Here are five changes to improve housing better for generation rent

Oh good, here we are again. Image: Getty.

Research by the Resolution Foundation has confirmed what many young people already sensed; that for them, the private rented sector in Britain is less a stepping stone, and more of a trap. The research predicts that up to a third of millennials will live in private rented housing from the day they’re born, until the day they die.

Many aspire to own their own home, pay off the mortgage and have an asset against which they can leverage the support they may need in their old age, or pass on to their children. But this traditional dream is becoming increasingly distant, as more of the UK’s housing stock is owned by organisations or landlords with multiple properties.

What went wrong?

Home ownership is increasingly the preserve of those with wealth, or older people who bought at a time when housing was cheaper. Some of the wealthy don’t just own their own home, but also others, which they collect the rent on to buy more properties.

While owner occupation, as a proportion of market share, has not changed dramatically, very recently (it has been around 62 per cent for a couple of years) the private rented sector has grown at the expense of the social housing sector.

Social housing – that’s homes owned by local councils or housing associations, rented out at significantly less than the market rate – has become rarer. And there’s more so-called “affordable” housing – usually a set proportion of up to 80 per cent of the market rate – which in many cases just isn’t affordable for those on lower incomes.

In continental Europe – especially countries such as Sweden – there is a different approach. The level of owner occupation is much lower, while the private rented sector is better quality, more affordable and more secure for renters.

What could work?

There are plenty of policies which could improve the situation for “generation rent”:

  • Cap rents in the private rented sector and regulate landlords, so that properties must meet quality standards; this is the case in countries such as Sweden, but the differences between markets means comparisons are nuanced and complex.
  • Reform tenancy law and enforce better protection for tenants against “rogue” landlords. There are stories about landlords undertaking “revenge” evictions against tenants who have complained. There are examples of poor or no repairs, hazardous and unhealthy conditions to live in, but the legal redress for tenants is slow, costly and limited.

  • Invest government money to build more social housing, and keep it in public ownership for those who can’t access the private market. At the moment, “personal subsidies” do not provide long-term assets of bricks and mortar, but instead go into into welfare payments which, through rental payments, can ultimately boost profits for private landlords.

  • Disrupt the flow of public housing into private hands by halting the Right to Buy, which allows eligible social housing tenants to buy their home with a discount of up to £108,000 (£80,900 outside London). The Local Government Association refers to a “firesale” of social housing, with over 55,000 homes sold under RTB in the last six years.

  • Put more housing into the hands of communities by establishing co-operatives and community land trusts (CLTs), which have the power to decouple housing cost from market value, and link rent cost to earnings, with the uplift in value retained by the community co-operative – not wealthy private individuals. There are over 200 examples of small scale urban and rural schemes in England - such as East London CLT – learning from embedded projects, such as Champlain Housing Trust in Vermont, US. The relaunched Community Housing Fund will go some way to boosting activity here.


Why things won’t change tomorrow

The UK can’t just set out tomorrow and become Sweden by placing more stringent regulations on rent levels, tenancy security and quality of housing. The UK’s political and economic systems are materially different, and this manifests in the flavour of its housing markets.

In his 1995 book, Jim Kemeny highlighted how, in England, the housing private market is protected from competition through the suppression of social renting. Neo-liberal policies which promoted private commercial interests over social ones were the bedrock of this paradox, and this remains the case now more than ever.

Pendulum politics, resulting from our democratic process, means short-termism is the only political game in town. Reforming the housing market, fixing the private rented sector and building more genuinely affordable housing need a longer term approach.

Then there are voter dynamics to consider: for example, Right To Buy appeals to people already in the social housing sector who wish to own. The policy is often leveraged at election time. But it benefits the few, rather than the many, and it disproportionately disadvantages young people who are in the private rented sector and cannot benefit from Right To Buy.

Older people, those who own their own homes, or wish to buy their council or housing association home, are more likely to engage with the current democratic system and vote. Until more and more young people use their ballot card, their voices will be marginalised.

The ConversationThere are too many vested interests in the political system to maintain the status quo. The people who can change the system – British MPs – have too much to lose. Just over 120 MPs – that’s almost one in five - declared on the register of interests that they rent out one or more homes or private properties. There is too much at stake for them to seek more regulation and fewer profits – turkeys won’t vote for Christmas.

Jo Richardson, Professor of Housing and Social Research, De Montfort University.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

The Adam Smith Institute thinks size doesn’t matter when housing young professionals. It’s wrong

A microhome, of sorts. Image: Wikimedia Commons.

The Adam Smith Institute has just published ‘Size Doesn’t Matter’, a report by Vera Kichanova, which argues that eliminating minimum space requirements for flats would help to solve the London housing crisis. The creation of so-called ‘micro-housing’ would allow those young professionals who value location over size to live inside the most economically-active areas of London, the report argues argues.

But the report’s premises are often mistaken – and its solutions sketchy and questionable.

To its credit, it does currently diagnose the roots of the housing crisis: London’s growing population isn’t matched by a growing housing stock. Kichanova is self-evidently right in stating that “those who manage to find accomodation [sic] in the UK capital have to compromise significantly on their living standards”, and that planning restrictions and the misnamed Green Belt are contributing to this growing crisis.

But the problems start on page 6, when Kichanova states that “the land in central, more densely populated areas, is also used in a highly inefficient way”, justifying this reasoning through an assertion that half of Londoners live in buildings up to two floors high. In doing so, she incorrectly equates high-rise with density: Kichanova, formerly a Libertarian Party councillor in Moscow, an extraordinarily spread-out city with more than its fair share of tall buildings, should know better.

Worse, the original source for this assertion refers to London as a whole: that means it includes the low-rise areas of outer London, rather than just the very centrally located Central Activities Zone (CAZ) – the City, West End, South Bank and so forth – with which the ASI report is concerned. A leisurely bike ride from Knightsbridge to Aldgate would reveal that single or two-storey buildings are almost completely absent from those parts of London that make up the CAZ.

Kichanova also argues that a young professional would find it difficult to rent a flat in the CAZ. This is correct, as the CAZ covers extremely upmarket areas like Mayfair, Westminster, and Kensington Gardens (!), as well as slightly more affordable parts of north London, such as King’s Cross.

Yet the report leaps from that quite uncontroversial assertion to stating that living outside the CAZ means a commute of an hour or more per day. This is a strawman: it’s perfectly possible to keep your commuting time down, even living far outside of the CAZ. I live in Archway and cycle to Bloomsbury in about twenty minutes; if you lived within walking distance of Seven Sisters and worked in Victoria, you would spend much less than an hour a day on the Tube.

Kichanova supports her case by apparently misstating research by some Swiss economists, according to whom a person with an hour commute to work has to earn 40 per cent more money to be as satisfied as someone who walks. An hour commute to work means two hours travelling per day – by any measure a different ballpark, which as a London commuter would mean living virtually out in the Home Counties.

Having misidentified the issue, the ASI’s solution is to allow the construction of so-called micro-homes, which in the UK refers to homes with less than the nationally-mandated minimum 37m2 of floor space. Anticipating criticism, the report disparages “emotionally charged epithets like ‘rabbit holes’ and ‘shoeboxes,” in the very same paragraph which describes commuting as “spending two hours a day in a packed train with barely enough air to breath”.


The report suggests browsing Dezeen’s examples of designer micro-flats in order to rid oneself of the preconception that tiny flats need mean horrible rabbit hutches. It uses weasel words – “it largely depends on design whether a flat looks like a decent place to live in” – to escape the obvious criticism that, nice-looking or not, tiny flats are few people’s ideal of decent living. An essay in the New York Times by a dweller of a micro-flat describes the tyranny of the humble laundry basket, which looms much larger than life because of its relative enormity in the author’s tiny flat; the smell of onion which lingers for weeks after cooking a single dish.

Labour London Assembly member Tom Copley has described being “appalled” after viewing a much-publicised scheme by development company U+I. In Hong Kong, already accustomed to some of the smallest micro-flats in the world, living spaces are shrinking further, leading Alice Wu to plead in an opinion column last year for the Hong Kong government to “regulate flat sizes for the sake of our mental health”.

Amusingly, the Dezeen page the ASI report urges a look at includes several examples directly contradicting its own argument. One micro-flat is 35 m2, barely under minimum space standards as they stand; another is named the Shoe Box, a title described by Dezeen as “apt”. So much for eliminating emotionally-charged epithets.

The ASI report readily admits that micro-housing is suitable only for a narrow segment of Londoners; it states that micro-housing will not become a mass phenomenon. But quite how the knock-on effects of a change in planning rules allowing for smaller flats will be managed, the report never makes clear. It is perfectly foreseeable that, rather than a niche phenomenon confined to Zone 1, these glorified student halls would become common for early-career professionals, as they have in Hong Kong, even well outside the CAZ.

There will always be a market for cheap flats, and many underpaid professionals would leap at the chance to save money on their rent, even if that doesn’t actually mean living more centrally. The reasoning implicit to the report is that young professionals would be willing to pay similar rents to normal-sized flats in Zones 2-4 in order to live in a smaller flat in Zone 1.

But the danger is that developers’ response is simply to build smaller flats outside Zone 1, with rent levels which are lower per flat but higher per square metre than under existing rules. As any private renter in London knows, it’s hardly uncommon for landlords to bend the rules in order to squeeze as much profit as possible out of their renters.

The ASI should be commended for correctly diagnosing the issues facing young professionals in London, even if the solution of living in a room not much bigger than a bed is no solution. A race to the bottom is not a desirable outcome. But to its credit, I did learn something from the report: I never knew the S in ASI stood for “Slum”.