A co-operative future for increasing housing supply

David Rodgers


We should follow the lead of the Welsh Labour Government and implement co-operative ideas to meet housing demand, writes David Rodgers.

Challenging the Conservative-led coalition government’s policies that are not in the national interest is the Labour and Co-operative Parties’ responsibility whilst in opposition.  That is easy with housing policies which are socially damaging and divisive and have abandoned any attempt to ensure that housing supply meets demand.  It is right to oppose the destabilising social consequences of housing benefit cuts and caps that will result in the poor being evicted and what Boris Johnson accurately says will lead to the “Kosovo style social cleansing of London”; cuts that are being challenged this week in the High Court by the Child Poverty Action Group.

Likewise, the planned loss of security of tenure in social housing and its replacement with two year fixed term tenancies. What incentive is there to put down roots and try to improve your personal circumstances if, in two years time, you will be out on the streets looking for high cost private rented housing in an overheating rental market? The pernicious cut of 13% of housing benefit if you have a spare bedroom, however long you have lived in your home or however much it is adapted to your needs, is particularly harsh for the disabled and the elderly.

Add to these measures the use of Orwellian language in the Government’s new “affordable rent” regime and the pernicious policy mix is complete.  This requires registered social housing providers, if they want grant from the national affordable housing programme (cut by 60%), to charge rents up to 80% of market rents.  In the numerous high-cost areas of the country, 80% of market rents will be unaffordable to the majority of working households and inaccessible to benefit claimants whose benefit is capped at 30% of local market rents. The Government’s aim of delivering 150k “affordable rent” homes before the next election is a poverty of ambition in the face of an acknowledged annual demand for new homes of 270k per annum, of which 70% need to be genuinely affordable to low to average income households. This poverty of ambition is a failure in social responsibility and intergenerational justice at a time when housing output is at its lowest level since 1924.

Reform of the planning system is vital if more homes are to be built, but not at the price of abandoning national housing supply targets to laissez faire localism and the Housing Minister’s refusal, in a Localism Bill in which 142 powers are  reserved to the Secretary of State, to exempt affordable homes built on land owned by a community land trust from being lost through leasehold enfranchisement.

What is a greater challenge than simple opposition to these policies is to propose new ones that will enable housing supply to meet demand and will appeal to the electorate at the next general election.  This is particularly the case at a time of severe fiscal constraint and economic turmoil created by the consequences of the deregulation of global banking. That is why it is good to see the thoughtful and analytical review of Labour’s housing policies under Ed Miliband’s leadership by the Shadow Secretary of State for Communities, Caroline Flint MP.

Finding new ways to meet affordable housing demand will require the next Labour government to be innovative and creative. Co-operative and mutual forms of housing tenure have been recognised by the independent Commission on Co-operative and Mutual Housing to have a unique potential to enable housing needs to be met. Why? Because the evidence shows that they create communities that are socially, economically and environmentally sustainable. They also have a unique capacity, through long-term mutual ownership of housing on community owned land, to draw-in new sources of long term investment from pension funds and other institutional investors. This is because they can offer investors the security of assets in long term, stable,  co-operative ownership which generate robust cashflows and annual inflation proof yields that match the investor’s obligations to beneficiaries.

Will the next Labour & Co-operative government at Westminster be the first to encourage and legislate for these new forms of co-operative and mutual tenure? Perhaps not.  Huw Lewis AM, the new Labour Co-operative Minister for Housing, Regeneration and Heritage in the Welsh Government, has publicly stated his intention to deliver the Welsh Labour and Co-operative Party manifesto commitment to increase housing supply by developing new co-operative and mutually owned homes in Wales.  His aim is to increase co-operative housing’s contribution to housing supply to the European average of 10%. Where Labour & Co-operative leads in Wales the rest of the UK will ultimately follow.

 

David Rodgers is the executive director of CDS Co-operatives, the largest co-operative service agency in the south of England and the elected President of the International Co-operative Alliance Housing Sector Organisation. He was one of the commissioners on the Co-operative and Mutual Housing Commission and the author of the Co-operative Party pamphlet ‘New Foundations:  unlocking the potential for affordable homes’.  He writes in his personal capacity as a Labour and Co-operative Party member.

David is pictured above in his role of ICA Housing President talking to a manager of Yeşilkent-KOOP in Istanbul.  This is a Mass Housing Project developed by 35 Housing Cooperatives organised under the umbrella of the Union of Yeşilkent Housing Cooperatives. There are 3,200 housing units built in 45 blocks on 200 hectares of land, allocated by Gürpınar Municipality.