Scrap tenancy for life, urges think tank

Readers' comments (21)

• Jim Paton | 21/04/2009 3:30 pm

  So "growing alienation and deprivation" will be solved by turning housing estates into shorthold transit camps, will it? Importing the insecurity, impermanence and instability of private renting into public housing would be a disaster. The effects of that on the lives and development of children already unfortunate enough to live in private rented housing (thanks to "gatekeeping") are already catastrophic.
  
  More doctrinaire social engineering and class war from Thatcher's children.

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  Joe Halewood | 21/04/2009 4:29 pm

  I dont have any natural aversion to looking at the 2 key ideas stated here, namely scrapping tenancies for life and allocation of tenancies based primarily on need. Both are worthy of discussion especially as 'social housing' is bust and needs fixing.
  What I do have a huge aversion to is the idea here as in the full 76 page report that Londons housing problems are the nations housing problems. Why must every new national housing policy suggestion emanate from and be based upon the capitals unique set of problems. To do so is extreme folly, yet every left, centre and right-wing policy suggestion always stem from London's problems as if they can simply be replicated to all corners of England. They cant.
  
  No doubt the two principal matters wont get discussed here other than the 'how dare they even suggest such a thing' statements or certain individuals problems with their landlords. That is a shame as genuine debate is needed.

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• michaelbarratt | 21/04/2009 9:51 pm

  In my view, Stephen Greenhalgh and John Moss are just a couple of right wing Tories attempting to undermine the security of tenure of council tenants who are already under siege due to job insecurity. How many council tenants are demonstrating to end secure tenancies? Only individuals such as Greenhalgh and Moss and similarly vested interests who are merely attempting to transfer the insecurity of the workplace into the home.

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• John Moss | 21/04/2009 10:10 pm

  Hi Jim, Hi Joe,
  
  Just to be clear, I think Crispin's slant on this is not the main thrust of the paper (which you can see in full here http://www.localisresearch.org/files/Localis_Principles%20for%20Social%20Housing%20Reform.pdf)
  
  Hills and various others have all pointed to the "residualisation" of those in social housing, we believe this is caused by allocations being restricted to the most vulnerable and the policy of funding home builders who then have to rent at below market rates.
  
  The shift to a common tenure based on ASTs is not the main thrust, though we think it gives consistency, but raising Housing Benefit so tenants can pay market rates, which means there is less need for security of tenure for life - which we see as incentivising people to stick in social housing even when their circumstances change. we'd like them to stay, just extract the value from the home.
  
  Giving people true mobility by funding households rather than house-builders has worked in Holland - look at the Smith Institute paper International Perspectives for that - and you can't call them Thatcher's children!
  
  Joe's point is not entiely valid. We see ALL councils being set free to set allocation policies to suit thier areas and specifically mention the suitability of vehicles like Communtiy Land Trusts for rural areas, again, raising HB to support local market rents also extends real choice down the income range, irrespective of location.
  
  Urban (not necessarily London) problems, do domintate the social housing debate, because that is where most of the probelm "estates" are. What we see is the ability for Councils and RSLs to double the number of new homes built and to rebuild those estates over ten years by releasing the sunk investment from the past which is currently trapped in bricks and mortar occupied by tenants with no incentives to get on in life or be a positive part of their neighbourhoods.

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• john souray | 21/04/2009 10:41 pm

  There is a theme developing here. This report suggests that social housing rents should be allowed to rise close to those in the private sector, with this effect:
  
  “Councils and RSLs will garner increased rents of over £5 billion with which to replace lost capital funding for building new homes and they should achieve sales of £75 billion over ten years through the right to buy part scheme.The potential number of new or rebuilt homes delivered through these reforms is around 900,000 over ten years.This “perpetual motion”, recycling the funds invested in social homes, will provide a long term source of funds for regeneration, repayment of debts to central Government and other priorities, or tax reductions, without recourse to the taxpayer or further borrowing.”
  
  This of course echoes what was said here recently by Tim Leunig: “A modest rent supplement of, say, £4 a week, would generate approximately £3.5 million in Coventry alone over the next five years - and ever bigger amounts in the future, as more people come under the system. That in turn would allow an extra 50 social houses to be built. Not a large number but, as another saying goes, every little helps.”
  
  And the editor of this journal recently praised the report of the Housing Futures Network, which suggests: “All rents should be based on the local market rent and should reflect the size and quality of the home. Housing associations would provide those who need it financially with a discount on the market price, based on income and delivered via a mix of government investment, social housing grant and personal subsidy through the benefits system. ….. More rent flexibility is essential. In London, for example, subsidised housing rents average around 40% of market rents and confer a permanent very substantial discount to the market. This is a poor use of scarce resources, making it difficult for the resident to see any prospect of moving on and difficult for the landlord to invest in improvements and new supply.”
  
  Last year, we spent a lot of time criticising in depth the Chartered Institute of Housing’s proposals to scrap….sorry, increase flexibility of…. security of tenure (“gnashing our teeth”, as the editor of Inside Housing rather patronisingly puts it) but there were other ideas in that report, including this one, as part of a range of possible outcomes from the proposed two-yearly review of a tenant’s circumstances:
  “A change of conditions in existing home – e.g. rent increase towards a more market level (which could be reinvested in better services or more homes)”.
  
  What are the common themes here? One: Rents need to go up, either in total or according to a tenant’s circumstances. Two: The extra income generated is designed to fund reinvestment in new social homes and regeneration.
  
  I just want here to point out what a thoroughly despicable and contemptible proposal this is; the perfect regressive taxation, where the duty for supporting the least well-off stratum in society falls squarely on the shoulders not of the rich, nor even of the prosperous middle classes enjoying the asset-based wealth that the housing bubble bestowed on them, but on the scarcely any better off, the next layer up.
  
  Of course, proponents will witter, many social housing tenants will be entitled to Housing Benefit, so that it is nevertheless the taxpayer more generally who will carry a lot of the burden. Exactly; but as soon as any claimants make any effort to get into employment, they find themselves doubly or even trebly taxed. As if the 60% plus taper on Housing Benefit were not injustice enough (despite the howls of protest at the Government’s proposal to apply just a 45% taper on the income of those earning six figure salaries), as their income rises above this they then find themselves not only paying tax like any other taxpayer, but extra rent as well!
  
  Social housing is a social good. It is not a reward or privilege to be earned; it is one of the building blocks of civilised society itself. This might not be true in the same way if we lived with apparently limitless resources, as the original settlers in America did, where apart from the inconvenient but temporary nuisance of the ethnic cleansing of indigenous peoples, it was possible to claim land and build homes from scratch. But we don’t live in that sort of society, or in that sort of geography. Unless you want to develop a society where you cower within the gated communities of your owner occupied housing estates while feral gangs of the dispossessed roam the streets controlled only by militarised riot police, then we’d better start taking that responsibility seriously, including giving some serious consideration (as I think none of these reports does) to the possibility the current recession should have alerted us to that it may not just be the weak and vulnerable whose needs the blind and short-term priorities of the market cannot meet .
  
  The cost of social housing should fall on society as a whole, progressively taxed across all incomes, not regressively taxed against the poorest and most disempowered.

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• Bernard Townroe | 22/04/2009 8:09 am

  Here, here, Mr Souray!

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• Harry Lime | 22/04/2009 8:49 am

  Just to add to Bernard's comments - great post John, very succinctly put!!

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• Chai Block | 22/04/2009 4:37 pm

  I personally don't think we need to consider increasing social rents, rather we need to ensure that social rents are available to those with the most needs.
  
  In recent years I've seen the number of Council and ALMO tenants qualifying for benefits actually drop. Just a few years ago you'd usually expect 75%+ of all council tenants to be on benefits, today that figure is struggling over 60%. This means that taxpayers are subsidising the rents for those able to pay their own rent, and the housing stock available for those in need is being reduced, while those subsidies are eating into the budget available for short-life tenancies.

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• John Moss | 23/04/2009 8:21 am

  John Souray said, "The cost of social housing should fall on society as a whole, progressively taxed across all incomes, not regressively taxed against the poorest and most disempowered."
  
  John, I agree with you and nothing in our paper suggests otherwise. All we suggest is thatinstead of funding a quango which funds housebuilders who then have to ration out below-market property, we give the funding direct to the tenants in need. But recognise this fact, one third of tenants of Councils claim no benefits at all, yet benefit from rents well below market rates. Should taxpayers fund their low rents even if they earn enough to pay a market rent or don't even live there - as many don't - sub-letting ilegally?
  
  I will say it again. The main thrust of our paper is NOT the abolition of security of tenure - we're happy to see landlord's offering long terms, even life tenancies if they wish. It would be up to them, not prescribed by law. What we want to see is the deprived neighbourhoods fixed and more homes built for those in need.

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• john souray | 23/04/2009 6:12 pm

  John Moss, rather peremptorily I must say, instructs me: "But recognise this fact, one third of tenants of Councils claim no benefits at all, yet benefit from rents well below market rates. Should taxpayers fund their low rents even if they earn enough to pay a market rent or don't even live there - as many don't - sub-letting ilegally?"
  
  First of all lets deal with the red herring of sublets. The clue is in the word "i(l)legally". It is contrary to the terms of a Secure Tenancy, and always has been (certainly since HA 1985). If this is a serious issue, then it is one of detection and enforcement. No change in rent regime or security of tenure would help, if you don't have the staffpower to police this effectively. And if you have got the staffpower, then you can get on with enforcing the existing tenancy conditions anyway.
  
  But now on to the meat of this:
  
  (1) You say that taxpayers fund the low rents of Council tenants who claim no benefits. Who do you imagine these Council tenants are, claiming no benefits, if they are not themselves taxpayers? It's not all like the Jasmine Allen Estate on The Bill, you know. They're not all single parents, thieves and drug dealers.
  (2) You are straightforwardly wrong to identify "rents well below market" with subsidy from the taxpayer. Many rents are low simply because the historic debt has been paid (or mostly paid on preinflationary sums) and there is no profit principle that needs to be met. Rent pooling, and the iniquitous Housing Benefit arrangements whereby some tenants are already subsidising their less well-off neighbours, tends to conceal this fact. But the brutal truth is that "affordable" is not a synonym of "subsidised", and this malicious little smear was another of the less savoury components of that CIH report last year.
  (3) In any case, the idea of a "market rent" makes little sense when we now realise that the land and property values on which market rents were predicated were themselves the product of a grossly inflationary bubble, sufficiently hyperinflated that its puncturing has shaken the global economy to its foundations.
  
  I know you meant to be civil when you said you agreed with me, but I fear that if you think that, it can only mean I haven't explained myself properly.

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