Paving the way for the death of social housing

Hammersmith and Fulham Council has noble intentions. Its regeneration plans focus on building mixed communities to reduce the borough’s extremes of rich and poor; it has promised to build more homes and to create “a ladder of housing opportunity for all.” But in reality, it is creating a borough that looks more like an exclusive gentleman’s club, but remains unaffordable to the majority. At worse, it may set a precedent that kills off council housing in other boroughs.

The council website proudly announces that it has helped to house a total of 58 families in the last year. That was less than half the number housed in previous year, and this in a borough that has more than 10,000 people waiting for a home.

Report on social housing reform co-authored by Stephen Greenhalgh

The former council leader, Stephen Greenhalgh, has said that he believes council tenants are “locked into a culture of dependency and expectancy.” Council estates, he argues, create “social ghettos” that cause many social ills such as crime and perpetuate a cycle of deprivation. “Social housing,” he says, “has become welfare housing.”

Councillor Andrew Johnson, the council cabinet member for housing, supports this view. He says: “Council homes are a springboard, not a destination.” He wants to help those “who make an effort and penalise those who simply cannot be bothered”.

Councillor Greenhalgh has two solutions. The first is to increase the number of affordable rented homes in the borough, and the second is to try to increase home ownership. To reduce the cost to council-tax payers, he wants to offer “a hand up, not a hand out,” and minimise the number of people on housing benefits.

But the definition of an affordable rent has been changed. Accordindefinitionsg to the Affordable Housing Framework introduced this year by Grant Shapps MP, the Housing Minister: “Providers will be expected to deliver a range of rents across their development proposals from homes let at target rents up to a maximum of 80 per cent of the market rent. In order to maximise the number of new homes, it is expected that most will be let at, or close to, the 80 per cent limit.” The Homes and Communities Agency, the national homes and regeneration agency for England, has also adopted this definition.

Hammersmith and Fulham is the fourth most expensive borough in the country, both to rent and to buy property. New developments will not include any more council housing, but will instead provide a large number of properties for rent at the 80 per cent level. That offers little opportunity for current residents on lower incomes to afford to live in the borough independently. Coupled with the Government’s benefit cap, large numbers of people may be forced out of the area.

Nick Raynsford, the Labour MP for Greenwich and Woolwich and a former Housing Minister and Director for the housing charity Shelter, describes this policy as an “Orwellian distortion of the truth.” The rise in affordable rent will inevitably force up the number of households requiring housing benefits, he says.

“I can think of no better way of creating dependency than forcing rents up – it is the worst possible way to tackle it. The merit of having social housing at well below market rates, is that it allows a large proportion of lower income households to live without benefit dependency.

“The consequences of this programme will be a serious shortfall of housing. It will exacerbate deprivation, homelessness and overcrowding. It may also mean that lower income households are priced out of affluent areas entirely.”

The assumption that people who need council homes are work-shy opportunists is leading the council to overlook its working population. A recent report in a Guardian Datablog, showed the minimum salary a person would need to be able to meet the  new affordable rent levels in every borough in England. For a one-bedroom flat in Hammersmith and Fulham  they would need an income above  £37,000 a year. The average income in the borough is £30,000.

Chart showing homes are unaffordable to the majority on average salaries for the borough

The new Localism Bill poses further problems. It devolves many powers back to local governments. Among the provisions for housing it states that local authorities will be able to limit those  who can apply for social
housing in their areas. They would therefore, be able to set their own eligibility criteria.

“It has been ill thought out,” Mr Raynsford says, ‘The most significant changes relate to the allocation of housing, which could give councils wider discretion to discriminate against certain groups of people.”

The Bill would also allow the council to rely more on the private sector to house those  in need but  Mr Raynsford points out that parts of the private market are poor quality and in poor condition.

Cllr. Greenhalgh supports selling  council homes to increase home ownership – and not just to tenants. In a Localis think-tank report that he co-wrote in 2009, he proposed that vacant homes be sold off. The document entitled Principles for Housing Reform, suggests the “strategic open market sales of void properties either directly or by transferring ownership to a partner who will then sell on.” The council is cashing in, instead of rehousing some of the thousands on its waiting list.

Furthermore, attractive 50 per cent discounts are offered to council tenants to buy their home. This cuts further the amount of council housing available. Once sold, the homes will not be replaced.

Inevitably, issues such as housing are heavily politicised. Opposition councillors such as Stephen Cowan have been quick to compare this to the Shirley Porter “Homes for Votes” scandal of the 1980s in that it will force natural Labour voters out of the borough. But Mr Greenhalgh appears to shows little concern that those on lower incomes may be priced out of the area.

The changes in the definition of affordable rents allow councils such as Hammersmith and Fulham, pretend that homes are affordable when they are not. Far from being a cure for the “social ills of social housing”, the changes will not fulfill either of the council’s aims – to build mixed communities and cut reliance on benefits. Instead it will cause a mass migration of lower-income households from a borough that already has a far lower percentage of council tenants than any other in London.  The result will be a monolithic, inner London zone, exclusive to high earners. It is better compared to a sweeping broom clearing the area of the poor, than a “ladder of opportunity for all.”