Identity
Although an extreme scenario, L & G argue that if HAs were to sell on 60 % of their housing stock to investors, the resulting transfer could lead to the creation of 40,000 new affordable homes per year using recycled subsidy, as well as £ 13bn in private capital, allowing total delivery to reach around 100,000 per annum. The whitepaper also advocates for the wider economic benefits of the theory, citing economic modelling that claims under a 35 % stock transfer situation, GDP is forecast to be around 0.16 % higher in 2037( c.£ 5.7bn in 2025 prices), rising to 0.28 %( c.£ 9.9bn) under a 60 % scenario. Through productivity gains, lower housing benefit expenditure and reduced temporary accommodation, the report also claims that the scheme could improve the government’ s fiscal balance by £ 3.1bn- £ 5.9bn.
The argument against
Of course, whilst more affordable homes as a bottom line are a net-positive, the emergence of for-profit providers within the sector carry heavy philosophical implications. Housing associations and registered providers have a clearly outlined commitment, that surplus profit should be reinvested back into the communities they provide for and used to enhance services for residents. Maximising social outcomes is the sole purpose of registered providers in this sense, something that is directly compromised under the framework of a for-profit provider.
Social housing is provided to those in need, not as a luxury. Families trapped in temporary accommodation waiting on social housing lists aren’ t their by choice, they are victims of a housing crisis that has squeezed those on lower incomes out of viability, who in many cases are still working day in and day out in a society which can’ t provide them with the decency of a stable home. The idea of investors profiting and generating capital from this reality is a morally ambiguous one at best.
Introducing profits and investor returns also generates a number of troubling questions. Should money be spent on improving an existing property or developing another? Should a landlord accept a lower return in order to provide homes at a deeper social rent? Should an asset be retained for the long term or sold when market conditions make disposal attractive? Whilst housing associations and registered providers already find themselves with a number of difficult choices to make during the current climate, introducing the additional sway of investors waiting for their money back adds an extra layer of financial incentive to decisions that have direct impact on the lives of so many people.
The rise of for-profit providers could been seen as a tangible metaphor for the incessant commercialisation of wider society. One only has to cast their mind back to the most recent World Cup, in which“ hydration breaks” were made compulsory( despite the commentators remarking on the chilly air-conditioned stadiums), giving private broadcasters lucrative ad windows to maximise profits. This need for capital and profit has increasingly grown and infiltrated almost every corner of society, a phenomenon today has become the new normal, but may well appear invasive and alien if compared with the world of twenty or even ten years ago.
If projections are accurate, for-profit providers are here to stay, and seemingly could keep on taking up more and more of the social housing space. experiences delivered to residents, and the security that can be preserved therein.
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