Take on the profiteering social housing bosses
Paul Kershaw, Chair Unite housing workers’ branch LE1111 and Socialist Party
Millions of housing association tenants will receive a higher rent bill this April; typically by over 4%. Many will be pushed further into poverty. At the same time, the mainstream news media have been exposing ‘Britain’s housing shame’; revealing appalling disrepair in housing association properties and the shocking lack of action to resolve problems on the part of associations.
ITV news explained that social housing tenants regularly contrast the speed at which their landlords contact them if their rent is a day late: “Many have told us they get calls, emails and letters almost immediately if there has been a problem or delay with a payment – while they wait weeks and months for repairs to be made in their home.”
Kwajo Tweneboa, a 23-year-old campaigner, took to Twitter to describe the terrible conditions on his estate and the battles tenants had with their landlord, Clarion, to get the most basic repairs carried out.
He described moving into a flat on the Eastfield estate in Mitcham, South London, which smelled of damp and was home to a nest of mice in the kitchen. The garden fence was broken, and the back door would not shut. His father became terminally ill with oesophageal cancer and had to be nursed in a flat with cockroaches, mould and mice. Kwajo took up the problems of other tenants facing bad conditions and his tweets went viral.
Members of the Social Housing Action Campaign (SHAC) echo Kwajo’s experiences. Groups of residents are organising in an increasing number of housing associations to fight back (see shaction.org). Tactics have included withholding rent or service charges to pressurise landlords to do repairs or to correct and reduce service charges. Action taken by SHAC members now extends to over 20 landlords. Some of these campaigns have met with success, demonstrating the power of collective organisation. But these battles reveal how many ‘social housing’ organisations behave like ruthless profit-seeking landlords.
Michael Gove used his first Tory conference as Secretary of State for Levelling Up, Housing and Communities to accuse social landlords of presiding over “scandalously poor” housing conditions. What stunning hypocrisy! The Tories have been in government since 2010 and have drastically cut funding for social housing, deregulated social housing providers, and reduced support for tenants and residents to have a voice in the running of their landlords.
Financial interests
There is no doubt about the terrible housing conditions. And there is no doubt that successive Tory governments have prioritised private property and financial interests over people in social housing.
Far from standing up for social housing, housing association bosses have been willing accomplices of the government in entrenching financialisaton.
Housing associations generated an overall surplus of £3 billion last year. Since the 2008-09 financial crash when some financial giants made a killing, there has been a ‘global wall of cash’ looking for safe ‘investment opportunities’ in ‘High Quality Collateral’ (HQC). What we see as homes, finance capitalists see as HQC! The business model of the major housing associations is to tap into this money and offer ‘investment opportunities.’
Global finance has been seeking out opportunities in rented housing around the world. In the UK there are moves to invest in ‘for profit’ corporate landlords such as, Grainger, whose largest shareholder is the US-based BlackRock, the world’s largest asset manager, with $10 trillion in assets under management. Lloyds Bank plans to go into the market directly as a landlord. Housing association bosses compete in this market for investment. Executive success is measured by their ability to please the financial institutions. Residents come well down the pecking order.
Typically, housing associations try to maintain a brand image as socially concerned organisations. But the reality is quite different. This is revealed in their response to the rising number of claims for disrepair. SHAC gained access to leaked management papers for Riverside Housing, revealing that, rather than taking emergency steps to improve repairs, their response was to organise a secret lobbying group to reduce tenants’ access to legal support. Secret, because, as they correctly explain: “[The] legislation is designed to protect tenants from irresponsible landlords and unsafe living conditions… Any action to limit their right to hold their landlords to account, could be considered as disadvantaging social housing tenants… it could be seen that [housing associations] are looking to avoid their responsibility to their tenants and allow them to live in unfit homes.”
Accountability
SHAC gave evidence on regulation and accountability of housing associations to MPs on the ‘Levelling Up, Housing and Communities Committee’ in January. Speaking for SHAC, Socialist Party member Suzanne Muna made it clear that residents do not feel their voices are heard.
At the same meeting, Clarion’s boss, Clare Miller, hotly denied that there had been a conscious decision to run down the Eastfield estate, but then admitted that cyclical repairs had been halted in preparation for a delayed regeneration scheme! The problems on the estate came from decisions at the top, not errors by frontline staff.
Elsewhere, Clarion residents of Clare House in east London were told they had to move out in October last year because a fire risk had been discovered; for many it had been their home for decades, and residents are still living in hotels. Residents had raised concerns with Clarion about fire safety since the Grenfell fire. Even after they had been told to move out, Clarion was unwilling to share fire safety information with them on the ludicrous grounds that they would not understand the fire safety reports!
If Clarion and other social housing providers were subject to democratic residents’ control, they would not be able to get away with decisions like these.
A government of the bosses, or austerity-driven councils acting in the interests of corporate landlords, cannot be relied upon to uphold housing safety, standards and affordability. This has been shown most tragically by the Grenfell disaster and subsequent inquiry.
In the immediate aftermath of Grenfell, the official Information Commissioner simply ‘urged’ housing associations to make safety information fully available to residents, making the excuse that she did not have power over housing associations as private organisations.
A local authority, prepared to act in the interests of its working-class residents, could take a number of measures now. Years of council cuts have seen thousands of council workers lose their jobs. A willing council could invest resources to employ environmental health officers, well resourced and with the objective to uphold safe housing standards as agreed by residents. Council-funded renovations to address urgent safety issues could be carried out immediately.
The government’s formula for maximum rent increases, of inflation plus 1%, is typically matched by local councils. To assist tenants facing a cost-of-living squeeze, councils must freeze social rents. Even Tory-led Wandsworth council has just taken such a step. Why can’t all Labour councils do so too?
To tackle social rent increases, and service charge hikes in housing associations, councils should refuse to agree planning permission for developments by housing associations and other private landlords who continue to rip off residents.
By taking these steps, using financial reserves and borrowing, a council prepared to lead the fight against the government for the required funding would win popular support from residents. Rather than assisting corporate landlords and developers, a socialist council could begin to transform residents’ lives.
But ultimately, left in the hands of corporate landlords or housing associations in hock to those same corporate landlords and finance capitalists, social housing will continue to be run for profit rather than need.
Social housing stock, publicly owned, could be managed democratically by elected committees of tenants and the wider community. By taking over the major housing associations with their vast ‘surpluses’, the resources to carry out repairs and fund sustainable development could be made available. Government investment to meet social housing need could be planned on a national basis, and executed locally with the democratic oversight of residents.
Rent control: Welsh Labour abandons promise
John Williams, Cardiff West Socialist Party and TUSC candidate for Plasnewydd ward in Cardiff
Rents are out of control. The average rent for a property in Britain has risen to £969 a month, according to Zoopla. Since the beginning of the pandemic, the average rent has increased by £62 a month. Wales has seen the third-highest increase – 9.8% in the last year. There are over 1,000 empty properties in Cardiff alone, and more than 4,000 homeless people.
Socialist Party Wales supports any genuine attempt to tackle homelessness, and guaranteed fair rents for all. In the Welsh Labour and Plaid Cymru agreement last year, after the Welsh Senedd elections, both parties announced a commitment to the principle of rent control. They cautiously posed: “The role a system of fair rents could have in making the private rental market attractive for local people on local incomes”.
However, there are no firm or clear proposals. Landlord organisations are already applying pressure, and the Welsh government is giving landlords time to come up with a strategy to oppose them.
Legislation
Welsh Labour Senedd members had the chance to show that they were serious in fighting for rent control and to tackle homelessness, by voting in favour of a Plaid Cymru motion to develop legislation for fair rents. The majority abstained. Welsh Labour deputy climate minister Lee Water said: “Labour had abstained because [rent control] is already covered by the budget agreement with Plaid”.
But in the detailed draft budget narrative document sent out by the Welsh government, we’ve seen nothing of the sort. What we have seen though, is the £3.5 million private sector leasing scheme aimed at tackling homelessness.
The scheme offers landlords grants and interest-free loans of up to £10,000. It gives councils the power to run a property, including any repairs, and, in return, the landlord gets guaranteed rent, but only 90% of the local housing allowance rent.
Currently, a puny amount of 24 properties in the whole of Wales are signed up to the scheme. The scheme only works if property owners want to give up income, which clearly they don’t want to do!
During lockdown, for a period, the Welsh government wiped out street homelessness by putting people up in hotel rooms, proof it was always possible to do so. However, it has not been prepared to fight for the funding for this to continue. What’s missing is the political will.
Like local authorities, the Welsh government could pass a needs-based budget, defying Tory imposed austerity. The Senedd could back up Welsh local authorities, overwhelmingly Labour-led, to take the same approach. In doing so, a fighting Welsh government could mobilise the support of the Welsh working class and demand the required funding from Westminster.
This is the approach the Socialist Party in Wales will be campaigning for when our members stand as part of the Trade Unionist and Socialist Coalition in local council elections on 5 May.
Rent control
- Cardiff City Council already licences landlords; all local authorities could do the same. Fair rent, secure tenancies, safety and decent conditions, as agreed by elected committees of tenants and trade union representatives, could be made a requirement of a licence.
- Tenants should have the right to rent tribunals, overseen by these committees, to challenge rent levels and unsafe conditions.
Empty homes
- Councils must use their powers to compulsorily purchase property left empty; to be brought back into council housing stock – to be rented at social rents on secure tenancies.
Council homes
- A mass building programme of eco-friendly affordable council homes to tackle the housing crisis, under the democratic control of working-class communities, to prevent overcrowding and to ensure the provision of all necessary services including green spaces.
