I saw an interesting wee documentary last night, how to get a council house on Channel 4. It showed the trials and tribulations of staff and prospective tenants in Tower Hamlets London caused by the chronic shortage of social housing in and around many major UK cities.
The demand for council houses is greatly exceeding supply in many parts of the UK. To such an extent, that there is a 5 year wait even for those classed as Category 2, thats usually people who are genuine hardship cases but already have some sort of roof over their heads…even if that roof is a single room with no lockable door, bed bugs & a pregnant wife (as it was for one couple) or mums settee (for another) or a family living in a single persons flat (which they were about to be evicted from). Others can wait as many as 10 years. And thats 5-10 years before they even show you a flat, which might be some dingy hovel, and you can only say no three times or you go to the back of the queue. Each week in Tower Hamlets 24,000 claimants try to get their hands on an average of 40 available properties.
And before anyone starts giving out about welfare claimants living on benefits or immigrants from Romania, most of those interviewed were actually employed and as British as bangers and mash. There is a common assumption that everyone in a council estate (nice history of the UKs social housing system here) is on benefits (or foreign), when in fact many are working class people who simply dont earn enough to be able to afford the exorbitant rents private landlords charge and/or are unable to get a mortgage. For people in this position a council house is a valuable life line. Otherwise they would be forced to give up their job and move away to somewhere less crowded (uprooting kids from school, etc.).
And of course the financial crisis has seen many drift into long term unemployment, unable to get a job despite their best efforts and thus forced to rely on state benefits. Many of these people are subsisting on housing benefits, which means taxpayers are paying their private rent, when if they could get a council house, the cost to the taxpayer would be reduced, better still if that council house puts them closer to a source of employment (or further education & training which then leads to a job).
Of course as one of those interviewed pointed out we have one person in particular to thank for the state of social housing and the enormous shortage of council house Thatcher. In 1980 she brought in one of her flag ship policies, which was to allow tenants the right to buy their own council house.
Now on one level you have to admire the marketing genius of this policy. Essentially the Tories wanted to gut the social housing system of the UK but get the poor saps who relied on it to pay the costs of doing so. Its kind of like the chocolate ration being lowered in 1984 being cut from 30g sold to the people as it being raised to 20g.
The consequence of this tory policy was that Britains system of social housing was devastated. While exact statistics are difficult to come by (I went by the you.gov site but got an access denied when I tried to get the exact statistic, youd swear the government was trying to hide something! ;D ) but its widely believed the policy led to the loss of between 1.3 million and 1.6 million council houses countrywide. Hence the current overcrowding. It is perhaps the part of Thatchers legacy that most directly impacts the lives of many in the UK.
And while some tenants made a mint out buying their council house at a massive discount (hardly being careful with tax payers money!) and then after a few years selling it at the peak of the boom. But for most it was a poisoned chalice. As theyre house was part of a largely council owned block they still had to pay maintenance fees to the council. And as many of these properties werent in great shape such maintenance bills were often high, particularly when labour came to power and began much needed repair of what council housing stock remained (notably by improving insulation and air tightness standards thus reducing winter heat bills). But some of those who owned their own home in those blocks would then be expected to pay tens of thousands of pounds to cover their share of such refurbishment costs.
Also, some who bought saw very little if any significant increase in their homes value, as prospective buyers found it difficult to get a mortgage (banks are often reluctant to give mortgages for council housing blocks as they worry the owner has no control over what the council will do with the building). This means in some areas of the UK, if youve been foolish enough to buy a council house, the only way youre going to sell it is by letting it go for below the market value. Which can be a bit of pain if you want to move away cos youve got a job at the other end of the country!
In short many of those who took up the right to buy found it to be little more than a millstone around their necks. The only winners from the right to buy scheme ultimately were the casino landlords who cashed in on the UKs housing crisis, as well as the spivs and speculators in the banks who were more than happy to let and unsustainable housing bubble develop…and then cash in from it going pop!
So whats to be done? Well obviously enough increasing the stock of council housing is a good start, however thats difficult with the Tories current housing policy. In Ireland one of the few things we got right during the boom was, based on the 1998 Bacon Report, a policy of requiring that 20% of all new housing developments had to include affordable homes. This led to a significant increase in the supply of affordable homes as well as an overall drop in rents across the country (unfortunately it was a case of too little too late and failed to stop the property bubble over inflating).
I would propose a similar policy for the UK, but one that requires that such affordable homes be made available for rent to local authorities. And in some overcrowded parts of the country Id raise it to 50% of all homes in any new development. This might seem harsh, but for a developer in London pulling in half a million a pop on a property development per flat, he can afford to toss a couple of the less desirable ground floor flats the way of the council and still make a mint. And if landlords or developers do kick up stink, point out to them how many other major cities in the world have rent control policies, which I suspect theyll like even less!
And as Ive mentioned before, in other parts of Europe social housing is taken much more seriously. One Council housing block in Germany is actually a world heritage site!
Of course the chances of the Tories adopting such a policy are somewhere between slim and none. While they talk the talk about affordable homes (problem is they seem to have a warped view of what counts as affordable), but Camerons government seem committed to finishing what Thatcher started. They are for example urging cash strapped councils & housing associations to sell off their existing stock of council homes or even pull them down and let developers put up flats.
Fearful that all those they are making homeless might dare to try and squat in the UKs 450,000 empty properties (mostly privately owned I might add), theyve tightened up the law and made squatting a criminal offence.
And of course theres Osbornes own right to buy scheme which is sort of like Thatchers policy on steroids. Inevitably the fear is it will gut what remains of the UKs social housing network and simply funnel profits and property to already wealthy casino landlords and likely lead to another housing bubble.