The private rented sector as permanent housing for low income

Report
The private rented sector as
permanent housing for low
income households –
housing policy and the local
authority role
Bryony Stevens
Senior Lecturer – University of the West of England
Work in progress..
• Small scale internally funded research project.
• Very much reporting on work in progress today.
• Original idea developed when Coalition first
elected – anticipated removal of security of
tenure in social housing.
• Led to thinking about likelihood of greater role for
private rented sector as permanent housing for
lower income households who in different policy
context might have accessed social housing.
The original question
• The initial idea was to explore the reality of living long term
in the PRS for lower income households.
• Focussing on the experience from the tenant's point of view
–what is their experience of security of tenure, housing
management, property conditions and neighbourhoods?
• What do they think of policy that encourages PRS as long
term housing? Inspired by thinking about the lack of
collective ‘voice’ for PRS tenants in comparison to social
sector.
• Decided to focus research on a specific housing market area
– because PRS varies considerably and local markets have
their own dynamics, based on nature of stock, demand
from different groups, etc.
Policy developments
• Subsequent policy developments have moved in the
expected direction.
• ‘Flexible’ tenure, ‘affordable’ rents, greater emphasis on
private sector housing for the long term. Social housing a
short term ‘safety-net’. Housing benefit cuts.
The current focus
• Secured UWE internal funding (time) and developed a
partnership with Exeter City Council (ECC) to carry out the
research taking Exeter as a case study.
• ECC has strong interest in working with PRS – one of first
authorities to develop a ‘social lettings agency’ – model
recommended by Rugg Review.
• Exeter has large PRS with strong demand from students
and professionals as well as lower income households.
• Before going on to conduct in depth interviews with tenants
the initial task has been to explore the nature of policy
towards the PRS and the role of local authorities in
both implementing and developing policy.
• This aspect of the research is the focus of today’s
presentation.
The PRS is growing
• In England the private rented sector in ascendency as a
proportion of the national housing stock, a tenure of choice
for households and a focus for housing policy both implicitly
and explicitly.
PRS and the Housing
system
• The PRS now makes up around 16% of housing stock in
England with an increase of 1million to this tenure since
2005. (DCLG Feb 2011).
• If current trends continue the PRS could overtake the social
rented sector by 2013 (Pattison et al; 2010: 5).
• Whilst home ownership remains an aspiration for many,
surveys suggest that there is a growing realization,
amongst younger people especially, that renting may be a
permanent housing solution (Blackwell and Park, 2011).
• Recent growth in demand for PRS interpreted as largely due
to both new household formation and housing market
issues e.g. lack of availability of alternative tenures for
new households who cannot access mortgages or affordable
housing (Pattison et al; 2010).
Social housing policy
and the PRS
• Coalition policy implicitly and explicitly encouraging
movement from the social to the private rented sector
• Implicitly - Recent policies (Localism Act, HCA funding)
diminish the distinctiveness of the social sector from the
PRS. Less security and higher rents in ‘social’ sector.
• Implicitly - AH providers to encourage tenants to move on to
the private sector at the end of their fixed term tenancies.
This likely to mean a move into private rented
accommodation, given barriers to owner occupation.
• Explicitly - Local Authorities to discharge their statutory duty
towards homeless applicants by placing them in private rented
accommodation, regardless of the wishes of the applicant.
Housing and welfare
policies and the PRS
• Two other key themes/areas of policy impacting on the PRS.
• Government seeking to encourage more institutional
investment in the PRS - to professionalize and boost
contribution of PRS to new housing supply. Announced
review into the barriers to such investment (HM Government
2011).
• Welfare policy significantly impacting on housing - housing
benefit cuts to limit the amount low income tenants, and
tenants in particular circumstances can pay.
• Raises questions about the boundaries of housing policy
and the different tactics employed in measures relating to
the social or private rented sectors.
Different policy
tactics
• Policies relating to the social housing sector directly
targeted at social housing providers, consulted
upon throughout the social sector, and implemented
through the relevant quangos – TSA, HCA.
• Policies intended to impact on private landlords
and the level of subsidy provided to them through
housing benefit are being implemented through
welfare benefit policy targeted at individual
tenants.
• This raises questions about the lack of any
collective ‘voice’ of private sector tenants within
the housing policy process – in contrast to the highly
orchestrated and Government supported tenant
involvement processes within the social sector.
Contradictory
policy discourses
• Like previous governments, Coalition emphasize the
importance of the PRS within the housing system as short
term, flexible accommodation for young mobile households.
• Make clear their intention to minimize ‘red tape’ and avoid
additional regulation of the sector.
• But the PRS also seen as suitable permanent
accommodation for homeless households, and those leaving
the ‘safety net’ of the social housing sector.
• Regulation is not to be increased, but rental income is to be
controlled through housing benefit regulations specially
tailored to impact on tenants in particular circumstances.
Contradictory
policy discourses
"So today I make a promise to good landlords across the country: the
Government has no plans to create any burdensome red tape and
bureaucracy, so you are able to continue providing a service to your
tenants.”
"I will not let the private sector be a poor quality alternative to the
high quality social rented sector.”
The accepted wisdom
about deregulation
• These contradictory discourses can be linked to tension
between government’s desire to increase private sector
housing solutions for those least well off, whilst also bowing
to a kind of accepted wisdom about regulation of the PRS.
• It is often argued that regulation caused the long term
decline of the PRS post 1914 and that deregulation, with
the change to the assured tenancy regime and use of ASTs,
is responsible for the growth in supply of the PRS in
recent years.
• The problem with this for policy analysis is that it confuses
deregulation with lack of policy intervention – policy
may take various forms besides regulation including nonintervention, exhortation, taxation, subsidy etc (Doling,1997:40)
Intervention in the PRS
and market conditions
• Although it brought about a less regulated private rented
sector, from the point of view of landlords and tenants, an
overhaul of the legal framework governing security of
tenure can hardly be characterized as a lack of state
intervention.
• Furthermore, as others have argued, (Kemp, 2010; 131,
Crook et al 1995) other housing market factors
coincided with the liberalized legal framework to
encourage private renting.
• E.g. housing market slump 1990s, deregulation of
mortgage markets/securitization leading to growth in buyto-let products, house price inflation in early 2000s making
rented property attractive capital investment.
Local authorities
and policy intervention
• Simplistic debates about regulation also lack consideration
of the role of local government in policy implementation
and development.
• In fact forms of policy intervention at local level are
many and varied and belie the notion that policy towards
the PRS is characterized by lack of state intervention.
• The research seeks to explore the interrelationship between
local government strategies, local housing markets and
local landlord organization to better understand the policy
and market tensions which help to frame the experience of
households in the PRS.
• The initial findings presented here are drawn from
interviews with key officers in the case study authority.
LA both implement and
develop policy
• Three key areas of statutory local government housing
activity relating to PRS
– Enforcement of Housing Act 2004 regulations relating to
property conditions in the PRS and HMO licensing;
– Accessing the PRS as part of housing needs/homelessness
responsibilities;
– Enabling/strategic housing activity, relating to the
development of new housing stock, in the case study authority
considerable activity around procurement of private rented
property for a social lettings agency and private sector leasing
scheme.
• The extent to which these different roles reflect tensions
and contradictions in policy at national level was explored in
interviews.
Findings from
the case study LA
• LAs develop their own policies towards the PRS – in case
study authority social lettings agency, use of S106 to create
PRS lettings. Plans to use social lettings agency for duty to
homeless households.
• How policy is implemented and developed is shaped by
the political complexion of the Council – in the case
study strong commitment to social housing, commitment to
seek high property standards from private landlords.
• Also responding to the particular nature of the local
housing market. The significance of local market
variations a recurring theme in previous research on the
PRS (Rugg and Rhodes 2003:941).
• In the case study authority the market is strongly shaped
by the effects of a large student population. Impacts on
rent levels, effectiveness of HMO licensing, availability of
PRS for lower income groups and LA schemes.
Findings from
the case study LA
• Whilst acknowledging potential tensions between their
roles – e.g. between accessing more PRS properties to
meet housing need and yet ensure high property standards
– officers work innovatively to make priorities coincide.
• A good example of this is use of loans/grants for property
improvements being made available as an incentive to
recruit landlords to the social lettings agency. Hence
creating access and better standards.
• Officers welcome the opportunity to discharge
homelessness duty to PRS. But see LA involvement in
recruiting landlords/managing properties as vital.
• All acknowledge that adequate supply of suitable, lower
rent PRS is not available in the local market to play the
role envisaged by current central government policy.
To conclude...
• In light of current policy developments it is important that
research addresses the reality of private renting as a long
term housing solution.
• In so doing we need a better understanding of both
national and local level policy towards the PRS and its
effects.
• The findings so far suggest we may be moving towards a
situation where:
– The role of LAs in attempting to secure, improve and manage the local
PRS becomes of increasing significance in meeting housing need.
– Increasingly integrated initiatives across LA departments/statutory
roles are required.
– Local markets shape housing outcomes of lower income households to
a considerable extent and in areas of high demand (and poor LA
intervention) they may find themselves increasingly disadvantaged.
Bibliography
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Blackwell, A. and Park. A (2011) The Reality of Generation Rent,
Halifax
Crook, A.D.H. , Hughes, J and Kemp, P.A. (1995) The Supply of
Privately Rented Homes: Today and Tomorrow, York: Joseph
Rowntree Trust
DCLG (Feb 2011) Survey of English Housing 2009-10 headline
report
Doling, J (1997) Comparative Housing Policy, London: Macmillan
HM Government (2011) Laying the Foundations A Housing
Strategy for England
Kemp, P. A. (2010) ‘The transformation of private renting’ in
Malpass, P and Rolands, R. (Eds) Housing, Markets and Policy,
London: Routledge.
Pattison et al (2010) , Tenure trends in the UK housing system,
BSHF
Rugg, J and Rhodes, D (2003) ‘Between a rock and a hard place’:
the failure to agree on regulation for the private rented sector in
England, Housing Studies 18:6, 937-946

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