As Camden Council begins to toy with the idea, today’s Affordable Rent proposal gives social housing providers – including local authorities, the discretion to charge up to 80% market rents as a precondition for all future government grants to build new social homes. This forces the question, ‘what is social housing, and is it affordable?’
The scheme was supposed to work on different tiers: existing social housing tenants – largely unaffected, and new tenants paying the higher rents. This is not how it has worked out in practice so far and has serious implications for all social housing tenants.
According to research carried out by East Thames housing group, rather than offering tenants more flexibility and a greater chance of lifting themselves out of social housing, the Affordable Rent policy could lead to greater dependency on housing benefit.
The study found that in Newham – one ofLondon’s poorest boroughs, families would need a combined income of £43,384 to escape the housing benefit trap. All sample households studied, with the limited exception of those with a median income level and two full-time working adults, would require housing benefit to afford a three-bedroom property. Rents could increase by as much as £233 a week for social tenants in the most desirable streets of the borough.
The higher end of middle income earners will be the ones who can possibly afford to pay these rents. But they will do so at the expense of the low income earners further forcing them to move out and concentrate in areas of high deprivation. This in turn may mean they will not be able to afford to pay the high costs in commuting to their work places. This will lead to job losses further exacerbating dependency on benefits in deprived areas, at the same time leaving affluent parts of our towns and cities without the core work skills.
This policy is ideological in nature, conceived by a Right wing government who aspires to see the cleansing of the poor out of the more affluent parts of our cities, driving a deliberate policy of concentrating dysfunctional families in council estates to create a medium – a justification if you like, in order to privatise council housing. On the one hand it proposes to increase social rents; on the other hand it caps housing benefits, creating a contradiction by nature. It pretends to lift the poor out of deprivation and smacks in the face of diversity and community cohesion, and will further exacerbate the divide between the haves and the have-nots in to geographically defined areas. It is nothing less than a con.
This crisis will not be resolved through ideology. For as long as ‘housing’ is considered to be contributing to the nation’s asset-wealth instead of providing ‘affordable homes’ for the many who need or want one – regardless of their social need or background, there will be no solution in sight.
Resolving this problem requires a brave government who would be prepared to drive down artificially high market rents by increasing social housing stocks to sufficient levels in high demand areas at the same time pealing this asset from the nation’s balance sheet. This seems unattainable at first glance but through self financing regeneration schemes and a combination of government grants obtained from council housing revenue receipts it is possible.
On paper the nation may well appear poorer if this were to happen, but that would be mitigated many times over through a housing benefit bill which would come down drastically to realistic levels. It would be mitigated when people who are currently in ‘artificial’ benefit traps, would be incentivised to work because a larger portion of their income would be retained instead of it being spent on extortionately high rents. That would boost productivity and contribute to the nation’s wealth.
A brave government indeed! The question is, who will accept the challenge!