There is wide agreement that Britain is in the grip of a housing crisis and it is likely to get worse. The Housing and Regeneration Bill now before parliament does nothing to address this, but instead proposes policies that could have disastrous consequences.
The troubles of Northern Rock and the collapse of the US housing market send a clear warning that the government must think again. In the US – a country that has never had an equivalent of council housing – millions of low and middle income families have been compelled to buy a home at the very limit of what they can afford.
The unscrupulous selling of “subprime” mortgages has sought to meet this need – resulting in mass repossessions and homelessness.
It would be a great mistake to think it couldn’t happen here, but this is precisely the possibility that the government is inviting with its current policies.
The slavish addiction to increasing home ownership – particularly through the many “low cost” home-ownership products that are subprime mortgages by another name – ignores what are already the early signs of a downturn in the housing market.
The Royal Institute of Chartered Surveyors, for example, recently predicted a 40 percent increase in repossessions.
The bill also runs the risk of seriously undermining other important government initiatives, particularly its code for sustainable homes and the objective of building 240,000 “zero carbon” homes a year by 2016.
The bill gives the overwhelming responsibility for providing these new homes to housing associations and private property developers. A recent conference of the House Builders Federation (attended by the housing minister) heard that very few developers believe that the government’s targets will be met.
Housing associations may be similarly unprepared. A random sample of the websites of half a dozen associations in east London found that not one of them even mentioned the code for sustainable homes.
The reason for this reluctance is very simple – cost. In a slowing market, developers will be very reluctant to pass on cost premiums of up to 30 percent for building homes that do not damage our environment.
The bill sounds the death knell for council housing available for all by introducing means testing. This is a fundamental rejection of the principles of the welfare state and of the government’s own policy review in the Hills report earlier this year.
Bringing means testing into housing runs the risk of repeating the disastrous mistakes of the US, where access to public low cost housing has always been means tested.
The result has been the creation of ghettos of poverty, overwhelmingly inhabited by non-whites, single parents, the elderly and disabled people.
As the Hills report shows, this social and ethnic stratification is already occurring as the result of British housing policies. The bill is an opportunity to change tack that should not be missed.
The first generation of council housing took place in response to the appalling conditions of the Victorian slums, the second as the result of the Blitz. It’s time for the third generation.
The core principles should remain the same – affordable rents, secure tenancies, public ownership and democratic control.
Unfortunately the Housing and Regeneration Bill persists with the absurdity of encouraging local councils and other public authorities to sell off their land.
Every day millions of pounds worth of public assets are being lost in this way, often with negligible overall returns to the public purse.
The long term benefits of retaining the value of public land have been recognised by a range of authorities and have led, in part, to the development of community land trusts. But what is council housing, if not a community land trust?
Taking the volatile cost of land out of the housing development equation will release massive resources. Local authorities not only own much of the land, they also have the knowledge and expertise to deal with the necessary legal and planning transactions.
This would substantially speed up the development process and make it cheaper. In this way, building council housing could make a substantial impact on the government’s target for 240,000 new homes a year.
The bill aims to put the final nail in the coffin of mainstream British council housing – a unique service that has served the needs of millions for generations.
If unchallenged, the consequences could be catastrophic. Council tenants will not allow this to happen. The majority of people want to see a future for council housing, but one that is based on taking the best of the past and combining it with a new vision for the council housing of the future.
A longer version of this article and a briefing on the Housing and Regeneration Bill are available at » www.defendcouncilhousing.org.uk