Why we need to rediscover council housing

My grandparents Jack and Mollie lived in a council house in Fullwell in Sunderland. It was a lovely house with a modest garden, not on a council estate, but on a street with a mix of different types and tenures of property.

My aunt kept telling them that they should buy a place of their own, rent was just money down the drain. Jack was an insurance salesman and he and Mollie considered themselves middle class, perfectly able to get a mortgage. But, to them, council housing was a legitimate tenure choice, not a sign that they could not afford anything else.

The council was broadly seen as a benevolent landlord, kept the property in good order and had installed their indoor toilet and their central heating. There was certainly no stigma involved in being council tenants, they had been required to provide references when they first got the keys.

I have been thinking about them a lot recently because of discussions I have been having as a member of the Manchester Social Housing Commission. This is chaired by the Bishop of Manchester and includes council tenants from across the city along with professionals, housing providers and politicians. We have been lobbying for a significant increase on the number of social and affordable homes to be built in the city.

Affordable housing generally means 80% of market rent, which is not really affordable at all 

I say “social” and “affordable”; what the commission really wants is social  housing. The two have been conflated in recent years, but affordable housing generally means 80% of market rent, which is not really affordable at all (Manchester sets a “living rent”, which is a bit better and relates to the local housing allowance).

The commission has been arguing for social housing, which is generally about half of market rent. The team has done excellent research into the housing need in Manchester, a city where rents and values have increased dramatically over recent years but is still ranked sixth out of 326 authorities on the Index of Multiple Deprivation. The commission has concluded that, based on need, half of new housing should be social and affordable, with at least 30% of this being social housing.

Much of the discussion has been focused on the draft local plan, published for consultation in September. This does not go quite as far as 50%, but it is seen as a significant step forward by the commission, with a policy requiring 30% of all new housing schemes (over 10 units) to be affordable with 70% of these being social housing.

Of course, the problem is that pretty much every developer in Manchester will argue that this is unviable. They will point to the recent temporary change in the London policy reducing the requirement for affordable housing (from 35% to 20%) with 60% of these being social homes.

Manchester’s existing policy is set at 20% affordable with no specified percentage of social housing. But viability arguments mean that hardly any development in the city has met this policy and the great boom in city centre apartments has included virtually no affordable, let alone social housing.

The council argued in the past that Manchester had too much social housing. In the 1980s about half of the city’s population lived in social housing and the previous administration wanted to rebalance the population with more private housing.

In many respects this has been a huge success; the notorious council estates like Hulme have gone and, as the city’s population has boomed, the proportion of social housing tenants has fallen to 32%. To achieve this the planners have accepted developers’ arguments about viability and the local plan policy has effectively been ignored.

A very different approach has been taken in Salford under its mayor Paul Dennett. Salford also has a policy of 20% affordable housing but has been much less tolerant of viability arguments.

Earlier this year, for example, Salford planning committee deferred the 3,300-home redevelopment of Regent Retail Park (with its 72-storey tower) by Henley Investment Management, in large part due to concerns about affordable housing. As a result, the developer committed to providing 660 social rented homes (or equivalent) to meet the 20% policy.

Salford’s housing market is very similar to Manchester, with many of the same developers. The problem is that in Manchester developers have grown used to not having to provide affordable housing and this has been baked into business plans and land deals. The new 30% policy will therefore be a stretch and the Social Housing Commission’s focus will be on holding the council to the new policy, rather than pushing for it to go further despite the levels of need.

The government’s £39bn Social and Affordable Homes Programme is a very good start, and one that most of the mainstream media seem to have ignored

There is however an assumption that we are not questioning here. This is the one that says that social housing is something procured as a tax on developers. The idea was that the cost of the social housing would net off the land value, but the reality is that this has become a tax on private tenants and buyers.

This was not how my grandparents’ house was built. It also was not how the almost 200,000 council homes built in 1950 were financed – the last time when we were building the numbers of homes targeted by this government. The great boom in council housing was funded through low interest, 60-year borrowing by councils with the repayments and management costs covered from rents in housing revenue accounts that largely broke even.

Then of course we f**ked everything up, for which architects must take some of the blame. Council housing became a byword for deprivation, crime and failed neighbourhoods, making it easy for Margaret Thatcher to sell it off and sweep it away.

Developer contributions are a distraction; we need to get back to building council (and housing association) housing. The government’s £39bn Social and Affordable Homes Programme is a very good start and one that most of the mainstream media seem to have ignored. Let’s hope that it can open up a new era of social housing in which people like Mollie and Jack would aspire to live.