To put it lightly there’s been quite a bit of discussion this week about how, as a nation, we aren’t building enough homes to satisfy demand (more/Orr views here). For a couple of days, the National Housing Federation report on the housing crisis got air time, print coverage and - perhaps most remarkably of all - even drew the unlikely phrase "I agree" from the lips of the Housing Minister. Perfect timing then to drop a brick of good news into the pool of despond with our announcement that we will be building 200 more affordable homes in our borough, an area where there is desperate demand for such properties.
You might think this blog would be a fairly straight-forward, celebratory piece. However, as much as I’d be happy to give the press release view, one of the reasons I started this blog is to give some insight into what goes on behind the headlines. In which case, although I’m greatly pleased by the announcement of new homes, I should point out that before accepting the conditions of the catchily-named Affordable Homes Development Framework there has been six significant months of deliberations and debate.
A bit of background first – the Affordable Homes' initiative, was formally announced last year in the Comprehensive Spending Review and it was, by all accounts, a last-minute addition. Scurrilous rumour has it that it was only after our naval battleship capacity was downgraded that the capital to fund the programme was found. Before that development there was precisely no provision for new housing in the review. Consequently, THT working in partnership with colleagues in other Housing Associations and with Trafford Council, applied for funding and we were successful in securing £4.335m of Government funding towards the cost of building the new homes in Trafford. So far, so simple; so where’s the complication? As you might have guessed it’s in how these things are paid for…
The balance of the costs, £17m, will be met from increased borrowing and to make sure we can repay that extra debt we need to change the way rents are set when some of our homes are let to new tenants. We will now be able to charge an “Affordable Rent”, representing up to 80% of the market rent, on selected properties. This will not affect the rent that existing tenants pay in their current property, but for those moving into one of our properties for the first time, the rent they will pay will be higher.
It was on this point that the soul-searching has begun. I have personally struggled with the question of whether it’s right that the new properties should be charged at higher rents in order to pay for new development. In the end, my conclusion was that in the case of Trafford this was the right thing to do. My Board was clear about the need to address the acute shortage of affordable housing in Trafford and the ever-increasing housing needs, evidenced by a Housing Register of some 10,000 applicants.
However, this need to increase rents to Affordable Rent levels caused much debate, particularly around the issues of fairness (some neighbouring and similar properties will have different rents) and affordability for people on low incomes. Ultimately, with the knowledge that rents would be below market levels, that the most vulnerable who want a home from us will see no change, with assurances that the housing benefits system will address the affordability issues and with the Government’s promise that Welfare Reform will ensure that nobody is worse off if they take up employment, the board believed that if we are to make progress with key missions – such as the Old Trafford Masterplan and the provision of Extra-Care schemes in the area – then we had to take this route.
It seems absurd to greet the announcement of 200 new homes, the places where 200 families can thrive, with anything but joy. Clearly, if it were that simple it wouldn’t have taken six months to decide! In the long-term there are other issues to address, namely that although 200 is a decent number we still have a 10,000 strong waiting list. Perhaps my gravest concern though is that in the long-term this form of house building just isn’t sustainable. As I write, plans are afoot to create the successor to the affordable housing regime and I hope that it recognises the legitimate place of public funding for regeneration so that in time we can add more and more zeroes to the number of new houses we’re announcing.
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A bit of background first – the Affordable Homes' initiative, was formally announced last year in the Comprehensive Spending Review and it was, by all accounts, a last-minute addition. Scurrilous rumour has it that it was only after our naval battleship capacity was downgraded that the capital to fund the programme was found. Before that development there was precisely no provision for new housing in the review. Consequently, THT working in partnership with colleagues in other Housing Associations and with Trafford Council, applied for funding and we were successful in securing £4.335m of Government funding towards the cost of building the new homes in Trafford. So far, so simple; so where’s the complication? As you might have guessed it’s in how these things are paid for…
The balance of the costs, £17m, will be met from increased borrowing and to make sure we can repay that extra debt we need to change the way rents are set when some of our homes are let to new tenants. We will now be able to charge an “Affordable Rent”, representing up to 80% of the market rent, on selected properties. This will not affect the rent that existing tenants pay in their current property, but for those moving into one of our properties for the first time, the rent they will pay will be higher.
It was on this point that the soul-searching has begun. I have personally struggled with the question of whether it’s right that the new properties should be charged at higher rents in order to pay for new development. In the end, my conclusion was that in the case of Trafford this was the right thing to do. My Board was clear about the need to address the acute shortage of affordable housing in Trafford and the ever-increasing housing needs, evidenced by a Housing Register of some 10,000 applicants.
However, this need to increase rents to Affordable Rent levels caused much debate, particularly around the issues of fairness (some neighbouring and similar properties will have different rents) and affordability for people on low incomes. Ultimately, with the knowledge that rents would be below market levels, that the most vulnerable who want a home from us will see no change, with assurances that the housing benefits system will address the affordability issues and with the Government’s promise that Welfare Reform will ensure that nobody is worse off if they take up employment, the board believed that if we are to make progress with key missions – such as the Old Trafford Masterplan and the provision of Extra-Care schemes in the area – then we had to take this route.
It seems absurd to greet the announcement of 200 new homes, the places where 200 families can thrive, with anything but joy. Clearly, if it were that simple it wouldn’t have taken six months to decide! In the long-term there are other issues to address, namely that although 200 is a decent number we still have a 10,000 strong waiting list. Perhaps my gravest concern though is that in the long-term this form of house building just isn’t sustainable. As I write, plans are afoot to create the successor to the affordable housing regime and I hope that it recognises the legitimate place of public funding for regeneration so that in time we can add more and more zeroes to the number of new houses we’re announcing.
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