The last Parliament saw housing become a truly national crisis. It was the moment when the shortage of homes of all kinds started to touch all corners of the country, and millions of people, on low and middle incomes.
The Housing and Planning Bill is the new majority Conservative government’s first response to this.
The Bill passed the House of Commons stage last night. This followed a lengthy committee stage and the usual Parliamentary ding-dong , including a bizarre episode in which the SNP turned up to complain about the stages of the Bill they couldn’t vote on under EVEL only to leave the chamber for the stages they could. In the end the Bill passed 309-216.
So where are we up to?
Firstly, it is worth stating that there are some positives. There are important steps to improve conditions in the private rented sector and stamp out rogue landlords, along with welcome tweaks to Compulsory Purchase Orders (CPO) and planning law that will encourage more private housebuilding.
Under pressure from Zac Goldsmith and Conservative MPs in London, the government will also at least allow councils in the capital to build 2 new affordable homes for every 1 council home they are compelled to auction off when it becomes vacant under Part 4 of the Bill. Though this is highly imperfect (it’s not clear yet if councils will in practice be able to build council rent homes), it is a worthwhile improvement and gives local authorities a better shot at replacing council homes lost. Tireless lobbying by Conservative backbenchers behind the scenes mean it’s likely this will be extended to other highly impacted areas.
Nevertheless, sadly, the Bill does not meet the scale of the challenge in the country.
In fact, as written, it remains a disaster for the provision of affordable housing for those on typical incomes – representing in sum the single biggest change to low-rent social and council housing in its long history, and in Shelter’s 50 years of existence.
At the heart of the Bill is a significant shift in who the government helps. The Bill spends much of its time not growing the overall sum of effort and investment towards a national crisis, but redistributing existing public resource – towards marginal home ownership products the government know only work for those on comfortable incomes, at the expense of affordable homes for those on lower incomes.
Thus we get Starter Homes – no bad thing on their own terms but paid for by cutting the provision of low-rent social housing, when the two serve very different markets and needs. We get the extension of Right to Buy to better off Housing Association tenants, paid for by forcing councils in expensive areas of the country to auction off badly needed council homes to the highest bidder and hand over sale receipts to central government, instead of moving a new tenant currently stuck on a waiting list into the home. Housing Associations will be able to replace homes lost with middle income products like shared ownership and Starter Homes.
On top of that, the government has taken the opportunity to settle a few long-standing grievances it has with council housing, sneaking through measures to end security of tenure for council tenants (2-5 years will now be the standard offer) and forcing households in council housing earning more than £30,000 (£40,000 in London) to pay market rents.
This is not befitting of a government that voters will expect to be working to solve the housing crisis for all parts of the population, in all corners of the country. It is also not befitting of the huge pool of talent, ideas and thoughtfulness that we know exists on the Conservative backbenches regarding housing.
Indeed, many of the most important interventions in yesterday’s debate came from Conservative MPs whose areas – most of them in areas of high housing pressures – will be deeply affected by the Bill. Their quiet anxiety has been a constant theme of the Bill’s journey.
To be fair, the redistribution of resource is in part a response to a genuine dilemma facing the government. The wide scale nature of the housing crisis has increased the number of people the market does not work for, and thus those looking to the state for help. That group now includes those on middle incomes as well as low incomes. Thus there will always be tricky choices about where money is spent.
But instead of a big bold plan to meet the aspirations and needs of everyone in the country– to fundamentally reform the market and increase investment in homes of all kinds – the government has balked (perhaps at fear of the NIMBY backlash among its own grassroots, or vested interests), and tried to the game the system. All effort is expended to get a few groups of people already close to home ownership over the line, to get the home ownership stats to tick up very slightly, while the underlying drivers of the crisis are perpetuated. One group’s needs and aspirations are played off against another.
It’s a small and at times petty minded response to what is a huge challenge facing the whole country.
This all may seem clever now, but it will create problems for the government in the long-term.
Shorn of help with housing, people on lower incomes will increasingly have nowhere to live but an expensive and unstable private rented sector. Ironically, low-rent council and social housing has always been their best route to home ownership – either through lower rents helping them to save, or using the Right to Buy. Now they will likely remain disgruntled private renters for most of their lives.
At the moment the government is stuck between pretending these people don’t exist, downplaying their number, or feigning the belief that things like Starter Homes or shared ownership will work for them.
But their number will only grow, no matter how they are moved around or attempts made to sweep them under the carpet. They will show up on the housing benefit bill, in Shelter services and, ultimately, at the ballot box.
The Bill arrives in the House of Lords early next month. Shelter will continue working with Peers and the government to influence it.
Meanwhile, you can see Shelter and KPMG’s ideas for a big plan for solving the housing crisis here.