The housing policy jigsaw – the changing picture

[Originally posted on Liberal Democrat Voice, 31/12/10]

I started this discussion of current developments in policy towards housing by noting that it is an area in which the tensions in inherent in balancing “the fundamental values of freedom, equality and community” are absolutely central. Housing policy needs to strike a balance between the individual and the aggregate – neighbourhood, city, regional – outcomes if it is going to deliver economically and socially (and environmentally) successful settlements. In this last post I will reflect briefly on changes in where this balance has been struck over time.

In the post-Second World War period housing policy was directed at improving the housing circumstances, and therefore the life chances, of individual households living in poor conditions. Choice and freedom took a back seat to breaking the link between income and housing conditions.  Governments of different political complexions engaged in a numbers game to outdo each other in supplying new social housing. Yet policies for creating New Towns, for example, very much sought to create socially balanced communities. Social housing policy was geared towards substantial price subsidies to deliver affordability, which made perfect sense in the absence of a housing allowance system. Council rented housing was a mass housing tenure accommodating households from across the social spectrum. It did not carry the stigma of social failure that it can have today. Social housing in countries like the Netherlands retains this flavour.

In the Thatcher era the focus swung away from the collective and towards the rights of the individual, most notably to exercise choice and free themselves from state control through the Right to Buy.  This was in accord with a discourse overwhelmingly supportive of home ownership. Both the social and private rental sectors saw rents move closer to ‘market’ levels in order to allow ‘undistorted’ choice between tenures. Much greater reliance was placed upon portable housing allowances, with their attendant poverty trap problems, instead of price subsidies to deliver affordable housing. The supply of social rented housing significantly declined. A declining social rented stock coupled with allocation of properties on the basis of need led to concentrations of social disadvantage. There was no real central policy concern for the neighbourhood or more aggregate impacts of these policies.

But from the early 1990s onward policy debates began to be more urgently concerned that a consequence of this approach was not only the residualisation of the social housing sector as a whole, but also the creation of “unbalanced” local communities with high proportions of socially disadvantaged residents. Persistent under-investment in (social) housing and deregulation of housing finance led to both decreasing affordability in the private sector and unmet housing needs. The turn of the millennium consequently witnessed reviews both of the UK housing supply and the mortgage industry. This all might suggest that there was a turn away from the individual and back toward the aggregate.

In fact, the Labour governments of 1997-2010 adopted a rather mixed approach. There were strong continuities – particularly in sustaining the Right to Buy, support for owner occupation, limited social housing construction, and the move towards more market-like rents for social housing. But there were differences, including a push for the private rented sector. The Labour governments’ emphasis upon building sustainable and mixed communities placed much greater emphasis upon the aggregate outcomes of policy. Yet, at the same time, there was a strong strand of thinking that it was the facilitation of individual choice that would achieve sustainable communities. This is embedded in the introduction of choice-based lettings in social housing and promotion of housing options. Yet, given that choice is just as, if not more, likely to lead to homogenous communities and segregation than it is to lead to sustainable, mixed communities, there were unresolved tensions in this agenda. Delivering successful mixed communities without explicit social engineering is a challenge that is yet to be fully met by anyone. Similarly, it is an unspoken tenet of UK housing policy that social and tenure diversity in neighbourhoods is a prescription for the poor, not the rich.

So far the Coalition’s housing policy pronouncements have focused more upon individuals and choice. They are concerned with the sorts of households deemed worthy of assistance from the state and reducing that assistance. It is about renegotiating the obligations of the state towards the citizen. Only in the planning field have the Coalition strayed closer to explicit discussion of the community dimensions and impacts of policy, but have done so in a way that does not give one total confidence that addressing long-standing issues of housing shortage and affordability are uppermost in their minds. It has been left to critics to try to open up the discussion to encompass the aggregate outcomes and consequences of policy.

Yet, understanding and accounting for the aggregate impact of policy change is vital. The processes these policy changes will put in train will take years to work their way through the housing system.  And if it turns out that the aggregate impacts are undesirable then it can take years to unpick the damage. Arguably the social housing sector is still trying to deal with the fall out of the policies of the 1980s and 1990s. So when considering policies that could have a substantial impact upon the lives of millions the wise strategy would be to proceed with extreme caution. Unfortunately, the strategy being pursued seems to be a little more “damn the torpedoes, full speed ahead”.

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