Q. How do you toe the line between the organisation’s commercial activity and its social purpose?
We don’t see a distinction between social and commercial because the overriding question is ‘what is the organisation for?’ Our core purpose is to build more housing for those who can’t afford market housing. Everything else is a means to an end.
There’s an increasing number of people who now can’t afford to be first time buyers, and in some cases can’t afford market rent. There’s no one providing any housing for that category of people. There’s a lot of people on £20,000 to £30,000 a year who now can’t afford to live in London. Our client group is broadening because of the way the country’s changing, the way the economy has changed and the way the workforce is remunerated, and we have to respond to that.
We thought let’s take the strength of the London and south east housing market and use that to our advantage. So we built up what we then called our 2:1 model. We could basically build two homes for sale and then provide enough profit to build an affordable home.
Q. There are critics who say that money invested in commercial activities is costing the UK new social homes. How do you respond to those allegations?
The easiest thing to do is sit on our hands, do nothing and say the government has turned off the money tap and therefore we can’t do anything. If anything, the housing crisis has got worse and it would be irresponsible to do nothing so we mounted this building for sale programme.
If that means building £250,000 flats in Enfield or Dagenham, well both builds houses and gets people into an affordable home. At the moment in the Isle of Dogs we’re building a 120-odd unit tower called Dollar Bay, the penthouses of which will go for way north of £1m. The profits from that are going to be able to subsidise building submarket housing for rent.
If One Housing Group and others were not generating cross subsidy then there would be a lot fewer affordable homes built – and that would simply exacerbate the situation.
Q. You believe that it’s the housing associations that are not being commercial enough that are damaging social housing?
There are hundreds of housing associations across the country who no longer develop any housing. Where I’ve got a question mark is where they are sitting on assets that have been publicly funded. It should be in the DNA of every housing association to build more homes. To have assets not being used to build when there are so many people who can’t afford homes is absolutely wrong.
Q. You called the social housing allocations process outdated in a recent live discussion. What do you think is wrong with the current system?
There’s a good example right outside our offices. It’s 200 units of all social housing and Camden council understandably insisted on 100% nomination rights. But we ended up with working households who wanted to leave the estate because it was welfare dependent, there were no role models for kids and there was antisocial behaviour.
That was the last estate we did that was 100% socially rented. Now it will be some for sale, some for shared ownership, some for intermediate as well as social rent. Despite the best of intentions, across the road from Primrose Hill, we’ve got people who don’t want to live there.
Q. Your critics would say you just want to select the most financially independent applicants to be your customers.
It’s not about that. It’s about recognising the fact that range of people who are experiencing difficulties in housing themselves adequately now is wider than it was 20 years ago. It is those people in low-paid employment, or on minimum wage – we’ve got to recognise that impacts on people’s ability to get a mortgage or pay a market rent in London. The social housing machine doesn’t recognise any of that.
Q. London is constrained by the green belt. As a London housing association that builds new homes, how do you deal with that?
One of the reasons not enough homes are built is how the planning system determines what land should be used for. The green belt is always seen as classic English countryside, but if you go around the M25 you can see bits of it that are, at best, golf courses. At worse, scrap metal dealers or bits of intensive agricultural farm land.
We’ve got 14 underground stations in the green belt so we can’t build around them. Wouldn’t it make sense to build 500 units around each of those tube stations, to a good density, and good design and all the rest of it. Well we can’t. There are so many powerful bodies such as the Campaign to Protect Rural England that politicians run a mile from challenging the green belt.
Q. When you’re up against such a powerful lobby group, how do you approach trying to change people’s minds?
We’ve got to make the link between Mr and Mrs Smith’s sons and daughters not being able to buy or rent a home of their own and the planning process. Until we get that perception across we are doomed.
Q. As funding has changed, so too has the way in which housing associations are regulated. How do you feel about some of the recent changes?
I think perhaps now we’re seeing the era of regulation come to an end in some respects. Things started to go wrong at Cosmopolitan in an era when the Housing Corporation was an intrusive regulator and the Audit Commission was there. It seems perverse to say the way to prevent another Cosmopolitan is to go back to more regulation when a more intrusive regulation system didn’t prevent it from happening in the first place. I’d rather see no regulation of housing associations. I think it needs a complete rethink.
Q. What would happen when a housing association fails?
Let it fail. Don’t assume that an organisation has got to be rescued. The regulator role should be to manage the transfer of that failing housing association into a more successful one so its tenants are protected and the public investment in the assets is protected as well. That’s all you need. All the other stuff that occupies 80% of the regulators time you don’t actually need. At the moment we’re preserving organisations for the sake of preserving them.
More stories like this:
• Who is affordable housing for? – live discussion
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