Reform the flawed social housing system

New homes we need without increased public spending

Author: Stephen Greenhalgh, Conservative Home - May 1, 2009

I thought that Kate Davies was spot on when she called for more ideas on how to address welfare dependency in social housing, after the launch of the housing green paper by Grant Shapps. John Moss and I have just written a 74-page social housing reform pamphlet published jointly by Localis and the Conservative Councils Innovation Unit. This paper outlines some of the principles that will help to address this problem and could provide a clever way to build 900,000 new homes without taxpayer funding.

Our "first principles" approach could revolutionise how social housing is thought of, how it is managed, and how it is funded. Today many social housing professionals want to embrace reform of the current system which they know to be fundamentally flawed. The Dutch did much of what we propose in the 1990s with great results. Deprived estates were re-built and areas with concentrations of poverty became mixed income, mixed tenure neighbourhoods.
What is our taxpayer-friendly way to build 900,000 homes? We call for the money going to the Homes and Communities Agency super-quango to be routed directly to Councils and RSLs by increasing Housing Benefit at the same time as allowing both council and RSL rents to rise to near market levels.

In addition, we want to incentivise tenants to build a stake in their home and neighbourhood by giving them the right to acquire "free equity" of up to 10% if they are good tenants, and the right to buy up to 25% of their home on a "buy one get one free" basis.

We believe that raising rents to market levels will fund the same level of affordable home building as now, but that the increase in asset value will allow RSLs to borrow up to £50 billion for further new home building, over ten years, doubling the number of new homes built. Finally, we believe that the income from partial right to buy will fund the redevelopment of the 500,000 most run down homes by releasing up to £75 billion from the value currently locked in to social housing estates.

None of this requires any increase in taxpayer funding or government borrowing.

Click here to read the full article