A sec­tor that is as safe as houses

Health and com­mu­nity co­he­sion are spin-off ben­e­fits of a well-planned so­cial hous­ing

The Herald Business - - Professional Brief -

The pro­vi­sion of hous­ing will mean dif­fer­ent things to dif­fer­ent peo­ple. For de­vel­op­ers, it is their rai­son d’être; private land­lords will see buy to let as an es­sen­tial com­po­nent of pen­sion pro­vi­sion, while lo­cal au­thor­i­ties and en­ter­prise com­pa­nies view hous­ing as a way of in­flu­enc­ing labour mar­kets and at­tract­ing in­ward in­vest­ment.

Direc­tors of build­ing so­ci­eties would be well ad­vised to stay in their beds if the pro­vi­sion of qual­ity hous­ing for all does not fea­ture as the prin­ci­pal cat­a­lyst which ignites the busi­ness and sus­tains it on a sim­mer even in quiet mar­kets.

But clearly hous­ing takes on a more fun­da­men­tal role for the in­di­vid­ual. Fol­low­ing the num­bers game that dom­i­nated post war hous­ing pol­icy when the agenda was clearly to build as many houses as pos­si­ble, ex­pen­sive lessons have been learned.

The per­ceived wis­dom is no longer to tackle the short­fall of pro­vi­sion solely by vol­ume, and nei­ther is hous­ing seen solely as the ba­sic en­ti­tle­ment of an in­di­vid­ual to a home.

In the owner-oc­cu­pied sec­tor pro­vi­sion has of­ten been spec­u­la­tive with the de­vel­oper tak­ing the risk. Else­where, in­ter­ven­tion by gov­ern­ment has fea­tured, where pub­lic sub­sidy is ei­ther di­rectly linked to the in­creased pro­vi­sion of hous­ing stock or in­di­rectly to im­prove in­ward in­vest­ment.

How­ever it is in the so­cial hous­ing sec­tor where the real ben­e­fits of in­vest­ing both pub­lic and private funds are more ap­par­ent. It is strange that this should be so, given that most sur­veys pre­dict it to be a de­clin­ing mar­ket.

We do not even call it hous­ing pro­vi­sion any more: com­mu­nity re­gen­er­a­tion is the pre­ferred term.

So­cial land­lords, quite rightly, have to demon­strate their abil­ity to adopt a wider re­spon­si­bil­ity for the real and sus­tain­able re­gen­er­a­tion of our com­mu­ni­ties rather than sim­ply build­ing houses if they ex­pect to re­ceive grant back­ing from their reg­u­la­tor, Com­mu­ni­ties Scot­land.

We have heard the old ar­gu­ment that any sec­tor re­quir­ing pub­lic sub­sidy is, by def­i­ni­tion, a com­mer­cial fail­ure.

How­ever, Scot­land’s near-200 reg­is­tered so­cial land­lords have not only shown that they are ca­pa­ble of pro­vid­ing good qual­ity hous­ing and an ex­cel­lent ser­vice to ten­ants, they are also pro­vid­ing sub­stan­tially more.Surely pub­lic sub­sidy is a worth­while in­vest­ment if the over­all so­cial and eco­nomic ben­e­fits it then gen­er­ates re­pays that in­vest­ment.

In ad­di­tion, there is a clear co-lo­ca­tion be­tween qual­ity so­cial hous­ing pro­vi­sion and the new re­al­i­sa­tion that hous­ing ten­ure may not be as im­por­tant as it used to be.

Ten­ure mix in plan­ning it­self de­liv­ers com­mu­nity in­te­gra­tion and re­duces so­cial and f inan­cial ex­clu­sion of the type that gated private de­vel­op­ments threat­ened to gen­er­ate.

Ev­i­dence sug­gests that this approach, linked with the key pre­req­ui­site of ten­ant par­tic­i­pa­tion helps re­duce crime and as­sists with the re­ten­tion of the gen­eral ap­pear­ance, and there­fore pop­u­lar­ity of new build so­cial hous­ing de­vel­op­ments.

This type of en­vi­ron­men­tal im­prove­ment is an­other rea­son why both pub­lic and private in­vest­ment in the sec­tor is so im­por­tant and so read­ily avail­able.

Private fi­nance providers will not only view so­cial rented hous­ing as nice to look at, and lo­cated in safer com­mu­ni­ties but also sus­tain­able and there­fore ca­pa­ble of ser­vic­ing long-term debt. The macro ben­e­fits con­tinue. Im­proved hous­ing and com­mu­nity spirit has ad­di­tion­ally been shown to im­prove health.

So why par­tic­u­larly do banks and build­ing so­ci­eties com­pete so fiercely to pro­vide the nec­es­sary top up fi­nance re­quired over and above the grant?

The sec­tor is per­ceived as safe, de­liv­ers ef­fi­ciency in hous­ing pro­vi­sion and an “af­ter sales” ser­vice that not only meets the im­me­di­ate need to in­crease the sup­ply of hous­ing but the wider ben­e­fits are there for all to see. Safe as houses, as we would say.

Con­tent sup­plied by Gor­don Camp­bell, head of re­gen­er­a­tion, Dun­fermline Build­ing So­ci­ety.

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