Building a Social Right to Housing

By Adam Peggs

The UK is gripped by its worst housing crisis for decades, a crisis that has fast become a social disaster. For the government this is effectively ‘a crisis of home ownership’, but the crisis is much more than that and its principal damage is not in falling home ownership. Instead, its most serious effects are in the UK’s catastrophic levels of homelessness, the acute shortage of social housing and ever-rising, exorbitant housing costs.

These problems are rooted in our economic model, instituted by the Thatcher government and continued ever since, which have depleted the stock of social housing, deregulated the sector and led to rapid house price inflation.

Since the 1980s much of the social housing stock has been privatised, via Thatcher’s Right-to-Buy policy. Since then we have had deregulated rents and watered down tenants’ rights, leaving England with the weakest tenants’ rights in almost all of Western Europe. The privatisation of much of the council housing stock has led to the effective collapse of council house-building. While cuts of 60% to Housing Association funding has led to a similar drop in the building of new social housing. The consequences have been drastic, in recent years this has involved the largest surge in housing costs for working class people in Western Europe, with inequalities in housing costs widening at a shocking pace.

The social impacts of this situation have been profound. In 2018 homelessness stood at 320,000 according to Shelter, with approximately 36 people becoming homeless each day. Eviction by landlords has risen as a cause of homelessness much more sharply than any other, indicative of the extent to which unaffordability and insecurity serve as the primary causes of the spiralling homelessness crisis.

While homelessness is the sharp end of the housing crisis, the social damage inflicted by the UK’s housing market is far more wide ranging. According to the Joseph Rowntree Foundation’s 2018 Poverty Report, after housing costs are accounted for more than 14 million households found themselves in poverty, including 4.1 million children and 4 million workers. In 2012[1], 11% of children lived in overcrowded homes – with the trends in both housing and poverty suggesting this problem has only grown during the following 7 years. According to the IFS low-earning households have experienced a 50% increase in housing costs in recent years, compared to a 0% increase for the best off households. And this is all in a country with a notable amount of empty and partly-empty homes.

Over the past few decades we have seen a steep increase in the proportion of private rental accommodation, where inadequate housing standards tend to be more common. Around 3 in 10 people in England now live in ‘bad housing’, rising to 4 in 10 residents of privately rented homes. This illustrates the sheer inaccuracy of the Thatcherite maxims that deregulation will improve standards and of ‘private good, public bad’ when it comes to the housing market.

The UK has been left with vast inequalities of housing wealth, with the geographer Rowan Arundel’s assessment of housing in the UK concluding that housing is not ‘a democratic or widespread asset’ and is ‘starkly concentrated’ among the richer sections of society. Thatcherism’s objective of a ‘Property-owning democracy’ has been no democracy at all.

Where the opposition is

Amid this kind of crisis it ought to be easy for the opposition party to lay out how the UK’s economic model and its housing policies have been a disaster and offer a clear, bold alternative. Instead the party has moved backward almost as much as it has moved forward.

Labour has continually built on its commitments to re-regulate the private rental sector. The party will likely continue to do so given that even Theresa May now advocates scrapping the notorious Section 21 (the ‘no fault’ evictions clause believed to be the biggest driver of homelessness).

While the party has remained firm in its commitments to re-regulate the private rental sector, its commitments on social house-building have been diminished. 2018’s Housing Green Paper from the party contained some worthwhile analysis and some positive pledges, but saw only a relatively mild emphasis on social housebuilding.

As Martin Wicks writes, Labour’s current commitment ‘of £4 billion a year grant for “affordable homes” is the same ‘level of grant available under New Labour eleven years ago’. Though social housing is described in the Green Paper as the ‘core’ of the affordable housing programme, the only specifics offered are a pledge for at least half of these homes to be social housing. This is a weaker version of the policy passed at conference in 2018 – and for that matter the language used in the last manifesto. Given that the shift from social rents to ‘affordable rents’ has played a role in increasing poverty we should be asking whether this is really good enough. This is not just about internal party democracy, but also about the extent to which the party is upholding its claim to be pushing for a ‘radically fairer’ society.

Even in more promising areas of the paper like the discussion of establishing ‘A Sovereign Land Trust’ its ideas ought to be more developed, with the Green Paper only suggesting that such a trust would be charged with purchasing land at closer to ‘existing use value’ – rather than at existing use value. This is a step forward in recognising the damage caused by land being sold off at seriously inflated prices. However, it could still see funding for social housing continuing to disproportionately benefit well-off landowners.

On Social Housing, Shelter have instead advocated the construction of ‘3.1 million more social homes over 20 years… with a cost of £10.7bn a year on average’. A number which falls to £3.8bn when savings in benefits and increased tax take are considered. This is every bit feasible for any incoming Labour government with the will to do so and the will to create the tools to make this process easier. Initiatives such as having social housing built by municipal owned companies (Direct Labour Organisations) and ensuring land is purchased at existing use value would certainly make this possible.

The party also misses a chance to address some of the key questions around Housing Associations. It is time for public oversight of Housing Associations combined with tenant-led democratisation, ensuring that there is real meaning to the social in social housing. And to tackle the rebranding of many Housing Association properties as ‘affordable’ rather than at ‘genuinely affordable’ social rents. After all, the growth of Housing Association homes being let at 80% of market rent risks pushing the sector in the direction of Britain’s unaffordable private rental system. In London this problem has been particularly severe with large numbers of new Housing Association properties being let at higher rates. Where Labour’s 2018 paper advocates improving Housing Associations, its ideas are limited. The launch of the Labour Campaign for Council Housing and the growing strength of other housing campaigns offers some promise that Labour can be encouraged to better live up to its aspirations.

Moving away from the preoccupation with home ownership

Owning your own home, ‘owner occupier’ status, is a key way of providing people with a stable place of their own. Promoting high rates of ownership has been an overarching goal of housing policy among successive governments and frequently used as a measure of success by politicians. This is so much the case in Britain that homeownership has sometimes been derided as an ‘obsession’, while the incumbent Prime Minister has dubbed owner occupation as the ‘British Dream’.

Despite its apparent merits, UK politics’ preoccupation with homeownership has long been a part of the problem. This has been true in two areas. Firstly, the degree of neglect this has caused for the interests of those too poor to make it onto the ‘housing ladder’. And second, to the extent this has promoted the idea of the home as primarily a financial asset.

For those reasons it is disheartening that Britain has still retained a good degree of consensus around emphasising the significance of homeownership. For both Labour and the Tories this consensus hasn’t just been rhetorical.

The Help to Buy scheme, for those purchasing their first home, has mainly benefitted middle and upper income households, while also inflating house prices further. That Labour seem to think the scheme is worthwhile is disappointing. That Labour pledged in its 2017 manifesto to guarantee the schemes funding until 2027 was a mistake.

The scrapping of Stamp Duty for first time buyers (for properties up to £300,000) in late 2017 appears to have had similar effects on house prices. Even though the changes to Stamp Duty were brought in by the Tories, Labour have championed the policy for some time. High levels of house price inflation have led to greater inequality and subsidising that inflation with tax cuts is no way forward. Surely instead we need to be making homes of different types more equal in tenure, giving social and private tenants more autonomy, more affordability and more security.

Community Land Trusts (CLTs) do offer a potential way forward for owner-occupation, putting the brakes on the commodification of housing and offering a model of affordable ownership in which house prices are linked to local incomes. Establishing CLTs could be  an effective way of pushing the sector toward affordable home ownership. Likewise, the ‘Common Ground Trust’ advocated in the recent Land for the Many report (and discussed in much detail by Beth Stratford and Duncan McCann here) could represent an ambitious and viable strategy for affordable homeownership. This would involve an independent trust buying land from underneath buildings and leasing the land back to the resident. The purchase of the land itself would reduce the price of becoming a home-owner due to the extent by which house prices reflect the price of land rather than of the bricks and mortar (which only account for an average of approximately 30% of the property value). Both CLTs and the mooted Common Ground Trust’ could justifiably be funded from the existing subsidy going to schemes such as Help to Buy, cutting Stamp Duty and the resources directed toward building ‘affordable homes’ for sale. This would likely cost more public money in the short term than subsidising private developers, but for much better social outcomes.

It is not clear that such an approach could be as promising as large-scale construction and promotion of social housing. The core benefits of homeownership have been security, autonomy from a landlord, lower costs – at least compared to a typical private rent – and the ability to sell a home off at a higher price. All but the last of these benefits could be delivered by genuinely high-quality and genuinely secure social housing.

 What is key is that there is a recognition that government efforts over the last decades to promote homeownership have had regressive effects – and that this has not been recognised as widely as it should have been. What is at least clear is that promoting homeownership should no longer be the top priority if we want to develop the idea of housing as a social right.

 

Which way forward?

The housing crisis shouldn’t simply be patched up, the sector needs to be remodelled and reshaped in the social interest.

We need quality Council housing, viewed as a public asset and delivered at a scale capable of providing it for all who want or need it. And we need more support for alternative forms like housing co-ops too. We need to acknowledge, and then to address that the financial sector has played a pernicious role in turning housing into an asset and ballooning house prices. And we need a recognition that promoting homeownership and the interests of owners (including landlords) has been put above the interests of the rest of society, with working class people paying the heaviest price. What is most likely the worst crisis of affordability for generations, intermixed with soaring homelessness and obscene inequalities, demands a more serious and full-throated response.

Towards a Social Right to Housing

Developing a social right to housing, for all, will not be straightforward. But Britain’s housing system is a social disgrace, not just since the recession but in the longer term. Fortunately there are some signs that the appetite for change is there.

David Madden recently wrote ‘the ideological consensus of the neoliberal era has been that housing should be privately controlled, debt-fuelled and highly unequal. It will take a lot of work to dismantle this system and build an alternative’. That is exactly the task in front of us – and it will surely mean abandoning old beliefs about how the politics and economics of housing should work.

Housing has been the area in which we’ve seen the largest transfer of wealth to the better off in generations. England’s lack of meaningful tenants’ rights has been a catastrophe, most of all for working class people. The UK’s privatised, unequal and prohibitively expensive housing market simply cannot deliver social justice.

The dream of universal housing and of social housing for all may seem fantastical right now, but they are not unattainable. There are already parts of the world that have made notable steps in the right direction.

In Singapore large swathes of land and housing are owned by the public sector, while this is hardly deployed in the social interest, it is indicative that the way in which our housing market is organised is far from inevitable. In Vienna we see unusually high levels of social housing (around 60% of the population live in such housing), while the substantial majority of land is held in common in Amsterdam. And the UK itself has in the past constructed far more Council Housing, often with better security for tenants, than has been built over the last 35 years.

Housing can be configured in very different ways to that which we see at present.

So why not here and now? And why not bolder than that? Reshaping housing would require some extraordinary changes but these objectives could be more attainable now than we have seen for decades

[1] Mack, J and Lansley S, Breadline Britain, (Oneworld 2015) 45.