• Surfing the Third Wave

    Arc4's Senior Consultant Colette Manion shares key discoveries from Australia's new approach to social housing in Inside Housing.

    Australians are known for their surfing prowess. But just recently the country's social landlords have swapped Bondi for the boardroom as they learn how to surf a new wave of social housing policy. A wave propelled by a stance on welfare reform that is sweeping fast through our social sector too.

    Dr Tony Gilmore, CEO of the Australian Housing Action Network, is clear that countries like UK, New Zealand and Australia have now entered a third wave of government support for tenants. The universal provision of the mid-20th Century and the later, more consumer focussed approaches have ebbed and been replaced by a third wave of support, where social housing is required to be ‘step-up’ not a ‘hand-out’.

    The new wave is nowhere more evident than in New South Wales (NSW). (The Australian States play the major role in housing policy.) The ‘Future Directions’ housing policy is a real paradigm shift and has been earmarked as pivotal to changing the face of social housing across NSW forever. The state’s housing Minister, Brad Hazzard's aims are not just to build more affordable housing, but make the housing continuum work better, enable transitions to the private market and reduce welfare dependency.

    The 23,500 new and replacement homes put English housing policy in an interesting contrast (albeit Future Directions is a ten year strategy.) The intention to transfer up to 35% of social housing stock to community housing providers and create mixed communities sounds more 1980s on British shores. There will also be a 60% increase in the use of support to occupy private rented accommodation. (Maybe news of our ballooning bill for private rent support has not reached Sydney yet.)

    However, beneath the shiny spin-doctored headlines lie a chilling distinction. Social tenants are to be divided into a 'safety net group’ whose members will need support in the long term, and the ‘opportunity group’ that can be helped to live an independent life free of welfare subsidies and living in the private market. As Minister Hazzard announced, it will do the children in social housing "good to see their neighbours in private housing going to a job each day”. A sense of the Victorian (and arguably Frank Field's) 'deserving’ and the ‘undeserving’ poor seems to be the ideological driver.

    Yes, perhaps a modest 10 percent of Australian social tenants have a reasonable income or might reasonably be expected to progress to work. But the harsh reality is, even in growing Australia, that for many, there are no suitable local jobs and the private rental market will prove just too expensive.

    Like the Aussie stereotype, their social landlords sound more entrepreneurial. A trait which the Future Directions strategy emphasises by encouraging new multi-faceted ‘vehicles’ that cater to a range of needs from finance to community support, perhaps a trick we have missed? Adopting the more commercial and somewhat market savvier approach Australian to housing could be the new path for many UK housing associations.

    The Australian engagement of Government is different too. Yes, there is a strong market component to what New South Wales is doing. But, there is also an overt commitment to joined up government (and with targets) !

    For example, there is a strong focus on education and employment. Improving the educational performance of social tenants is an overt goal. So interesting measures like trialling changed allocation processes so young people and families with children can be placed in dwellings that are close to better educational and employment opportunities are part of this housing strategy.

    So, as the third wave breaks over UK’s social landlords, maybe we should drawn on the lessons from the champion social housing surfers Down Under!

    During February 2016, Colette was Housing Action Network’s thinker-in-residence, based in New South Wales.

    Category: News, Comment, Housing industry, Social housing Tags: Social housing, arc4, inside housing, affordable housing, Welfare Reform
  • Steve Wood comments on the Autumn Statement and the impact for older people

    So, the dust settles on an Autumn statement which left some low income families breathing a sigh of relief as proposed cuts in tax credits were scrapped and buy to let landlords contemplating the impact of a 3% surcharge on stamp duty.

    Win or lose, there is little doubt that he changes announced by the Chancellor this week will be closely scrutinised over the coming days and weeks, and here are some early observations on how they impact on older people.

    Housing

    £400 Million of funding for housing associations and the private sector to build more than 8000 new ‘specialist’ homes for older people and people with disabilities.

    The Care and Support Specialised Housing Fund (CASSH) is already on track to deliver 4000 new homes and we are eagerly awaiting the announcement of the allocation of a further £155 Million under CASSH2. The additional funding announced on Wednesday is a welcome continuation of the governments recognition of the importance of good quality housing for older and disabled people but many agree that it is not nearly enough when you consider our ageing demographic.

    An additional £500 Million available by 2019/20 for Disabled Facilities Grants. The government equates this to over 85,000 adaptations and estimates this will prevent 8,500 people from going into residential care.

    Social Care

    The drive to integrate health and social care by 2020 forges continues with the commitment to increase the funding available through the Better Care Fund from April 2017, increasing to an extra £1.5 Billion by the end of 2019/20.

    Local Authorities with a responsibility for social care have the option to levy a ‘precept’ on Council Tax, with all additional income to be directed into spending on social care. The Chancellor claims that this has the potential to raise up to £2 Billion in additional funding by 2019/20.

    Reform of the New Homes Bonus scheme could generate £800 Million which would be directed into social care.

    Any additional funding is to be welcomed but the fact remains that the care sector remains in crisis, and much of the additional funding might not see its way into providing new services. Within the full Autumn Statement, it is suggested that the additional money available would in part help local authorities increase the rates at which they currently commission care services to counter the impact on providers of the imposition of the National Living Wage.

    Welfare

    Housing benefit for social housing tenants will be capped in line with the private sector, limiting housing benefit for social renters taking up new tenancies from April 2016 to Local Housing Allowance rates

    It remains to be seen if this will apply to ‘specified’ accommodation such as extra care housing, where rent levels are often much higher that the LHA. If exemptions are removed or limited to exclude extra care housing, then this will have serious implications.

    Pensions

    The state pension for existing pensioners will rise by 2.9%, or £3.35, to £119.30 a week from April, to match the rise in average earnings, the largest increase in 15 years. This is the result of triple-lock pledge on pensions which means the state pension rises each April to match the highest of inflation, earnings, or 2.5%.

    Next year is a significant one for new retirees as it is the start, from April, of the new flat-rate state pension, set at £155.65 a week. However, not everyone will get the full amount, such as some of those with a private or workplace pension provision. Some who have built up an additional state pension may get more.

    Generally, this is good news for pensioners and again they have been protected from a lot of cuts by this government, although many people retiring under the new arrangements from April remain unclear about, and indeed let down by, the fact that they will be penalised if they have contracted out at any time during their working life.

    Pension credit payments will be stopped for people who leave the country for more than one month. Currently, pension credit is paid for up to 13 weeks while claimants are temporarily abroad. If they go overseas for medical treatment under the NHS, then it is paid for longer. The same new restriction for those going overseas will also apply to housing benefit

    All in all then a real mixture but an overall sense that whilst recognising the need to invest in better housing and to provide additional support to a significantly underfunded care sector, the measures put forward to bring this about fall well short of the mark.

    Category: News, Housing industry, Arc4 Tags: older people, older persons housing, Housing, autumn statement
  • A conference devil’s in the dictionary

    Veteran Conference speaker Derek Long, has drafted “another page from the housing textbook for the University of Life” to help you get through your next conference. “Whether you’ve been caught resting your eyes just too long in the morning plenary or returning from an important break out session in a nearby pub, these are the topics to distract your boss with,” he says.

    SAP RATING:
    The degree to which you believe the government will honour commitments on renewables funding

    BENEFIT CAP:
    A poorly designed item whose headroom shrinks over time

    HANDCART:
    The vehicle that social housing is currently travelling in

    HARROGATE:
    What older housing professionals call Manchester

    EFFICIENCY SAVINGS:
    Cuts

    CUTS:
    An ill-considered reduction in your budget

    SAVINGS:
    The judicious reallocation of your colleagues’ under-used resources

    THE PUBLIC SECTOR:
    Whatever the prime minister says it is today

    COUNCIL HOUSING:
    What housing associations hope the TV reporter calls their stock after a gas explosion

    ALMO
    A trial separation (see also The Crimea)

    AWAYDAY:
    An event with an overnight stay in an expensive hotel so the chief executive can get to grips with … a colleague. (Derived from the original phrase Have it Awayday)
    NB Awaydays often result in ALMOs

    NOVATE:
    To downgrade the chief executive’s lease car deal from a Jaguar to a Vauxhall

    RENOVATE:
    To replace the chief executive’s lease car with a bicycle allowance

    PEAK DEBT:
    A statement incomprehensible to modern students

    STAKEHOLDERS:
    Colleagues who are always ready to hammer their points home (See Dr Van Helsing)

    BOILER REPLACEMENT PROGRAMME:
    A male chauvinist chief executive’s solution to his mid-life crisis
    NB Boiler replacement always results in an ALMO

    CONVEYANCING:
    The act of transfering a valuable commodity – i.e. money – to your solicitors

    VALUE FOR MONEY CONSULTANT:
    A person who borrows your watch to tell you the time … and then recommends you buy a new watch, but more cheaply.

    Category: Comment, Housing industry, Social housing, Arc4 Tags: Cuts, Housing, Welfare Reform, Council Housing, Public Sector, Benefits
  • Right to Buy makes no sense in growing Austrian market

    Austrian social housing chiefs facing strong price rises are astounded
    by the UK government's intention to extend the Right to Buy, arc4
    Director, Derek Long, has learnt.

    The Right to Buy policy attracted incredulity during an overview of
    current UK housing policy that Derek gave to 30 Austrian housing
    association Chief Executives and journalists in October. The
    undermining of the social rental asset base at a moment when
    affordability is crucial for economic recovery was considered by the
    Austrian delegation as a poor outcome, both for the UK as well as its
    associations.

    The fact-finding visit into UK social housing was organised by the
    Österreichischer Verband gemeinnütziger Bauvereinigungen - the
    Austrian version of the National Housing Federation for co-operatives
    and limited profit housing associations.

    Whilst Austrian housing prices have not increased as fast as the UK's
    in past year, the Austrian price to income affordability gap has grown
    faster even than in the UK. In the five years since 2010, house prices
    in Austria rose 18% more than incomes. This level of unaffordability
    is the highest of the developed countries in the OECD. The UK has the
    fourth highest increase after Germany and Switzerland at 8%. Austrian
    house prices were also outstripping rental increases at a slightly
    higher rate than in the UK.

    Commented Derek Long,

    "To deliver Right to Buy replacements successfully, HAs will need a
    forensic understanding of local markets."

    Category: News, Housing industry, Property, Arc4 Tags: right to buy, austrian housing market, arc4, Social housing
  • Are you in the market …?

    Delegates never return from the Federation’s Annual Conference saying they have seen something genuinely historic that will unlock new market opportunities for them. Yet, the opening of Grand Central – the new shopping mall above the redeveloped Birmingham New Street Station – has changed all that!

    In other news, from the Fed’s 2015 Annual Conference, Minister Greg Clark’s foisting of a voluntary Right to Buy regime onto the housing association movement is genuinely a historic shift, on a par with the 1988 Housing Act. Every significant association is now operating in the home ownership market. Regardless of size or inclination, they will be selling a chunk of their best rental properties and replacing them with sale or shared ownership products. The result of the NHF’s eight day “vote” on the voluntary code is a foregone conclusion. The large providers have already given their support and the counting will be by the amount of stock held.

    So, what are the key implications for associations?

    - All associations are in the home ownership business now. They will need to really understand their markets and their customers to a far greater extent than ever before. That will be a challenge – especially for those who are not already developing.

    - Decisions to reinvest in stock will have to be made in the context of the market – will this asset transfer as soon as the kitchen fitter has walked down the path?

    - The question of whether to renew sheltered housing assets has become even more difficult to determine.

    - Understanding the reaction of existing tenants will be pre-requisite intelligence for any major board decision. “Pay to stay” tenants will be at the front of the queue – and in some parts ethnic groups may also be very active in buying their homes.

    - Larger providers will use the receipts to spread risk and relocate their businesses into better markets thereby undermining the market where the RTB occurred.

    - Downstream, there will be much more competition for the remaining social rented stock as RTBs slide into private landlords’ hands.

    - This is going to produce interesting responses from the retail mortgage companies. Will red-lining of estates reoccur once defaulting follows the inevitable interest rate rises? Might this be a commercial opportunity to diversify into the private rental market?

    - The Minister’s two year replacement turnaround is very tight. Achieving the misleading 1 for 1 replacement will become a political and therefore regulatory issue in a couple of years.

    - And so on. This is a genuine paradigm shift. Government, regulator and the sector have only the broadest of ideas where the Birmingham announcement will end up.

    Lemonade?

    Given the housing crisis, RTB2 is clearly a daft policy. History will regard spending hundreds of millions of Pounds to end up with many fewer homes as immense folly. To disrupt the last remaining delivery mechanism for volume building in a recession will haunt future government’s economic policy. And undermining probably the strongest part of the third sector in Britain represents a cultural vandalism that weakens our civil society profoundly.

    So can associations make lemonade from the huge lemons they’ve been handed?

    Yes, but it will all hinge on using what government will pay in compensation quickly and effectively. Quickly, means replacing the lost property within two years, or the significant hole in rental income will be made deeper by the Treasury clawing back the compensation. Effectively, means using this opportunity to diversify into new markets – both locations and products – before the social rental base becomes too small to support significant growth. This can only happen where associations have a real and very precise understanding of their local housing markets. This forensic understanding can only be gained from real-time intelligence about what it costs to rent or buy down to street level and who their public and private competitors are.

    Like it or not, we’re all in the market now.

    Derek Long is a director at arc4, the housing and markets consultancy

    Category: News, Housing industry, Property, Social housing, Arc4 Tags: Social housing, Housing, natfed, right to buy
  • Arc4’s Derek Long on the Korean Housing Market

    The South Korean housing market is currently under immense pressure. Jeonse, its unique tenure form where tenants pay upwards of 60% of the entire value of the house, has become almost unaffordable in the first half of 2015.

    Arc4 director Derek Long, a keynote speaker to the government’s First International Housing Finance Forum in Seoul in 2013, was recently asked by Seoul’s equivalent to Radio 4's PM programme to bring a British perspective on what reforms could rebalance the Korean housing market as part of a discussion with local professors. Click the play button below to listen to the programme, which was broadcast at the end of July.

    Category: Housing industry Tags: Korea, Housing, Rent
  • Arc4 assesses opportunities and challenges for registered providers

    With the Chancellor's Summer Budget adding momentum to the "Northern Powerhouse", Arc4’s Derek Long was invited to analyse the future opportunities and challenges for the new grouping of the Chairs of Greater Manchester Registered Providers. The group will now complement the longer-standing Chief Executive led providers group in the city region and will be a focus for non-executives' development.

    Category: News, Social housing, Arc4 Tags: Housing, Social housing, Registered providers
  • When is a traveller not a traveller?

    As the echoes from Black Rod’s knocks on the Commons’ door at the opening of Parliament fade away, American tourists are about to be treated to another great British political tradition. One which is almost as venerable – the Passing of the Hot Potato.

    No one is quite sure when this practice started, but for generations, as an election looms, successive Secretaries of State at DCLG have pushed less appetising political morsels to the back of their plate for their successors to chew over. Airports, HS2s, awkward planning applications for fracking badgers, all tended to slip to the bottom of the red box to await the inevitable reshuffle. Such has been the fate of DCLG’s consultation on proposed changes to planning policy and guidance relating to gypsies, travellers and travelling showpeople.

    The consultation period ended on the 23rd November and students of Sir Eric Pickles’ 2010 Week One intervention into planning policy might have expected a Conservative-vote winning pronouncement in the run up to the election. That a decision has fallen to his successor may point to some major issues which will be a challenge for council planners and housing strategists – and not just in the arena of gypsies and travellers.

    CLG’s consultation sought to remove travellers who had settled permanently from the statutory definitions of “gypsies and travellers” and “travelling showpeople”. In essence, if you don’t travel, you can’t be a traveller. The confusion between culture and behaviour is one for the sociologists. But the logistical challenges for local authorities to obtain legally robust definitions of need are jaw-dropping.

    How can one prove someone has been travelling when they are not in your local authority ? How effective will projections of demand for pitches be, if there is a large reservoir of potential travellers impermanently “settled”?

    The pressure for officers to get the supply of pitches spot on will increase if CLG’s aspirations to strengthen limitations on new sites in “open countryside” are agreed. This is all the more important as loopholes over sites within Green Belt and Areas of Natural Beauty are to be sealed.

    If pitch supply fails to match demand, unauthorised encampments will increase – but under the consultation, meeting such unauthorised demand with permanent sites will be more difficult because “intentional unauthorised occupation” will be regarded as “a material consideration that weighs against the grant of permission". The creation of such Catch 22 situations will only create more uncertainty for officers trying to implement the law.

    Unless all these uncertainties are resolved, our advice to help local authorities is simple.

    1.  Make sure your assessments are up to date.

    2.  Use good consultants who have good communication channels with communities that can adapt to different local conditions

    3.  Keep good records – you’ll need them ! Robust evidence covering a range of issues about permanent sites and unauthorised encampments will put you in a strong position

    Overall, CLG’s response to the consultation has wider implications for planning and housing strategies. For example, the lack of an up-to-date supply of deliverable sites being downgraded from a significant material consideration to just a material one for temporary permission may well spread into other areas where housing supply is contested. Whatever the basis for Greg Clark’s recent decision to call in Maldon District’s development plan, the implications may be far-reaching. How such precedents play out for other aspects of social housing could leave officers in a planning no man’s land.

    So beware! A hot potato may be landing on your desk any day now.

    Category: Comment, Housing industry Tags: Travellers, Gypsies, Housing

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