Property buy-up cross-subsidy the key to social housing issues
How to solve the housing crisis in rural and coastal Wales? Former Ceredigion Plaid Cymru MP Cynog Dafis believes he has an answer...
THE debate about holiday homes has been grinding on for decades but the pandemic has injected a new urgency into the situation.
What with Brexit and a certain nervousness about frequent foreign travel, there is every reason to believe that holidaying in Wales will become more attractive. The second homes problem, a function of the vast disparity in economic prosperity between the big cities and rural Wales, is set to get much worse.
A flurry of initiatives is now being proposed to deal with what has become a crisis in our rural communities, including those where Welsh is a community language. They include raising council tax on second homes to punitive levels; building more social and “affordable” housing for local people; using planning regulations to limit the percentage of holiday homes allowed in certain communities. There is merit in all of these ideas, though none is without its downsides.
What all of them leave out, with the exception of a recent initiative by Gwynedd to purchase a small number of houses for local use, is the existing housing stock and a whole lot of other property likely to become vacant in the near future: retail space in high streets and a host of redundant chapels, to give two examples. How to gain access to these properties for local use is the question, given that purchase and renovation is, for various reasons, a relatively expensive business.
The key is to capture some of the undoubted profit that can be made from holiday homes for local community use – in effect, to transfer some of the wealth of the big cities to the relatively disadvantaged economies of rural Wales.
I propose that a public or community-owned body would purchase property on the market and develop a proportion as holiday accommodation and the rest for social housing. The former would cross-subsidise the latter.
Herewith, an example. A three-bedroom house bought for £200,000 (the current average price of a house in Wales) would be rented for social housing at about £90 a week, giving a gross income of £4,600 a year. Such a house, a desirable but unremarkable bungalow on the Ceredigion coast, is offered at £500 a week which, assuming 40 weeks per annum occupancy, comes to £20,000.
Those are crude figures, of course. There would be various on-costs, council tax, mortgage payments, renovation and maintenance, and for the holiday home insurance, marketing, hiring and the weekly clean. On the other hand an element of public subsidy and/or community investment might be appropriate. Whatever the case, the scope for cross-subsidy seems obvious.
Who would run such an enterprise? Some options are:
A subsidiary established by a local authority or a consortium; Housing associations; Not-for-profit community businesses;
A development agency such as Arfor, proposed by Adam Price for the west.
Such an initiative would be smallscale and experimental to begin with, learning as it goes. But is there any reason why it could not over time become a significant factor in confronting the crisis and providing for community needs? A single initial organisation could spawn local and regional companies, preferably community controlled, to which stock could be transferred. There would be multiple benefits. Welsh communities would be empowered, taking ownership of a section of the tourism business, rather than being victims of market forces beyond their control.
Social housing, including shared and assisted ownership options, would be provided from the existing housing stock, at the heart of towns and villages, rather than segregated in new estates on the outskirts.
There would be a mechanism for upgrading existing housing in terms of quality, energy efficiency and retrofitted small-scale renewables.
Green space would be protected for sustainable food production, wildlife habitat and leisure.
Hundreds of jobs in local businesses involved in renovation and the supply chain and in servicing the holiday homes would be created.
Welsh-speaking communities would be afforded some protection from the effects of the constant, unnecessary expansion of the housing stock, often irrelevant to local needs and driven by the interests of outside large-scale developers.
This is currently no more than a concept but I believe it at least merits consideration. The new Welsh Government soon to be elected should commission a feasibility study, and if the concept stands up get a pilot project going immediately.