Germany, there is no historical link between employers, and employee housing.
“Certainly in the UK the view is that the housing market is a market, and if you need something for your employees, you just go and buy it. The idea that you would be engaged with the delivery process is not something yet that employers have got into,” he explains. “In fact, what’s starting to happen if you’re KPMG or Deloitte is that you’re starting to move people to Birmingham [from London] because it’s not far away, it’s cheaper to live there - you’ll just start to see economics make markets.”
The conversation swiftly moves onto the topic of how housing associations and local authorities can work better together, as Mr Cowans shares his thoughts with the panel.
“Local authorities are looking for solutions, and they want to work with people who have got solutions - they don’t care who they are, as long as they’ve got a solution. So saying we do ‘x’, but the problem isn’t ‘x’, sort of takes you away from the table,” he comments.
Councils are looking for long-term joint venture partners with clout and ability, says Mr Cowans, and it’s a “no-brainer” that associations should be fulfilling that role. “Can we do it? Interesting question,” he muses.
Mr Mercer says although A2Dominion hasn’t entered into any joint ventures with councils previously, the association is in discussions with local authority partners at the moment.
“To get them to understand that they could bring something to the table with that long-term revenue stream by doing joint ventures is challenging, but I think eventually [joint ventures] will become quite the norm really.”
“It’s about bringing solutions - there’s no point going to a local authority and having the same old conversation which says, ‘could you give us some free land, could you speed up planning, that would be so much easier’. It’s not really the answer,” adds Ms Cooke of Midland Heart.
Mr Dytor of Urban Catalyst says that although housing associations are “very capable” of delivering solutions, he’s not entirely convinced that many “tell that story very well or actually have the mindset to deliver that approach” when speaking to local authorities.
“The reality is, if you can demonstrate that you can solve a problem, the world will beat a path to your door. If you are the problem, then they won’t,” says Mr Cowans of Places for People. “I think the state is generally looking for innovative, large-scale, can-do solutions to its problems, and it wants people who will work alongside them in 50/50 joint ventures.”
Philip Barnes, group land and planning director at house builder Barratt Homes, also adds his thoughts about partnerships from a developer perspective.
“Barratt is a business committed to quality, it’s a business committed to growth. We will not deliver growth on our own - we need partnerships with local authorities, we need partnerships with housing associations. We already have them and they will strengthen, but we want more.”
Mr Stacey of SYHA suggests there is a reluctance for many developers in parts of northern England to work with local authorities and housing associations to deliver housing supply, because of a lack of viability on many sites.
“One of the things I hear often is that it’s all about land. It isn’t in the Sheffield city region, you’ve got more land than you can build on. The trouble is when they get traffic-lighted, the vast majority of the sites aren’t viable, and that does just mean they aren’t a valued proposition,” he suggests.
“You’re never going to get a developer who would want to work in any area where they’re not going to turn a profit, but I think there’s got to be some sort of market where you can work with people, particularly in a region where that market is totally different. But it’s difficult to get those partners as they’re not going to be knocking your door down as much,” comments Mr Mains of South Tyneside Homes.
Mr Barnes of Barratt Homes says that if providers are to enter into joint ventures, they’ve got to be aware of the hazards involved. “Some people are happy to share costs, but not risk,” he adds.
“Risk-taking isn’t just shorthand for doing something that’s a bit less than plain vanilla in the hope that we’re going to make shed-loads of money. Risk-taking is that you’ll foul some things up and need to withstand them,” says Ms Cooke of Midland Heart.
Jeremy Eveleigh, managing director at Soho Ltd, the commercial subsidiary of 800-home Soho Housing, says there are some challenges for organisations of its size that work in a high-value location in terms of growth and taking on more risk.
“There’s lots of pressure on us to find ways of trying to achieve growth, and balancing that with risk is very difficult. I think it’s about investing in trying to really understand what you’re doing and just making sure you’ve got competency around, and that you’re not going to put your business at risk.
“It’s very real for an organisation of our size,” he says.
Mr Barnes says what the discussions have highlighted for him is that parts of the sector have a “fear of the new”.
“Some of the comments today have been very positive about the changed environment and the need to do things differently. Others seem quite fearful about what it means for you,” he says.
Mr Stacey disputes this view, however. “I think, from the association point of view, we’ve come across this negative vibe. You have got the wrong picture, I think there’s very little pessimism around - I think people are open-eyed about what the risks are, but people are looking for new ways of doing things,” he says.
Mr Hackett of Amicus Horizon, for one, is excited about the future. “It’s an opportunity to build a strong foundation with really good customer services, taking our residents with us and then understanding and buying into the benefits of the growth and being much bigger,” he says. “If you can crack the combination of being both local and relevant and take people with you, to fit the scale to develop many more new homes, then I think that’s the right formula for us - and we see that as an opportunity for even further growth,” he adds.
For Mr Dytor of Urban Catalyst, an effective end result, delivered through partnerships, will be what is most important for his organisation going forward.
“What I really want to do is do things really well.
“I need to do it in partnership, with people who have the flexibility to work alongside us, because we will be flexible, so you will need to respond to the needs of the local authority, the local community, local stakeholders - and if I can find partners to do that, I’m well pleased,” he concludes.
In association with:
Chief executive, Places for People
Group land and planning director, Barratt Homes
Chief executive, A2Dominion
Chief executive, South Yorkshire Housing Association
Chief executive, Midland Heart
Group managing director, South Tyneside Homes
Group chief executive, One Manchester
Chief executive, Amicus Horizon
Managing director, Urban Catalyst
Managing director, Soho Ltd