Three tests for the Social Housing Green Paper

Acting Head of Policy and Research Brian Robson sets out three areas where the Social Housing Green Paper for England – due in the next few weeks - needs to act to redesign the housing system to make it work for those on low incomes.

As a society, we believe in justice and compassion. But right now, millions of people in our country are pushed into poverty by high housing costs. We share a moral responsibility to make sure that everyone in our country has a decent standard of living.

Last September, then-Communities Secretary Sajid Javid announced a ‘wide-ranging, top-to-bottom review’ of the issues facing the housing sector. Ten months on, we’re onto our third minister of state for housing, have a new Secretary of State, and a new Ministry of Housing – and it looks like we’ll shortly have the long-awaited Social Housing Green Paper.

If the Green Paper is to live up to the ambitions Sajid Javid set for it then his successor, James Brokenshire, needs to do more than just tinker at the edges. The Green Paper represents a real opportunity for the Government to redesign the housing system to tackle the high housing costs that are locking families into poverty. Here are the three areas I’ll be looking out for when the Green Paper is published:

Will the Green Paper increase the supply of low-cost rented homes?

Back in February, JRF published analysis showing that delivery of new affordable housing in England has been running around 30,000 homes per annum short of what’s needed to meet newly arising need:

Delivery of new affordable housing in England has been running around 30,000 homes per annum short of what's needed.

These homes can offer low rents, decent quality standards, and much-needed stability for families, taking them off the ‘housing treadmill’ and giving them vital breathing space for the things that matter – saving for a deposit, progressing at work or in education.

Furthermore, building these homes adds to our overall supply of housing, contributing to the Government’s ambition to get more homes built quickly. There’s widespread consensus amongst the public, throughout the housing and homelessness sector, and across political parties, that we need more of these homes.

The Housing Minister told last month’s Chartered Institute of Housing conference that he wanted the Green Paper to look at what he called "the structural underpinning of supply". I’ll be looking out for what that means in practice.

If it’s serious on supply, the minimum the Green Paper needs to do is commit to an additional 30,000 homes per year, to bridge the gap between existing supply and newly arising need for affordable homes (of all types) that we identified in February.

Research for Crisis and the National Housing Federation suggests that if Government wants to meet current needs and address backlog needs amongst those on the lowest incomes, it needs to go further - aiming for a total 90,000 of the lowest-cost social rented homes each year.

If we get anywhere near either of these figures, it would represent a big increase on current plans. The last new money announced for low-cost rented housing – the £2bn the Prime Minister announced at the Conservative Party conference last year – is to be spent over five years and will pay for just 5,000 new homes each year.

Will those homes be affordable for low-income working families?

Let’s assume there’s some commitment to supply in the Green Paper. The next question is, how affordable will those homes be to the people who need them?

This really matters. Social housing has become less affordable in recent years, as existing rents rose, and many new lettings were at higher market-linked ‘Affordable Rents’.

Despite the name, these rents can be far from affordable. New JRF analysis looks at Affordable Rents and compares them to traditional council and housing association rent levels. It finds that across England, Affordable Rents for typical two-bed properties work out at £1,400 per year more expensive than social rents. That’s more than a low-income family’s average annual household energy bill.

As the map below shows, this effect is particularly pronounced in the South of England, particularly in London, where Affordable Rents are £3,350 per year more expensive, and in the South East, where the average difference is £2,000 per year. Linking rents to market prices is making affordable housing more expensive in the very areas where its role is needed most. This is a real failure of policy.

Affordable Rents for two-bed properties as a percentage of equivalent housing association social rents

In the South of England, particularly in London, Affordable Rents are £3,350 per year more expensive than social rents. In the South East, the average difference is £2,000 per year.

We’re not alone in these concerns. The Chartered Institute of Housing last month called for rents to reflect local incomes, and there have been some positive signs from Government on affordability. They’re now funding the lowest-cost social rented homes once again, albeit only in the places where affordability pressures are most acute, and at nowhere near an ambitious enough scale.

The Green Paper needs to formalise this shift by prioritising homes let at rents which reflect the earnings of those likely to occupy them, rather than those linked to the dysfunctional private rented market.

JRF’s preference is for homes let at Living Rents, which have a direct link to local earnings. This ensures they’re affordable to a person earning a low wage typical for the area. Overall, Living Rents are slightly higher than traditional council / housing association rents, but that link to local earnings ensures they are still affordable.

For any investment in housing, there is a trade-off between the number of homes you build and how affordable they are. Living Rents strikes the right balance – ensuring affordability at a lower cost per home than traditional social rented homes. The result is more homes that are genuinely affordable to those on low incomes.

Will the Green Paper ensure that stigma is tackled and tenants have a voice?

I’ve been involved in the Chartered Institute of Housing’s Rethinking Social Housing initiative, and one of the key messages from the tenants engaged with through that project is that they feel there’s a need for greater accountability and thought about how tenants’ voices can be heard at national and local level. As one tenant put it, "Social housing will become a thing of the past unless we get heard".

A key test for the Green Paper will be what mechanisms Government puts in place in order for it to hear tenants’ voices at national level, and what signals it sends to social housing providers about what they should put in place locally.

Many people also expressed concerns about a perceived stigmatisation and stereotyping of social housing. This appears to be very closely related to the victimisation, stigmatisation and objectification felt by people in poverty about their portrayal in the media. Is it the tenure, or the people it houses, that are stigmatised?

Either way, the Government should set an example by rethinking how they talk about poverty and social housing. In the Green Paper, and beyond, we need to hear less about ‘sink estates’ and more about the vital role low-cost rented housing plays in ensuring everyone has a decent standard of living. JRF’s work with Frameworks on Talking About Poverty would be a good place to start.

Sajid Javid said he wanted a Green Paper that would "Inform both Government policy and the wider debate for many years to come". If the Green Paper is to reach that high bar, it must begin the process of redesigning our housing system to make it work for those on low incomes.