Mind the gaps says Duncan Bowie but the new policy does put social housing back centre stage.
About two weeks before the local elections, Jeromy Corbyn and shadow housing minister, John Healey launched a new housing policy. While this got little press coverage and came out too late to influence local Labour election manifestos, it is nevertheless an important document and more lengthy and detailed than policy statements the party has produced recently on other policy areas. There is much in the statement to be welcomed and an advance on previous Labour Party policy statements on housing, which have generally focused far too much on helping home owners. The new focus on the need for more social rented homes, including homes to be provided directly by local housing authorities is long overdue, as is the proposal to suspend the ‘right to buy’, though the statement could have gone a step further with a commitment to follow Scotland and Wales by abolishing the scheme once and for all – something we should have done in 1997. We also now have a commitment to requiring a ballot of existing tenants and leaseholders on estate regeneration schemes, which follows Sadiq Khan’s change of tack in London in response to tenant lobbying.
The review has adopted a relatively narrow framework and the statement does not adequately consider a number of policy areas, including planning policy, financial policy, fiscal policy and benefit policy, which impact directly on the ability of national and local government to deliver housing policy objectives, and on some aspects seems to be behind rather than ahead of government thinking. The Conservatives and the civil servants in Whitehall have finally realised that there is both a shortage of social housing and a problem with the quality of the existing housing stock. The fire at Grenfell has forced a policy rethink and the Government has not just brought back funding for new social housing (though not nearly enough) but is also looking at issues such as land acquisition costs and land value capture. Labour still has some catching up to do.
One of the key problems with housing policy is that what is now called ‘affordable housing’ is not affordable by many middle-income households, and certainly not by lower income households. The term ‘genuinely affordable’ as used by Sadiq Khan and in the new policy statement is inadequate. Social rented housing affordability should be defined as rent and service charges being no greater than 30% of net average household incomes for the lowest quartile of household incomes in the relevant local authority or housing market area. We also need clear criteria for determining affordability for other forms of sub-market housing including shared ownership. Planning policy targets relating to affordable housing should be applied on this basis, with developments not meeting the appropriate affordability definition being treated as market provision and not complying with affordable housing policy or contributing to affordable housing targets.
We need more clarity on Labour’s social rent targets – rent levels, security and volume – with sufficient grant per home for local authorities and housing associations to fund family sized homes as well as smaller homes. These should be at social rents (discounting the value adjustment factor in the target rent regime). Grant funding for shared ownership homes and other forms of discounted home ownership should be terminated and replaced with equity-based loans.
It is important that resources be allocated on the basis of relative housing needs, not just under competitive bidding regimes or bilateral agreements with city regions, local authorities or Housing Associations. Councils as statutory housing bodies must have the central role. There must be a nationally consistent methodology for assessing the comparative housing requirements of each local authority area, both in relation to the needs of the existing stock and the need for additional homes and national resources should be allocated to local authorities (and not directly to housing associations or private developers) in relation to this needs assessment. While we should support the removal of nationally determined limits on local authority borrowing, the Labour Party needs to be explicit in recognising that direct central government subsidy is required both in relation to the improvement of existing stock (including retrofitting in relation to fire safety), the undertaking of estate regeneration schemes which protect the quantity and quality of social rented homes and for new social rented homes (to avoid dependence on private funding/developer-led schemes).
The cost of land, investor speculation in land and in planning permissions is one of the main obstacles to the provision of housing affordable by households on lower and middle incomes. Current legislation (including the 1961 Compulsory Purchase Act) must be amended to give a power to LAs and Mayors to CPO land at Existing Use Value. We also need direct central government funding for Local Authority led estate regeneration (separate from funding for new build) to avoid dependence on private funding/developer led schemes which involve loss of social housing.
There are several other gaps in the Labour Party’s policy. We need to be more specific about reforms to the local government funding regime, including retention of needs-based formula grant and the removal of national caps on council tax levels. Councils need the flexibility to introduce new council tax bands with higher rates. The party must develop a policy to reform stamp duty, council tax, capital gains tax and inheritance tax to make the housing market more stable and to incentivise effective use of existing and new housing stock.
The section on planning in the policy statement is weak. We need a policy on national spatial planning on housing growth, regional and sub regional planning, appropriate locations for sustainable development, clear criteria for Green Belt reviews and a commitment to the abolition of Permitted Development for office/industrial conversion to housing. We need a policy on density to ensure densification is managed to support appropriate housing supply rather than focusing on maximising returns for developers and investors.
While the focus of this review is on increasing housing supply, the party needs to develop Policy on homelessness and supported housing. We also need to ensure that housing associations return to their original objectives of focusing on meeting the needs of lower income households and others who cannot access market housing and to have much tighter regulation of housing associations. Tenant empowerment on its own is insufficient.
Duncan Bowie is author of Radical solutions to the housing supply crisis (Policy Press 2017)