A practical policy for the next Scottish Labour government
In the 1970s and 1980s, new housing associations played a crucial role in helping Edinburgh remain a city with a mixed residential population, by enabling substantial areas of the traditional tenements ringing Edinburgh’s centre to get a renewed lease of life.
Dunedin and Canmore (now joined but originally separate) started work in 1975 in the Gorgie and Dalry areas. Edinvar, closely associated in its early days with the University area, helped to ensure that the Southside did not become a glorified university campus. Port of Leith and Lorne Housing Associations performed a similar role in Leith. This was an inspired combination of preserving our built heritage and providing affordable rented housing.
Since those early days, housing associations have expanded, largely through new build. In fact there have even been moves away from the inner city tenements because of the challenges. Castlerock-Edinvar stirred up a storm in the early part of this century when they proposed selling their properties at Drummond Street because of the very high cost of an essential second refurbishment. In the end the properties were refurbished by the housing association (by then part of a larger organisation ) and remain low rent homes. However there have been other smaller scale disposals by some associations, sometimes because of the difficulty of getting agreement in mixed ownership stairs on fabric repair and maintenance.
One of the big changes in the city’s housing over the last few years is the rapid expansion of the private rented sector. At the time of the 2001 census 11% of Edinburgh’s households were private tenants, by 2011 this had risen to 22% and all the available evidence is that it is still rising. More people rent privately than are council or housing association tenants. No longer is private renting mainly for young people, with the age of first time buyers rising and many families now renting for many years.
Landlords have shown an increasing interest in former ‘council’ estates. Many council tenants bought because they wanted to stay in their homes, but many of the original buyers are now moving on. These properties are particularly attractive to landlords because of the good capital to rental ratio. In a fairly typical six-in-a-stair ‘council’ block in an area like Lochend or Gracemount, there may be two council tenants, two owner occupiers and two private tenants, but the balance is increasingly tipping towards the private lets.
Tenants with similar incomes, living in identical flats, are paying very different rents, with the private rent often being double. For a substantial number these higher rents are only manageable because the tenant gets help through housing benefit. The growth of the private rented sector in the last 15 years or so is one of the factors causing overall housing benefit expenditure to rise so much.
This is not the only problem. While some landlords take very great care with their properties, others do not. Communities see the impact through neglected gardens and communal areas, and additional complications in trying to get agreement for communal repairs and improvements. This week there were only 57 council and housing association properties available for let in Edinburgh, of all sizes and types. That included 6 new build, and that only happens in some weeks. Over the last two years availability has slipped from between 80 and 100 a week to between 50 and 60.
So is there a case for housing associations to now return to their roots? Why shouldn’t they, and the council, start acquiring some of the properties which already exist, rather than always waiting for new build with all the problems of land, planning permission and so on? This could be done on the basis that the total cost did not exceed new build cost (including land).
Some years ago I know that the then housing regulator and funder, Communities Scotland, was cool about acquisition rather than new build, arguing that this could distort the lower end of the buying market and harm the chances of first time buyers. But first time buyers are being priced out anyway by private landlords.
Another bureaucratic argument is that the properties coming up for sale might not meet the Scottish Housing Quality Standard that all council and HA properties have to meet, but this could be factored into the cost envelope.
This may not only be an option in ‘ex council’ properties. Recently in the city we have seen an example of a private landlord (a charitable trust) planning to dispose of over 100 properties on the open market, serving notices to quit on the tenants, many of whom have been living there for years but have suddenly discovered that they have very limited legal rights. Housing associations could step in to that sort of situation too.
What’s not to like? Procurement of additional low rent homes reasonably quickly, enabling reduction in housing benefit payments. Greater ability to influence communal repairs and the upkeep of areas, to the benefit of all residents.
The one big ‘but’ in all of this is ‘subsidy’. Low rent housing has always required public subsidy, normally nowadays in the form of a grant towards building costs. If existing properties are bought instead of new ones built, it would not speed up supply. However opportunities exist right now in Scotland to double (or more than double) investment through subsidy by using the new borrowing powers available through the Scotland Act 2012.
It is commonplace for politicians (especially aspiring leadership and deputy leadership candidates…) to say we need more affordable housing. Here’s a practical way of both doing it and funding it.