LGA Housing Commission | Tackling the #HousingCrisis

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No.602 | August 2016

Tackling the housing crisis

The LGA’s Housing Commission has launched its first report, looking at the wider benefits of allowing councils to build more homes.

The nation’s housing crisis demands action. Spiralling house prices are forcing difficult choices on families, distorting the housing mix in local areas, and hampering growth. Every local area is different, and housing challenges and their solutions are complex and vary around the country. There is no silver bullet.

Councils want to build homes, and see homes as central to driving growth and propserity. Local authorities are approving 9 in 10 planning applications, providing homes that are needed and are affordable, and that create environments where people are healthy and happy.

The LGA set up a Housing Commission last year to explore how a renewed investment in the different new homes that people need can deliver significant wider benefits for communities, and prevent future public service challenges and costs.

Over the the past 8 months it has heard from developers, planners, charities, health partners, housing associations and many others. Its early findings were published at the the LGA’s Annual Conference in Bournemouth in July.

The Commission’s scope has been beyond bricks and mortar. It has been looking at 4 key themes:

  • how to build more homes;
  • how to create prosperous places;
  • how housing can boost employment; and
  • how it can support our ageing poplulation.

Its interim report, Building our homes, communities and the future: Preliminary findings from the LGA Housing Commissionfinds councils should be enabled to help build more homes that plug gaps in the market, particularly building the next generation of affordable homes, homes meeting the needs of those in crisis, and to support our ageing population.

Cllr Peter Box, LGA Housing spokesman said: “Our Housing Commission aims to build on what we know works so that councils and our partners can lead the building of homes, communities and prosperity for future generations.

“Bold new action is needed in the wake of the UK’s decision to leave the European Union, and local government must come together around our joint ambition to build homes and strong inclusive communities.

“Investment in housing has significant wider benefits and we want to build the right homes in the right places that can generate growth and jobs, help meet the needs of our ageing population, and provide the infrastructure, schools and hospitals that enable communities to thrive.

“We must be freed to make this change happen.”

The work of the Commission continues, and its findings and evidence will come together in a final report later this year.

This will form the basis for LGA activity with councils and our partners, alongside other priority areas such as responding to national building reforms, improving conditions in the private rented sector, and supporting efforts to reduce homelessness.

Housing Commission report – at a glance

1. How to build more homes
The last time the country built more than the 250,000 houses a year it is estimated the country needs was in 1977/78 – when councils built 44% of new homes.

Private developers have only been able to build an average of 90,000 a year since 2009/10. In 2013/14, this represented 77% of all new homes. In comparison, councils were only able to build 1% of all new homes in the same year.

The Commission recommends:

  • Government should provide national backing for new local government housing delivery models building new and different types of homes, which could include new intermediate rent, rent-to-buy, modular housing and co-housing options.
  • This must coincide with a revitalisation of council house building by allowing councils to keep a greater proportion of Right to Buy receipts, and to combine receipts with Homes and Community Agency funding.

2. How to create prosperous places
Housing investment has substantial wider benefits for people and places. It has a vital role to play in improving health, creating jobs, boosting educational attainment, and enabling social cohesion.

The Commission recommends:

  • Allowing councils to set planning fees locally so that they can cover costs, and continue to develop a proactive planning approach for unlocking housing growth
  • Developing powers for councils to ensure homes are built on sites where planning permission has been granted but building may have stalled.

3. How housing can boost employment
A good mix of housing stock is critical in attracting both employers and workers to an area, and housing providers play a leading role in helping their residents to gain the skills to find jobs and progress in their careers.

4m working people will need access to some type of affordable housing even if the country achieves full employment by 2024, new research published by the LGA reveals.

Widespread demand for affordable homes will be much higher should the country fail to train millions to take the higher skilled and higher paid jobs that are projected to be created by 2024.

The Government can support this by:

  • Actively devolving the key responsibilities and services to encourage economic growth such as housing infrastructure, skills, and employment support.
  • New partnership commitments at the national and local level should be forged to increase the mix of homes, alongside new approaches for supporting households that need help to find work, improve skills and increase their earnings.

4. How housing can support our ageing population
Between 2008 and 2033 around 60% of projected household growth will be made up of households with someone aged 65 or older.

The aspirations and needs of older people are growing and diversifying, and there is a need to plan the mix of housing that responds to demographic change and creates inclusive communities.

The Commission recommends:

  • Creating a new market for homes that are attractive and suitable for older people and better able to meet health needs which, in turn, would release more family homes into the local market. A sustainable funding model needs to be established to provide more supported housing options for vulnerable people
  • The Government develop a viable funding model that enables local housing and health partners to increase the mix of quality specialised and supported housing options to rent and buy for older and vulnerable people

LGA First | Helping residents in the private rented sector

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April 2016

Helping residents in the private rented sector

Betsy Dillner

Over the past decade, the housing market has undergone an earthquake. With house prices out of reach in much of the country and a shortage of social housing, increasing numbers of people have no option but to rent from a private landlord. As a result, the population in the private rented sector has doubled in the past decade, and now outnumber social tenants.

The response of local authorities to this trend has been mixed. Some have long recognised the challenges facing increasing numbers of their residents, from rents costing more than half a household’s income to chronic negligence of landlords towards the condition of their properties. A number of pioneering councils have introduced landlord licensing to streamline the enforcement process, and are thinking creatively about how to build more housing at social rents.

But conversations Generation Rent has had with councillors and tenants reveal that some in local government still have a lot of catching up to do. Often we get the impression that the only people they’re interested in are council tenants and leaseholders, despite the fact that more of their constituents rent from a private landlord – including many on council estates.

This is understandable given that local authorities have a lot more power and responsibility over their own stock, but it seems easy for them to forget that it’s also their job to enforce standards in private rented housing. One tenant told us that after months of trying and failing to get her landlord to fix a leak in her bedroom she, quite reasonably, called the council’s housing department. Instead of passing her on to environmental health, they just advised her on how to apply for social housing.

Another tenant related a conversation he’d had with a council candidate who was out canvassing. Asked what he would do for the 1 in 3 local people who rented privately, the candidate rambled enthusiastically about “staircasing”. He didn’t win. [NOTE to councillors: of you say this word to private renters, they’re more likely to think you’re talking about the landlord finally fixing that loose bit of carpet on the way to the first floor].

To be fair to councils and their members, they might not have taken notice of private renters because we’re not a loud presence in local politics. Private renters have no idea whether they’ll still be living in the same borough – let alone the same home – in a year’s time, so they are less likely to be engaged in their local community, and less likely to coalesce into local renter groups in the same way that social tenants have.

This has been changing over the past few years, with groups emerging in boroughs that have seen rapid change in the housing market; including inner London, Oxford and Brighton. Generation Rent is a national group giving these local groups a voice in the national debate, and nurturing campaigns where tenants need representation.

One activity we have on a local level is research into letting agents and the fees they charge through the website www.lettingfees.co.uk. Local authorities have responsibility to ensure that letting agents publish their fees, so we hope that this will be a resource for them as well as local flat-hunters. The research will also help bring together local activists, and help develop a relationship between the council and its private renter population.

And with local authorities set to gain powers and resources from the Housing & Planning Bill, we hope they start giving local renters in the private sector the attention they need.

Betsy Dillner is Director of Generation Rent

For more information about Generation Rent visit www.generationrent.org

 

LGA First | Making sense of housing policy

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No. 597 | March 2016

Features | Making sense of housing policy

Cllr Peter Box

Councils are keen to build more homes and the LGA is working hard to ensure proposed housing reforms don’t make that job more difficult.

Councils share the Government’s ambition to increase house building and enable home ownership.

From the outset, the LGA has been working privately and publicly to try to mitigate any of the potential negative impacts and unintended consequences of Government housing reforms on behalf of councils and local communities, But it is clear that the Housing and Planning Bill has wide-ranging implications for local communities.

Measures within the Bill – currently being debated in the Lords – risk combining to reduce the number of existing council homes, which local authorities will be forced to sell and then struggle to replace.

This could lead to an increase in the Housing Benefit bill as more people are forced to move into the more expensive private rented sector. This will do nothing to help councils reduce homelessness and the use of temporary accommodation.

The LGA has opposed plans to force councils to sell off homes to fund the Right to Buy extension to social housing, and a mandatory Pay to Stay policy [see below] and the provision of Starter Homes at the expense of affordable homes to rent. Meanwhile, we have been working at real estate services provider, Savills to understand the impact of these housing policies, as part of our effort to make the case for additional flexibilities to Government, Parliament and partners.

Plans for Starter Homes at discounted prices, for example, will help support home ownership in some areas but will nbe out of reach for all people in need of affordable housing in 220 council areas, according to Savills. We have argued that councils must have the flexibilities to shape the number, location, types and quality of Starter Homes to ensure that they meet local need, alongside other affordable homes for rent.

The LGA also strongly opposes the proposal to require councils to charge mandatory market-based rents to higher income tenants, and to take a sum of money from councils based on a national estimate of the additional income from higher rents. Many social housing tenants across the country will be unable to afford market rents or take up the offer to by their council house under this policy.

This Pay to Stay policy needs to be voluntary for councils – as it will be for housing associations to protect social housing tenants, and avoid hard-working families being penalised, people being disincentivised to work and earn more, and key workers, such as nurses, teachers or social workers, having to move out of their local area. Councils must also retain any additional income generated from rents to reinvest in new and existing homes.

The LGA insists the extension of Right to Buy to housing association tenants must not be funded by forcing councils to sell off homes. As a minimum, the LGA forecasts councils would be forced to sell 22,000 ‘high value’ homes in order to fund this extension.

This number could be much higher depending on how the Government chooses to define ‘high value’. Councils should always be free to manage their assets to meet the needs of local communities and must retain 100% of all receipts to reinvest in new and existing housing.

The LGA will continue to firmly make the case – in both private and public – regarding the importance of councils playing a  lead role in house building, reducing homelessness and benefits, and enabling home ownership.

Cllr Peter Box is Chair of the LGA’s Environment, Economy, Housing and Transport Board.

Analysis: Impact of the Housing and Planning Bill

Savills and the LGA project that 66,000 council homes will be sold to tenants under the existing Right to Buy scheme by 2020.

Local authorities could then be forced to sell a further 22,000 ‘high value’ homes by the end of the decade to fund plans to extend the scheme to housing association tenants. This could vary depending on how the Government defines ‘high value’ for different areas.

Required rent reductions, of 1% a year for the next 4 years, take £2.2bn from council housing budgets by 2020 – making building replacements extremely difficult.

There is a risk that of the 88,000 homes sold up to 2020, 80,000 will not be replaced. This will add £210m to the Housing Benefit bill.

Forcing councils to sell off homes to fund the extension of Right to Buy to housing association tenants could cost councils £6bn by 2020, according to Savills. A total of 5,500 homes would be sold each year should ‘high value’ be defined as the top third value of the regional market.

Discounted starter homes will be out of reach for all people in need of affordable housing – defined as those who would have to spend 30% of their household income to buy or rent a home – in 220 council areas [67%], and for more than 90% of people in a further 80 [25%] council areas.

Should the Pay to Stay policy be mandatory for all social tenants, around 50% of tenants deemed high income in the South East, East of England and London would not be able to pay market rents or take up Right to Buy, and would need to move out of the area to find a similar property.

SavsMa_451
The areas of the country that need affordable housing that can afford a Starter Home

FURTHER READING:
LGA Media Release Starter homes will be out of reach for majority of families in need of affordable homes in England  [17 February 2016]

LGA First | The future of housing

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January 2016

The future of housing

The LGA has launched a Housing Commission to explore new ways in which councils can enable the building of more homes

Cllr Peter Box CBE

Councils built nine times more homes between 2010 and 2015 than between 2000 and 2005, and are desperate to dramatically increase the availability of new homes in their local areas.

This is vital to building the 230,000 new homes the country needs each year, as private developers have not buolt more than 150,000 a year for more than three decades.

The LGA’s recently announced Housing Commission will set out a forward-looking vision for the future of housing, and explore new routes to housebuilding so councils can enable the creation of more desperately needed homes.

It will also explore the importance of effective housing in boosting jobs and growth, helping meet the needs of an ageing population, saving social care and the NHS money, and helping people into work.

It will focus on four themes:

  • House building – new ways that councils can enable investment in new homes;
  • Place making, community and infrastructure – the role of councils in shaping homes within prosperous places and communities;
  • Employment, welfare reform and social mobility – the role of housing in supporting tenants to find work; and
  • Health and quality of life for an ageing population – the role of housing in adapting to an ageing poplulation and preventing onward costs onto social care  and health services

We are looking for evidence on the key issues for communities, partners and councils, on good practice that has successfully addressed those issues, and what is needed to build on those successes.

We want councils, partners, organisations, and individuals to contribute their issues, evidence, and examples of effective housing and ideas to the Commission’s Advisory Panel, made up of examples and academics [see below[.

The Commission will take a medium-term view incorporating current housing reforms but will look beyond them in making the case for councils to be able to deliver the homes our communities and places need.

We’re working with Ministers to ensure housing and planning reforms support council efforts to build more homes, and the Housing Commission will investigate how the Government and councils can help to deliver houses to solve our housing shortage.

Councils must be able to play a lead role in building the homes we desperately need, and building the homes in a way that creates prosperous places and growth, helps people into work, and positively adapts to an ageing population.

This is the best way to meet local and central government ambitions for our communities, to reduce waiting lists and housing benefit, keep rents low, and help more people live long and happy lives.

Fact file 

The Housing Commission is led by Town Hall leaders on the LGA Housing Board supported by an expert Advisory Panel including:

  • Catherine Hand, Partner, Trowers and Hamlins
  • Chris Wood, Partner, Altair
  • Dave Simmonds OBE, Chief Executive, Inclusion
  • Professor Jo Richardson, Director of Centre for Comparative Housing Research
  • Neil Revely, Chair of ADASS Housing Network
  • Sue Adams OBE, Chief Executive of Care and Repair England
  • Will Colthorpe, Argent LLP, Chair of British Property Federation Development Committee

All contributions to the work of the Commission are welcome.

If you wish to make a submission.please send no more than 3,000 words to:
LGAhousingcommission@local.gov.uk
before 26 February 2016.

The Commission’s findings will be published in the Spring and presented at the LGA’s Annual Conference in July.

Cllr Peter Box CBE is Chair of LGA’s Environment, Economy, Housing & Transport Board