Land and housing supply: it’s about more than just build out rates

Perhaps one of the biggest political and societal challenges of our time is housing supply. Even the UK Government thinks the housing market is broken and our biggest housebuilders say they alone won’t be able to deliver the number of homes necessary to meet policy ambitions. In England, the growing lag between planning approvals and housing completions is given as one explanation for the sluggish speed of housing delivery and is of increasing political and popular interest. Yet, build out rates form only one part of a much more complex set of processes that determine the speed and mode of speculative housing delivery. How housebuilders interact with land markets, make product selection choices and manage construction programmes are also likely to influence supply outcomes.

Our market-led housing system relies heavily on the private sector to deliver new homes. These private housebuilders, motivated primarily by profit and return on capital, are key delivery agents of new homes, producing anywhere between 70 and 80% of the total housing output in any given year. To deliver new homes at an acceptable profit, housebuilders must draw assumptions on the quantity, price and sales rate of new homes many years before they are built in order to generate competitive land bids and secure their raw material. Once planning permission is granted and the land purchased, housebuilders must wait until the houses are constructed and sold, hopefully at the rate and price predicted many years before, to achieve their desired profits. Any rise in underlying land prices between site purchase and eventual house sales can boost profits significantly.

This process of speculative housing provision requires risk taking and profit making by market actors yet is subject also to intervention and regulation by the State. The ability of government policy to shape market behaviour, together with the influencing effect of broader structural changes in the economic, demographic and political contexts of housing provision, mean that a diverse range of factors can shape supply outcomes. This may go some way to explaining why the housing supply question remains so difficult to address. Yet, these dynamic state-market relations, with their theoretical and empirical pluralism, are the very reason why we are interested in the behaviours and attitudes of speculative housebuilders. Indeed, without an understanding of how speculative housebuilders acquire, process and build out housing land, policy-makers cannot fully address the UK’s housing supply problems.

It is for these reasons that we have chosen to focus our exemplar project on a systematic review of existing evidence around how the speculative housing supply system currently works and consider the limitations to its current operation. In doing so, we will be able to evaluate whether, and to what extent, the speculative housebuilding industry is able to address new demands in the supply side of the housing market and reflect on how policy solutions brought forward to address housing supply problems have been effective or otherwise.  To achieve this task, we intend to establish a comprehensive knowledge and evidence base on the speed and mode of speculative housing delivery. We are particularly interested in understanding how speculative housebuilders engage with land markets, their product selection choices and the time they take constructing new homes. This will allow us to consider what new policy interventions may be necessary to ‘speed up’ housebuilding and overcome the precarity of provision we currently face.

We aim therefore to examine existing evidence on how speculative housebuilders acquire, process and build out housing land to ascertain how these factors contribute to the speed and mode of housing delivery. If you’d like to learn more about our aims and objectives, to be kept informed, or to engage with the project team, please get in touch.

Professor David Adams and Dr Sarah Payne are Co-Investigators, Dr Bilge Serin is Research Associate, and Dr Gareth James is Knowledge Exchange Associate, for the UK Collaborative Centre for Housing Evidence.

Authors: Professor David Adams, Dr Sarah Payne, Dr Bilge Serin & Dr Gareth James
Published: 19/02/18

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CaCHE and HSA announce strategic partnership to support future generations of housing researchers

We are happy to announce that the Housing Studies Association (HSA) and UK Collaborative Housing Evidence Centre (CaCHE) have formed a strategic partnership to support the housing researchers of the future.

HSA, the UK’s longstanding membership organisation for housing researchers and practitioners, provides a forum for housing-related debate, promotes the study of housing, and seeks to encourage the practical application of research in policy and practice. During the HSA’s 2017 Annual Conference it was announced that Professor Ken Gibb and a multi-disciplinary, cross-sector consortium of partners had received funding from the Economic and Social Research Council, Arts and Humanities Research Council, and Joseph Rowntree Foundation to establish a centre for housing evidence.

CaCHE aims to influence and transform housing policy and practice through better problem diagnosis, policy evaluation and appraisal of new opportunities, and generate improved housing outcomes for all. Since launching at the end of last year, a series of exemplar research projects have commenced, four PhD researchers have started their work, and an evidence-mapping exercise across seven key themes has been started. Five Knowledge Exchange Hubs and resident voice focus groups are also being set up across the UK which will co-create CaCHE’s future priorities.

Core to CaCHE’s programme of work and HSA’s aims as a learned society is to create a legacy of new housing researchers with multi-disciplinary and multi-methods expertise to the address the housing problems of the future. It is on this task that the CaCHE/HSA partnership will focus.

The HSA’s annual conference in Sheffield on 11-13th April this year provides the first opportunity for us to work together on these shared aims. The conference is renowned for it’s supportive and vibrant Early Career Research (ECR) Workshop stream, and this year the stream will be supported by CaCHE. CaCHE are providing financial support for a number of bursaries enabling early career housing researchers to attend and members of the CaCHE team will attend the ECR sessions to support and give feedback on ECRs research.

Professor Gibb, Director of CaCHE will also be chairing the conferences opening plenary on the Politics of Housing Policy featuring Keith Jacobs (University of Tasmania), Brian Lund (Manchester Metropolitan University), Marisa Gerstein Pineau (Frameworks).

We hope to see you at the conference in April and look forward to working together on our shared aims in the future.

Professor Ken Gibb is the Director of the UK Collaborative Centre for Housing Evidence and Dr Beth Watts is the Chair of the Housing Studies Association. 

Authors: Professor Kenneth Gibb and Dr Beth Watts
Published: 12/02/18

Our approach to Knowledge Exchange and how you can get involved

Knowledge exchange (KE) is a process that brings together academics, users of research, wider groups and communities to exchange ideas, evidence and expertise. The Research Councils recognise that knowledge exchange has societal, economic and cultural benefits, often referred to as ‘Impact’. In our approach to KE and Impact, we borrow from good practice and build on existing literature. While we are mindful of the challenges associated with synthesising and mobilising knowledge, and of assessing the quality of evidence produced, we believe that solutions to housing challenges will only emerge by harnessing the expertise of world-leading academic researchers from a wide range of disciplines, drawing on knowledge from within different professional communities, and combining the work of existing networks operating at a variety of scales and in different locales.

The UK Collaborative Centre for Housing Evidence (CaCHE) recognises that there are very different housing challenges to be found across the UK; it is therefore configured as a distributed ‘hub and spoke’ model, active in all parts of the country, designed to ensure geographic reach and nationwide relevance. It has a permanent presence in London, Sheffield, Cardiff, Belfast, and Glasgow. Our KE team is overseen by Gavin Smart and includes Moira Munro and Gareth James in Scotland; Ed Ferrari and Gareth Young in Northern England; Jeff Matsu and Chris Foye in Southern England; Stanley McGreal and Joe Frey in Northern Ireland; and Peter Mackie and Bob Smith in Wales.

Inspired by the Harvard model of the Tobin project, we will undertake a series of prioritisation exercises with stakeholders from across the UK housing sector, at national and sub-national levels. These exercises will take the form of intensive, expertly facilitated workshops to identify priority research questions. Prior to these exercises, we will facilitate focus groups to capture residents’ voices and feed these into the prioritisation process. We anticipate an intellectually stimulating and inclusive process which sets priorities in a way that is consensual, transparent, independent and dynamic.

The resulting projects will inevitably take several different forms and will have different durations. In the meantime, we are already working on 12 evidence reviews. The subject and the primary KE contact for each project are included in the table below.

CaCHE Evidence Reviews (Year 1-2017/18) & KE contacts

table_GJblog4

In addition to the prioritisation exercises and exemplar projects, we will hold up to 20 KE events annually, which will help to test, refine and promote evidence from our reviews, collaborative projects and new research. These workshops and conferences will focus on specific problems. Recent events include a workshop entitled ‘Fixing our broken housing market’ with the UK Department of Communities and Local Government (DCLG). Future events will include an annual housing and policy conference: the first, with Policy Scotland, will explore challenges in the Private Rented Sector in Scotland; and subsequent events will focus on the problems identified via the prioritisation exercises mentioned above. We are also planning secondment opportunities and public engagement through major annual lectures, as well as bespoke regional activities, such as our recent contribution to the ESRC Festival of Social Sciences.

This is but a flavour of what we’re doing and what we have planned for the coming years. To stay informed, you can follow this blog, sign up for our mailing list and follow us on Twitter. If you’d like to know more about CaCHE projects, join our KE network, or become involved with any of the projects listed above, please get in touch with a member of the KE team. If you think there is a gap in the evidence base that CaCHE can help fill then the KE team would also be keen to hear from you. KE is about establishing two-way communication and engagement. We therefore look forward to learning from you and to sharing ideas, research evidence, experiences and skills with you, to better understand and tackle housing problems in all regions of the UK.

Dr Gareth James and Dr Chris Foye are Knowledge Exchange Associates, and Dr Gareth Young is Knowledge Exchange and Impact Fellow, for the UK Collaborative Centre for Housing Evidence.

Authors: Dr Gareth James, Dr Chris Foye and Dr Gareth Young
Published: 08/01/18

The single-family home: an international perspective

Adriana Mihaela Soaita, Research Associate at the UK Collaborative Centre for Housing Evidence, reflects on her recent trip to Dresden for the conference, “Single-Family Homes under Pressure”.

When I was invited to speak at the 2nd Homes Up International Conference “Single-Family Homes under Pressure?” organised by Leibniz-Institute of Ecological Urban and Regional Development, Dresden, I was thrilled.

Firstly, as an academic with a growing reputation in the field of post-communist housing, as well as a Romanian practising architect and planner, I was delighted to see first-hand the DDR state-built large housing estates and their later transformation. Learned knowledge can benefit from direct observation; as the saying goes, a picture is worth a 1,000 words (of course, it can equally lie). This will however not be covered in this blog.

Secondly, the single-family house has been an ongoing focus of my research. In Romania, where building houses was banned for almost two decades, there is a popular fascination with this housing type, seen as enabling a singular relationship between home and cosmos in a truly Heideggerian sense of dwelling. The untranslatable expression ‘casa pe pamant’ [a house on the ground], hinting at this philosophical understanding, titled my presentation, which was one of the first and can be found here.

Finally, the conference, which marked the completion of an important multi-disciplinary project led by Professor Clemens Deilmann, brought together a truly international audience, with guests from and presenting on Japan, US, and much of Europe (Denmark, Germany, Italy, Romania, Spain, UK). Reflecting across these presentations, it struck me that one of the key common issues reported was that of vacancy, on which I now focus.

Understanding the diverse socioeconomic, spatial and cultural aspects of vacancy is imperative for finding policy tools to distribute the stock more efficiently and manage associated problems. In relation to this, I wish to highlight some of the challenges discussed.

  • Of measurement: Unfortunately there is little data collected on the reasons for vacancies, with German Censuses having for the first time recorded the number of vacant dwellings only in 2011 but no vacancy reasons, as I learnt from Manuel Wolff’s presentation. Surprisingly, Romanian statistics surpass the German ones, thus we know that a significant part of vacancies is confined to second homes.
  • Of meaning and context: While theoretically second homeownership is an expression of and contributes to increasing inequality, this is particularly true for some places and countries, as Christine Whitehead emphasised in her opening keynote. An extreme example of housing-stirred inequality is the case of US vacancies in the sub-prime market, located between repossessions from low-income homeowners and purchases by landlord capital (Bernadette Hanlon). Conversely, in rapidly aging societies such as Japan (Akito Murayama) but also in parts of Italy (Federico Zanfi) and Denmark (Jesper Ole Jensen), vacancies are situated at the nexus of economically constrained owners and lack of market demand. In this case of vacant, derelict dwellings, granular solutions at the level of the neighbourhood are sought, which require governmental subsidies and local community action. We learned that the Danish government has such solutions in place. The Romanian situation is also worthy of future research, with post-1990 new built output having been totally offset by increased vacancies while overcrowding still affects more than half the population. Family welfare strategies and poor housing conditions are key causes of this – similar to Spain, Italy and Greece (Montserrat Pareja-Eastaway) – with migration adding to it.
  • Of magnitude: Reported vacancy rates varied from 0.5 to 7 percent in Germany (hardly worth worrying about if not for being too low in places) to an astonishing 50 percent (some US sub-prime neighbourhoods and Japanese suburbs). This sparkled a vivid discussion regarding what figure represents a ‘healthy’ vacancy rate so that markets could work and the stock be renewed? Our academic tacit knowledge put forward the undocumented figure of 4-5 percent; the presentation on low/high vacancy regimes (Cletus Coughlin) was also unable to offer the silver bullet, however it was agreed that research in the area would be welcomed.

In addition to these, there were many other interesting presentations approaching the single-family house in terms of morphology (Carola Ebert), lifestyle (Anne Caplan, Immanuel Stieß, Andrea Dittrich-Wesbuer), price determinants (Wolfgang Maennig), and demographic change and resource efficiency (Andreas Blum).  Maja Lorbek closed this two-day conference with some thought provoking scenarios related to the future development of single-family housing. I leave her title – ‘Imagine the future’ – to remind readers that the future is not given but made through our acts of imagination.

My thanks for the invitation to this stimulating conference go to the ‘Home Up’ project team.

Project coordinator:
IOER, Leibniz Institute of Ecological Urban and Regional Development: Prof. Clemens Deilmann, Dr. Maja Lorbek, Andreas Blum, Robin Gutting, Jacqueline Lohse

Project partners:
Ifo Institute Dresden Branch: Prof. Dr. Marcel Thum, Carolin Fritzsche, Lars Vandrei
ILS, Research Institute for Regional and Urban Development: Dr. Stefan Siedentop, Andrea Berndgen-Kaiser, Markus Wiechert
ISOE, Institute for Social-Ecological Research: Dr. Immanuel Stiess, Melina Stein, Larissa Deppisch
ZEW, Centre for European Economic Research: Prof. Dr. Michael Schröder, Dr. Oliver Lerbs

Dr Adriana Mihaela Soaita is a Research Associate at the UK Collaborative Centre for Housing Evidence.

Author: Dr Adriana Mihaela Soaita
Published: 4/12/17

Bright spot in the budget: UK Government backs Housing First for vulnerable homeless people

While on the whole the much-trailed ‘Housing Budget’ was considered something of a disappointment, Phillip Hammond delivered rather more on homelessness than many of us might have expected. A cross-governmental “Homelessness Reduction Task Force” was announced, and there was also welcome news of a £20 million injection of funds into private rented sector access and support schemes. However, perhaps the biggest surprise was a substantial (£28 million) investment in three “Housing First” pilot schemes for homeless adults with complex needs in the West Midlands, Manchester and Liverpool.

When considered alongside the passage of the Homelessness Reduction Act 2017 earlier this year, and the manifesto committment to halve rough sleeping by 2022, this may seem indicative of successive Conservative administrations taking seriously their responsibilities towards some of those who are “not managing well at all’ in the current era of austeririty.

However, let’s be clear that the Cameron/May administrations have plenty ground to make up on homelessness. Their welfare ‘reform’ policies, particularly Local Housing Allowance (LHA) restrictions, have contributed to sharp rises in homelessness since 2010, and a slashing (by more than two-thirds) in spending on housing support services since the Coalition came to power has decimated the help available to single homeless in many parts of England. The recent abandonment of plans to roll out LHA limits to social tenants, and Budget announcements mitigating some Universal Credit implementation problems, are welcome, but they go nowhere near far enough to undo the damage wreaked on the housing and welfare safety net over the past seven years.

That said, it would be churlish to fail to give credit where it is due and there is no doubt that this formal commitment by Government to Housing First is excellent news. The UK has, thus far, been a bit slow to the races on a fundamental change has taken place in homelessness services across much of the rest of the developed world, inspired by the ‘Pathways to Housing’ model initially developed in New York City.

Housing First involves rapid access to ordinary (private or social) rental housing for homeless people with complex needs, coupled with intensive and flexible support, provided on an open-ended basis. It contrasts with the ‘treatment-first’ philosophy of traditional transitional models, which seek to promote ‘housing readiness’ in a hostel-type setting. These transitional models have been criticised for their high placement failure rate and for institutionalising homeless people. Homeless people often strongly dislike hostels, and difficulties in managing challenging behaviour in these congregate environments means that those with the highest needs are sometimes excluded.

Robust international evidence has demonstrated impressively high housing retention rates in Housing First projects (often 90% at the one-year mark). The broader outcomes of Housing First interventions on the health and quality of life of homeless people are less uniform, but still on balance positive, and better than for traditional models.

Considerable cost savings for Housing First have been demonstrated in the United States and Canada, particularly for those with the most complex needs, and are consistent with findings in the more limited UK evidence base. A feasibility study in Liverpool city region found that using Housing First to replace most of the region’s 1,500 units of 24/7 supported housing would generate estimated cost savings of £4 million.

One obvious concern raised about Housing First programmes is the shortage of affordable housing in many areas of the country. Ways forward could include identifying housing associations committed to this agenda as part of their ‘social mission’, and reassuring landlords of the reliable support packages available. The fact that support for people in Housing First programmes must be available for as long as it is needed, rather than limited to a transitional period, makes it potentially challenging to resource. This reinforces the imperative to engage the health and criminal justice sectors in this agenda, in the knowledge that many of the potential cost savings associated with Housing First will accrue in those sectors.

Housing First has, finally, been gathering momentum in the UK over the past couple of years, with Homeless Link developing a national programme in England, a ‘Housing First Scotland’ partnership being established, and fledgling developments in Wales and Northern Ireland too. Organisations as diverse as the Joseph Rowntree Foundation and the Centre for Social Justice have published reports calling on Government to invest in this model.

One might say that the evidence in favour of Housing First is now so strong that there is little need for further pilots, even well-funded ones, and we should just get on with rolling it out across the country. But the substantial ‘change management’ process involved in implementing Housing First at scale may benefit from further testing in the UK context. Let’s hope that the opportunity will be seized in the three favoured city-regions to use their experience to push forward with this progressive and evidence-based agenda at national level.

Professor Suzanne Fitzpatrick is a Co-Investigator for the UK Collaborative Centre for Housing Evidence, and Director of the Institute for Social Policy, Housing, Equalities Research, at Heriot-Watt University.

Author: Professor Suzanne Fitzpatrick
Published: 28/11/17

Ken Gibb: Thinking about the budget, housing and Scotland

I have long felt that making sense of the budget each year requires a few days and the lifting of at least some of the immediate confusion, argument and data fog that descends. There was considerable anticipation that the budget would mark an important staging point in the apparent prioritisation of housing by the UK Government for England – something that goes back at least to the Fixing the Broken Housing Market white paper and now continues with the preparations for the social housing green paper. Alongside these developments, it was anticipated that more plans to achieve ambitious house building targets would be set out and that this would include a major commitment to more affordable supply.

I will come back to housing and also some specifically Scottish dimensions of the budget below. The Sunday papers this morning, at least those to the right, have columnists suggesting that, politically, the budget went well. But this seems to be about not compounding ongoing political problems for the government and surviving the immediate period so as to be able to fight on. However, the troika of the Institute of Fiscal Studies, the Office of Budget Responsibility and indeed the HM Treasury’s Red Book itself forecast low productivity growth, difficult public finances and continuing stagnant real earnings. This is a grave context and yet of course it is all too often buried by the understandable but overwhelming Brexit steamroller.

There were many housing announcements, though some were better defined, costed and designed than others. Inside Housing summarised the intended housing changes:

  • £125 million over two years’ increase in targeted affordability fund for Local Housing Allowance (LHA) claimants finding it difficult to pay rent.
  • Changes to universal credit worth £1.5 billion including allowing housing benefit claimants to continue claiming for another 2 weeks after a new claim.
  • Committing to achieve the 300,000 net additions to housing supply by the middle of the next decade and to support this through £15.3 billion of a mix of capital funding, guarantees and loan funding which would in part support the unlocking of strategic sites and estate regeneration’s – although the majority of the money appears to be for private development (though the Treasury say that part of the new financial guarantees ‘could’ be used for affordable housing as well – Inside Housing, 24 November 2017, p.2).
  • £1 billion of extra borrowing capacity for councils to build affordable homes in areas of high demand.
  • Pilots will be carried out in the West Midlands for the new HA right to buy.
  • Councils given the ability to charge 100% council tax on empty properties.
  • On the planning side pledges were made to invest in five new garden towns and also an ‘urgent review’ of how to close the gap between planning permissions and house building.
  • Homelessness initiatives will include three new housing first pilots.
  • Fiscally, stamp duty will be ended for all first time buyers in England, Wales and Northern Ireland purchasing homes worth up to £300,000 (and on the first £300,000 if the property is less than £500,000).

While there has been general recognition of the scale of the supply measures (which also include continued help for SME builders) and the direction of travel on homelessness, there has been less enthusiasm for the perceived limited additional support for affordable housing supply and a sense that they signal incremental rather than fundamental change (as suggested by David Orr). Even the FT commentary after the budget suggested that it was time to just end the English councils’ ceiling on housing borrowing altogether. Further valuable commentary from the housing sector on the budget announcements can be found from various sources can be found here (CiH, Jules Birch, Shelter and NHF).

I want to say a little more about the stamp duty change. Many economists are rightly critical of transactions taxes in terms of inefficiency compared to recurrent property taxes. The changes announced this week are the latest demand-side housing market interventions which, while targeted to first time buyers, will in all likelihood put upward pressure on house prices to the benefit of existing owners of housing assets and reducing the benefits to the formal beneficiaries. Both IFS and OBR have made this point, as have many commentators elsewhere. The evidence will out on the actual effects (insofar as models can actually, credibly, separate out the effects of the fiscal change on house prices and activity) but there is a wider question.

A slightly perverse outcome of greater fiscal devolution to Scotland has been fiscal competition between UK and Scotland. So far, this has been exemplified by housing taxation: the tax rates competition between the two parliaments over stamp duty (land building transactions tax in Scotland) and the decision of Scotland to follow the 3% tax hike on second properties and buy to let landlords purchases. Now, the Scottish government has to consider how it will respond to a sizeable reduction in stamp duty in the rest of the UK.

There is an interesting reversal of classic oligopoly theory going on here. Traditionally, it is argued that where a small number of suppliers dominate a market, one firm raises prices and no-one follows; but if one cuts prices, they all follow and reduce their prices too. With fiscal competition in this devolved duopoly of the UK there is a different asymmetry. Tax increases are followed in this case by Scotland because economic revenue benefits trump political costs (e.g. buy to let landlords are the main losers from higher stamp duty/LBTT rates) but where taxes are cut in the present UK budget for political reasons (and they arguably trump economic arguments in this case) how should or can Scotland respond given its public finance constraints (the opportunity cost is larger because of the smaller budget Scotland manages).

Housing is more prominent now as a domestic policy priority and is much higher on the political agenda. It is complex and multi-faceted and that is represented by the breadth of housing-relevant announcements last week. Policy to move us beyond an incremental change, however, will require sustained commitment over at least a decade. To return to the microeconomics of housing, we need a permanent, structural, change in the shape of the supply curve (so that it is more elastic), not a short term shift, welcome though that may be in its own terms.

Professor Ken Gibb is the Director and Principal Investigator of the UK Collaborative Centre for Housing Evidence. 

Author: Professor Ken Gibb
Published 26/11/17, Brick by Brick

Nuancing homelessness figures in Britain

Last week, homelessness hit the headlines again as the charity Shelter report over 300,000 people in Britain are homeless or living in inadequate accommodation. The authors recognise that this figure includes rough sleepers and those living in temporary accommodation, but does not include the “hidden homeless”; the so-called “sofa surfers” who have no secure accommodation but are inherently difficult to measure so not officially recorded as homeless. In Scotland, this was the subject of a recent STV documentary, which offered a glimpse into the lived experiences of a number of hidden homeless people and families with young children.

The Shelter report is a timely piece of work and draws attention to the pressing need for action to tackle the problems of homelessness and rough sleeping in Britain. It highlights a number of issues that we know are at the core of the housing crisis in the UK, including affordability and insecurity, particularly insecurity in the private rented sector.

In parallel, a recent paper by Bramley & Fitzpatrick (the latter is the CaCHE Theme Lead on Homelessness) shows a clear relationship between younger age groups and the likelihood of having recently experienced homelessness; and that lone parent (mainly female-headed) households like those featured in the documentary, are especially vulnerable to homelessness. Those who’ve experienced child poverty and teenagers with health and support needs and behavioural issues were also shown to be most at risk of homelessness in young adulthood. The key point is that poverty (rather than say risks associated with precarious security through marginal affordability) is the overriding driver of homelessness: lone parents and young people are more likely to be homeless mainly because they are more likely to be poor. The authors conclude that addressing child poverty and adverse teenage experiences should be a policy priority and could be highly-cost effective in the long run.

The Shelter report also includes a detailed breakdown of homelessness in England (comprising temporary accommodation and rough sleeping figures), which enables regional ranking and appears to be consistent with other evidence showing that the problem is greatest for London and the South East. Because the new report by Shelter does not have the same detail on Scotland and Wales, it would therefore be useful to look at the Shelter report alongside other recent work on homelessness in Enlgand, Scotland and Wales (and indeed Northern Ireland).

First, let’s look at the most recent data from the Homelessness Monitor (HM) – a longitudinal study, led by Fitzpatrick and Heriot-Watt, commissioned by Crisis and funded by Crisis and the Joseph Rowntree Foundation. It shows that rough sleeping in Scotland appears to have decreased by almost 50% compared to an increase of 132% in England, between 2010 and 2015. Statutory homelessness levels also appear to have been on a downward trend in Scotland since 2010, whereas HM data show levels have risen by 44% in England. In Northern Ireland the proportion of applicants deemed to be statutorily homeless has increased year-on-year since 2012. In Wales, statutory homelessness applications increased by 23% between 2010 and 2014, and fell again the following year. There are also a number of methods for measuring hidden homelessness, including the number of concealed households and sharing. The HM data show that the number of concealed households has risen by a third in England since 2008, has remained relatively stable in Wales, and has fallen slightly in Northern Ireland.

Second, in his recent work for Crisis, Glen Bramley examines the current and projected levels of different categories of homelessness, defined as ‘core’ and ‘wider’ homelessness. In this report, he sets out the current levels of ‘core’ homelessness across England, Scotland and Wales. Bramley estimates the ‘core’ homelessness population is 236,000. Importantly, this figure includes the so-called “sofa surfers”, who number 68,300 – an increase of 52.9% between 2011 and 2016. The report includes projected levels of core homelessness up to 2041 and reveals a remarkable degree of difference between England, Scotland and Wales: England shows an initial pause followed by an accelerating increase; Wales shows a sharper initial increase, with a pause after 2021, then a further medium rate of increase; and Scotland, by contrast, shows an initial downward trajectory until 2016, then a gradual increase.

This reportEradicating ‘Core Homlessness’ in Scotland’s Fourt Largest Cities’, a report to Social Bite by Littlewood et al. – finds that homelessness remains a significant problem in Scotland’s main cities, despite safety nets and widespread support for ‘Housing Options’. Indeed, the abovementioned fall in statutory homelessness cases in Scotland is the result of the ‘Housing Options’ approach and, when that’s taken into account, homelessness levels have remained relatively stable in Scotland, at least according to the HM data. Among a number of recommendations for Scotland, the authors support the ‘Housing First’ model, which offers permanent, affordable housing as quickly as possible for individuals and families experiencing homelessness; and could help 470 people a year, with accommodation and support services, to avoid returning to homelessness. The Local Government and Communities Committee of the Scottish Parlaiment, currently conducting an inquiry into homelessness, is sympathetic to this approach.

There are a number of points of agreement between these different reports. Bramley and Fitzpatrick convincingly demonstrate that poverty, in all its forms, is the main driver of homelessness, but there are other significant drivers that should not be overlooked including availability and affordability of accommodations, as well as insecurity. Taken together, and including the new Shelter report, these studies provide a detailed and nuanced picture of complex homelessness in Britain and its constituent parts. The story differs between and within regions. Nuance is therefore important; but whatever the exact figures, there’s simply no disputing the fact that the problem is #FarFromFixed.

What is the Scottish Government, in particular, doing to tackle homelessness and rough sleeping? I recently attended a Holyrood Policy event at which Marion Gibbs, the Scottish Government’s Homelessness Team Leader, outlined the Government’s strategy for tackling homelessness and rough sleeping in Scotland. This includes, among other things:

In addition to this, I recently attended a Shelter Scotland Conference, where discussion focused on reforms to private rented sector tenancies. Shelter cite the ending of a private tenancy as among the main causes of homelessness. This was an excellent event at which a number of prominent speakers, including Professors Christine Whitehead and Douglas Robertson, dealt with a range of issues from Scottish rent reforms in an international context to how letting agents can help tenants sustain tenancies. Tom Moore, CaCHE co-investigator form the University of Sheffield, also spoke on the lessons from Ireland. The new legislation takes effect in Scotland from the beginning of December and includes a shift to open-ended tenancies, with fewer grounds to terminate a tenancy including an end to “no fault” evictions, and the small matter of local second generation rent controls. In addition to our work on homelessness, which cuts across all of our broad themes, we also plan to follow and monitor the implementation of the new legislation – so stay tuned!

Dr Gareth James is Knowledge Exchange Associate for the UK Collaborative Centre for Housing Evidence. 

Author: Dr Gareth James
Published: 13/11/17

Ken Gibb: Disruptive ideas for housing land and infrastructure

I chaired a panel session this week at the annual Homes for Scotland conference in Edinburgh. The idea was that our four speakers would consider land and infrastructure challenges around the risks and opportunities created by disruptive changes. These disruptions are novel ways of delivering housing, changing how funding and infrastructure is done in order to deliver more housing that is less expensive and can, arguably, and to different degrees, alter the way our housing system functions.

The populariser of the disruptive innovation concept, Clayton Christiansen, argued that small scale innovators take root and outcompete incumbents. They are, in other words, a silent but growing threat to business as usual. In this context innovations aimed at either using land value uplift capture through planning law reform to fund new infrastructure (rather than from scarce public finances); or, separating out land and infrastructure (into a common good fund underpinned by a state guarantee) and a separate element for the build cost – serves to offer a threat to the status quo business model of land oriented speculative housing developers.

The planning reform proposal, from Thomas Aubrey at the Centre for Progressive Capitalism, and the plan to separate out land & infrastructure from bricks & mortar (Matthew Benson from Rettie and Co) were the central examples provided of disruptive challenge in the panel session.

They entered this lion’s den this morning on the premise that the current housing system is broken – new housing needs to be affordable or at least considerably less costly, there needs to be much more of it and infrastructure critically needs to be funded upfront to facilitate new home development. Typically, in the UK, unlike much of continental Europe, this is funded by central government in different ways and from a range of government departments. It is typically not, and despite initiatives like community infrastructure levy, in the form of capturing (part of) land value uplift on the granting of planning permission.

There is thus a public finance argument in favour of such a shift – a charge or tax could in principle reduce the requirements on public revenues to pay for new infrastructure. Second, lower priced housing costs and the development of the long term funded investment in a common future fund – could reduce the cost of housing over time and again reduce important aspects of the housing budget (ie by reducing unit costs). As my colleague Christine Whitehead has often said, one measure of good housing policy is its capacity to reduce the cost of housing to households and the tax payer.

Our first speaker, Nicola Woodward (Lichfields), went further and argued that new housing and an efficient housing stock, are essential economic infrastructure, vital to growth and productivity. My colleague Duncan Maclennan has been making this argument for some time and indeed goes on to argue that benefit-cost ratio metrics that propose large productivity impacts for things like transport investment are often mis-specified and overstate value relative to housing investments and which in turn are often understated. This is partly about attribution i.e. increased densities attribute to transport rather than housing social returns, but also due to a failure to properly consider the counterfactual i.e. the cost to the economy of not investing in housing. Duncan’s argument, till now at least, seem to have been more positively received in other places like Canada and Australia than here.

What about the critical responses? One interesting response from the panel was that those who might feel that these sorts of new models or reforms to planning would damage the interests of the existing players – were essentially missing the point in that the objective is to improve the working of the housing system. There will be losers and they will typically be loud while winners will probably only whisper at best. So, the political economy of pursuing this credibly is both interesting and challenging. Two possibilities suggested were, one, to set up demonstration pilots; or, second, to attempt forms of innovation in planned new towns.

It might be pointed out second that using funds from value uplift for new infrastructure for roads, schools, water, etc. means those funds cannot be used for S75 affordable housing. On the other hand, as Matthew Benson pointed out, his model could be applied to any tenure mix including social housing and it would all be cheaper than the current new supply status quo. A worry was also expressed that this class of reforms might impact on house prices, though the direction of impact was not completely clear to me. Benson argued in any case that house prices are dominated by the existing stock and the proposals suggested would not in reality be big enough to affect the overall housing market.

Will these or other similar ideas actually disrupt land and planning to support more, less costly, housing supply work? How will they relate to wider community plans, the work of the new Scottish Land Commission and the upcoming planning legislation coming in Scotland? Some of these ideas are not unlike more traditional disruptive ideas like land community truss. Perhaps we therefore need a suite of ideas that can be used at different times across our range of market contexts. I am sure the debate will continue.

Homes for Scotland’s 6th annual conference took place on Wednesday 1 November at the Waldorf Astoria (Caledonian Hotel), Edinburgh.

Author: Professor Ken Gibb
Published 2/11/17, Brick by Brick

Why the mounting problems with Universal Credit are entirely predictable

Universal Credit (UC), the Government’s flagship welfare reform, is in difficulty with ‘bad news’ stories about it abounding. It has been criticised for having fundamental design flaws, such as the absence of effective data sharing between the Department for Work and Pensions (DWP) and social housing landlords, and, crucially, the requirement for new claimants to wait at least six weeks for their first benefit payment.

Several recent research studies suggest that these design flaws, along with others, have resulted in a marked increase in arrears for tenants who have moved onto UC. For example, a study of the impact of UC in the London Boroughs of Southwark and Croydon and the Peabody housing stock, which examined the rent payment patterns of 775 claimants over a nine month period, found that arrears rose by £115 per claimant over course of the study, with in total, 3.4 per cent of rent owed not being paid. The study also found that the management costs associated with rent collection increased.

However, none of these findings are unexpected as they are consistent with those of the evaluation of the ‘trial’ designed to test UC: the Direct Payment Demonstration Projects (DPDPs). Significantly, in light of the apparent surprise shown by Ministers when yet more bad news about UC surfaces, it is important to note that the study, which myself and another CaCHE team member, Dr Kesia Reeve, directed, was funded by DWP. The DPDPs explored the impact of the two central tenets of UC: direct payment and the payment of housing benefit every four weeks, which is broadly in line with monthly payments under UC. The evaluation drew on a range of research instruments, including: three longitudinal surveys; an analysis of claimants’ rent payment patterns over an 18 month period, with the experiences of 7,252 claimants in receipt of DP being compared with those in a comparator sample of 4,941 tenants; and, more than 300 in-depth interviews with claimants and key stakeholders. The key findings of the study, which are presented in a recently published article in Housing Studies (Hickman et al., 2017), are:

  • Most tenants encountered difficulties under DP and only eight per cent of those who were still on DP at the end of the programme managed to pay all of their rent in full over its duration.
  • Many tenants found DP stressful and a source of anxiety. A telephone survey of under-payers found that, when asked why they wanted to leave the DPDP programme, 34 per cent of respondents reported that it was ‘too stressful’. A number of tenants who were interviewed in-depth highlighted how stressful they found DP, particularly when transitioning from landlord payment. ‘It [DP] did make me worry and panic … cos obviously I’m ringing them [landlord] saying: ‘this is what I’ve been paid, is it right?” And they’re: “well if that’s what’s been paid”. And I’m: “no I want to make sure it’s right. I don’t want you sending me a letter saying you owe us £15 from last week 13 from the week before”. And then it all mounts up and you’ve got loads of rent arrears and I don’t want that.’
  • DP in the trial had a significant negative effect on landlords’ arrears and a total of £1.9m of rent owed was not paid over the 18 month period, which was equivalent to 2.3 per cent of their annual rent roll. Overall, tenants who went onto DP paid 95.5 per cent of all the rent owed, compared with the comparative sample who paid 99.1 per cent of rent owed (a difference of 3.6 percentage points).
  • Landlords reported that managing DP was much more resource intensive than the ‘traditional’, landlord payment, where (for tenants on full HB) benefit payments were paid directly to them. For example, one landlord noted that it had to devote three times more resource than ‘normal’ to secure a payment under DP: ‘So on average we’re putting three times the work in to get the same debit that we used to have before’. Landlords identified a number of areas where the delivery and management of DP had resulted in the use of additional resource and increased costs, with staff time identified as being the largest one.
  • These findings, along with others, then, suggest that the problems currently being encountered by UC were entirely predictable and to be expected. However, we will have to wait and see if these problems become more acute as it is rolled-out to a broader, and more representative, client base.

Paul Hickman is Professor of Social Policy and Housing at Sheffield Hallam University and a member of the UK Collaborative Centre for Housing Evidence study team. He can be contacted at: p.g.hickman@shu.ac.uk.

Author: Professor Paul Hickman
Published 1/11/17

Work begins at the new Collaborative Centre for Housing Evidence

The UK Collaborative Centre for Housing Evidence (CaCHE) started its real work last week, kicking off with a launch event in London. Four of 13 initial projects are underway, as well as four linked PhDs.

In the next few months, the Centre will focus on completing its operational set-up, starting further projects and establishing five regional knowledge-exchange ‘hubs’. Each hub will bring together people who represent the local housing system.

We will also run our first events and start the wider work of re-engaging with the many people and organisations who told us that they want to work with us to improve housing policy and practice through better use of evidence.

CaCHE has six broad objectives:

  1. Establishing an independent research centre
  2. Providing evidence that fills gaps in knowledge
  3. Helping people to understand what knowledge we have in housing policy and practice
  4. Promoting innovation and helping researchers across the UK to generate good evidence
  5. Promoting use of available data through the development and sharing of data
  6. Learning from the past to inform the future of housing policy and practice.

CaCHE will cover the whole of the UK. We will be inclusive, multi-disciplinary and use a range of research methods. We are also committed to co-production and knowledge-exchange through five dedicated staff who share our focus on the translation, dissemination and communication of our findings.

We are organised around six research themes:

  1. Housing and the economy
  2. Understanding the housing market
  3. Aspirations, choice and housing pathways
  4. Housing and its relations to health, education, employment, poverty, inequality, etc.
  5. Place-making, design and neighbourhoods
  6. Multi-level governance

We also have an additional cross-cutting work strand on homelessness

We chose a dozen initial exemplar projects – including evidence reviews – on issues such as homelessness prevention, housing taxation and international policy transfer, that is, taking the best policies from other countries and finding out whether they could apply here too. We also have projects with complementary research investments, such as the Urban Big Data Centre.

Co-production

We want to ensure that our work is genuinely co-produced. Therefore, we will be borrowing an idea from Harvard University’s Tobin project. We will also use our hubs as intensive deliberative workshops. We know how difficult it can be to have meaningful participation from residents and citizens in such ‘expert’ settings, so we will also hold “resident voice” focus groups in each locale to find out what they think.

Our first 12 months

In our first year we are undertaking a scoping review and 12 exemplar projects, which are mainly evidence reviews relevant to housing. We are also running a number of events. For example, we are holding a meeting in Reading about the future of new-build social housing in the light of the upcoming green paper. We will also hold an annual Scottish housing policy conference.

Part of the community

CaCHE is distributed across the UK. Our administrative hub is in Glasgow but we also have a presence at universities such as Sheffield, Cardiff, Reading, Bristol, St Andrews, Ulster, Adelaide and Heriot-Watt. In Glasgow, the Centre is located in the city’s east end at the University’s social sciences research hub in Bridgeton, where we co-locate with the local urban regeneration company, Clyde Gateway, and the Glasgow Centre for Population Health. We aim to work closely with our new colleagues and the local community to ensure that part of the CaCHE legacy is to make a positive impact the lives of the people of Bridgeton and beyond.

Leaving a legacy

The most important academic legacy we aim to leave is the contribution made to the next cohort of housing researchers in the UK. We will fund eight post doc housing researchers and three post doc housing knowledge exchange associates, and we will generate up to 10 PhDs linked to CaCHE. In addition, there are four early career co-investigators who are developing an early career research network for CaCHE and they will also play a management shadowing role throughout the programme. The early career focus is enhanced by an extensive programme of secondments operating in both directions between academia and policy and practice.

Author: Professor Ken Gibb
Published 25/10/17 on ESRC blog.