NIFHA Chief Executive Cameron Watt outlines the vital role of housing associations and opportunities for the sector to deliver much more through current reforms.
This article originally appeared in Agenda NI, to view it as a pdf click here.
In spite of a sluggish economic recovery, the next few years are going to be tough for Northern Ireland as austerity bites and the public sector reduces in size.
In such an environment, local housing associations have the potential to make a transformational contribution in meeting social and economic challenges. Of primary importance is providing great services to existing customers. From this firm foundation we are committed to building an increasing range of affordable homes, offering high-quality care and support to people with particular needs, and helping nurture more resilient communities.
Housing associations are working hard in further strengthening their organisations to these ends. Maintenance services are becoming more responsive, such as through use of modern technology and guaranteed appointment slots. To meet housing need, our sector is aiming to build 2,000 high-quality new social homes this year. Meanwhile over 1,000 first-time buyers will be helped on to the housing ladder through Co-ownership.
For every new social home built, housing associations match and multiply government investment pound for pound. This means twice as many homes can be built as with public funding alone. With 22,000 households still in housing stress, it is vital that the Northern Ireland Executive prioritises investment in new social homes in the next Programme for Government.
Social Housing Reform Programme
Adequate funding, whilst vital, is not sufficient for success. Supportive policies and structures are just as important. In January 2012, the Department for Social Development (DSD) launched the Social Housing Reform Programme (SHRP). Its remit is to create a social housing system that meets our future needs; that is financially sustainable for tenants and government; that maximises investment in existing and new social housing; and creates space for social landlords to play a more innovative role in the communities they serve.
The SHRP is split into two main areas – policies and structures.
Policy reform includes a new regulatory framework. In contrast to the old approach based on compliance with a prescriptive ‘guide’, the new system is based on the principles of good governance including being risk-based, proportionate and outcome-focused. At its heart are standards covering service delivery, governance and financial viability. The primacy of boards in setting the strategic direction, providing oversight and challenge in their organisations will be enhanced. In this enabling regulatory environment, housing associations should be set free to innovate to better meet the needs of existing and new customers.
Whilst the proposals emerging from DSD on regulation are very encouraging, the development of a rent policy for social housing presents major challenges. Government priorities include achieving greater coherence and consistency in rents across all social housing. This will be exceptionally difficult, given the wholly different funding models for housing associations and the Northern Ireland Housing Executive (NIHE), and the need for our sector to borrow significantly to deliver the development programme.
As charities driven by social purpose, housing association boards strive to set affordable rents for tenants whilst remaining viable. Analysis undertaken for DSD confirms that housing association rents are at a reasonable level, compared to both the local market and associations in Great Britain. Therefore, rather than rent-setting, NIFHA proposes a robust rent standard that ensures openness and transparency in setting rents whilst allowing boards to balance affordability for tenants with the need to ensure associations remain viable and sustainable.
Stock transfer opportunities
By far the most controversial area of the SHRP is the future of NIHE’s 88,000-home landlord arm. Urgency is needed given an unfunded requirement of around £6 billion over the next thirty years to refurbish and maintain NIHE homes to a good standard.
NIHE has undoubtedly achieved great things. However, as times change so do the appropriate structures for delivering affordable housing. Since the 1990s, many hundreds of thousands of homes across Great Britain have transferred from the public sector to housing associations. Overall, stock transfer has been a great success. That is why no mainstream British politician now advocates renationalisation.
Set free to innovate, many of these stock transfer landlords have achieved great things, not just in providing high-quality homes, but in supporting tenants to fulfil their aspirations and turning around deprived areas. Stock transfer in Northern Ireland could achieve the same results, driving major social and economic change. It is also the most realistic option to tackle NIHE’s funding deficit, allowing billions of pounds of low-cost private finance to be raised to refurbish homes. Crucially, using existing housing associations could mean much quicker refurbishment of homes as private funding can be secured more promptly than by setting up new structures.
To succeed the SHRP must build on existing strengths. Northern Ireland’s 24 housing associations currently provide 38,000 high-quality rented homes and 7,000 shared ownership homes. Tenant satisfaction levels are high. This year our sector is on course to deliver key development targets. Also, through high-quality housing, care and support, housing associations are enabling tens of thousands of vulnerable people to live with maximum independence in the community, helping fulfil the vision of Transforming Your Care.
However, we have the capacity to contribute much more through landlord reforms. NIHE tenants in Derry-Londonderry and Bangor have been balloted on proposed small-scale transfers of their homes to local housing associations, voting overwhelmingly in favour. More extensive and quicker refurbishment of their homes has been possible as a result.
Giving high-performing local housing associations opportunities through landlord reforms will create a more diverse and innovative social housing sector. There will be pressure to keep NIHE stock within a single structure but to do so would be a huge missed opportunity. While reforms must create landlords with sufficient scale to fulfill the expectations of tenants and government, they must also create bodies with a local focus, including links with the new super-councils. A ‘super-association’ of 88,000 homes could struggle to engage effectively with eleven local authorities.
Given existing housing associations’ proven expertise in meeting tenants’ diverse needs, raising private finance and developing new homes, our sector should therefore be given a fair chance to do much more under reforms. This could include investing hundreds of millions of pounds in NIHE homes and estates. Using existing associations also maximises the potential to provide much-needed social homes for the 22,000 families in housing stress.
Central to the SHRP must be what is best for current and future tenants. Creating a diverse, innovative, liberated and well-financed social housing sector is a huge prize. With boldness and imagination it can be achieved. Housing associations look forward to contributing to reforms to deliver great homes and help build thriving communities.