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NPF Reports review: Housing

Housing, which was covered by the Communities policy commission, is now incorporated within the Housing, Local Government and Transport Policy Commission. It has met three times between February and April.  Given the breadth of this remit, there appear to only have been a limited focus on housing issues. According to the annual report, concern about the Right to Buy scheme was mentioned at the first meeting apparently because this was the focus of motions passed at the 2016 conference. The second meeting discussed the impact of leaving the EU on housing. The third meeting was attended by Eileen Short from Defend Council Housing and Alistair Smith from the National Housing Federation. This discussed the powers of councils to tackle rogue landlords, the need for public land to be used to build social and council housing and how to help first time buyers onto the housing ladder. The policy commission does not appear to have met since the general election. As the election was unexpected, there was no time for the Commission to meet to discuss the manifesto, though regional and local government members were phoned for comments.

The manifesto was very brief on housing, promising more affordable homes and better standards for private tenants – in fact the Conservative manifesto had much more detail on policy reforms especially in relation to increasing new housing supply. John Healey, the shadow housing and planning Minister wrote a more detailed mini-manifesto, using much of the material in the Lyons review of housing published last year, but the publication was delayed by the Manchester terrorist attack and only released two days before the election so got little attention – the only proposal to get coverage was the idea of a stamp  duty holiday for first-time buyers – Labour again focusing attention on the squeezed middle rather than those households who have no hope of getting on the housing ladder, who could be referred to as ‘the squashed bottom’.

The policy forum report gives little impression that the Labour Party is thinking seriously enough about measures to deal with the current crisis – the continuing reduction in the supply of social rented homes, the spiralling unaffordability of the market sector in much of the country, high rents and poor conditions in much of the private rented sector, and poor management and conditions in much of the residualised public sector brought to our attention so acutely in the Grenfell Tower fire. With all this focus on ensuring security from terrorist attacks protecting the country from terrorism, we cannot give people security in their homes and protect them from being burnt alive. The policy forum report mentions the need to build 100,000 council and housing association homes over 5 years – not a very ambitious target, but gives no indication of how this will be funded.  It mentions a ‘consumer rights revolution to improve standards, security and affordability for people who rent’ and that is it.

So what should we do? This is my programme as set out in my recent book Radical Solutions to the Housing Supply Crisis, Bluntly, if we are to increase affordable housing supply, and replace the worst of private sector provision, we need massive investment, and to fund this investment we need tax revenue. To reduce housing benefit payments before we have increased affordable supply would be catastrophic. This is a 20-30 year programme.

We have not learnt the lessons of the 2008 credit crunch and in fact we have had a housing deficit whether the country has been in boom or bust. It is time to throw off long held ideological assumptions as to ideal forms of tenure and the relationship of state to market. There is a systemic problem which cannot be corrected by short term measures and more radical solutions are necessary if the housing market is to be stabilised and the delivery of new homes increased. We need to recognise that if we are to tackle inequity in wealth and opportunities, we need to tackle inequity in housing which is now the central component in inequity between households both within and between geographical areas. It is also central to the growth in inter-generational inequality.

The first priority for any incoming Government should be to repeal the 2016 Housing and Planning Act, with the exception of the rogue landlord clauses. The last Housing and Planning Minister, Gavin Barwell, realised that this legislation would do nothing to increase housing supply, whereas if actually implemented, it would both reduce social housing supply and the security of new social housing tenants. The Grenfell fire has understandably shifted the Government’s priorities, but we need to ensure that making existing council housing safe should not be at the expense of building new affordable rented homes.

The second priority is to redirect current Government housing investment and increase the overall level. This means stopping all forms on subsidy, whether direct or indirect, to owner occupied properties and households and new development for individual or corporate private ownership.

The Government should reinstate a programme of capital grant to social rented provision through councils and housing associations on the basis of secure tenancies and controlled rents.

The third priority should be a systematic reform of policy on planning and land. The Government should draw up a national spatial plan which identifies general locations for residential and employment growth supported by planned transport, social and utilities infrastructure.

Local Planning Authorities should be required to allocate housing sites to meet the full housing requirements in their area, or, where this is not possible, reach agreement with neighbouring authorities in their sub-regional or city regional planning area as to identification of residential development capacity.

Local planning authorities should also have the power to compulsorily acquire any housing site allocated in an approved plan at Existing Use Value (EUV). This is essential if the cost of development in higher value areas is to be reduced significantly. Where a Local Planning Authority grants planning consent for a private development, they should have the power to take an equity stake in the development, so part of any subsequent value uplift is repayable to the authority.

The fourth priority should be to ensure reform the regime of land and property tax so it supports housing policy objectives rather than obstructs them. Stamp duty on purchase of residential property should be replaced by a tax on the capital gain on land and property on disposal. Inheritance tax should be revised to increase the tax on the transfer of land and residential property through inheritance. Higher rates of taxes should be introduced for higher value property.  Rates of tax on individual property should take into account the level of occupation of properties – properties which are under-occupied to be subject to a multiplier relating to the level of under occupation, with penal rates for vacant property. There should be no limits on the ability of local authorities to set rates of council tax. This would enhance local democracy and reduce the dependence of local authorities on grant from central government.

The core components of reform to the housing market and housing supply are land, ownership, money and power. These are fundamental issues, and any proposition, whether from Government, political parties, academics or practitioners, which fails to operate within these parameters will be inadequate. We must return to a housing policy based on effective use of residential accommodation rather than a policy based on individual asset appreciation.

Duncan Bowie is a lecturer in housing and planning at the University of Westminster and author of Radical Solutions to the Housing Supply Crisis (Policy Press 2017) and The Radical and Socialist Tradition in British Planning (Routledge 2016)

6 Comments

  1. JohnP says:

    This is all good stuff from you Duncan, but the NPF itself doesn’t appear to be coming up with anything solid in terms of policy proposals to meet our Manifesto house building ambitions.

  2. C MacMackin says:

    A good, informative article with concrete, realistic solutions. As is the pattern, the commissions have done no work to develop policy, despite ample material being available for them to draw from.

  3. David Pavett says:

    This article is really helpful. Unfortunately it shows yet again how the Policy Commissions are falling down on the job.

    Everyone in Labour agrees that housing is a key issue but few are prepared to work on it. When they do and even produce extensive materials as Duncan in his recent book (linked in the article) and in works like Rethinking the Economics of Land and Housing (2017)
    by Josh Ryan-Collins, Toby Lloyd and Laurie Macfarlane these have no discernible influence of Labour Policy. There is no record of them being discussed. They are not listed as materials used (nothing is). The whole approach is completely slipshod. Strong, feasible and coherent policies were never produced in this way.

  4. Bazza says:

    Excellent points and I support all of the recommendations here.
    I got a resolution passed at my branch and CLP the other year (for the undynamic National Policy Forum) on a comprehensive housing programme which included bringing back taxes on private landlords with multiple properties (scrapped by the Tory/Lib Dem Coalition Govt).
    I also tried to think creatively and said we could explore looking at mortgages where you bought 50% of the property and got the rest on a 120 year lease like some houses in conservation areas.
    The only gaps I failed to address were the ownership of banks, building societies, and land and perhaps we need to explore the first two and the third is covered here.
    On a personal note – just got back from a 2 day break in Liverpool and I have never seen so many homeless people on the streets.
    Even on the famous Mathew Street (and not far from The Cavern) a homeless couple had made a doorway their home with little bits of household things including touchingly a small brush and dustpan (they were both fast asleep in their sleeping bags as we passed one lunchtime).
    Heartbreaking stuff indeed and a call to action by a future Labour Government that is even bolder than 1945!
    Solidarity!

  5. Paul Dias says:

    Very interesting piece.

    I would add a fifth priority: to proof the fruits of the first four priorities against future privatisation.

  6. Peter Rowlands says:

    A party that is serious about policy development would have people like Duncan as key consultants, but it appears that this is not the case. We obviously need to take the policies he is advocating on board, or at least debate them.To be fair to the party however, this was the only policy commission area where a separate mini manifesto was produced, as Duncan points out.

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