Housing and the old Labour comfort zones

[Tim Lund]

Whether or not it's fair to say that

Hyde Housing are awful

looking at their behavour overall, rather than Lee's recent experience, it still backs up my impression that many people don't want to live in social housing, not necessarily because of any kind of snobbery, but because social landlords are not seen as being very good.

Again, this may or may not be fair, but it's something many on the Left are in denial about, as in housing, like other issues, they prefer to retreat to their comfort zones. I raised it in an email to one would be London 2016 Mayoral candidate recently, linking to a blog I wrote elsewhere, referring to the Sydenham Labour Party meeting last year with Dianne Abbott:

On the Left, the typical evasion is to think only about social housing. We need more social housing, and local councils should have more freedom to build it; of all involved, local councils are best positioned to help increase overall supply. But most people don’t want to live in social housing: tellingly, at the public meeting I attended, there was significant dissatisfaction with the performance of both Housing Associations and local authority housing management.

How to Evade the Housing Crisis: A Guide for 2016 London Mayoral Candidates

So thanks for the additional evidence.

Meanwhile, I'm brushing up on my German, having learned recently that since the 1980s there has been a system whereby typical rent levels have been published by municipalities, so providing one essential element of what is needed for a rental market to work well. The lack of such data is an open invitation for tenants to be ripped off.

A German lesson in rent controls

(Sorry about the paywall )

It is a mystery to me how a system for capping annual rent rises, which is just about to be introduced in areas of Germany with high demand, can be seen as eviidence for anything, other than what people hope might happen. For me, the experience of 30 years and well established economic theory about the value of open data count for rather more.

[leenewham]

many people don't want to live in social housing, not necessarily because of any kind of snobbery, but because social landlords are not seen as being very good.

So the solution should be to improve the landlords.

Look at Coin Street.

[Tim Lund]

If the stories are real, then it's not unfair is it?

This thread started as a moan about Hyde housing and a fence. I'm not sure it's the right place to talk about social housing in general or label all social housing as somewhere people don't want to live. Infact, I think that is unfair.

Social housing for many, my grandparents included, a necessity. Coin street shows what can be done when properly run.

It's true, some people focus on one aspect of housing as 'the one solution' to the problem, when it's clear that it's a complex problem that will need a variety of remedies and ideas to combat it. But that's debate for a place elsewhere.

Please don't hijack this thread to make it a place for charts, data and a cry for 'building more housing'.

Apologies again for making these comments as written on the original thread, but there is still a case for making the connection between this sort of anecdotal evidence, which is a pointer to how many people think, and what politicians say. Otherwise, politicians and activists can just carry on talking about social housing as they would like it to be, and not as ordinary people perceive it - fairly or not. It's the sort of thing which leaves open space for the Conservatives to win votes with policies such as extending the right to buy to Housing Association tenants. And while know you had no intention of undermining the reputation of Housing Associations in general, you must admit that starting a thread with the title "Hyde Housing are awful" will do some small amount to damage.

It also doesn't help to say "Social housing for many, my grandparents included, [is] a necessity", because accepting necessities is not what most people aspire to. It would be better if there were housing options, other than ownership, to which people did aspire. There was a time, in the post war era, when Council housing would have been such an option. There are plenty of good Housing Associations, which will include some smaller ones, such as I suspect Coin Street, where there is a sense of connection between the management and tenants, and surpluses are recycled to the benefit of existing tenants. It works well for them, and being in a prime location such as Coin Street will help. But such HAs are not representative, and they are not the ones which will provide all the new homes which those on the Left hope to provide the new housing which they say they want.

Now, as it happens, this time I wasn't making a plea for more housing - it just seems that is the only part of what I write about housing that you hear. In fact, I went on to make an argument for a type of government regulation in the rental market which would make the market work better, specifically by removing the letting agents' information advantage, which, unsurprisingly, the use to rip off tenants. It would be part of the solution to a complex problem, since it would remove some of the sense of helplessness of private rented sector tenants - on which here's a link which might be of interest

Bricking it – starting a family without a foundation

But since you mention it, we do need more homes, and given what might called 'Peak unaffordability', there are going to be many more young families who cannot, indeed should not, get on to the housing ladder, so the twin big issues for this upcoming generation is how we get more such homes, and how we get better management of rental properties, both private rented and social.

[Tim Lund]

many people don't want to live in social housing, not necessarily because of any kind of snobbery, but because social landlords are not seen as being very good.

So the solution should be to improve the landlords.

Look at Coin Street.

I was writing my last post as you wrote that, and you'll see that I say improving the landlords is one of the two twin challenges. But getting all existing rented properties as well managed as Coin Street will not do anything about overcrowding, which is why we need more supply.

As to how the landlords, private or social, could become more like Coin Street - well, that would take too long. But I hope we can agree that just saying 'more social housing' as the solution to the housing crisis is glib and simplistic.

[leenewham]

If someone says that they had a bad experience with an airline, does that mean all airlines are bad?

Why is stating something that is true 'not helpful'?

We need more housing, we need better housing associations, we need rent controls, we need to distribute demand for housing by having a more balanced economy across the UK, we need to stop housing being seen as an investment, we need to change how places are bought and marketed and a host of other ideas including how immigration works to solve the housing problem.

I agree, just saying 'more social housing' is as stupid as saying 'just increasing supply will solve the housing crisis and bring prices down'. As I've said all along, it's a complex problem that will need a carefully considered set of solutions for both the long and short term.

One opportunity we have is to move parliament to the centre of the UK so the Houses of Parliament can be repaired (which will save billions) and used for something else, such as a museum etc. We need to take the heat out of the London economy.

[_HB]

This is timely and makes for thoroughly depressing reading.

http://www.theguardian.com/cities/2015/ ... wainwright

This City is going to be like Blade Runner when the next crash comes. I think I might move to Greece.

[leenewham]

Good article HB.

So we are building lots of overly expensive property?

A studio for a shade under 600k in elephant and castle plus maintenance fees!

This says to me that new builds actually push prices up. Unless the new builds are cheaper than the market base, then prices will continue to accelerate.

[_HB]

Yeah, and underlines the point here that just building isn't enough. If anything, tougher restrictions on what developers can build is needed (if that article is anything to go by). Plus rent controls and some kind of land tax (LONG OVERDUE).

Really quite obscene that the Heygate can be developed with so much profit going to developers and so little thought given to social/affordable (whatever) housing. No thought about community cohesion, ethnic and cultural diversity. Lip service paid to things like green space and sustainable living/travel. Because those things don't look very good on a spreadsheet in the accountants office at the developers HQ.

You can point fingers at developers but ultimately successive generations of politicians are to blame IMO.

[Tim Lund]

If someone says that they had a bad experience with an airline, does that mean all airlines are bad?

I went out of my way to say your writing this would only have a marginal impact, but the difference here is that people will associate Hyde Housing with HAs in general, rather than ways in which housing in general might be consumed, to use the economics jargon. If I said I'd had a bad experience with, I don't know, Air Turkmenistan (I haven't), then it would tend to undermine the reputation not just of this distinguished carrier, but those from neighbouring 'Stans which flyers might think of as in the same group. Similarly if I had a bad experience with a budget airline. Say you have a bad experience with one of the large HAs, and it will hurt the reputation of others, but not the reputation of alternative ways of getting a roof over your head, such as owner occupation.

[Tim Lund]

So we are building lots of overly expensive property?

We're probably building lots of over specced properties, a point I tried to convey by referring to underground swimming pools on the 'Affordable' housing thread

I'm sure all this new build round the Elephant is very good quality, but I'd have preferred it if somehow the planning system had diverted the developer's investment into delivering a larger number of more modest but still acceptable homes - but Nimbyist aesthetics divert it the other way.

A studio for a shade under 600k in elephant and castle plus maintenance fees!

This says to me that new builds actually push prices up. Unless the new builds are cheaper than the market base, then prices will continue to accelerate.

The reason these new flats will sell at a higher price than those they replace is because they will be of a better standard, and better managed. Why they should be better managed amounts to asking why all landlords can't be like Coin Street.

If new builds so close into the centre of London were priced below the price of existing flats - which is what I'm taking you mean by market base - they either they are going to be even worse than the flats being demolished, or you need some kind of bureaucratic system to decide who should get them - with all the opportunities for corruption that such processes bring with them, e.g. as discussed here

Illegal council flat subletting

[Tim Lund]

Yeah, and underlines the point here that just building isn't enough. If anything, tougher restrictions on what developers can build is needed (if that article is anything to go by). Plus rent controls and some kind of land tax (LONG OVERDUE).

I suspect most people know that rent controls are not a great idea, since they deter people from letting out properties they own, so leading to fewer people living in the same amount of housing stock. It also means that tenants whose controlled rents are significantly less than they would otherwise have to pay have an incentive to stay put, when otherwise - new job opportunities, wanting to downsize - they would move on, again freeing up supply.

We already have some kind of land tax - Council Tax - but I'd agree 100% that land taxes in general should be increased, and reformed, so that they are less arbitrary. But, sadly, it is now probably a lost cause until such time as the Labour Party, or whatever emerges to replace it, recover from the Ed Miliband experience.

You can point fingers at developers but ultimately successive generations of politicians are to blame IMO.

Indeed.

[_HB]

The reason these new flats will sell at a higher price than those they replace is because they will be of a better standard, and better managed. Why they should be better managed amounts to asking why all landlords can't be like Coin Street.

I don't think anyone is disputing that but £600k for a modest flat in a crappy bit of London just puts another line under the absurdity of the housing market in this city.

If new builds so close into the centre of London were priced below the price of existing flats - which is what I'm taking you mean by market base - they either they are going to be even worse than the flats being demolished, or you need some kind of bureaucratic system to decide who should get them - with all the opportunities for corruption that such processes bring with them, e.g. as discussed here

Apart from a handful of very highly specced penthouses they will all almost certainly be of the usual, depressing rabbit hutch layout with flashy but cheap fixtures and fittings and everything else built to a minimum standard. The only reason they can get away with speculatively pricing them above the going rate is because the market in London is so absurdly overheated.

And we're back to the politicians.

[_HB]

I suspect most people know that rent controls are not a great idea, since they deter people from letting out properties they own, so leading to fewer people living in the same amount of housing stock. It also means that tenants whose controlled rents are significantly less than they would otherwise have to pay have an incentive to stay put, when otherwise - new job opportunities, wanting to downsize - they would move on, again freeing up supply.

Maybe not rent controls as such then. But better protection for tenants, longer tenancy, limits on rent increases etc more like de facto rent controls. I'm not convinced that these kind of measures necessarily mean reduced supply in the way you suggest.

[JRobinson]

@_HB yes indeed, re: Heygate, Southwark council have a lot to answer for with the way this was handled. The huge sums paid to the developer (Lend Lease?) the guarentee of affordable housing for previous tennants, the compulsory purchase prices of previous owner/occupiers, etc, etc, the list goes on. The figures are out there on the interwebs, probably on http://www.London-SE1.co.uk somewhere, but Southwark sold the land for something like a single figure of millions, and the developer stands to make tens of millions of profit from the sale of the none affordable properties, the green space being built has been reduced from the original plan, and even though it's said as being the largest amount on any developement in recent years in central London, the net result is still less than was there originally!
it's a modern day equivalent of slum clearence! it's despicable that they'll get away with ruining peoples lives, pushing up local house prices, kicking out the poorer people, and generally making E&C a less nice place to live for those locals who've not been forced to move out. Shame on Southwark Council.

[Tim Lund]

This is timely and makes for thoroughly depressing reading.

http://www.theguardian.com/cities/2015/ ... wainwright

This City is going to be like Blade Runner when the next crash comes. I think I might move to Greece.

I agree it's depressing, but I don't share your exciting Blade Runner fantasies. The centre of London will become more like central Paris, or as Kensiington, Chelsea & Westminster are already, ghettos for the very rich, with a few old tenants on controlled rents hanging on in there. It's beyond, in the 'burbs and banlieus, that there will be isolated large scale developments where social problems fester, with harrassed Housing Association managers desperately trying to live up to the responsibilities foisted on to them by the complaisant residents in the centre.

[Tim Lund]

@_HB yes indeed, re: Heygate, Southwark council have a lot to answer for with the way this was handled. The huge sums paid to the developer (Lend Lease?) the guarentee of affordable housing for previous tennants, the compulsory purchase prices of previous owner/occupiers, etc, etc, the list goes on. The figures are out there on the interwebs, probably on http://www.London-SE1.co.uk somewhere, but Southwark sold the land for something like a single figure of millions, and the developer stands to make tens of millions of profit from the sale of the none affordable properties, the green space being built has been reduced from the original plan, and even though it's said as being the largest amount on any developement in recent years in central London, the net result is still less than was there originally!
it's a modern day equivalent of slum clearence! it's despicable that they'll get away with ruining peoples lives, pushing up local house prices, kicking out the poorer people, and generally making E&C a less nice place to live for those locals who've not been forced to move out. Shame on Southwark Council.

I'm with you here, although I suspect the problem is bigger than Southwark Council.

Can I try a return to the call for more transparency I made in the OP?

It is a mystery to me how a system for capping annual rent rises, which is just about to be introduced in areas of Germany with high demand, can be seen as evidence for anything, other than what people hope might happen. For me, the experience of 30 years and well established economic theory about the value of open data count for rather more.

The same principle should apply to viability assessments.

The problem with Labour is that it prefers its old comfort zones - sentimentalising about social housing, bashing wicked landlords with rent controls, when they, as representatives of the political classes, are probably more responsible for the problem.

I'd not say transparency was everything, in the same way that there is more to solving the housing crisis than building more homes, but a credible long term challenge to the Conservatives has to embrace transparency, in the same way that any long term solution to the housing crisis has to embrace increasing supply.

[Eagle]

I contend we are in Lewisham and surrounding areas building thousands of units. Never seen so much development in all my years .

There may already be too many new units for the infrastructure in the area.

[leenewham]

It's not just the spec.

They charge such huge fees because they can, because they know property will go up in price, because they know people will buy it, because they know that if they do, in the future the buyer will make a profit because they know the prices will go up.

This is how new flats are actually being marketed.

Listen to the radio.

Or look at these:
http://www.telegraph.co.uk/finance/prop ... ondon.html

http://www.telegraph.co.uk/finance/prop ... ondon.html

There isn't a single home for sale in London for under £100k
http://www.londonlovesbusiness.com/prop ... 20.article

We need more health centres, schools etc to go with these properties. I'm not seeing much evidence of this.