CaCHE responds to the Affordable Housing Commission call for evidence
In February 2019, the Affordable Housing Commission put out a call for evidence with regard to four key issues; i) understanding the affordability challenge, ii) increasing supply, iii) managing demand and iv) other policy areas that need to change.
In this response, we point to that research undertaken by the UK Collaborative Centre for Housing Evidence (CaCHE) which is of relevance to these four key issues.
In order to define the affordability challenge, we first need to decide how to measure affordability. In his September 2018 report, How should affordability be measured?, Professor Geoff Meen reviews four existing metrics of affordability, before proposing two new measures of affordability: a ‘low-income renter affordability’ metric to capture the housing stress experienced by low-income renters, and a ‘first time buyer affordability’ metric which calculates the proportion of homes in a particular geographic area which are affordable to different deciles of the income spectrum.
Professor Geoff Meen’s second report, Policy approaches to improving affordability, then addresses the question, ‘why is housing unaffordable?’ and ‘how can we make housing more affordable?’. The report demonstrates that the most important factors affecting affordability come from the macroeconomy (e.g. interest rates) and labour markets (e.g. incomes). Increases in private housing supply reduce house prices but they have to be large and long-lasting to have a major effect on affordability. An important role therefore remains for an expansion in social rented housing.
Some of the difficulties in achieving and maintaining high levels of private housing supply are explored in the report, How does the land supply system affect the business of UK speculative housebuilding? An evidence review, by Dr Sarah Payne, Dr Bilge Serin, Dr Gareth James and Professor David Adams. They evaluate some of the key strategies of the speculative housebuilding sector, in relation to land acquisition methods, land portfolios and questions of land ‘banking’; product selection, and the speed of housing delivery.
Reforms to the demand side of the market through taxation could also improve the distribution of the housing stock. The issue of tax policy was explored in greater detail in the International review of housing taxation by Cyrille Leneol, Jeff Matsu and Barry Naisbitt. They systematically reviewed the effects of three different types of housing taxation: a property transfer tax; capital gains tax on chargeable profits resulting from the disposal of residential property; and the relationship between taxation and the conditions in the private rented sector.
The costs and consequences of unaffordable housing are manifold. In their report, The ‘frustrated’ housing aspirations of generation rent, Dr Kim McKee and Dr Adriana Mihaela Soaita review the literature on the experiences of ‘generation rent’ before discussing their own qualitative research with young low-income renters. They conclude with a series of possible reforms to the private rental sector.
Housing Associations are now the main managers and suppliers of social housing in England, and their role and capacity have been significantly affected by recent welfare reform. In their report, Scoping study: the impact of welfare reform on housing associations, Professor Paul Hickman, Dr Jenny Preece and Dr Ben Pattison draw on a series of interviews with housing association management to explore the effects of these welfare reforms on housing associations.
The final strand of CaCHE work of obvious relevance to the Commission is the Social Housing Policy Working Group. The questions, ‘what role should housing providers play and what products old and new should be backed by government and how?’, and ‘how can government support the funding and financing of affordable housing and what needs to change with the current system?’, are addressed by Professor Ken Gibb in his report, Funding new social and affordable housing. Understanding the production of new housing as a function of four elements – land, equity, construction costs and financing – the report reviews the different policy-levers which have been used to fund the supply of sub-market housing.
In response to the question, ‘what needs to change to ensure the skills and capabilities are in place to deliver more affordable housing?’, Professor Flora Samuel argues in her report, Promoting design value in public rental housing: an English perspective, that we need to foster design and delivery innovation in Local Authority housing teams if we are to ensure that new social housing supply is to be sustainable.
The commission asks, ‘what other areas of policy need to change, such as reforms to the machinery of government, governance of housing providers, place-making and public realm?’. Professor Alex Marsh’s review on Social Housing Governance is likely to be of use in this regard. It examines the current issues around organisational strategy and scale; governance structures and values; the voice of tenants; organisational performance; and thinking systemically.
Finally, the commission asks, ‘do you have any other thoughts about what could help ensure housing is more affordable, including examples of best practice from the UK (devolved nations) and overseas?’. Here we would point them to the three evidence reviews that have been conducted on social housing in Wales (by Dr Bob Smith), Northern Ireland (by Professor Joe Frey) and Scotland (by Dr Bilge Serin, Professor Keith Kintrea, and Professor Ken Gibb).
Over the next few months, CaCHE will also be publishing reports on: How can innovation contribute to addressing the housing crisis?; and How should we evaluate housing outcomes?. We would be happy to discuss our findings on any of the projects above with the Commission.
If you have any questions regarding the CaCHE submission to the Affordable Housing Commission, please contact Dr Chris Foye.
Date: March 19, 2019 3:02 pm
Author(s): Chris Foye