Local authorities must reclaim social housing as private market fails households
THE State has been the main source of housing for low income families for over a century and nearly a quarter of the national housing stock has been built by local authorities.
This is evident in the estates in our cities and towns, and across the countryside which is dotted with labourers’ cottages dating from the late 19th century.
Social housing, especially where it involved slum clearance schemes, gave rise to better public health, eliminated infectious diseases, and vastly improved infant mortality rates.
It also secured hundreds of thousands of poor households from the clutches of exploitative slum landlords.
Central and local government combined to build these houses in the face of objections from vested interests who stood to lose out from reforms and political ideologies which opposed interference in the free market.
Social housing is needed because markets fail and vulnerable families are at risk of precarious, insecure, and unaffordable accommodation which is often a pathway to homelessness.
The current housing crisis has seen growing waiting lists for social housing, rising rents in the private market, and homeless families living in hotel rooms.
The private market has clearly failed many households yet current housing policy does not seem to consider reigniting large scale social housing provision as a remedy to the crisis despite the fact that it has a proven track record.
If the local authority sector delivered good-quality, secure, affordable, and sought-after homes in the past why can’t it do so now and into the future?
In addressing this question it is important to note that the housing crisis has been accelerated by the economic crash and its aftermath but has its roots in the diminished supply of social housing which predates it and can be traced to reforms which have been ongoing for over two decades.
This is a position which the Government’s Social Housing Strategy 2020 will reenforce rather than reverse as it places heavy reliance on the private market and a minority role for mainstream social housing.
Broadly speaking, three phases of social housing development can be identified in the Irish system, namely pre-1990, 1990 to 2003 and from 2003 to the present.
The first (and longest) phase established the benchmark of high levels of construction of local authority homes, available to tenants with excellent security of tenure and at affordable rents.
The second phase was characterised by diversification as local authority housing was supplemented by housing association provision. This phase also saw the rise of subsidised private renting as a stepping stone to either of these destinations.
The third phase is characterised by displacement of local authority and housing association provision. It involves a shift away from direct provision by local authorities and voluntary housing associations towards the private market.
Central to this policy shift is an increased reliance on the private market for both the financing and supply of what has now been restyled “social housing supports”.
Two salient aspects of the current private market reliance are long-term leasing, and the expanded use of the private rented sector via a new housing assistance payment (HAP).
Long-term leasing involves local authorities or housing associations leasing properties from a private landlord for periods up to 20 years. The housing assistance payment involves the local authority paying the full rent to the private landlord, and collecting a differential rent from the private renter.
While some aspects of these policy changes are very welcome (eg, the fact that households in receipt of the housing assistance payment will be able to take up full- time employment), serious question marks remain.
In relation both to long-term leasing and to units sourced through the HAP, at the end of the lease period, the property reverts to the private owner. This raises the question of what becomes of the tenant who potentially faces relocation from their home at the end of the lease.
Indeed, the issue of the degree of participation of private landlords in the HAP (in the context of rising rents and static rent supplement levels) adds to the insecurity for households in the sector.
In the context of key components of the social housing offer, namely security, stability, and availability, such offers are clearly inferior to the traditional local authority offer.
Reliance on the private market is not a sustainable way to provide homes for low income households and the direct provision role of local authorities must be re-ignited. However if this is to happen what form will it take and who will pay for it?
On the question of delivery, reverting to the unitary housing department within a singular local authority is no longer a viable option.
Local government structures have changed and much of the accumulated expertise and capacity of housing departments has been lost. A more collaborative approach is needed.
Many local authorities now devise joint housing strategies to plan for future needs. This logic should be extended to housing provision and management to achieve critical mass in administrative efficiency, estate management expertise, and tenant choice to the process.
The second question relates to who pays. Historically direct provision by local authorities was paid for from central government funds by block grants or generous loan subsidies. However social housing is now identified as an investment opportunity for private finance.
Yet this option has potential pitfalls which go against the rationale of non-market housing. What will become of vulnerable households who are at risk of poverty and may fall into arrears, or households who have needs which require extensive supports which cost time and money?
Privately financed social housing is necessarily more risk averse and this could lead to cherry picking of tenants.
The diversification of social housing supports to include accommodation from the housing association sector and a well regulated private rented sector is to be welcomed.
However, this diversification must not be at the cost of the displacement of the long established lead role of local authorities in providing secure, stable, affordable homes to low incomes households.
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