As Jessie J said we all have a price tag. There have been a spate of money related articles and reports that highlight how the conversation on Social Housing is increasingly being framed in economic terms. This is not entirely surprising as most of this is aimed at a Government that primarily uses, sometimes blunt, economic tools to deliver its policy. One of many worries here is that policy and the numbers are at odds.
Peabody and the CBI recently produced a report which attempted to quantify the contribution to London (£15.3bn) of social tenants. Just a while later we get the great and the good Moodys, downgrading the credit rating for Places for People and Genesis because more risk has been introduced because of diversification away from Social Housing. We also have the thresholds for Pay to Stay, £31,000 outside London and £40,000 in London. So it seems that the argument for social housing is now being fought on the numbers playing field.
The latest indications on what government grant will be available point clearly to a policy that is about fiddling at the edges of market intervention on build for sale and is not about increasing social housing supply. Indeed, as the details emerge on the Right to Buy for Housing Associations and the money effectively being removed from Local Authorities another avenue for increased building is shut off.
So we have a situation at best where social housing rental supply will be at best static. It seems that supply will be met by using Pay to Stay to push people out into the private market and ‘free up’ units. Mmmmm, there are a few issues here that don’t quite make sense:
- An already overheated private rental market and lack of affordable sale properties for those being pushed into leaving the social rented market
- Brexit pushing properties off the market
- HA’s risking more borrowing costs because effectively they cannot build the level of social housing they would like and therefore higher build costs = either less supply of new homes or inflated costs
Throw in Housing Benefit caps and (if ever) Universal credit and the numbers look less like adding up.
Maybe we need a bit more advanced economic modelling which really takes into account the benefit brought to the economy by workers accessing really affordable housing and what the impact on our economy of the multiple squeeze on this group will be.
One other important point made by CIH and NHF, in the last recession virtually the only significant building was of social housing which saved us from even worse economic turmoil.