As political parties attempt to outdo each other with promises about the number of new homes they would build if they win the general election, housing associations are rushing to complete the number of homes promised earlier.
Labour wants to see 200,000 homes a year built by 2020 while the Green party says it will build 500,000 social rented homes. But for all the political promises about the number of homes a new government will build, the government has little control over the figures. However, the one area that the government could control was in how much social housing was built. But that is quickly changing.
As the funding available in the affordable homes programme – the pot of money available for housing associations to build new homes for rent – shrinks, many housing associations are looking elsewhere for money to build homes. As the government’s definition of “affordable housing” creeps away from what most people think of as affordable, we find ourselves asking: how relevant will government funding be in future?
The affordable housing programme has changed beyond recognition under the coalition. Grants became smaller while the rents that social landlords had to charge increased.
It has marked a big turning point. For the previous four years the affordable housing programme has been crucial to building new homes, but the changes that have been made to its make-up have shown a failure to understand what the poorest people can afford. It has meant that many housing associations have had to make their own money – and has underlined the diminishing role of the state.
As the current four-year affordable homes programme comes to an end and housing associations fight to hit the 70,000 new homes target, a detailed look at the cause and effect of the programme on ground level reveals some uncomfortable truths.
Foremost, setting an uncompromising deadline is deeply flawed. Anything can happen on a build to delay completion as you are reliant on so many things. Moreover, the production of affordable housing is an ongoing process; it does not begin with a target and end at the deadline. So while they may be ticking boxes in government, on the ground it creates artificial boom-and-bust cycles that put high demands on contractors, who are already in short supply. It is a challenge to even get contractors to bid on certain schemes, as their order books are often completely full and those that do bid have raised their costs as they are aware of the deadlines.
In addition to this, the change in the guidelines on affordable homes has made things yet more complicated. What was once called social rent became affordable rent and prices increased to up to 80% of the market rate, a big hike from previously. This has led to complex discussions with our local authorities about the level of rent, about what people can afford, who qualifies for housing and whether the people on the waiting lists who may struggle to pay those rents would be put forward for housing.
Finally, the substantial cut in the grant has meant housing associations have had to diversify and create new businesses and partnerships to generate profit to replace the lost subsidy.
While quotas are set to try to ensure success on paper, they can work against us on the ground. The government’s latest programme has taught us three things: first, that their deadlines and targets are artificial and as long-term businesses we need long-term programmes; second, that their changing guidelines are moving further away from the requirements of the people most in need, simply to succeed in the numbers; and finally, that their cuts mean they are failing to adequately support their purpose.
Meanwhile, housing associations have a very real job to do and a duty to deliver truly affordable homes that meet the incomes and requirements of the people who need them. In practice this has led to our aims and agendas becoming ever more conflicting. Moreover, as the government makes further cuts to funding, the onus is on housing associations to deliver these houses outside of the affordable homes programme and outside of the control of politicians.
I predict that next time round will be a changing story for affordable housing. The government may set its deadlines and targets but will have far less control over the number and tenure of affordable houses being built. All things considered, I don’t think that is such a bad thing.
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