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POLITICAL COMMENT: Let’s boost social housing and supply of new homes
10:00am Thursday 27th February 2014 in News
Buy this photo » Oxford City Council is starting work on two new developments of council homes. Cllr Scott Seamons, council board member for housing, is pictured at Broadlands Mill, Old Marston, development Picture: OX65514 Mark Hemsworth
We all know that Oxford is in the grip of a major housing crisis. Thousands are on our housing waiting list, average house prices are approaching £400,000, and “affordability”, whether for those looking to rent in the private sector, or to buy a property, is a disaster, with the relationship between private rents and incomes, or house prices and incomes, worse than almost anywhere else in the country.
Oxford is now quite unusual in not only requiring 50 per cent of new housing developments to be “affordable”, but for 80 per cent of that housing to be “social rented”.
This means rents for the new properties are at a level of around 40 per cent of market levels.
This flies in the face of the Tory/Lib Dem government policy – they argue that new “affordable” housing should be at 80 per cent of market levels.
We’ve been told that we will only get Government grants for new homes if we agree that most will be at this higher level, and housing associations are also being instructed to double the rent on properties when they become vacant, so that new tenants have to pay the new, “affordable” rent.
In doing this, the Government hopes that the higher level of rental income will be reinvested in new housing. But it is a critical miscalculation.
First, rents are so expensive in Oxford that “affordable” rents at 80 per cent of the market level are simply not affordable for people on modest or even middle incomes.
By my calculations, someone renting a three-bedroom house at this “affordable rent” level would need to be earning at least £34,000 per year to be able to afford it – actually well above the average for the city.
Secondly – but related – what this means is that more tenants would have to rely on state support to fund their living costs.
This would drive the nation’s housing benefit bill higher still.
It is worth remembering, every time you hear a Government minister complaining about “soaring benefit bills”, that by forcing council and housing association rents up, they are actively making the situation worse.
The other major change the coalition Government has introduced is that councils and housing associations are now able, and indeed encouraged, to offer short tenancies (often as short as three years) to their tenants.
The idea is superficially attractive – when people no longer need the property, they are reassessed, move out, and a place is freed up for new tenants.
However, in practice it is a disaster. It sends an awful message to tenants: if you do well and get an income above a certain level, your landlord can end your tenancy and force you out of your home.
It means that increasingly areas of council and housing associations homes will have in them a concentration of the very poorest in society, rather than having a genuinely mixed community.
It puts council and housing association tenants in the position of being “second-class citizens”, without the security of those who own their own homes.
In Oxford, we haven’t introduced these new, time-limited tenancies in our council stock, and discourage housing associations from doing so.
I’m in favour of a completely different vision of social housing – where council and housing association homes are once again available for local people of all backgrounds, at a rent they can afford, and in particular to the growing number of Oxford people who stand no chance of buying a house, can’t afford private rents, and are in effect being forced out of the city they love.
I also want to see the same level of security enjoyed by council and housing association tenants as for owner occupiers.
This would make a huge difference to our city, and would save the Government money on the housing benefit bill too.
There are two things that would need to happen, though: first, Government would need to prioritise investment in social housing. And second, we need greatly to increase housing supply, even if it means offending a few people in the process.