Housing Policy 4


Housing: approaches to policy

by Trevor Locke

Part 04

Providing better housing stock

I looked at the need for joined-up policies to improve the supply of housing and now move on to considering the factors that play a part in approaches to the supply and provision of housing. One issue stands out for me and that is whether this country is currently making the best use of its existing stock of housing.

Making better use of existing housing stock

It has often been said that the issue confronting policy-makers in housing is not the supply of new housing but making better use of existing housing stock. In April, The Guardian commented that ‘housing needs to be at the heart of economic policy’ [Guardian, 2015] This editorial argued that ‘The squeeze on new homes and the shortage of social housing has produced a runaway private rental market. That has driven up the overall cost of housing benefit and inflamed the shortage of homes as those who can invest in buy to let do so.’ The article refers to the work of Danny Dorling, who argued that ‘housing is the defining issue of our times. Tracing how we got to our current crisis and how housing has come to reflect class and wealth in Britain, All That Is Solid radically shows that the solution to our problems – rising homelessness, a generation priced out of home ownership – is not, as is widely assumed, building more homes. Inequality, he argues, is what we really need to overcome’ [Dorling, 2015] More refurbishment of existing housing stock is something supported by Dorling. The Guardian editorial thought that only the Green Party (in the 2015 election) provided ‘a thread that runs through almost every aspect of its policies’ and concluded by saying ‘housing needs rescuing from speculation and restoring to its rightful place, at the heart of economic and environmental policy.’ [ibid] Commentators maintain that the BTL measures in the 2015 summer budget will lead to sharp increases in rent levels as landlords pass cost increases on to their tenants [Dean, 2015]

One element of this debate is to do with property conversion in the cities. More and more buildings are being converted into apartments and one aspect of the solution to the housing crisis is to convert existing properties into affordable accommodation. In the city this has been met with a degree of success. There has been an increase in the supply of apartments created from buildings that have fallen into disuse. In Leicester, the city centre (in the area known as the Cultural Quarter) has many old factories that have been converted into flats. This has renewed an urban area that had fallen into neglect and disrepair. It is a pattern that has been repeated across many cities in the Midlands. These conversions were not new-builds; they involved re-generating properties that had become empty and disused, bringing them back to life to provide homes for people who choose to live in the inner city. Not the best homes for families, but more appropriate for young urban professionals, childless couples and older single people. That development creates a supply that frees up properties that would be more suitable for families, allowing younger single people and students to move out of houses that are suitable for families. In Leicester we have seen moves to transfer student accommodation away from using terraced houses, that are more suitable for families, to purpose-built student units. Many student houses have been built (or converted from existing stock) that are exclusively for students and this has enabled older stock, more suitable for family occupation, to be brought back into general use.

How credible is it to reuse existing housing stock? A team at University College London reviewed the evidence on this issue, looking in particular at the energy use of buildings as one factor in deciding whether to refurbish or demolish them. The team came to the conclusion that ‘There is a growing body of research suggesting that extending the life cycle of buildings by refurbishment is preferable to demolition in terms of improved environmental, social and economic impacts.’ [UCL, 2014]

Critics and commentators on housing have long pointed to the fact that many properties are unoccupied and have called for empty properties to be brought back into use. ‘Powers designed to help English councils bring empty homes back into use were used just 17 times in 2014, according to figures obtained by the Green party MEP Keith Taylor’, reports the Guardian. [Osborne, 2015] It was the Labour government that introduced empty dwelling management orders in an attempt to give local authorities powers to bring buildings back into use. In England, over half a million houses lie empty, buildings that could be brought back to house families. Empty dwelling management orders (Edmos) were introduced by the Labour government to make it easier for local councils to take possession of properties that had fallen into disuse. The orders allow a council to take temporary ownership of an empty home while it works with the owner to make it habitable and bring it back into use. There are of course a variety of means through which Councils can deal with the problem of houses lying empty and bringing them back into use. What is clear from the data is that there are lots of them.

In the rural areas the supply of affordable homes poses problems. The typical ‘barn-conversion’ is well outside what young working people can afford. These are conversions for the wealthier sections of society or for people who can afford second homes. I would argue that change of use conversions could provide affordable housing in the countryside, more quickly and less expensively then new-build, to meet the growing demand for homes for working people. We see some hope here; the Government announced plans, in August 2015, that aim to increase the availability of housing in rural areas, whilst protecting the Green Belt. This comes in the Rural Productivity Plan which pledges to deliver of starter homes at a 20% discount for first time buyers under the age of 40 [DEFRA, 2015]. There is a shortage of starter homes for young, first-time buyers. Added to this the need for homes for last-time buyers (older people down-sizing from large family houses) which some companies are now meeting with retirement homes and villages. It is at the age ends of the housing demand spectrum that most pressure is felt and I return to these all important issues below.

Our housing stock is not well-managed. Much of it lies empty, derelict or neglected in the urban areas. Local authorities have not been keen enough to identify empty houses and bring them back into use or to enable developers to convert derelict properties into accommodation. The land-owning shires are oriented to the supply of land for new build. Yet, a lot of rural properties are either disused, poorly used or are suitable for conversion but deliberately left empty. Somehow, the landed gentry, many of whom are members of rural councils, fail to see this. Those who lose out the most, due to the current short-fall in housing supply, are working young people. Nearly half of all young people now rent accommodation, both flats and houses. In 2011 the Government published a statement on Providing Affordable Homes for Rent updated recently in the Policy paper: 2010 to 2015 government policy: rented housing sector [Department for Communities and Local Government, May 2015]. The government claimed that it was improving the quality and quantity of properties for rent, both in the private and social sector. Measures now being taken include the of funding local authorities to refurbish their housing stock and encouraging more investment in the private rented sector through schemes like new loan guarantees and the Build to Rent Fund, among others. These actions stemmed from the publication, in November 2011, of the policy paper Laying the foundations: a housing strategy for England [DCLG, 2011]. It reflected the Government’s desire to get the housing market moving again and they admitted that they would not achieve this by attempting to control the housing market from Whitehall. There was a realisation that it is only at local level that housing management can properly be carried out.

If the goal is to supply a balanced mix of housing options, then only local bodies can achieve that. As some have suggested, there needs to be a radical overhaul of housing associations. Private sector supply is also needed but policies need to balance the rights and security of tenants with the incentives of property owners to continue to invest in the market or to enter it. If the balance swings to far in the direction of tenants, the supply could be jeopardized. Likewise, giving too much power to property owners leads to insecurity and poor standards for tenants. If a local housing market is controlled by landed gentry, then the full range of options are likely to be ignored. Policies geared to urban environments tend to fall short when applied to rural situations. If this country had a stronger lobby for social housing, it is likely that we would also see a better management of our existing housing stock, instead of an obsession with new-build. Several news reports this year have focussed on opposition to proposals to take land out of the the green belt for large-scale housing developments. Why is it that commercial developers like green field sites and new builds so much, when large quantities of buildings remain unused or poorly used in the urban areas?

Not all existing housing stock can be made better. It some cases it would be better to replace older housing with new; pre-war terraced housing can be improved but in many ways it would be better to replace it with new build constructions that have higher standards of insulation and energy use. With urban land being in short supply, we need new models of house building that replaces old stock with new units that use the same footprint of land but which can be constructed on site in much less time and at much less cost than units based on traditional methods of construction. This suggests the far greater use of components that are fabricated off site, the use of cheaper and environmentally better materials and constructions that can be erected with less labour. These days it is perfectly possible to design modular housing materials that can be put together very quickly with the resulting dwelling being a fraction of the cost of a traditional brick-built house. These cheaper homes could off-set the cost of demolition of old buildings. We do not need to buy up vast swathes of green land to solve the housing crisis; what we need to do instead is to replace old homes with new ones on the same sites. More and more people want to live in cities; they do not want to have to commute (into areas of higher employment) from green belt estates. City life offers many cost-saving advantages, principally in travel to work.

Make better use of land

In our small islands, land is in short supply. There are many conflicting demands on the use of land in Britain. Some of it has to be used for farming, some for sport and leisure and some forms part of our national heritage and natural assets and, as such, needs to be protected from any kind of development. Planners created the green belts as a way of ensuring that urban areas did not become conflated into extensive concrete jungles. There is pressure now to relax local planning in the interests of housing development and green belts are under attack. In my view this is a grave error, primarily because it is so unnecessary and reflects an obsession with new build that is unwarranted. Having green belts was a sound and sensible policy intended to enhance the quality of life of people living in their vicinity. There is no need to encroach on them in order to increase the supply of new-build housing. Other alternatives to poaching green belt land makes far more sense. Foremost among these, I argue, is making better use of urban land.

More should be done to rescue and recycle brown field sites, industrial areas that have fallen into disuse. There is enough land to meet the need for housing and business development, even in the finite limits of our group of islands. There is enough land if we take an objective approach to its use. The problem is that brown field sites can cost more to develop than green field ones. To put it another way – there is less profit from the development of brown field sites compared to the profits that can be made from exploiting virgin land. Land shortages however and the long time it takes to secure permission for greenfield developments, could well see an increasing interest in brownfield. Really, it is not that simple. Some developers have had the foresight, imagination and resilience to both develop brown field land and to make a reasonable profit from doing so. I am not referring here to heavily contaminated land or land that is riddled with mining subsidence. The kind of land I am thinking of, is where a change of use can be effected without inordinate costs of cleaning or repairing it. In urban areas, in particular, land use is not as good as it might be. Local authorities do not have sufficient powers to compulsorily purchase neglected and unused land that has been left vacant by speculators in the hope that land prices will rise. In the 2015 summer budget, plans were announced to grant automatic planning permission to build on deserted industrial sites. The government proposals also include improved powers of compulsory purchase that could increase the supply of such sites. Land that is already given over to housing does not require complex planning consents; it is a simple case of knocking down an old house and putting up a new one in its place. Huge amounts of money are being spent on applying for planning permissions for rural green land. That process is exacerbated by protesters who are opposed to developments in their rural back yards. All of this is unnecessary. We should not be building new housing in the countryside; we should be putting housing into our existing urban landscapes.

Our country cannot afford land speculation given the crisis in housing supply and the growing needs of industry and commerce as the economy grows. Speculation in property did find a voice in Cameron’s conference speech this year and proposals are already in place to deal with the problems created by those who want to invest, speculatively, in the housing market. This is not the same as encouraging investment in housing; we do want to encourage capital to flow into housing but it must be geared to long-term housing need. Cameron talked about providing housing that could not be sold on quickly to make a quick profit. Buy To Sell is not a good way of managing housing supply and he seemed to have grasped that. The challenge to policy makers is to encourage investment in bringing new homes on to the market and ensuring that they stay available to those who buy them for a reasonable period of time. Providing homes for families who want to settle in them for five years seems very reasonable.

One of the big challenges for housing management, over the next ten to twenty years, will be the supply of land that is suitable for housing. The floods of 2013/14 highlighted the lack of planning and foresight by developers who built on flood plains. The Government wants local planners to ‘take full account of flood risk, coastal change and water supply and demand considerations’ [DCLG, 2015] English house builders have not been good at water management when developing new-build sites on land previously used for farming. As sea levels rise, many coastal areas will become uninhabitable and people will be forced to move inland to homes on higher ground. This movement of house owners to areas not prone to flooding or coastal erosion needs to be planned for now – not when it becomes a national crisis in the future. As thousands of houses are destroyed by rising seas levels, demand for new homes will put even more pressure on housing demand. Is the Government and local authorities planning for this? They seem to be but concerns are many that the Right To Buy proposals will create shortages of affordable social housing, where stock is not replaced when it is sold. The government is reforming the planning system, moving decision making to the local level as part of the National Policy Planning Framework, published in 2012 [DCLG, 2012] Getting local planners to take account of flood risks and drainage is a stated goal of the government. So far, so good. But the inability of property developers to manage water, both by building in the wrong place and through inept attention to water table levels, is something that policy makers will have to get to grips with. This cannot be done without national co-ordination. Part of that involves giving local authorities the powers to enforce standards of local water management.

Dealing with the short-fall in housing supply

It is good to see builders trying something new. The British building industry has never been good at innovation; bound to traditional ways of doing things, slow to change and reticent to innovate, British builders are not known around Europe for their leading edge practices. In Germany, Austria and other countries builders are more inclined to try new ways of tackling housing supply. OK, there are some notable exceptions to this in Britain.
Custom build, for example, represents one way of thinking outside of the box. Companies that have tackled new ways of designing and building housing are breaking the mould by following projects that have been a success on the continent. Governments have not however had any road to Damascus moments when formulating their housing policies. National and local governments must become more aware of the possibilities offered by new ways of doing things in the building sector. Government must be prepared to encourage innovation in house building. Mention has been made above of modular units constructed off site that can be assembled quickly and that use less labour to finish a construction. Materials that are cheaper and more environmentally beneficial offer advantages for this approach to building. It is these new materials that are likely to see a decline in the use of the standard clay house brick.

In Manchester, the Great Places Housing Group is having a go at custom build. The Self-build and Custom Housebuilding Bill 2014-15 received royal assent as the Self-build and Custom Housebuilding Act. The government launched a loan fund (in June 2014) to enable building of self-build homes. The encouragement of self-build is now finding a place in the policies of many political parties. We also see the emergence of new kinds of dwelling units, such as the micro-apartments aimed at young people. There has been a trend in students and young professionals taking over property that traditionally served the needs of families. By clubbing together, they took over houses, forming multiple occupancy tenancies and in doing so gentrified neighbourhoods, raising rental and house prices, that forced families out of the area. Better neighbourhood management would have seen the creation of a mixture of tenancies, allowing young people to live alongside established families, but in properties better suited to the lifestyles of tenants aged between 18 and 35.

With an ageing population, demand for smaller accommodation types will increase, as older people give up their large family homes and seek units more suitable to two-person occupiers. The housing market now has to cater for the growing demand for retirement homes. Housing needs to be suitable for older people: not necessarily those who need care but retirement homes for active people who can look after themselves. Many older people move away from the large houses they had, after their children have grown up, and move into smaller types of accommodation. The problem with this is that more and more adult youngsters are being forced to stay at home with their parents for longer periods. This prolongs the time at which parents can sell their large family homes. They depend on their children being able to secure their homes before they can sell up and move out.

There is now more demand for housing extended families, where the younger generation must provide a home for their parents, grandparents and other family members. This is often ignored by house builders who are still focused on the needs of the nuclear family. Changes in the birth-rate have led to changes in household size. The ONS statistics of 2013 found that ‘The fastest growing household type was households containing two or more families, increasing by 39% from 206,000 households in 2003, to 286,000 households in 2013 [ONS, 2014]. Multi-family households still only represent 1% of all households.’ [ONS, 2013] Weighed against this is the increasing demand for larger homes from people in ethnic communities where providing for extended family groups is usual; if this country sees an influx of migrants from the far east this will add to the demand for housing that can accommodate larger groups of people. That 1% is likely to rise as accommodation for extended family accommodation increases.

Weighed against this trend towards extended family units, it is likely that there will be an increasing trend in people living alone. Given the divorce rate, more and more older single people will choose to live alone or with one other person. Young adults often choose to live alone until they marry and need to move into their first family home; but this period of life is extended by the difficulty in obtaining a first-time mortgage. It is in the private rented sector that demand for single-person units is likely to be most strong. All of this enhances the need to create flexible housing supplies based on demonstrable needs and to provide options for people who have a variety of housing requirements. We cannot depend on the concept of the nuclear family any more to represent the most prevalent model of housing. Demographic trends and changes to age-related lifestyles are likely to result in an increasingly complex pattern of accommodation demand.

I have so far considered the factors that we can see playing a part in approaches to the supply and provision of housing, including making better use of existing housing stock and more effective use of land. In the next chapter, I return to the brick as a central material in the construction of housing. Looking to the future of house design and supply, I move on to considering ways in which we can think outside of the box, focusing on where the future of housing might take us.

References

Contents of the entire work