Social Engineering in London

[LondonMix]

I was researching something on the EDF and came upon some old threads bemoaning the need for more council housing in London and I was wondering if this is really true. Demand for housing in London (private and council) outstrips supply.

Don't get me wrong, I think the social engineering that the UK gov't does to ensure that London doesn't become a city for the 7m most affluent people in London is definitely the right thing (and leads to a better socio-economic mix than in the city centre of Paris and New York where I have also lived).

My only concern is that the more of the existing housing stock that is used for social housing for the working poor and unemployed, the more expensive private sector housing gets (for example if there were only 100 homes in London and half of them were for social housing, the remaining 50 houses would go to the 50 richest people in London via market competition meaning the city would become increasingly comprised of the economic extremes).

Given this dynamic, what does the forum think is the right amount of social/ council housing for London (as a % of total housing) taking into account that the greater the percentage is the fewer middle income people can afford to live here? Nationwide, I think social housing accounts for 18% of the UKs total housing stock with another 2% of people in private homes recieving housing benefit. I think London has a much higher share than that though but I can't find the stats. Should we be trying to make sure London mirrors the country in general so it doesn't become a rich bubble rather than accomodating the potential never ending demand for those who cannot afford to live in the city trying to stay here (people migrate from elsewhere in England and move into social housing in London all the time). I mean if I were unemployed or working minimum wage, I'd rather live in London than Kent for a lot of reasons so I think the demand is potenatially never ending... Clearly we need key workers but how many low wage jobs does London actually have as percentage of total employment and how much of the countries unemployed and disabled should London accomodate (its fair share proportionally rather?) given there is not unlimitted housing?

Whatever this % is, I think the overall percentage should remain constant even as new properties are developed to keep up with London's growing population.

[silverfox]

You've asked a number of questions here LondonMix that may put people off trying to Reply.

"Demand for housing in London (private and council) outstrips supply..."

So what's new? This has been the situation for centuries and will continue in all urban centres.

"Don't get me wrong, I think the social engineering that the UK gov't does to ensure that London doesn't become a city for the 7m most affluent people in London is definitely the right thing (and leads to a better socio-economic mix than in the city centre of Paris and New York where I have also lived)..."

Why is a 'better' socio-economic mix necessarily desirable in a particular area? Will people become more friendly, more neighbourly, more altruistic? Will they share the same public services or will there still be a divide between those who, from economic necessity, need to use public services (Doctors surgeries etc) and those who can afford/company provides private services (eg, Bupa). I understand that ghettos here are undesirable but that is what Market forces would produce. Social engineering, no matter how noble the intention, will not stop more affluent people people shopping in dearer stores and poorer people shopping in cheaper stores, for example. The fact that a banker may live next door to a postman does not constitute a more equal society.

"... My only concern is that the more of the existing housing stock that is used for social housing for the working poor and unemployed, the more expensive private sector housing gets..."

A basic economic fact here. Are you worried for your own prospects? Also, as the age of austerity has now forced us to address, in what sense are the long term unemployed entitled to live in (social) housing in areas of high demand at the tax payer's expense? If a family has grandparents, parents and adult children that are unable to secure employment and dependent on benefits why not say sorry, you cannot live in The borough of Westminster, but we can relocate you to Hull next week. What is wrong with that?

"...What does the forum think is the right amount of social/ council housing for London (as a % of total housing) taking into account that the greater the percentage is the fewer middle income people can afford to live here?

Can't speak for the Forum here, but you seem to be saying that you're worried you (middle class people) will be priced out of London. The fact is, like generations of people before you in any major city, you need to work harder and scrimp and save like the rest of us to stay in London or throw in the towel and move out to the shires.

"...Should we be trying to make sure London mirrors the country in general so it doesn't become a rich bubble rather than accomodating the potentially never ending demand for those who cannot afford to live in the city trying to stay here (people migrate from elsewhere in England and move into social housing in London all the time). I mean if I were unemployed or working minimum wage, I'd rather live in London than Kent for a lot of reasons so I think the demand is potenatially never ending... Clearly we need key workers but how many low wage jobs does London actually have..."

The problem is, and this is why there are attempts to socially engineer a solution, people flock to cities to try to get on in life and improve their lot. Thousands of graduates flood into London and other cities each year to get on the career ladder. If they stayed in Leicester and Wolverhampton for example, it would decrease demand on housing stock. If you choose to go to a city it's easy to criticise those on social benefit as making things more difficult for you. however, any reduction in the numbers of (controlled) social housing will not necessarily help the situation and may in fact increase rents, house prices, so that only the truly affluent can afford to stay in London and other big cities.

[DJKillaQueen]

I think some fundamental points are being missed here...

That over the past three decades aprrox two million social homes have been sold under right to buy schemes and the majority not replaced (there are currently 1.8 million people on council housing waiting lists nationally)

Inflation in the price of private sector housing has outstripped many salaries. The soaring Housing Benefit bill is a direct reflection of that where almost 700,000 people in full time work need help paying their rents. 68% of recipients of HB are social housing tenants (2012 figures show around 6 million receiving HB).

If we want to talk about social engineering, we may as well talk about deregulation too that led to over inflation of housing values and contributed to the current crisis. We should criticise the right to by scheme too. There are many factors in recent decades that have brought us to here and those have been discussed at length in previous threads on the subject. There are no easy solutions.

At the end of the day all people need somewhere to live that they can afford and all cities need a mix of socio-economic members to fulfil all the layers of employment etc required to function.

Morally, given that life is not a level playing field and birth is the luck of the draw, penalising a person simply because they are poor is something that the welfare state was designed to eradicate. That is the mark of a civilised society.

On a practical level we can consider it like this. If person A works for person B for a low wage and then has to travel more than a reasonable distance to get to that job, then eventaully the cost of travel makes that job untenable. That's the problem with shunting the poor to the suburbs and beyond.

Also in British cities, the suburbs are typically 'leafy' and the preserve of the middle classes. The poor have traditionally been more central. It's only in recent social history that the centre of towns and cities have become gentrified....mainly as industry has declined and conversion of warehouse and former factories into luxury flats aimed at trendy young professionals have replaced them. London is an anomalie to that, having always had a wealthy central district, but then again, the poor have never been able to afford to live in those districts so there's nothing new happening.

[uncleglen]

Friends of the Earth did a study and said that this country can only practically (I expect they are talking about sustainability in an environmental sense given where they are coming from) support 35 million people! So we are well and truly screwed.

[LondonMix]

Nope, not worried, I already own a house here in ED. You are right, market forces would naturally create economic ghettos. I think economic ghettos are bad both for the rich and for the poor for a host of reasons . Bad for the poor as it hampers social mobility in a number of ways. I think its bad for the affluent as it can make them completely ignorant of the less fortunate which makes it easier to stereotype, resent, demonise etc.

I worry about those in the middle who are being priced out of London in the same way I worry about the working poor disappearing from London.

Still, people are always mindlessly clammering for more social housing without necessarily considering that 1. the demand for social housing is unlimitted and the fact that waiting-lists exist is not necessarily a good enough reason to build more social housing and 2. the unintended consequences of social housing (which is to further stratify the city economically).

Just trying to see if anyone has a view on how much social housing is actually necessary without referencing that there is demand for it. Are there any other objective criteria to help us decide?

[????]

"Demand for housing in London (private and council) outstrips supply..."

So what's new? This has been the situation for centuries and will continue in all urban centres.

Rubbish silver fox - as a student you could pick up hard to let flats from the councils in London the early 1980s and the poulation was in decline and some other Urban centres are dying and diminishing in popultion and full of empty houses - Detroit being an obvious global example, but plenty of inner city UK emptying and boarding up

[LondonMix]

Also, you contradict yourself:

any reduction in the numbers of (controlled) social housing will not necessarily help the situation and may in fact increase rents, house prices, so that only the truly affluent can afford to stay in London and other big cities.

Increasing the supply of private housing cannot ever result in an increase in prices by itself. If you are assuming that the social housing is simply destroyed rather than converted to private use, then okay but no one has suggested that. In fact, the question is only if more social housing is needed....

[DJKillaQueen]

Lets change the term 'social' housing for 'affordable' housing....because that is essentially what we are talking about. The fact is, that too many people are priced out of the private housing sector, be it for rental or purchase. So that's how much affordable housing we need...around two million homes nationally.

Either social housing can be built to create those affordable homes (the rents of social housing are controlled by legislation) or the government can do as some governments do accross Europe and regulate the private rented sector by restricting the rate at which rents can increase or by capping them and by guaranteeing long leases to tenants (another aspect of social housing is that no one can evict you every six months).

It's a total myth to think that deregulation and free markets take care of these things. It is plain for all to see that it does not.

It is also true to say that in some areas of the country there is a surplus of available housing, but they also tend to be areas of high unemployment and poor socio-economic diversity. People are not going to move anywhere if they can't find a job. So the cities of the South tend to be over populated, and those of the North under populated.

Rents are at a record high. The government changes to Housing Benefit have had no impact whatsoever on rents. I personally know of several families in social housing crammed into one bedroom flats because there are not enough 3 and four bedroom properties available for them to apply for...in one case a family of five! It's not just that we need affordable housing....we need the right kind of housing too.

[silverfox]

???? Wrote:

-------------------------------------------------------

> "Demand for housing in London (private and

> council) outstrips supply..."

>

> So what's new? This has been the situation for

> centuries and will continue in all urban centres.

>

> Rubbish silver fox - as a student you could pick

> up hard to let flats from the councils in London

> the early 1980s and the poulation was in decline

> and some other Urban centres are dying and

> diminishing in popultion and full of empty houses

> - Detroit being an obvious global example, but

> plenty of inner city UK emptying and boarding up

I seem to remember that in the early 80s London operated a system of 'Essential Worker' housing/accommodation whereby postmen, tube workers etc would be given priority for council flats. This would imply that a problem existed with affordable housing. And yes, I remember some students were also getting some of these flats. Unfortunately people like me paid top whack for dodgy bedsits and have always had to pay true market rates through life.

[LondonMix]

DJ- I agree. Of the 2mln of affordable housing needed though, how much of it should be in London? Do you think we need more here? I think you'd have a waiting list in London until all 2m of the national figure was available in the city.

The real problem I guess is that we need to develop other cities so everyone doesn't think the only way to make it in life is to move to London.

[DJKillaQueen]

You make the assumption that everyone migrates to London within the UK. They don't. London has a core population that goes back generations like any city.

Southwark for example (one of the largest social landlords in the country) has around 20,000 households on it's council waiting list. This has seen a sharp increase of 2000 in the past twelve months and a rise of from around 15000 since the coalition came into government (probably a reflection of the recession, unemployment and welfare reform).

Here's what shelter say on Southwark......

PUBLIC HOUSING LOSSES: Locally, from 2000 to 2010, 6115 Council homes were bought through the Right To Buy scheme and removed from the public housing availability. In the same decade approx 1000 households per year joined the Southwark Housing Waiting list, the total number on the list reaching a current high point of almost 11,000. It?s worth pointing out that the figure of 11,000 households does not mean 11,000 people are waiting but means that 11,000 people and in many cases their family and dependents are also waiting for homes.

NEW BUILDS and WEALTH: In the same period 5470 ?affordable? homes were built across the Borough although this has not in anyway impacted on or diminished the massive Council waiting list suggesting that ?affordable? housing is not an option for most on the list. In the same period again house price to income ratio has nearly doubled in the Borough and the average selling price of a home in Southwark has quadrupled. Again from 2000 to 2010 average incomes on Southwark have rocketed as a result of the new middle class residentials in the area. It?s not that poor people are earning any more money that makes the statistics high, its that the new wealthy people in the area skew the stats upwards.

One final addition worth adding is that the figure for empty homes in Southwark now stands at 3367 dwellings.

Accross london there are an estimated 370,000 households on waiting lists (around 30% of the national figures approx). So that's how much affordable housing London needs. Shifting them out to other cities isn't the answer as they won't find social housing there either. It's a shortfall nationwide and one that is rising all the time.

One of the impacts of welfare reform has been a reduction in private landlords willing to rent to those needing Housing Benefit. Not quite what the government told us all would happen is it? And even more demoralising is that the government want to reintroduce high discounts for the right to buy scheme.....to further encourage the offloading of social homes.

They have followed with a promise that every home sold will be replaced but it won't happen, mainly because the government favours private partnership development whereby a developer receives grants in return for including a certain (and low) percentage of homes for housing association ownership within their development. So the number of social homes built will be a low percentage of private sector peoperties built, meaning that it's the market forces of the private sector that will determine home many new affordable homes are built....not social need for those homes. Totally backward.

If we want to go back to a time when families live out of one room because that's all thay can afford then let's just keep going on as we are.

[Saffron]

Lewisham PBP has an interesting take on social housing problems, including occupying derelict council housing that is up for sale, and using trainees and volunteers to bring the houses up to acceptable living standards.

Read more about their efforts here: http://www.peoplebeforeprofit.org.uk/lewisham/lewisham-pbp-news/237-london-a-quadrant-tries-to-sell-off-flats

and here: http://www.peoplebeforeprofit.org.uk/lewisham/lewisham-pbp-news/100-lewisham-pbp-news-9

[Chick]

Silverfox:

If a family has grandparents, parents and adult children that are unable to secure employment and dependent on benefits why not say sorry, you cannot live in The borough of Westminster, but we can relocate you to Hull next week. What is wrong with that?

Have you ever been to Hull?

[LondonMix]

DJ, you are totally missing the point. The question is where new social housing should be built, not if it should be built. Saying 'Shifting them out to other cities isn't the answer as they won't find social housing there either'

isn't an agrument since the housing isn't in London either and it can be built outside of London.

We can add a criteria that historical links to the local area moves you up the waiting list. However, truthfully, lots of people in the private sector can't afford to live where they grew up. Its not an argument that trumps all other considerations and if people want access to housing provided by the tax payer,they need to be flexible about where it is located.

We can all agree that everyone who qualifies for social housing should be housed. However, people don't have the right to demand to live anywhere they want. London, can't house everyone who wants to live here. There needs to be a limit that is determined in some objective way beyond simple demand for a nice area especially given the distorting impact it has on other elements of the housing market.

[DJKillaQueen]

First of all, social housing is not provided for or subsidised by the tax payer. That is a myth. Capital loans used to help fund the building of homes have to be repaid and that repayment comes out of the housing revenue budget, which is rent paid. In addition, if the governemnt didn't cream off a percentage of rent paid to local authorities, they'd be in a far better position with regards to the financing of capital building. It's worth noting that under the Thatcher governemnt, local authorities were not allowed to spend the revenue from the sale of council homes on the rebuilding of new homes to replace them!!! There is a lot of ignorance about facts of the financing of social housing and I wish people would do some research first before believing what they read in the media.

With regards to where social housing should be built.....London holds around 12% of the UK populstion. That's normal for a capital city. If we are to locate people out of London then there need to be jobs, schools, hospitals and all the other things needed to accomodate that population. It's not as simple as building homes anywhere where there's space. Some Northern cities for example have demolished housing because the populations of those cities have shrunk drastically over the past 30 years while the south has increased. There are very goood reasons for that, linked to the economy. And every local authority has a waiting list, unable to build sufficient new homes as it is. Every local authority also has a shortage of three and four bedroom homes as these properties were the first to be snapped up under right to buy.

London can house every single person on the current waiting list. There are more than enough empty properties at any one time. The issue is 'affordable housing'. Around 200,000 people in full time work in the capital have some of their rent paid by HB because they don't earn enough. Are you suggesting we move those people out too? Or just those on the waiting lists, some of whom also have low paid jobs in the capital. Because that is the real problem. Average rents are outstripping salaries. It's a problem right accross the country and a gap that is continuing to widen. We need to address that as much as building affordable homes.

[Loz]

Average rents are outstripping salaries. It's a problem right accross the country and a gap that is continuing to widen. We need to address that as much as building affordable homes.

Rents are supply and demand. Rents are high because there is high demand. There are only three ways to counter this:

1) Increase supply

2) Lower demand

3) Introduce some other control.

(3) won't happen, even if Ken's 'non-profit agency' gets created. And HB only distorts the market upwards, by pumping cash in and making the problem worse.

[LondonMix]

DJ

I'm not sure if you are avoiding answering the question or if I just don't get your point. London has 12% of the population-ok. The more relevant statistic would seem to be that 18% of the nation's households are in social housing. Therefore, London's fair share would be to have 18% of its own housing stock for social housing. According to the report at the link below, London has close to 25% of its housing stock devoted to social housing. http://www2.lse.ac.uk/geographyAndEnvironment/research/london/events/HEIF/HEIF2_06-08/TheRoleofSocialHousinginTheLondonEconomy/socialHousingsCurrentRoleinLondon.pdf

While some might argue that housing costs in London mean that more social housing is needed here for low income and key workers, this is not borne out by the facts. According to the statistics, only about a third of those in social housing in London work including those working part-time. Social housing is not primarily for working people.

As Loz says, private rents and house prices are a question of supply and demand. The more new social housing that is built on sites that could otherwise have been used for private housing, the more upward pressure will be put on private rents and house prices. Social housing (particularly for key workers) should be provided for all that need it but at a justifiable amount for each city given the impact it has on the private sector housing costs.

DJ can you please justify your claim there is enough housing for everyone on the waiting list? According to Empty Homes, there are 74,000 empty homes in all of London http://emptyhomes.com/statistics-2/. There are 880,000 people / 350,000 households on the waiting list for council housing in London http://www.politics.co.uk/opinion-formers/national-housing-federation/article/nhf-social-housing-waiting-lists-rise-in-22-london-boroughs-.

Again, the question isn't if we need more social housing but if we need more in London and so far no one has said anything to suggest why London should have more than its fair share of social housing.

Social Housing is indeed provided by the tax payer though this is totally irrelevant to the question at hand. The history of how social housing was developed and funded historically is more complex than you state DJ. More importantly, the construction of new social housing would need to be funded by tax payers as the rents collected for social housing is not sufficient to keep up with servicing council housing's existing debt, repair needs and administration costs according to this consultation report. http://www.communities.gov.uk/documents/housing/pdf/1290620.pdf. Overall, the system does not have the means to fund additional social housing. It will be need to be developed by the private sector or by the tax payer. Either way, it needs to be built, but decisions on how and where need to rational given limited resources. I'm all for funds raised from the sale of council homes being earmarked for developing new council homes, but that just leaves the total unchanged rather than developing new housing.

[DJKillaQueen]

Are you really suggesting London should be a ghetto for those on above a certain salary. That's completely insane. London belongs to all of us, not just the wealthy. The unemployed also have more chance of finding work in London than they do in many other cities, which is why people come here, but also the level of unemployment is London is lower than other parts of the country too so London can accomodate it. My point is that shifting the poor, or unemployed or whatever to anyher place isn't doing anything to address the problem of unemployment or housing people in any kind of afforable way. So it's no answer to anything.

Rents and house prices are not soley the result of supply and demand. They are also the result of a completely and isanely deregulated sector that through it's deregulation, has been artificially protected from normal market forces. We have had three recessions in the last 30 years and not a single one of them has meaningfully impacted on house price inflation. But where Loz is rigbht is that it's too late to change any of that, so it won't be changed.

You are absolutely wrong on the financing of social housing. This is an area I know a huge amount about. House building is funded by capital loans and grants that HAVE TO BE PAID BACKED WITH INTEREST. The reason why rents are not sufficient to service social housing is because the government takes a percentage of the rent paids (like some kind of tax) and then retiurns part of it as housing subsidy (creating the myth of government subsidy). If southwark for example were allowed to keep ALL of the rent they collect...they would have enough to cover the service costs of their properties. This is thankfully about to change under new legislation devised by the last labour government and to be put into place by the current coalition.

[LondonMix]

DJ- that response is so cynical. How can anything I stated suggest that I want London to become a ghetto for those above a certain income level? I said I strongly believe London should have social housing (18% of all housing in fact). I simply have suggested that there is no justification for London having more than its proportional share of the total national social housing requirement given the impact it has on private housing. Lot's of things affect the cost of private housing but supply of housing is certainly one of the most crucial factors.

You are twisting these simple facts beyond all recognition simply because you have no rational argument against this that is based on facts rather than emotion.

I understand your point regarding the government taking a portion of Southwark's rents. Part of what the government collects is used to subsidise councils whose rents do not cover their costs and like you've said the rest is diverted for other uses (though not housing benefit anymore). There are a host of reasons why many involved with funding decisions don't believe the model you mention can work for future social housing development. However, none of this has anything to do with the question at hand which is how much social housing belongs in London. If you want to move the discussion along to a new subject just say so and I will be happy to debate this with you.

[DJKillaQueen]

You are twisting these simple facts beyond all recognition simply because you have no rational argument against this that is based on facts rather than emotion.

You are very patronising, esp given that housing issues are something I have continued experience of through my voluntary work (and have engaged in many detailed debates on this forum on that issue). As such I have a very good understanding of the pressures of the market forces vs social housing vs the situation people sadly find themselves in (along with a thorough knowledge of the facts of housing revenue and financing). All of my arguments are based on facts...the fact that the proportion of rent to income is too high....that too many people can not afford private rents without tax payers money being sunk into housing benefits.

You are presenting an argument for housing solutions based on quota rather than need. I simply disagree with that and think I have made a good argument for my reasoning (whilst feeling no need to personally insult your intelligence). You can not explore workable solutions to the housing crisis without understanding why the crisis exists in the first place, hence debates around financing and rent capping being more than relevant.

Again you simply fail to understand how the government creaming of rents impacts on local authorities ability to maintain stock. It is not a subsidy at all...it's money that should never have been taken by the government in the first place and it is the taking of that money that has left local authorities unable to fully maintain their stock. This is thankfully going to change.

People need to be housed. It doesn't matter where we house them, we will have to build homes to house them or regulate rents to make more private sector homes affordable. It may as well be London as anywhere else.....ALL capital cities have a higher than avarage of poorer demographic residents. There's nothing unusual there. So there you go...that's my view...London can have a higher percentage of social housing, because it's in the nature of a capital city to do so. Happy now?

I really can not be @rsed getting into another pompous discussion with someone with a desire to dismiss another's opinion (whether you disagree with it or not) as emotive and off point................that's just disrepectful to my intellect and sadly a reflection on yours.

[LondonMix]

I don't think I have insulted you but if I have then I apologise. Let's try to not make this personal and stick to the issue at hand.

A simple question for you DJ-- what's the cut-off? If every unemployed person in the UK wanted to live in London and 100% of the housing stock therefore needed to become social housing to accomodate them, would that be okay, even if it forced the majority of people who work in London out of the city?

In my view there simply needs to be some objective criteria beyond the existence of a waiting to list to determine the creation of social housing in London. And the decision needs to be taken in light of all of the good and bad consequences of the policy adopoted.

I have already agreed with you on the impact central government taking a portion of certain councils' rents has so I have no idea why you are arguing with me about that-- (read my post carefully and you will see I mentioned that a portion of what is being creamed off is tranferred to other councils- i.e. certain councils susidise poorer councils not that social housing in itself is a subsidy which is a totally different discussion that I wasn't trying to provoke). I agree how social housing is funded is important, just that its is not relevant to if social housing should be built in London vs elsewhere.

Where we really disagree is that as you state in your post, you believe it makes no difference if housing is built in London or elsewhere as it has to be built. I agree it has to be built. However, in London, given the demand pressure that already exists in the private housing market (not to mention the cost of land), building more council housing (where private housing could be developed instead) has a greater negative impact than it would elsewhere in the country. Demand for private housing is greatest in London vs. elsewhere in the UK. If you disagree with that, can you please explain why?