The Tory housing benefit cuts will make more young people homeless

A young woman in a Crisis shelter in 2000. Image: Getty.

One morning, when Catherine Geddes was 16, her mother dropped her off at college, informed her that she’d changed all the locks, and told her daughter she would never be allowed to return home.

Catherine, who grew up in Huddersfield, had a volatile family life. Her violent father would drag her up the stairs by the hair, and lock her out of the kitchen. Catherine developed mental health problems and self-harmed. The dysfunction was too much for her mother – who had two younger children – to deal with, and she left her daughter to find a new life for herself.

Now 23 and living independently in a council house near Bradford, Catherine tells me how she relied on claiming housing benefit when she was kicked out of her family home. She moved into a hostel, and her rent was paid directly by the government.

“My housing benefit went to them, you also got a housing worker who would help you with bills, set up your property, make sure you were ok, things like that,” she recalls.

Without this assistance, Catherine says she would have been forced to live on the streets – something that she experienced for two weeks when she was waiting for her accommodation payment to come through. “It’s absolutely harrowing,” she tells me. “And it’s not just that – you just lose all sense of your self-esteem, you just feel useless, you feel like you’re better off dead, you can’t see a way out.”

From Thursday 6 April, the government has removed young people like Catherine’s automatic eligibility to housing benefit. Now, the onus will be on 18 to 21-year-olds to prove that they should be entitled to claim the benefit to a member of staff at the Jobcentre known as a work coach. Otherwise they are expected to carry on living at home.

Homelessness charities such as Shelter, Crisis and Centrepoint say that this will lead to a rise in homelessness, as vulnerable young people who can no longer live at home fail to navigate the complicated new system – and private landlords become less likely to let rooms to them.

“People’s lives are complicated; they don’t fit into neat little boxes”

The government expects to save £105m from this cut by 2020. It will affect around 1,000 young people in the first year, and 11,000 in this Parliament as universal credit is fully rolled out. The Department for Work & Pensions has issued a list of exemptions, which are supposed to stop young people in precarious situations from losing out.

But it’s not that simple. The concern is that young people will be unable to “prove” their circumstances to a Jobcentre employee. “Some of the things you might have to disclose are very, very sensitive issues, such as sexual exploitation and things like that – things that people might not want to share with their work coach,” Heather Spurr, a policy officer at Shelter, warns. “As an 18 to 21-year-old, you haven’t matured yet, you might not have the confidence that a 30-year-old might have. People’s lives are complicated; they don’t fit into neat little boxes.”

“Most people don’t want to talk about their personal lives, especially young people,” adds Balbir Chatrik, director of policy and engagement at Centrepoint. “Many don’t want to bad-mouth their parents – they probably don’t want to say if their parents can’t keep them because they haven’t got the finances, or are addicted to drugs or alcohol. That’s not very easy to admit.”


Chatrik is concerned that young people will “slip through the net” because they either won’t bother applying, believing they’re not eligible, or they will be unable or too traumatised to prove their vulnerable circumstances.

“It’ll lead to a massive increase in homelessness”

Young people will also be less likely to find alternative housing, due to the new policy creating a “Catch-22” renting situation. You can’t apply to be exempted from the housing benefit cut unless you have a tenancy agreement with your landlord. But any potential landlord is very unlikely to rent to you unless you can prove your funds, ie. unless you can prove that you can claim housing benefit.

“If you imagine the journey this young person’s going to go on – even if they do have an exemption, it's going to be incredibly difficult for them, because there’s this negative feedback loop,” says Spurr.

Also, because of this new system, landlords will simply be less likely to let to young people because they are now less able to claim housing benefit. “It’s really hard for 18-to-21s to be able to rent a place anyway, because landlords would prefer someone who’s in work,” says Chatrik. “Now [the new policy] is having a chilling effect on landlords, and they’ll be even more reluctant to rent to 18-to-21s.”

She warns: “Young people will stay in hostels like ours, and they won’t be able to move on. So you’ll have the equivalent of bed-blocking in hostels.”

As a consequence, the number of young people sleeping rough is expected to rise. “It’ll lead to a massive increase in homelessness,” says Chatrik.

“It risks leaving people with nowhere to go but onto the streets,” adds Spurr. “We’ve been warning that this could lead to an increase in youth rough sleeping. While the exemptions are welcome, if you just give them a read, it is so, so complicated to understand whether you’re exempt or not. It’s incredibly difficult for someone to navigate.”

“Everyone needs stability; why would anyone choose not to have that?”

The policy was announced by the Conservative government in 2015, and was a party manifesto pledge ahead of the general election. The DWP worked with charities to come up with the lengthy list of exemptions, and also narrowed the age range for the restriction (it was originally going to withhold the entitlement from 18 to 24-year-olds).

But Centrepoint calculates that up to as many as 9,000 young people who would once have been protected by the benefit will be “left destitute”. And Shelter’s director of campaigns, policy and communications, Anne Baxendale, laments the “sometimes impossible burden of having to prove they can’t go home” that some will now face. “Put simply, many young people will slip through the net and end up on the streets.”

Chatrik believes there is a political rationale to the government hitting 18- to 21-year-olds. “Young people tend not to vote,” she tells me. “They’re a much easier target than all the people who do vote.” She adds that government ministers may not realise why some young people cannot stay with their parents. “They [people working in government] were at home, they could live at home,” she says. “So maybe it’s not as easy for them to see that actually it’s unsafe for some young people to live at home. I suspect not many of them have experienced that.”

Catherine, who now volunteers for various charities and does some work for Centrepoint, feels “absolutely devastated” that teenagers with difficulties like she had will no longer have a guaranteed safety net. “I’m really scared about their future,” she says. “It’s a very young and vulnerable age to be at. A lot of people leaving home or being kicked out are for genuine reasons. You don’t want to be putting yourself in vulnerable situations. Everyone needs stability; why would anyone choose not to have that?

“I cannot understand why this is happening, because we’re the next generation. We are going to be the next generation of workers, of parents, of everything. To give out that message that we’re not even worth having a house – people are going to lose faith in the political system.”

Anoosh Chakelian is senior writer at our sister site the New Statesman, where this was originally published.

 
 
 
 

How the pandemic is magnifying structural problems in America's housing market

Justin Sullivan/Getty Images

Long before Covid-19, the United States suffered from a housing crisis. Across the country, working class and low-income Americans struggled to pay rent, while the possibility of home ownership receded into fantasy. In hot markets, affordability became a struggle for even the middle class: In California, 41 percent of the population spends over a third of their income on housing costs. 

The coronavirus pandemic will only make these trends worse as millions are unable to work and the economy dives into a recession. Building could slow down in the medium term, as construction loans (risky bets in the best of times) become harder to come by. Unsubsidised affordable housing is often owned by small landlords, who are more likely to struggle during recessions, prompting flips to home ownership or sales to rental empires. 

New York Times reporter Conor Dougherty documented America’s longstanding housing crisis – and California’s efforts to battle it – in his book Golden Gates, which debuted just before the pandemic hit. “My sense is that right now coronavirus is magnifying a lot of things that were already happening,” Dougherty says.  


While Covid-19 adds new pressures, he says that many of the same issues we were facing still loom over the issue, from developers crowding the higher end of the market, to escalating construction costs, to stagnating wages and vulnerable service-sector jobs that leave ordinary Americans struggling to keep a roof over their heads. “That’s my larger message,” Dougherty says. “I think the structural problems continue to be a much bigger deal than the cyclical problem in housing.”

CityMetric spoke with Dougherty about how his thinking has changed since Covid-19, Donald Trump’s pro-suburban rhetoric, and the apparent exodus from San Francisco. 

I’ve really been struck by how strong the housing market seems to be despite the epic economic crisis we are facing. Costs seem to be higher everywhere. I've heard realtors talk about bidding wars like they haven't seen before in Philly, where I live. But perhaps that's just pent up demand from the big shutdowns?

What you have is an economy that has bifurcated. You have fewer middle-income jobs, more lower-income service jobs, and more higher-end jobs in software and finance. That's how our economy looks and that's a problem that is going to take the rest of our lives to solve. In the meantime, we have this housing market where one group of people have so much more money to spend than this other group. Cities reflect that. 

What's important about this bifurcation isn't just that you have gross inequality, but that these people have to live next to each other. You cannot be someone's Uber driver and telecommute. You cannot clean someone's house remotely. These lower-end service workers have to occupy the same general housing market as the super-high-end workers. 

All the pandemic has done is thrown that even more out of whack by creating a situation where one group of people is buying and expanding homes or lowering their home cost by refinancing, while another group are at income zero while trying to live in the same housing market with no demand for their services. When you see home prices booming and an eviction tsunami coming in the same newspaper, that tells you the same thing the book was trying to show you.

Does America writ large have the same housing shortage crisis as California and the Bay Area more specifically? There are other super hot markets, like New York City, Boston, or Seattle. But in Philly, or in Kansas City, is there really a lack of supply? 

There are three kinds of cities in America. There are the really out of control, fast-growing, rich cities: the Bay Area, Seattle, New York. There are declining Detroits and Clevelands, usually manufacturing-centric cities. Then there are sprawling Sun Belt cities. This book is by and large concerned with the prosperous cities. It could be Minneapolis, it could be Nashville. But the housing crisis in places like Cleveland is much more tied to poverty, as you pointed out. 

Those kinds of cities do have a different dynamic, although they still do have the same access to opportunity issues. For instance, there are parts of Detroit that are quite expensive, but they're quite expensive because that's where a lot of the investment has gone. That's where anybody with a lot of money wants to live. Then you have Sun Belt cities like Dallas and Houston, which are starting to become a lot more expensive as well. Nothing like the Bay Area, but the same forces are starting to take root there. 

I think that the Bay Area is important because throughout history, when some giant American industry has popped up, people have gone to Detroit or Houston. Now tech, for better or for worse, has become the industrial powerhouse of our time. But unlike Detroit in its time, it's very hard for people to get close to and enjoy that prosperity. There's a certain kind of city that is the future of America, it has a more intellectual economy, it's where new productive industries are growing. I think it's an outrage that all of them have these housing crises and it's considered some insane luxury to live there. 

A recent Zillow study seemed to show there hasn't been a flood of home sales in the pandemic that would signify a big urban exodus from most cities, with the glaring exception of San Francisco. Do you think that could substantially alleviate some of the cost pressure in the city proper?

On the one hand, I think this is about the general economy. If unemployment remains over 12% in San Francisco, yes, rent is going to be a lot cheaper. But is that really the reality we're all looking for? If restaurants and bars that were key to the city's cultural life remain shut, but rent is cheaper, is that what everyone wants? I bet you when this is all over, we're going to find out the tech people left at a much lower rate than others. Yes, they can all work from home, but what do you think has a bigger impact on a city: a couple of companies telling people they can work from home or the total immolation of entire industries basically overnight?

I don't want to make predictions right now, because we're in the middle of this pandemic. But if the city of San Francisco sees rents go down, well, the rent was already the most expensive in the nation. It falls 15%, 20%? How much better has that really gotten? Also, those people are going to go somewhere and unless they all move quite far away, you're still seeing these other markets picking up a lot of that slack. And those places are already overburdened. Oakland's homeless problem is considerably worse than San Francisco's. If you drive through Oakland, you will see things you did not think possible in the United States of America. 

Speaking of markets beyond San Francisco, you have a chapter about how difficult it is to build housing in the municipalities around big cities – many of which were just founded to hive off their tax revenues from low-income people.

That’s why you see Oregon, California, or the Democratic presidential candidates talking about shaking this up and devising ways to kick [zoning] up to a higher level of government. We've always done this whenever we've had a problem that seems beyond local governance. Like voting rights: you kick it to a higher body when the local body can't or won't solve it. 

But for better or for worse, this suburban thing is part of us now. We cannot just undo that. This notion of federalism and local control, those are important American concepts that can be fiddled with at the edges, but they cannot be wholesale changed. 

The first time I ever met Sonja Trauss [a leader of the Bay Area YIMBY group], she told me she wasn't super concerned about passing new laws but that the larger issue was to change the cultural perception of NIMBYism. We were living in a world where if you went to a city council meeting and complained about a multifamily development near your single-family house, you were not accosted for trying to pump up your property values or hoard land in a prosperous city. You were seen as a defender of the neighbourhood, a civically-minded person.

What is significant about YIMBYism is that the cultural tide is changing. There is this whole group of younger people who have absorbed a new cultural value, which is that more dense housing, more different kinds of people, more affordable housing, more housing options, is good. It feels like the tide is turning culturally and the movement is emblematic of that. I think that value shift will turn out to have been much more lasting than anything Scott Wiener ever does. Because the truth is, there are still going to be a bunch of local battles. Who shows up and how those places change from within probably will turn out to be more important. 

As you said, we've been seeing a lot of Democratic candidates with proposals around reforming zoning. How does Joe Biden's plan compare to the scope of the ambition in the field? 

There are two big ideas that you could pull from all the plans. First, some kind of renter's tax credit. It is obscene that we live in a country where homeowners are allowed to deduct their mortgage interest, but renters aren't. It is obscene that we live in a world where homeowners get 30-year fixed mortgages that guarantee their house payment pretty much for life and renters don't. If we think that it's a good idea to protect people from sudden shocks in their housing costs, that is as good of an idea for renters as it is for homeowners. 

I tell people that in this country, homeowners are living in the socialist hellscape of government intervention and price controls. Renters are living in the capitalist dream of variable pricing and market forces. Homeowners think they're living in this free market, but actually they're in the most regulated market – there are literally price controls propping up their market mortgages. 

Then there is Section 8 housing. Right now homeowners get access to the mortgage interest deduction. That programme is available to as many people as can use it, yet only about a quarter of the people eligible for Section 8 can get it. I think rectifying that is hugely important and a lot of the plans talked about that. 

The second big idea is using the power of the purse to incentivise people to more robustly develop their regions. You should have higher density housing in fancy school districts, near job centres, near transit. We're going to use the power of the purse to incentivise you, within the bounds of your own local rules, to do this right. Of course, that’s what Donald Trump is running against when he talks about Affirmatively Furthering Fair Housing (AFFH). 

When I was a local reporter in Philly, the city went through with that AFFH regulation despite Trump and HUD Secretary Ben Carson not being interested in enforcing it anymore. The city produced a fat report that maybe a few people read, but I don't think it changed policy. It's this phantom that Trump is running against, an ideal version of the policy that did not exist. It's also a phantom no one's heard of until Trump started tweeting about it. 

It’s been bizarre to watch. But Trump does seem to recognise that suburban politics don’t neatly fit into a red or blue construct. People who live in Texas and claim to want a free market system will turn around and erect local regulation to make sure nobody can build apartments near them. People in the Bay Area who claim to be looking for a more diverse place will use different logic, anti-developer logic, to keep apartments being built near them. 

People like that regardless of how they feel about things nationally. The bluntness with which Trump is doing it is discordant with the electorate and quixotic because people don't know what he's talking about. But the basic things he recognises – can I make voters feel like their neighbourhoods are threatened – he's onto something there. As with many things Trump, his tactics are so off-putting that people may ultimately reject them even if under the surface they agree.

You hear people on the left say the scary thing about Trump is that one day a good demagogue could come along. They're going to actually tax private equity people and they're actually going to build infrastructure. They're going to actually do a lot of popular stuff, but under a racist, nationalist banner. I think the suburban thing is a perfect example of that. There's a lot of voters even in the Bay Area who [would support that policy] in different clothing.

The world has changed completely since Golden Gates debuted just a few months ago. Has your thinking about housing issues changed as a result of the seismic disruptions we are living through?

The virus has done little more than lay itself on top of all of the problems I outline in the book. Whether we have an eviction tsunami or not, a quarter of renters were already spending more than half their income on rent. There's a chapter about overcrowded housing and how lower-income tenants are competing with each other by doubling, tripling, and quadrupling up for the scant number of affordable apartments. We now know that overcrowded housing is significantly more of a risk [for Covid-19] than, say, dense housing. If you live in a single-family home with 15 people in it, that's a lot more dangerous than 40 apartments in a four-story building.

Housing is just a proxy for inequality, it's a way of us building assets for one group at the exclusion of another. It is an expression of the general fraying of American society. I don't feel like that larger message has been affected at all, it's only been enhanced by the pandemic. With the caveat that this can all change, it just doesn't seem to me like there's some uber housing lesson we can learn from this – other than having a bunch of people crowded together is a really bad idea. 

Jake Blumgart is a staff writer at CityMetric.