Housing association

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Housing association development in Royal Tunbridge Wells Housing Association development, St John's Rd - geograph.org.uk - 1057423.jpg
Housing association development in Royal Tunbridge Wells

In Ireland and the United Kingdom, housing associations are private, non-profit organisations that provide low-cost "social housing" for people in need of a home. Any budget surplus is used to maintain existing housing and to help finance new homes and it cannot be used for personal benefit of directors or shareholders. [1] Although independent, they are regulated by the state and commonly receive public funding. They are now the United Kingdom's major providers of new housing for rent, while many also run shared ownership schemes to help those who cannot afford to buy a home outright. [2]

Contents

Housing associations provide a wide range of housing, some managing large estates of housing for families, while the smallest may perhaps manage a single scheme of housing for older people. Much of the supported accommodation in the UK is also provided by housing associations, with specialist projects for people with mental health issues or learning disabilities, with substance misuse problems (alcohol or illegal drugs), the formerly homeless, young people, ex-offenders, asylum seekers, and people fleeing domestic violence.

In Australia, the term "housing association" refers to larger, growth-oriented 'not-for-dividend' community-housing providers. Smaller community housing providers may include trusts, cooperatives etc. State and territory-owned public housing represents about 80% of social housing in Australia. Over the years these public housing entities have had different names including: 'housing commissions', and 'housing trusts'.

History

Housing associations first appeared in the second half of the nineteenth century as part of the growth in philanthropic and voluntary organisations brought about by the growth of the middle classes in the wake of the Industrial Revolution. Early examples are the Guinness Trust, Peabody Trust and the Metropolitan Association for Improving the Dwellings of the Industrious Classes.

They increased in importance over the last decades of the twentieth century due to changes to council housing brought in by the Thatcher government, when rules were introduced that prevented councils subsidising their housing from local taxes, channelled grants for construction of new social housing to housing associations and allowed council tenants to buy their homes at a large discount. This, combined with cost-cutting initiatives in local government and a housing benefit scheme that was more generous to housing associations than local authorities, led to many councils transferring their housing stock to housing associations. These organisations are often referred to as large-scale voluntary transfer organisations or local housing companies.

The Housing Acts of 1985 and 1988 facilitated the transfer of council housing to not-for-profit housing associations. The 1988 Act redefined housing associations as non-public bodies, permitting access to private finance, which was a strong motivation for transfer as public sector borrowing had been severely constrained. These new housing associations were also the providers of most new public-sector housing. By 2003 36.5% of the social rented housing stock was held by housing associations. [3] Currently, some of the biggest housing associations in the UK are Clarion Housing Group, Sanctuary Housing, L&Q and Peabody Trust, to name just a few. Some housing associations have partnerships with real estate investment trusts: Civitas Social Housing is the largest social housing real estate investment trust, working with 15 housing associations. [4]

Housing associations may be constituted using various forms of legal entity. Many are industrial and provident societies, but there are also trusts, co-operatives and companies. They may or may not be registered charities.

Registered social landlord (RSL) is the technical name for social landlords that in England were formerly registered with the Housing Corporation, or in Wales with the Welsh Government. From 2010 to 2012, associations were termed registered providers under the Housing and Regeneration Act 2008, irrespective of status (private, public, for-profit or not-for-profit). As of 2012, the terms registered social landlord and private registered providers of social housing are both used as alternative names for housing association. [5]

Housing associations are generally considered as private entities in that they are not owned or directly controlled by the state. This status, however, has been challenged by a number of legal rulings. In 2004 the British government accepted an EU ruling that considered housing associations as public bodies for the purposes of procurement.

Subsequently, the English High Court in Weaver v. London and Quadrant Housing Trust [2008] EWHC 1377 (Admin) ruled that housing associations were public authorities and as a result could be subject to judicial review in certain circumstances. [6] The court stated that the housing association sector was 'permeated by state control and influence with a view to meeting the government's aims for affordable housing, and in which RSLs work side by side with, and can in a very real sense be said to take the place of, local authorities'.

This issue had wider political significance since housing associations' borrowing (which stood at approximately £30 billion in 2006) [7] does not contribute to the UK's public sector borrowing requirement, the control of which is both a stated government objective and part of the EU's criteria for membership of the European single currency.

Management

A feature of housing associations is that, although the larger housing associations usually have paid staff, a committee or board of management made up of volunteers, or paid non-executive members, has overall responsibility for the work of the organisation. A board might include residents, representatives from local authorities and community groups, business people and politicians. There are more than 30,000 voluntary board members running housing associations throughout England.

Funding and regulation

Housing associations' day-to-day activities are funded by rent and service charges payments made by, or on behalf of, those living in its properties. In this sense, housing associations are run as commercial entities and the majority do not depend on donations for their general activities.

New housing generally receives economic subsidies, the source of which will depend on where the association is based:

Subsidies for new homes (often termed 'social housing grant') amount to sizeable public investments. In its 2008–11 prospectus, the Housing Corporation stated that in the three-year period to 2011 investment would be "at least £8 billion". [9] The majority of this would go to housing associations for use in development projects. Since 2003, in an effort to seek greater value for money, much of the funding by the Housing Corporation for new house building has been channelled to fewer than 80 "developing housing associations" that have achieved "partner status" through partner programme agreements. Long-term lender option borrower option loans (LOBOs) have been taken out in the past by housing associations. [10] [11]

Housing associations borrow money to pay for new homes and improvements. After the Housing Act 1988, the proportion of the cost of new homes met by capital grants was scaled back by the government, so borrowing became the primary source of funding for investment. Much of this was simply borrowed from banks and building societies, but after the 2007–2008 financial crisis, these institutions ceased to offer long-term loans, so developing associations are increasingly turning to corporate bonds to raise funds for expansion. [12]

The HCA implemented a new government policy of "affordable rents" for its 2011–15 funding round, requiring associations to set rents at up to 80% of market rents so that less up-front capital subsidy would be required. In September 2013, a group of London boroughs initiated a judicial review to challenge this policy. [13]

Landlord's obligations

A landlord's obligations are set out in several pieces of legislation, including the Landlord and Tenant Act 1985, which applies to tenancies entered into after 1961. In summary, section 11 provides that a landlord shall:

If a landlord refuses to repair a rented property, the tenant can take action to require them to carry out necessary works and claim compensation.

Industry bodies

There are four industry bodies representing housing associations working in the UK, each covering a respective country. They are:

The NHF (formerly the National Federation of Housing Associations) claimed that at the start of 2003 they had around 1,400 non-profit housing organisations in their membership, owning or managing approximately 1.8 million homes across England.

In the 2000s, some larger associations formed regional groups for purposes including lobbying government bodies. The G15 group of London's largest associations [15] was followed by East Seven in East Anglia. [16]

See also

Related Research Articles

<span class="mw-page-title-main">Public housing</span> Residential properties owned by a government

Public housing, also known as social housing, refers to affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a combination thereof. The details, terminology, definitions of poverty, and other criteria for allocation may vary within different contexts, but the right to rent such a home is generally rationed through some form of means-testing or through administrative measures of housing needs. One can regard social housing as a potential remedy for housing inequality. Within the OECD, social housing represents an average of 7% of national housing stock (2020), ranging from ~34% in the Netherlands to less than 1% in Colombia.

The Housing Corporation was the non-departmental public body that funded new affordable housing and regulated housing associations in England. It was established by the Housing Act 1964. On 1 December 2008, its functions were transferred to two new organisations, the Homes and Communities Agency and the Tenant Services Authority. The Corporation was formally dissolved on 1 April 2009.

Housing tenure is a financial arrangement and ownership structure under which someone has the right to live in a house or apartment. The most frequent forms are tenancy, in which rent is paid by the occupant to a landlord, and owner-occupancy, where the occupant owns their own home. Mixed forms of tenure are also possible.

Equity sharing is another name for shared ownership or co-ownership. It takes one property, more than one owner, and blends them to maximize profit and tax deductions. Typically, the parties find a home and buy it together as co-owners, but sometimes they join to co-own a property one of them already owns. At the end of an agreed term, they buy one another out or sell the property and split the equity. In England, equity sharing and shared ownership are not the same thing.

Subsidized housing is government sponsored economic assistance aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housing". Forms of subsidies include direct housing subsidies, non-profit housing, public housing, rent supplements/vouchers, and some forms of co-operative and private sector housing. According to some sources, increasing access to housing may contribute to lower poverty rates.

The Right to Buy scheme is a policy in the United Kingdom, with the exception of Scotland since 1 August 2016 and Wales from 26 January 2019, which gives secure tenants of councils and some housing associations the legal right to buy, at a large discount, the council house they are living in. There is also a Right to Acquire for assured tenants of housing association dwellings built with public subsidy after 1997, at a smaller discount. By 1997, over 1,700,000 dwellings in the UK had been sold under the scheme since its introduction in 1980, with the scheme being cited as one of the major factors in the drastic reduction in the amount of social housing in the UK, which has fallen from nearly 6.5 million units in 1979 to roughly 2 million units in 2017, while also being credited as the main driver of the 15% rise in home ownership, which rose from 55% of householders in 1979 to a peak of 71% in 2003; this figure has declined in England since the late 2000s to 63% in 2017.

Housing Benefit is a means-tested social security benefit in the United Kingdom that is intended to help meet housing costs for rented accommodation. It is the second biggest item in the Department for Work and Pensions' budget after the state pension, totalling £23.8 billion in 2013–14.

<span class="mw-page-title-main">House in multiple occupation</span> British term for shared residential properties

A house in multiple occupation (HMO), or a house of multiple occupancy, is a British English term which refers to residential properties where 'common areas' exist and are shared by more than one household.

<span class="mw-page-title-main">Poplar HARCA</span>

Poplar HARCA is a housing association in London, England. It is the landlord of about 9,000 homes in the East London area, a quarter of which have been sold leasehold; the remainder are let on assured tenancies at subsidised rent levels.

The Social Housing Services Corporation (SHSC) operated in the Province of Ontario, Canada between 2002 and 2012 to provide group services for non-profit and co-operative housing organizations following the provincial download of over 270,000 social housing units to local municipalities.

<span class="mw-page-title-main">Public housing in Australia</span> Government supported housing in Australia

Public housing in Australia is one part of social housing and the other is community housing. Public housing is provided by departments of state governments. Australian public housing operates within the framework of the Commonwealth-State Housing Agreement, by which funding for public and community housing is provided by both federal and state governments. According to the 2006 census, Australia's public housing stock consisted of some 304,000 dwellings out of a total housing stock of more than 7.1 million dwellings, or 4.2% of all housing stock.

The Tenant Services Authority (TSA) was the operating name of the Office for Tenants and Social Landlords, the former regulatory agency of registered providers of social housing in England.

<span class="mw-page-title-main">Homes England</span> Public body that funds new affordable housing in England

Homes England is the non-departmental public body that funds new affordable housing in England. It was founded on 1 January 2018 to replace the Homes and Communities Agency (HCA). HCA in turn was established by the Housing and Regeneration Act 2008 as one of the successor bodies to the Housing Corporation, and became operational on 1 December 2008.

Bromford is a housing association providing affordable housing and specialist housing support services. The businesses covers a wide geographical area, predominately Central England and the South West, which includes the West Midlands, Shropshire, Staffordshire, South Gloucestershire, Cirencester, the Cotswolds, Northamptonshire and Buckinghamshire. Bromford also incorporates Bromford Homes, an outright sale business arm providing shared ownership homes to assist private/social renters move onto the property ladder.

<span class="mw-page-title-main">Public housing in the United Kingdom</span> British government and local authority housing programmes

Public housing in the United Kingdom, also known as council housing or social housing, provided the majority of rented accommodation until 2011, when the number of households in private rental housing surpassed the number in social housing. Dwellings built for public or social housing use are built by or for local authorities and known as council houses. Since the 1980s non-profit housing associations became more important and subsequently the term "social housing" became widely used, as technically council housing only refers to housing owned by a local authority, though the terms are largely used interchangeably.

<span class="mw-page-title-main">Housing and Planning Act 2016</span> United Kingdom legislation

The Housing and Planning Act 2016 is Act of Parliament in the United Kingdom that makes widespread changes to housing policy and the planning system. It introduces legislation to allow the sale of higher value local authority homes, introduce starter homes and "Pay to Stay" and other measures intended to promote home ownership and boost levels of housebuilding. The Act has been subject to a number of criticisms by those opposed to the loss of social housing promoted, the extension of right-to-buy to housing associations and possible work disincentives under "Pay to Stay".

<span class="mw-page-title-main">Clarion Housing Group</span> British housing association

Clarion Housing Group is the largest housing association in the United Kingdom with 125,000 properties across more than 170 local authorities. Clarion Provides a home to over 350,000 people.

<span class="mw-page-title-main">Affordable housing by country</span>

Affordable housing is housing that is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index. A general rule is no more than 30% of gross monthly income should be spent on housing, to be considered affordable as the challenges of promoting affordable housing varies by location.

The Regulator of Social Housing regulates registered providers of social housing in England. This function was transferred from the Homes and Communities Agency in October 2018. Until April 2012 it was performed by the Tenant Services Authority. It is sponsored by the Ministry of Housing, Communities and Local Government.

Community housing in Australia is not-for-profit affordable housing provided by community housing organisations known as Community Housing Providers (CHPs). It is part of the social housing sector. CHPs have varying modes of operation and structure, and different types of stock. Any budget surplus in CHPs must be used to maintain existing housing, to provide better services for tenants or to help finance new properties. Although independent, the CHPs are regulated by the state, and commonly receive public funding. Most of their stock is owned by public housing authorities (SHAs) in each State, and the CHPs manage the tenancies using the rent received from tenants.

References

  1. ↑ Malpass, Peter (2000). Housing Associations and Housing Policy: A Historical Perspective. New York: Macmillan Press. ISBN   0-333-65558-3.
  2. ↑ "Housing Associations in England – implications for Northern Ireland" (PDF). 2016.
  3. ↑ Hal Pawson, Cathy Fancie (10 September 2003). The evolution of stock transfer housing associations (Report). Joseph Rowntree Foundation. ISBN   1-86134-545-3 . Retrieved 3 March 2017.
  4. ↑ "REIT moves into Scotland using housing association only registered in England". Inside Housing. 20 May 2019. Archived from the original on 9 July 2021. Retrieved 20 May 2019.
  5. ↑ "Housing association homes". GOV.UK . Retrieved 19 December 2012.
  6. ↑ "Local Government: Divisional Court decides RSL is a public authority" (PDF). Pinsentmasons.com. Archived from the original (PDF) on 24 September 2015. Retrieved 9 July 2015.
  7. ↑ "The Tenant Services Authority and the Housing Corporation". www.housingcorp.gov.uk. Archived from the original on 2 June 2011. Retrieved 2 February 2022.
  8. ↑ "Affordable Housing Capital Funding Guide 2014–15". Homes and Communities Agency. Archived from the original on 18 October 2014. Retrieved 9 July 2015.
  9. ↑ "The National Affordable Housing Programme 2008–11" (PDF). Housing Corporation. Archived from the original (PDF) on 1 October 2012. Retrieved 1 October 2012.
  10. ↑ "LOBOs explained". Inside Housing. 9 January 2009. Archived from the original on 11 July 2015.
  11. ↑ Mayhew, Freddy (6 July 2015). "Spotlight on Newham Council over high interest 'LOBO' loans". Newham Recorder . Archived from the original on 10 July 2015. Retrieved 10 July 2015.
  12. ↑ Hollander, Gavriel (11 November 2011). "End of the line for long-term lending". Inside Housing. Archived from the original on 4 August 2012. Retrieved 19 January 2012.
  13. ↑ Sharman, Laura (23 September 2013). "London boroughs call for judicial review of affordable rents policy". LocalGov.co.uk. Archived from the original on 17 October 2015.
  14. ↑ "NIFHA » The Northern Ireland Housing Associations' Charitable Trust (NIHACT)". www.nifha.org. Retrieved 8 June 2017.
  15. ↑ Dowler, Crispin. "Model is broken say mega-associations | News". Inside Housing. Archived from the original on 4 September 2012. Retrieved 9 July 2015.
  16. ↑ "Super seven join forces on eastern promise | News". Inside Housing. Archived from the original on 4 August 2012. Retrieved 9 July 2015.
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