Hospital waiting lists, blocked A&E departments, overcrowded schools, jammed public transport… all are examples of public services failing to meet need, and all make headlines on a regular basis. But efforts to meet housing need at a time of constrained resources do not provoke the same level of interest, even though a substantial number of Northern Ireland’s people are homeless or inadequately housed.
What is ‘housing need’?
A person or household has a ‘housing need’ for accommodation of a minimum standard as specified by government. Definitions of need may be influenced by the law, for example on overcrowding, or by social norms, such as access to an indoor bathroom. Those in housing need may apply to be housed by a non-profit (‘social housing’) landlord – in Northern Ireland, by the NI Housing Executive or by housing associations – and they will be allocated a home that fits their needs criteria. Rent will be cheaper than on the open market because the construction costs of their home will have been part subsidised by the state.
Housing need and the supply of social housing
In 2014-15 around 19,600 households applied to the Housing Executive for housing because they were homeless. Due to the complex legal criteria for defining homelessness, only 11,000 were accepted, which is the usual proportion. If a household is homeless, the Housing Executive has to provide some kind of accommodation even if it is temporary. Those who are not defined as homeless may apply to join the waiting list for social housing, which stood at 39,300 in March 2015, with around 22,000 regarded as having a serious housing need.
Most housing need is met from existing social housing, with 8,809 re-lets in 2013-14. The Housing Executive calculates how many additional social housing units are needed, currently 2,000 per annum. Due to funding constraints, the Programme for Government 2011-15 committed to only 6,000 units over a four-year period; a total of 6,101 homes were completed, meeting the Government target but not the independent need calculation. All new social housing is built by housing associations.
Matching need to supply
Matching housing need to available supply requires decisions about the definition of need, allocations policy, management of how housing should be allocated, efficient access to existing stock, and the construction of additional units if they are required. Housing is a devolved function under the Minister for Social Development, and so most of the relevant decisions will be made at Assembly level, albeit in a wider UK context of austerity.
Allocating social housing:
Once applicants have been prioritised through being given ‘points’ for each aspect of their housing need, they must be allocated a suitable home in terms of size, type and location. The allocations process can be contentious, with differing views about what kinds of need should take priority. In 2013 the Department for Social Development (DSD) commissioned a review of social housing allocations policy. All the recommendations are based on either helping people to keep their existing homes, or speeding up the allocations process so that properties are empty for as short a time as possible. One proposal was to introduce ‘choice based lettings’ (CBL), to allow applicants to choose their own new letting online, and subsequently CBL has been operating in some areas of low demand with some success. The review rules out several options used in England, such as short-term tenancies and compulsory use of the private rented sector. The use of the ‘bedroom tax’ to force tenants into smaller housing is also not supported, although voluntary transfers and ‘mutual exchange’ schemes to free up larger property are encouraged.
Defining need:
Because ‘housing need’ is defined by policy and legislation, its meaning can be changed by government. For example, any of the four criteria for acceptance as homeless can be altered. In Scotland the ‘priority need’ category was abolished in 2012, thus widening eligibility. Alternatively, access to the waiting list can be restricted, for example through removing entitlement to those with very low priority after an initial assessment, as has been done in England, thus narrowing eligibility. Changes to the priority given to certain types of need may also be made. In Northern Ireland, there is no appetite from any of our politicians for making major changes to existing definitions of need.
Making best use of existing stock:
It has been estimated that around £6.1bn is required to maintain and modernise the Housing Executive’s housing. Unlike housing associations, the Housing Executive must fund all its improvements from existing income and it is not usually allowed to borrow because its loans would count in public expenditure totals. Therefore an important part of the DSD’s Social Housing Reform Programme is to consider more ‘stock transfer’ from the Housing Executive to housing associations, with tenants’ consent, to increase the potential for borrowing to fund improvements. This is a controversial move, as housing association rents are currently higher, and the Housing Executive is a popular landlord. Another possibility is to allow the Housing Executive to borrow within prudential limits, which the new councils are able to do. However, without a change to Treasury accounting rules, such borrowing would still be defined as public expenditure.
Two further possibilities are examining the impact of the House Sales Scheme and tackling residential segregation. The House Sales Scheme (Northern Ireland’s Right to Buy) was introduced in 1979 and has led to 119,000 dwellings being sold at a discount to sitting tenants. In Scotland, Right to Buy will be abolished from next April, after many years of restricting entitlement in high need areas. Wales appears to be looking at the same approach. Here, there is a case for reviewing the policy and considering whether to limit it in some way. Finally, it has been estimated that £21m a year is spent building additional social housing in response to residential segregation, as applicants cannot be housed where they do not feel safe. Social landlords have been working together since the mid-2000s on programmes to tackle segregation. Residents sign a Shared Housing Charter promising to behave in a way that supports good relations and diversity.
Maximising opportunities for new social housing:
Housing associations have been seeking new sources of private finance in order to continue to meet housing targets. This has been made easier by recent mergers which allow larger organisations to consider bond finance and to obtain larger conventional loans. Associations have achieved procurement efficiencies through a difficult process of partnership working which is currently under review. Stock transfer from the Housing Executive provides a chance to build new housing through demolition or infill development. The Housing Executive could also build new homes again if prudential borrowing were allowed.
Residential segregation continues to affect new housing developments as well as established estates. Working with housing associations, eleven developments have been let under the ‘Shared Future’ banner since 2006 and a further ten are planned under the Together, Building a United Community strategy. This is, however, a small number. But the most serious missed opportunity has been the absence of developer contributions for social and affordable housing as part of the planning process, as is required in the rest of the UK. There have been repeated calls for their introduction here, and a consultation paper last year emphasised their importance for housing supply in the light of the difficult financial situation. The response to consultation was that further research would be carried out before any requirements were introduced – perhaps indicating the lobbying strength of property developers in our region.
The future
In Northern Ireland there is no wish to restrict eligibility for social housing. Thus, allocating appropriately, and making sure there is as much available stock as possible, are the areas where improvements could be made, led by the DSD as the responsible government department. Examples should include:
- Expand Choice Based Lettings for low demand stock and in areas where residential segregation is less severe;
- Continue the existing small scale stock transfer programme, to result in both refurbished existing stock and new housing where land is available;
- Lobby for a change to Treasury accounting rules to allow (nationally) borrowing for social housing to be exempt from public expenditure figures
- Allow the Housing Executive to be included in the 2011 Prudential Borrowing Framework;
- Consider the suspension of the House Sales Scheme in high demand areas;
- Continue to support work to reduce residential segregation;
- Keep procurement efficiencies under review;
- Provide advice and support to assist housing providers to access new sources of finance; and
- Introduce developer contributions as soon as possible.
Providing appropriate and affordable housing for all will remain a substantial and difficult policy challenge in the foreseeable future. If the above measures do not suffice, a more fundamental political decision will have to be made: cut entitlement or increase funding.
The featured image in this article has been used under a Creative Commons licence.
