Housing associations who let properties under new ‘Affordable Rents’ may have lost touch with their ethical values and social purpose, according to Leeds Tenants Federation.
From April, housing associations can apply for affordable housing grant from government on condition that they charge ‘Affordable Rents’, set at 80% of market rents, for a percentage of re-let properties and on all their new built stock.
So-called Affordable Rents – part of the package of reforms aimed at undermining the values of social housing – were brought in by the Coalition government’s Comprehensive Spending Review in 2010 and the green paper ‘Local Decisions – a fairer future for social housing’.
As well as setting rents at 80% of market price, housing associations would let these properties as short-term tenancies, instead of granting security of tenure to new tenants.
Housing association rents in Leeds might double under the new scheme while research showed that introducing ‘Affordable Rents’ in London could raise rents by 200%. While housing benefit may cover the increased rent, working tenants would find themselves forced into the benefits trap.
Affordable rents also pose a problem for the business plans of housing associations. They will find it difficult to predict their future rental income with any certainty, since rents will be fixed by market prices and may go down as well as up.
Social housing exists as an alternative to the private market and its rents have been set traditionally according to ideas of what is affordable – usually thought of as a ratio between income and housing costs. In recognising that the private housing market is often totally unaffordable, social housing provides people with a basic need – essential housing – without regard to their ability to pay.
Providing shelter to people who cannot pay market costs has been the social mission of housing associations, many of whom have charitable aims. In letting properties at so-called ‘Affordable Rents’ housing associations risk developing new homes that people in housing need cannot afford. These Coalition reforms are an attack on the values of social housing and on people’s well-being. Housing associations who develop under these terms may be doing more harm than good.