Give me Shelter

At last, housing professionals are starting to come out of their bunker and challenge some of the prejudice and misinformation that exists about social housing.  Campaigns like  Council Homes Chat and SHOUT have inspired more housing folk to engage with the bigots and the ignorant on twitter and in the comments pages. For too long the affordable housing sector has lived within a rather complacent cocoon, but one of the things I’ve learned over the years is that we should never underestimate the level of ignorance about housing among the wider population. Even nominally intelligent people often seem clueless or impervious to rational thought when it comes to housing, and the rise of UKIP means that immigration often dominates the housing debate.

Which means that there has never been a greater need for well written reports and clever publicity that can get the housing message across to a wider public, something I wrote about nearly two years ago. Currently, some of the best output is coming from Shelter. Not only do they provide some of the clearest analysis of the breadth and scale of the housing crisis, with well thought out solutions, but they are also have the knack of distilling complex data into easily digestible images and soundbites. Who can forget their £50 chicken, for example?

Shelter’s latest report ‘Building the homes we need – A programme for the 2015 government’ - is a fine example. Produced with KPMG it sets out a clear summary of the consequences of the housing crisis – a huge housebuilding deficit, widening social inequality, homelessness, soaring house prices and rents, a decline in savings and pension provision, the rising HB bill – and then proceeds to a forensic analysis of the causes of the crisis. This covers landbanking, blockages in the  planning system, the decline of small housebuilders, the opaqueness of land ownership and land transactions, finance and investment.

The report quotes from the Treasury’s recent statement committing £100 billion to major infrastructure investment. ‘…infrastructure equips a country for future economic growth, and is often a pre- requisite for economic expansion to occur.’ It not only ‘creates the need for additional material to be produced and services to be employed, leading to job creation across the relevant parts of the supply chain …but allows the economy to function more efficiently’ in the long-term. This could have been written about housing investment, and the report makes a strong argument that housing should be treated as infrastructure in its own right, since every pound spent on construction generates £2.09 of economic output, and 92 percent of all housing investment stays in the UK, with 56 pence of each pound returning to the exchequer, of which 36 pence is direct savings in tax and benefits. This is a strong argument in favour of switching investment from housing benefit to bricks and mortar, something the SHOUT campaign is calling for.

Despite UKIP, it seems we could also learn a few things from our European neighbours. The report notes that 80 percent of Austrian homes are procured by self builders, compared to just 10 percent in the UK – the lowest in Europe. The building industry is increasingly becoming a ‘too big to fail’ cartel, dominated by big beasts, (in London just 23 firms were responsible for 70 percent of all homes built in the year to June 2012). Given the recent history of the banking crisis this should be ringing alarm bells in Whitehall.

Some of the key proposals in the report include:

  • Doubling the level of investment in the affordable homes programme, witih a better mix of tenures including truly affordable homes.
  • Relaxing green belt rules and allowing swaps of green belt land at the margins – something I have been writing about for a long time!
  • Making the planning system more pro-active.
  • Improving the level of data on land ownership and land costs so that land transactions are more transparent.
  • Building five garden cities.
  • Helping small building firms obtain finance and providing sites for small builders.
  • Introducing a new National Housing Investment Bank to finance affordable house building.
  • Putting housing centre stage in City Deals.
  • Raising council borrowing caps.

It’s hard to disagree with any of that. On planning, the report argues against a fundamental reform of the system due to the political cost (i.e. the nimby vote) but proposes new Home Zones, based on a Dutch model that has seen the construction of 90 urban extensions in recent years. These would be based on joint ventures, led by public-led development corporations and would provide investment and tax breaks to build new suburbs of between 200 and 5,000 homes, with a mix of tenures and space for self-builders. Crucially, they would be funded by uplifts in land values with landlowners receiving compensation based on their exisiting use value, rather than residential values. 

The report is clearly written and sets out the building blocks of a realistic step change in supply that would lead to well over 200,000 homes a year being built in England for  the first time in decades. It’s well worth a read.

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