Housing Co-ops and Social Housing

Housing co-ops and social housing

By Rockdove Rising Housing Co-op

 

We are writing this article to continue the discussion begun by Tony of Mary Ann Johnson Housing Co-operative in his contribution ‘What housing options should Radical Routes support?published in the last edition of Radical Rumours (May 2014). In his article Tony discusses the nature of Radical Routes, Housing Co-ops, Social Housing and the interrelations between the three. His main theme is the purchase of ‘right-to-buy’ (RTB) social housing and whether or not this is ethically acceptable for a Radical Routes co-op.

Firstly, we need to lay our cards on the table and say that we at Rockdove Rising (RdR for short) are currently in the market for a flat (or flats) on the ‘Redbricks’ estate in Hulme, Manchester, and the only properties on the estate are either actual social housing or former social housing previously purchased under the RTB scheme. However, this is the estate we live on (we currently rent two flats from private landlords), and it is the estate we wish to continue living on. The resolution of this debate is, therefore, of direct significance and bearing on both our potential membership and future use of Radical Routes’ loan-making facilities.

The debate we think falls into two distinct parts:

  1. Purchase of de facto social housing vs. purchase of former social housing, and;

  1. Whether or not Radical Routes housing co-ops are indeed a form of social housing.

We would like to discuss, under these two headings, the various points raised by Tony in his article.

Purchase of de facto social housing vs. purchase of former social housing.

Generally speaking, and in no cases so far as we are aware, are housing co-ops tenants of other social housing providers, e.g. housing associations or councils. Housing co-ops tend not to apply for social housing themselves, may well not be eligible should they wish to do so, and are therefore not in the first instance likely to be exercising the RTB of de facto social housing. Thus, on a practical level, there are no actual situations (that we are aware of) in which this is happening.

More likely, and the situation in which RdR finds itself, is the purchase of former social housing, either from the first buyer, or some subsequent buyer. Tony suggests that:

“…we (Radical Routes) should refuse loans to any co-op who buys an ex RTB if it’s from the first owner. After all, that’s where the profit margin is at the most hefty and we would be supporting someone making a big, big profit from social housing.”

However, we at RdR are nonetheless looking to buy a property, and we therefore need to deal with the realities of the market place, i.e. actual house prices. To begin to debate how much profit it is appropriate for someone else to make on the sale of their house begs the question ‘Where do you draw the line?’. On this ground other examples of ethically questionable profit making include both solicitors fees (often well in excess of £100/hr) and estate agents’ commissions (usually a few percent), both of which will have been paid for by Radical Routes loans on numerous occasions.

It is beholden upon the members of a housing co-op to obtain the best price they can for the benefit of themselves and all future members. But we cannot expect to restrict ourselves only to sellers who are willing to disclose how much money they are making on a given sale, and the subset of those whose profit falls below some acceptable threshold. There is, in effect, no way of judging the issue.

However, in the limited experience of RdR, both of the private landlords from whom we rent have indicated that they would be willing to give us, as a co-op with social housing credentials (more on which in the second part of the discussion), a discount below the market rate of the properties. Both of our current landlords are people who exercised the right-to-buy, but both are nonetheless supportive of housing co-operatives. During discussions, one of them stated that, for him, it simply made financial sense to take advantage of the right-to-buy offer. He also indicated that he would be willing to come and, in his own words: “Spend an afternoon in the stocks” at a Radical Routes gathering, discussing why he exercised his right to buy. Frankly, neither of the landlords from whom RdR rent are people we would wish to ostracise, and not simply because we rely on them for our housing.

Granted that these two individuals are perhaps more socially minded than most in that they would be willing to offer discounts off market price, but the more general argument is that it is not individuals who are destroying social housing through greed, but government policy. This appears to be aimed at both eradicating social responsibility and maximising housing prices as the basis for a massively leveraged financial market. The fact of the matter is that the majority of people purchasing right-to-buy housing are just ordinary folk doing what makes economic sense to them, as opposed to profiteering capitalists on a social housing rampage.

At the end of the day, it does not make a difference to our co-op, or to the reclamation of private housing into what is arguably a social housing enterprise (more below), whether we pay X amount of money to person A, who has just bought the house under RTB, or to person B, who bought it off the person who exercised RTB, or to person Z somewhere else down the line. For us it is more valuable to capture from private ownership the most appropriate property for the co-op than to stand in judgement upon exactly who made what when.

It is also worth mentioning that the alternative would be leaving those flats already in private ownership to be likely bought by the person with the most money, a buy-to-rent, which for the most part are then rented out to people not in need of cheap housing AND NOT to people on benefits. Generally speaking, by housing co-ops buying up former social housing, they are preventing gentrification, preventing the pushing out of people in receipt of social security benefits, and are encouraging people who are less transient and want to have more of a stake in the place they live and get involved in community activism.

We do recognise we have somewhat side-stepped the issue of purchase of de facto social housing, due to the argument that practically-speaking it is not happening, but we do not wish to dismiss it simply on that basis. We believe that the question revolves around the nature of housing co-ops and whether or not they offer truly ‘social housing’, as is discussed more fully below.

Are Radical Routes housing co-ops actually a form of social housing?

This is perhaps a larger debate than can be had here, but there are a few things that we would like to consider.

One of the central points raised by Tony is that Radical Routes housing co-ops do not truly fulfil the criteria for social housing, on the basis that:

“We DO NOT take people most in need into our co-ops and homes. What we take is politically or environmentally active/aware comrades…. we are self selecting and we don’t house those ‘most in need’.”

and

“…local authorities have social housing to support people from vulnerable groups – we dont.”

We are open to discussion of basic defining principles of social housing, but as a starting point we have used the following definition from the website1of the housing charity Shelter:

Social housing is affordable housing

A key function of social housing is to provide accommodation that is affordable to people on low incomes. Limits to rent increases set by law mean that rents are kept affordable.

Social housing is allocated on the basis of need

Unlike in the private rented sector, where tenancies are offered by the landlord and letting agent to whomever they choose, social housing is distributed according to the local council’s allocation scheme. Since the Localism Act 2011, councils can decide who is or isn’t eligible to go on the waiting list for social housing. Out of those who meet the council’s criteria, legislation requires that certain groups be given ‘reasonable preference‘.

Briefly, ‘reasonable preference’ may be given to the following (according to Shelter):

  • If you are homeless or about to lose your home

  • If you are living in very poor conditions

  • If you have a medical condition

  • If you were seriously injured in the armed forces

  • If you need to live in the area to avoid hardship

  • If you are at risk of violence or threats

From these definitions it is clear that the term ‘social housing’ encompasses a broad spectrum of types of need or vulnerability to be addressed, from simple provision of low-cost housing to more comprehensive levels of care for the most vulnerable, i.e. people falling into several categories on the above list.

With respect to social housing being affordable housing, Radical Routes housing co-ops do clearly provide this, and is one of the central reasons they exist.

With respect to allocation on the basis of need, we acknowledge that social housing requires preference be given to people of those groups, rather than them being provided for incidentally, and we agree that RR does not necessarily show a preference for those in need. Nonetheless, it is likely that RR co-ops have and do provide housing to members of the listed groups, and maybe there are co-ops with selection criteria that assess need2.

Furthermore, if the state has sold assets which would have been used for preferentially supporting these groups, isn’t it better that we transfer those assets back into common ownership with a social purpose (which will convey benefits to those in need if we do our social change work well!), rather than leave them in private hands? We would also add that the aims of social housing are not only to provide those in need with affordable housing, but also to give people control over and security in their living circumstances, compared with the private sector. More generally housing co-ops have also in places been a response to council or housing association mismanagement, that local people know how and what’s needed and can provide it sometimes better than a large organisation with many staff wages.

On the Redbricks there is an existing community with a character and dynamism which could be erased if it was all slowly transferred from social to private ownership, and the role that social, political and environmental activists may play in influencing or developing their communities for the benefit of all should not be understated.

The Redbricks is perhaps unusual in the level of activism across the estate both historically and presently, and it is in no small part thanks to the commitment and dedication of activists that the estate has so many worthwhile community projects. Currently these include the Tenants and Residents Association, a monthly bring-and-swap exchange, a monthly People’s Kitchen’ providing cheap food to estate residents, a bike club providing free bike repairs and advice once a month, a sewing club that meets once a month, an estate internet collective (low-cost service provider), a community gardening group that meets regularly, a ‘Green Zone’ environmental group (which by itself has brought in over £100,000 worth of funding to the estate). The estate has also hosted community meetings to fight against the bedroom tax and has been working with the local housing association to improve housing allocation policy.

It is thus demonstrable that even if only the activists are provided with cheap housing then the subsequent payoff in terms of community services will have impacts in other areas where people find themselves vulnerable. More information about the Redbricks is available both at www.rockdove-rising.org.uk and at www.redbricks.org. RdR are still finalising their secondary rules, but community activism and participation is important to all members and it is likely that we will write a secondary rule for the co-op regarding involvement in estate activities.

To conclude, what is Radical Routes about if not that by providing ‘social housing’ of one sort or another it seeks to influence and address some of the wider societal problems that create those vulnerabilities in the first place? We would like to see the movement grow, and as it grows to generate sufficient surpluses to further focus on the most vulnerable sectors of society. It is partly a matter of scale. We are small, and so it does not seem that we can offer the services provided by the state. But proportionally it is quite likely that Radical Routes members contribute significantly more of their total available work capacity to addressing these problems than the state does. The intentions of the state are doubtful in the extreme, and the dismantling of the welfare state continues apace. It would be a pity if we did not have the confidence in our experience and capacity that we can indeed fill some of those gaps.

Aidan, Ana, Dan, Heisser, Damien, Gaz, Jess, Johno

(With thanks to various others who have been willing to discuss these issues and provide comments on an earlier draft)

2To what extent these things exist is debatable, but it may be worth conducting some form of survey amongst members to at least partially quantify how inclusive of those groups RR actually is. It is also worth noting that under the Department for Communities and Local Government ‘Planning Policy Statement 3: Housing’ co-operatives and other Industrial and Provident Societies are eligible for registration as Registered Providers of social housing.