Inflexible, insecure, and losing them money: what the “tenancy trap” means for Britain’s renters

Oh god. Image: Getty.

All across the UK, renting is the new normal. The proportion of UK renters has doubled in the last twenty years. Yet when you think of the word “renting”, what springs to mind? The chances are that you’ll still think of students, flat-shares, arguments over milk. Alternatively, dodgy estate agents, sky-high deposits, and a tenancy agreement you need a law degree to read.

This isn’t an attempt to demonise renting – I’m a renter myself. And as both a renter and the CEO of a housing association I think that the rental offer needs to change. Gone are the days when you got the keys to your first home at 30 – middle-aged renters are one of the fastest-growing demographics. More people than ever will be renting into retirement. And the crisis of rental affordability certainly isn’t limited to London – recently Your Housing Group revealed that in the North West, average rents eat up nearly a third (26.7 per cent) of average incomes. With more people than ever renting privately for longer it’s high time that policy-makers thought long and hard about how to make renting better. Renting could and should be an attractive offer in and of itself – not something you’re strong-armed into because you can’t afford to get on the ladder.

It was with this in mind that I commissioned research about the state of renting in my home patch, the North West of England. I wanted to explore the experiences of renters – private and social – of all ages in order to understand their wants and needs, and how the sector could better work for them. There are 1,143,438 people renting in the North West – how do they feel about homes they live in?

Disappointingly, one in six respondents – equivalent to 205,818 households across the North-West – believe that they get a “poor level” of service from their landlord. This wasn’t hugely surprising – new data from MHCLG shows that hobbyist landlords dominate the market. Some 45 per cent of landlords just own one property, and only a meagre 4 per cent of private landlords are in the sector as a full-time job or business.

I know from experience that the upkeep and maintenance of tenants’ homes really is a full-time job – which begs the question of why professional landlords such as housing associations aren’t given a more substantial role in housing Britain’s growing population of renters.

Another issue that really struck me was how many renters feel fundamentally insecure in their own homes – the place they should feel safest. Around 47 per cent of those living in the North West disclosed to our pollsters that they wanted a longer-term tenancy – that’s equivalent to 537,415 households. What’s more, 83 per cent of respondents explicitly said that this was because they wanted greater “security”. Frankly, I don’t blame them – tenancies ended by landlords accounted for 28 per cent of all local authority homelessness acceptances in 2017, and Citizen’s Advice research revealed that renters who complain about problems with their homes are 46 per cent more likely to be evicted.

Precarious tenancies are clearly a really big issue for renters. However, inflexibility – and the imbalance of contractual power between renter and landlord – is also a big problem. Around 15 per cent of North-Western renters revealed that they had been forced to turn down a job opportunity because of the terms of their tenancy. That’s 171,515 people in the North-West turning down jobs.

We hired a former Bank of England economist to crunch the numbers and ascertain the lost income of those tenants having to turn down new roles. His calculations showed that the average tenant is losing out on the new job bump of £1,012 per year because of this “tenancy trap”.

Looking at these figures, it becomes clearer why tenants are turning down opportunities. Fear of excessive costs is clearly a factor. Whilst it’s excellent news that the Tenancy Fees Act will reduce the considerable costs private tenants face when moving, tenants can still be liable for “reasonable costs” for “loss suffered” if they wish to terminate a tenancy early. What’s more, stumping up the cost of a new deposit – even without the additional tenancy fees – can still be costly. For the average earner, after tax that additional £1012 per year will come to about £800. The typical deposit required by a private landlord is 4-6 weeks’ rent, and based on average rental prices in the North West, that could come to between £524-£786. This could all but wipe out that post-tax new job bonus.


As both a tenant and a housing association landlord, these findings really hammered home the need for a new rental offer to me. It’s encouraging that the government is making legislative changes – from exploring scrapping ‘no-fault’ Section 21 evictions to getting rid of tenancy fees – but piecemeal change won’t be enough to deliver the homes and tenancies renters urgently need.

Successive governments’ failure to build enough homes has meant that a housing shortage has entrenched unaffordability in both the purchase and rental market. Only building more homes will turn this sorry state of affairs around. What’s more, it’s time for a serious conversation about what a decent tenancy looks like. At Your Housing Group we’ve been thinking hard about how a life-long “passporting” tenancy could allow our tenants to move with ease from property to property, upgrading and downsizing as their needs change; from the city to the suburbs to a shared community development in old age. We’d like to see more people given the option to enjoy a housing offer that meets their needs, not those of their landlord.

In order to deliver the homes – and tenancies – Britain’s renters need, housing associations must be given a more prominent role in providing homes to Britain’s renters – of every financial and social background. Housing associations are raring to build, and at Your Housing Group we’re working on a number of proposals that could see sustainable sources of finance such as pension funds investing in delivering homes all over the country.

Unless Britain gets building we’ll never tackle the housing crisis in the UK. We need more homes and a radically improved tenancy offer that meets renters’ needs. It’s high time the government ended our country’s reliance on volume builders and private landlords for housing delivery, and let housing associations take the reins.

We build quality, affordable rental and purchase homes, where they’re needed. Tenants are at the absolute heart of our vision. We know what renters want – and with the right money and powers, we can deliver it.

Brian Cronin is the chief executive of Your Housing Group, a housing association with more than 28,000 homes in the midlands and the north.

 
 
 
 

How China's growing cities are adapting to pressures on housing and transport

Shenzhen, southern China's major financial centre. (Photo by Daniel Berehulak/Getty Images)

In the last 40 years, the world’s most populous country has urbanised at a rate unprecedented in human history. China now has over 100 cities with populations greater than a million people, easily overshadowing the combined total of such cities in North America and Europe. 

That means urban policy in China is of increasing relevance to planning professionals around the world, and for many in Western nations there’s a lot to learn about the big-picture trends happening there, especially as local and national governments grapple with the coronavirus crisis. 

Can Chinese policymakers fully incorporate the hundreds of millions of rural-to-urban migrants living semi-legally in China’s cities into the economic boom that has transformed the lives of so many of their fellow citizens? The air quality in many major cities is still extremely poor, and lung cancer and other respiratory ailments are a persistent threat to health. Relatedly, now that car ownership is normalised among the urban middle classes, where are they going to put all these newly minted private automobiles?


Yan Song is the director of the University of North Carolina, Chapel Hill’s Program on Chinese Cities and a professor in the school’s celebrated urban planning department. She’s studied Chinese, American, and European cities for almost 20 years and I spoke with her about the issues above as well as changing attitudes towards cycling and displacement caused by urban renewal. This conversation has been edited for length and clarity.

American cities face very different challenges depending on which part of the country they are in. The Rust Belt struggles with vacancy, depopulation, and loss of tax base. In coastal cities housing affordability is a huge problem. How do the challenges of Chinese cities vary by region?

Generally speaking, the cities that are richer, usually on the eastern coastal line, are facing different challenges than cities in the western "hinterland." The cities that are at a more advantaged stage, where socio-economic development is pretty good, those cities are pretty much aware of the sustainability issue. They're keen on addressing things like green cities.

But the biggest challenge they face is housing affordability. Cities like Beijing, Shanghai, Shenzhen, and Hangzhou are trying to keep or attract young talent, but the housing prices are really, really high. The second challenge is equity. How do you provide equal, or at least fair, services to both the urban residents and the migrants who are living in the city, to alleviate some of the concerns around what the government is calling “social harmony?” 

Then the cities in the hinterland, typically they are resource economies. They are shrinking cities; they're trying to keep population. At the same time, they are addressing environmental issues, because they were overly relying on the natural endowments of their resources in the past decades, and now they're facing how to make the next stage of economic transition. That's the biggest divide in terms of regional challenges.

These urban centers rely on migrant workers for a lot of essential services, food preparation, driving, cleaning. But they live tenuous lives and don't have access to a lot of public services like education, health care, social insurance. Are Chinese policymakers trying to adopt a healthier relationship with this vast workforce?

The governments are making huge efforts in providing basic services to the migrants living in the city. They're relaxing restrictions for educational enrollment for migrants in the cities. In health care as well as the social security they are reforming the system to allow the free transfer of social benefits or credits across where they live and where they work [so they can be used in their rural hometown or the cities where they live and work]. 

In terms of health care, it's tough for the urban residents as well just because of the general shortage of the public health care system. So, it's tough for the urban residents and even tougher for the migrants. But the new policy agenda's strategists are aware of those disadvantages that urban migrants are facing in the cities and they're trying to fix the problem.

What about in terms of housing?

The rental market has been relaxed a lot in recent years to allow for more affordable accommodation of rural-to-urban migrants. Welfare housing, subsidised housing, unfortunately, skews to the urban residents. It's not opened up yet for the migrants. 

The rental market wasn't that active in previous years. But recently some policies allow for more flexible rental arrangements, allowing for shared rentals, making choices more available in the rental market. Before it was adopted, it’s prohibited to have, for example, three or more people sharing an apartment unit. Now that’s been relaxed in some cities, allowing for more migrant workers to share one unit to keep the rates down for them. You see a little bit more affordable rental units available in the market now.

I just read Thomas Campanella’s The Concrete Dragon, and he talks a lot about the scale of displacement in the 1990s and 2000s. Massive urban renewal projects where over 300,000 people in Beijing lost homes to Olympics-related development. Or Shanghai and Beijing each losing more homes in the ‘90s than were lost in all of America's urban renewal projects combined. It didn't sound like those displaced people had much of a voice in the political process. But that book was published in 2008.  How has policy changed since then, especially if people are more willing to engage in activism?

First of all, I want to make a justification for urban renewal in Chinese cities, which were developed mostly in the ‘50s and ‘60s. At the time, [in the 1990s] the conditions weren’t good and allowing for better standards of construction would inevitably have to displace some of the residents in older settlements. In my personal opinion, that wasn't something that could be done in an alternative way.  

Still, in the earlier days, the way of displacing people was really arbitrary, that's true. There wasn't much feedback gathered from the public or even from the people affected. In the name of the public interest, in the name of expanding a road, or expanding an urban center, that's just directed from the top down. 

Nowadays things are changing. The State Council realized they needed more inclusive urban development, they needed to have all the stakeholders heard in the process. In terms of how to process urban development, and sometimes displacement, the way that they are dealing with it now is more delicate and more inclusive.

Can you give me an example of what that looks like?

For example, [consider] hutong in Beijing, the alleyway houses, a typical lower-density [neighbourhood] that needs to be redeveloped. In the past, a notification was sent to the neighbours: “You need to be replaced. You need to be displaced, we need to develop.” That's it. 

Nowadays, they inform all different sorts of stakeholders. They could include artists' associations, nonprofits, grassroots organisations that represent the interests of the local residents. Then they [the citizens groups] could say what they really want to preserve. “This is what we think is really valuable” and that will be part of the inputs in the planning process. Some of the key elements could possibly be preserved. They  [the authorities] also talk about the social network, because they realized that when they displace people, the biggest loss is the social network that they have built in the original location. So, it's not only conserving some of the physical environment, but also trying to conserve some of the social network that people have.  


(STR/AFP via Getty Images)

Speaking of urban renewal, there was a big emphasis in the ‘90s and 2000s on highways. A lot of auto-oriented development in Beijing, following more of a Los Angeles than New York model. There's this quote I saw from Hong Kong architect Tao Ho, during the 1990s development of Pudong in Shanghai, warning against replicating “the tall buildings and car-oriented mentality of the West." 

In the ’90s or the first decade of the 21st century, most cities in China were still making mistakes. When I was a student, in the late '90s, I was translating for the American Planning Association. At the time, Beijing was still taking out the bike lanes and the planners from APA were telling them: “No, don't do that. Don't make that mistake." 

In the past decade, that's not occurring anymore. It has been happening [adding bike lanes] for a couple of years in Beijing, Shanghai, Shenzhen. More attention has been given to improving the service quality of green transportation, upgrades to buses, the bike lane system, and so on. 

As China got richer, bikes became a symbol of poverty and, like you said, urban planners began removing bike lanes. Cities like Nanjing and Shanghai considered banning bikes from the central city entirely. 

For a long time, bike lanes were abandoned and the road surface was more devoted to the car. But in the past few years this has been changing, more road space has been given to bus rapid transit and to bike lanes. The attitude giving precedence to the private car is giving way.

Another thing they are trying to do is behavioural change, teaching younger generations that biking is cool, creating a new set of values that's more sustainable. In some major cities, you see educational campaigns, posters around the cities, [saying] bicycling is really cool. 

A recent paper you worked on looked at air quality in Chinese cities and found they are still struggling. The paper cited a study suggesting “that Chinese cities face the worst air quality across different cities around [the] world based on an extensive research of 175 countries.” Your paper recommends transit-oriented development and significant green outdoor space. Is that something you see policymakers adopting?

Yes, definitely, although with regional variations still. The eastern and southern cities are seeing more policies toward transit-oriented development. They are adapting smart technology too. For example, Hangzhou, which is the model of smart cities, the tech tycoon Alibaba installed sensors on every single traffic signal there. Then they were using technology to change the light, so when they detect a higher volume of traffic, they streamline the green lights and the red light wouldn't stop the cars, so there are less carbon emissions at the intersections. They showed that there was a reduction of up to 15% emissions. 

What about in terms of parking policy? How are policymakers trying to deal with the influx of cars in these cities? Are there parking minimums like in many American cities?

I was visiting Hangzhou in December, their “Smart City” headquarters there. They were trying to use technology to let people know where there's parking, so they don't have to drive around, which increases carbon emissions. In other cities, like Shenzhen, they were increasing the parking fee in the downtown by 50 yuan, or seven US dollars an hour. That's pretty high in the context of Chinese cities. It was 10 or 20 yuan before. So, just increasing the parking cost in the downtown area so that you discourage people from driving.

What are you working on now?

My new research is still on air quality. We had a really cool collaboration with a counterpart of Google Street Map. In China, that’s Baidu StreetMap. We asked the company to install another sensor on their cars when they take pictures. We added a sensor for air quality. So, we will know at a street level what are the current emissions by geolocation, by time. That will be really cool when we have all that data. 

Jake Blumgart is a staff writer for CityMetric.