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Pushing the boundaries of devolved government in Wales
2018 should be the year for the Welsh Government to be brave on housing, says Stuart Ropke
Affordability. A word that suddenly seems to be on the lips of everyone working in and involved with the housing sector.
It seems perverse that we should even be discussing it. Just what has happened when those involved in social housing feel the need to stress that rents should be affordable?
Surely this is our reason to be here, enabling those who cannot meet their needs on the open market to have a good, high quality, truly affordable home?
Only a month ago, Welsh housing associations who worked with Community Housing Cymru on our ‘Housing Horizons’ project declared that our vision for 2036 was a Wales where good housing is a basic right for all.
So what is going on?
I suspect that we’re at an inflection point where the contradictions of years of disjointed government housing and welfare policies, combined with an economy where growth has been anaemic since the financial crisis of 2008, have stretched the affordable housing policy system to breaking point.
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While the sector in England has welcomed the UK government’s intention to restore inflation plus rent increases from 2020, after four years of rent cuts (a fate we avoided in Wales), it would be naïve to suggest that housing associations will be able to return to business as usual.
It’s worth revisiting the Housing Green Paper issued by the then Department of the Environment, Transport and Regions in 2000.
The green paper heralded the arrival of the rent-setting system we know today.
“The stable policy environment has enabled housing associations to invest in new homes.”
Among other policy objectives, that green paper said that rents should remain affordable in the long term and that there should be a closer link between rents and qualities that tenants most value in a property.
The result was a system that saw rents rise at above inflation, but aimed to protect tenants from excessive year-on-year rent increases.
It was also a system basically adopted by the Welsh Government when it took responsibility for housing policy in the post-devolution settlement.
Of course, at its heart was a classic policy trade-off. A trade-off between the financial health of housing associations and their ability to develop new homes, particularly in the environment where they were building the vast majority of new social housing and affordability.
By any standards, the policy (with a couple of hiccups) has demonstrated resilience and longevity.
It has been one of the foundation stones of the growth of housing associations and has contributed to the availability of long-term private investment in the sector, boosting the confidence of lenders.
Even today, when affordability is being questioned, the vast majority of housing association rents in Wales remain affordable on any measure.
The stable policy environment has enabled housing associations to invest in new homes and also to hugely improve the standard of existing homes.
However, as we approach 2018, we live in a very different world to the one that existed at the turn of the millennium.
A world where benefits have been frozen, where wage growth for many is suppressed, but pensioners have seen their incomes rise and be protected.
A world where there may be considerable economic turbulence as we exit the European Union, and where Wales may suffer more consequences than any other nation or region of the UK as the recipient of far greater amounts of European Structural Funds on a per capita basis than any other UK nation or region.
“We called on the Welsh Government to initiate the first review of housing policy in a decade.”
That is why, when we launched Housing Horizons a month ago, we called on the Welsh Government to initiate the first review of housing policy in a decade.
When there is a pressing need to increase the number of homes we are building, but old certainties no longer exist, reviewing and renewing policy on a piecemeal basis will no longer work. How should government invest its resources in housing?
How do we meet the aspiration to build zero-carbon homes? What does a sustainable and fair rent policy look like today, and does a one-size-fits-all by government edict make sense anymore? How can we embrace an all-encompassing view of affordability, not based just on rents but on the real costs of running a home?
These are just some of questions that need answers, not in isolation but in tandem.
“I sense a real desire to challenge the status quo and to initiate the wide-ranging conversation we need.”
The conversations I’ve had since we launched that 20-year vision a month ago have only convinced me that any review needs to be more radical, not less.
Wales has often pointed to its approach to housing as an example of where devolution works and where things can be done differently. However, if we are serious about tackling the housing crisis, we need to be even braver in pushing the boundaries of what devolved policy can deliver.
The conversations we are having with the Welsh Government are promising.
With housing recognised as a priority in the Welsh Government’s strategy, I sense a real desire to challenge the status quo and to initiate the wide-ranging conversation we need.
2018 is the year we need to grasp the nettle and chart a new course.
Stuart Ropke, chief executive, Community Housing Cymru
