Monday, September 7, 2009

Social housing reform

* Comment is free Making room to move

Nothing will happen of course but good to see this in the paper, maybe for another era. Suggests that the solution to social housing is to end security/inheritance of tenure, as apparently the bulk of social housing provides more rooms than existing tenants need, while new and many existing applicants have to squash in to what becomes available. Reminds me a bit of Westminster offering 100K to social housing recipients just to get them out to make space. There is always a way to make money in the UK...

Posted by stillthinking @ 01:53 PM (845 views)
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8 thoughts on “Social housing reform

  • mark wadsworth says:

    Well yes, that’s part of the answer.

    The most important bit is to build loads more state-owned housing and let it out at whatever rent just about covers interest and running costs, which is about half of current market rents, and keep building it until market rents and house prices fall to little above true rebuild costs (about half of total market value of housing, the rest is land value/bubble value/scarcity value).

    Or even better, set a low target rent and then sub-contract the day to day running to private companies by competitive auction every few years, if they can keep running costs below rents, then they keep half the difference, or whatever. If they fail to maintain and repair, then nobody will want to live there and rents will fall below the interest they have to pay to the council, so it’s not a one way bet.

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  • The whole system is a mess. Imagine if there was a government-owned car company which produced only a few thousand cars a year, but then sold them for less than half the price of a comparable private-sector car. No wonder there’s so much demand and such long waiting lists!

    If the government simply charged social tenants market rents, then a lot of the “demand” would evaporate. Social tenants in expensive areas (e.g. inner London) would quickly consider moving to cheaper areas, just like the rest of us have to.

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  • My preferred approach is to kill several birds with one stone – combatting recession, unemployment, benefit dependancy and the perennial issue of affordable housing; with a major and immediate national home building campaign; with the spotlight on self build and community managed schemes.

    Current Tory policy is looking quite favourable at the moment, but they need the courage to really get to grips with the issue once they take office. A target of building 2m homes in five years is not unrealistic, and would create a very large amount of employment, both directly and indirectly.

    With the supply side of housing sufficiently relaxed, more people will be able to afford property without recourse to the state; and the state would find it much easier to arrange suitable housing for those in genuine need.

    If the next government also seeks to achieve neutral population gorwth, by matching immigration against emigration; the need for additional property after the five year period would be very greatly reduced, and construction work could become almost entirely focused on redevelopment, rather than the development of greenfield sites.

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  • mark wadsworth says:

    @ Drewster, re ‘market rents’.

    Whether we implement Uncle Tom’s plan or my plan, then inevitably ‘market rents’ would fall. If we truly had a profit maximising economy, then supply would rise and rents would continue to fall as long as they were above a normal return on the cost of bricks and mortar plus repair/insurance costs.

    The point is, what you or I refer to as ‘market rents’ in the private sector aren’t really market rents at all – they are kept considerably above true market rents because of restrictions on supply (the Homeowner vote and the NIMBY vote being far more important, electorally speaking than any adherence to true free market principles.

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  • Mark, Uncle Tom,

    There’s a lot to be said for unleashing the builders and giving people the freedom to build their own homes. It seems plausible that giving people space to breathe, instead of cramming them into rabbit hutches, would ameliorate many of today’s social ills.

    Mark,

    As long as people have the carrot (of cheap social housing) dangling in front of them, just out of reach, then they won’t push for reform. If we charge market rents on social housing then everyone will see just how stupidly expensive property is, and there will be more demand for new building.

    Btw did anyone see the recent series “Neighbourhood Watched” on BBC about a housing association in the north-west? It helps give an insight into how housing associations work.

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  • mark wadsworth says:

    @ Drewster “As long as people have the carrot (of cheap social housing) dangling in front of them, just out of reach…”

    But what if they just built 250,000 houses a year? Every young couple would get a house after a few weeks’ wait, pay £3,000 a year rent, and that would be that. Why is that out of reach? It’s what we did between 1920 and 1960, after all. If they built enough then £3,000 would be the market rent (if it fell any lower there’d be no point building any more, of course, as it would no longer cover the real cost).

    I didn’t see programme on Housing Associations. AFAIAC they are thieving self-serving scum, but there may be exceptions.

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  • The individual HA workers were portrayed as working hard to meet nonsensical and badly-defined targets (e.g. housing applicants get points depending on how many problems they have, so they are encouraged to exaggerate their problems so as to get higher priority). One main feature was that they try to keep as many houses as possible occupied at all times, minimising voids etc. Also problem tenants were a recurring theme: recovering drug addict scores highly on points, gets house, turns house into crack den, trashes house and neighbourhood, house is taken away for bad behaviour, becomes homeless, and the cycle repeats. Each time the HA pays to have the house cleaned and restored to a liveable condition.

    All in all, there was a strong sense of futility to the entire programme.

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  • mark wadsworth says:

    Drewster, I sometimes wonder whether this country doesn’t run social housing deliberately badly just to put people off it.

    But this is entirely unnecessary – there’s no natural law that says HAs and LAs can’t evict crappy tenants like that, or that each estate should have a fair sprinkling of such scum just to make life a misery for all. They can build special estates somewhere in the middle of nowhere for all the no-hopers, sort of open prisons if you will, while the other 98% of the population live happily ever after.

    Contrast this with office blocks rund by Crown Estates – that’s state-owned and let on a commercial basis, and from the outside you wouldn;t notice any difference. In Germany they have loads of social housing (OK, privately owned but with subsidies for rents) and from outside that doesn’t look any different to normal housing.

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