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April 4, 2018

Game over?

The housing association movement, from the outside looking in, appears to be going through a period of transition. On the one hand there are the huge, acquisition and merger hungry, corporate beasts that are often difficult to differentiate from any mainstream volume house builder. Without the public subsidy of old, they are being forced to play by the same rules. On the other hand, the community-controlled housing associations, also starved of public subsidy, are increasingly unable to develop new social housing. So what next for housing associations? Neil Gray, writing for Bella Caledonia, argues it might be game over.

Neil Gray, for Bella Caledonia

Housing Associations (HAs) have long been promoted as an affordable and viable solution to the housing question. But it is now abundantly clear that they increasingly function as a Trojan Horse for privatisation and housing financialisation, exacerbating rather than mitigating the erasure of public and social housing. Despite protestations to the contrary, this is as much the case in Scotland as it is in England. Neil Gray reports for Bella.

After years of preferential funding allocation treatment over public housing—which has more or less been frozen out of the equation—HAs have been subject to significant reductions of state funding, making them ever more dependent on the private market.

Increasingly acting as large corporate organisations—including strong tendencies towards mergers, and a reliance on risk-laden bond funding and real estate investment trusts (REITs)—HAs now typically produce homes for market rent, market sale, so-called ‘affordable rent’ (80% of market rent in England), and home ownership—rather than genuine affordable ‘social rent’.

Those defending HAs claim that they are charitable bodies following a ‘community ownership’ model with social obligations. As I will show, this claim is untenable; but even if it were not, with massively reduced state funding HAs must submit to the prerogatives of the banks and the laws of competition in the housing market rather than the needs of tenants. The question is material and political rather than moral, and the figures are damning.

In England, only 8.4% of HA housing completions during Q2 of 2017–2018 were for ‘social rent’; the rest were for market or intermediate rent or sale. In the financial year, 2016–2017, fewer homes for social rent were built with government funding than in any other year on record, with completions down by 96% in seven years. At the same time, UK HAs posted record operating profits for the year 2017, propped up by ever-increasing debt levels which rose by an aggregate of 17% from 2016 to 2017.

The Scottish Government has garnered praise in some quarters for adopting more progressive housing policies than the rest of the UK, not least from the Scottish Government itself. They cite the nationwide cessation of Right to Buy (RTB) on 1 August 2016, the mitigation of tenant rent burdens associated with the ‘Bedroom Tax’ via state funded Discretionary Housing Payments (though not the repeal of the policy itself), and relatively progressive homelessness legislation (though the rough sleeping homeless population has never been more visible).

These measures undoubtedly have a tangible beneficial impact for tenants in an otherwise punitive housing market. Yet praise of ‘Scottish exceptionalism’ should not blind us to the extent of housing privatisation in Scotland, the enormous scale of ongoing demolition programmes, and the lack of political will for a genuine and necessary expansion of public/social housing.

Neither should it obscure current Scottish housing policies such as Help to Buy or the Rental Income Guarantee Scheme (RIGS), the latter of which not only entrenches an already over-heated and insecure private rented sector (PRS), but does so by guaranteeing the income of ‘Build to Rent’ PRS developers against void risk and non-payment of rent risk. This subsidy for private developers, a creature of Scottish government policy, it hardly needs saying, epitomises everything that is wrong with current housing policy in Scotland from a tenant perspective.

In what follows, I briefly discuss the housing context in Scotland before honing in on Glasgow, and particularly Glasgow Housing Association (GHA), which was the beneficiary of the largest housing ‘stock transfer’ project in the UK in 2003, and the largest ‘modernisation’ (read ‘privatisation’) project in Europe at the time. The consequences of this process are now all too evident in a housing landscape dominated by rapidly escalating private rent, the absolute erasure of public housing in Glasgow, and a massive overall decrease in social housing.

In conclusion, I contend that HAs are increasingly part of the problem and not the solution to the ongoing housing crisis. The independent tenant’s movement in Glasgow and Scotland more generally has been badly marginalised, in large part through tenant incorporation into toothless HA management committee structures. I argue here that its resuscitation must necessarily be central to any solution to the contemporary housing question. Living Rent Tenants Union provide one important example of how that process is already emerging.

The Privatisation of Scottish Social Housing

Like elsewhere in the UK, and indeed Europe, there has been a marked shift from the social housing sector towards private homeownership and the private rented sector (PRS) in Scotland. According to the Scottish Government, owner occupation doubled from around 30% in 1969 to around 61% in 2016. In the same period, the percentage of households in the social rented sector halved from around 50% of households to around 23%, while the proportion of households in the PRS decreased from around 20% to 5% by 1999, before rising again to around 15% in 2016. The decline and rise of the PRS, it can be noted, is inextricably and inversely bound up with the rise and decline of public housing.

The rise of the PRS, in Scotland as elsewhere, can also be attributed to the demise of the ‘homeownership dream’ as house prices have increasingly risen beyond the means of first-time buyers, creating an additional context for the consolidation of an exploited and impoverished ‘generation rent’.

The principle reasons behind the overall reduction of public housing in Scotland and the UK were Right to Buy (RTB) sales, housing ‘stock transfer’ from council housing to HAs, and massive funding cuts in the social housing sector. These can be seen as part of a wider ideological attack on the very principle of public housing, working alongside the visceral return of a usurious rentier economy and a general tendency of capital to seek profits from urbanisation rather than industrialisation.

RTB has been responsible for the loss of around 2.7 million public homes in the UK since 1980, with around half a million council homes lost to private sale in Scotland before the cessation of RTB for new applicants on July 31, 2016. Annual RTB sales in Scotland peaked at 40,000 in 1989, settling at around 15,000 between the mid-1990s and mid-2000s, before dipping to 1,735 in the year ending March 2016. This means that most of the damage was done before RTB sales were closed for council housing, but that the new legislation has not been insignificant.

‘Stock transfer’ from public housing to HAs has contributed to the loss of around 1.5 million public homes in the UK since its inception in 1988. Scotland followed the policy later. In 2003, three councils undertook stock transfer to HAs (Dumfries and Galloway, Glasgow and Scottish Borders), resulting in a loss of over 20% of the total Scottish public housing stock. Another 4% was lost through stock transfers in Argyll & Bute and the Outer Hebrides in 2006, and in Inverclyde in 2007. As I will show shortly, further substantial losses to public housing were only prevented by significant tenant anti-stock-transfer campaigns in several major cities and towns across Scotland.

Following the Great Financial Crisis of 2008, housing budgets in the UK were cut by nearly 50% for the period between 2011 and 2015. Likewise, there were very significant funding cuts for social housing in Scotland. Between 2007 and 2013, the Scottish Government’s new build social housing budget allocation per house was reduced from £77,000 to £44,000.

Paul Martin, the Labour MSP for Glasgow Provan, said in a Meeting of Parliament at the time, that these cuts were ‘putting at risk the very existence of the community-based housing association movement’. The term ‘community-based housing association movement’, is something of a misnomer as I will show, but Martin’s contention that HAs are becoming increasingly precarious is entirely credible give current trends.

Scotland has traditionally had the highest level of public housing in the UK, but as Eric Clark, a prominent gentrification scholar, has argued in the context of Sweden, it is precisely because such a large public fund of institutionalised commons existed in Sweden that it has liberalised faster than any other Western country over the last two decades. A similar argument could be made about Scotland, and in particular Glasgow, where Labour Party hegemony was rapidly transformed into viral neoliberalism from the 1980s with the Labour-dominated District Council becoming an increasingly active state player in urban accumulation strategies. Glasgow’s wholesale housing stock transfer in 2003 provides a compelling case study in this regard.

 Glasgow Housing Association

In 1981, nearly 55% of the Scottish population lived in state funded council housing, and in Glasgow the figure was as high as 61%. Aside from Birmingham, the city maintained (or under-maintained) the highest percentage of public housing in the UK. Since the early 1980s, however, the tenure switch in Glasgow has been dramatic, with social rented housing (inclusive of public housing and RSLs) decreasing from 70% to 36% of citywide housing provision overall between 1975 and 2015, and the PRS, widely acknowledged as the worst of all possible tenures, increasing from 5% to 20%, and more than doubling in the last decade alone.

In Glasgow, as noted previously, the entire public housing stock of the city (81,000 homes) was transferred to GHA in 2003, making it Scotland’s biggest social landlord.

Before detailing the consequences of this transfer, it is important to note that the ballot on stock transfer was only narrowly won after a significant citywide anti-stock-transfer campaign. There was a sense that if Glasgow, the largest city in Scotland, said yes to transfer, then other Scottish local authorities would follow. But the critical understanding developed through the Glasgow ‘No’ campaign, alongside negative news of tenants’ experiences post-transfer in England, helped mobilise successful tenant campaigns against stock transfer proposals in Dundee and Aberdeen, and full stock transfer ballots in Edinburgh, Stirling, the Highlands, and more recently, East Renfrewshire and West Dunbartonshire.

In part this was down to a less complicated privatisation processes in Scotland compared to the rest of the UK. There were no Private Finance Initiatives (PFIs), and no Arm’s Length Management Organisations (ALMOs) in Scotland, meaning that tenant organisation could be mobilised around stock transfer ballots with more clarity. In part, it was because local campaigns were well organised, sometimes with the support of Defend Council Housing (DCH) and trade unions, albeit with limited resources, and in part because tenants simply did not believe their housing experience would be improved through stock transfer.

At the same time the ‘No’ votes were of note because tenants were given an extremely skewed ‘choice’ in the ballot (‘ultimatum’ is a more appropriate word), which gave no incentive at all for a vote against transfer. By contrast, the ‘Yes’ vote, in Glasgow for instance, promised total housing debt relief for the local authority from the Scottish Executive and British Treasury of around £900 million pounds; an expected demolition programme of around 11,000 council homes; and significant investment in re-cladding and maintenance (exterior and interior). There was also much talk of tenant participation and ‘community ownership’, which I will address shortly.

Since the ‘Yes’ vote, GHA has become part of the Wheatley Group, which comprises six HAs; two care organisations; three commercial subsidiaries (including Wheatley Lowther Homes, ‘one of Scotland’s leading developers, letting agents and property-management specialists’); a charitable trust; and joint ownership of City Building (Glasgow) with Glasgow City Council (GCC), a repairs and maintenance company controversially calved off as an arms-length external organisation (ALEO) from the GCC building services department in 2006.

The Wheatley Group disingenuously takes its name from the socialist, John Wheatley, the famous ‘Red Clydesider’ who was prominent in Glasgow’s 1915 Rent Strikes and who delivered the Housing (Financial Provisions) Act 1924 (‘The Wheatley Act’), which significantly increased government subsidies for local authorities to build public housing. Recuperating Wheatley’s name, it need hardly be said, is a barefaced negation of socialist principles (ideally at least), since the Wheatley Group, and its ‘family members’, especially GHA, have helped significantly privatise the social housing landscape.

Since stock transfer in 2003, the stock of GHA ‘affordable homes’ has decreased from 81,000 homes to 39,272 homes. Around 20,000 of this reduction is down to a mass high-rise demolition programme, which has provided a lucrative process for the demolition industry as well as condemning thousands of tenants to a usurious and deeply insecure private housing market. It is unclear whether ‘affordable homes’ means homes for actual social rent, but given the broad definition usually applied, the figure for genuine social rent could be much lower.

Another 20,000 or so have been ‘second-stage transferred’ to smaller Local Housing Organisations (LHOs), who now own as well as manage the former GHA properties. This was a central part of the ‘community ownership’ mantra in the initial stock transfer proposals, but has been extremely controversial since second-stage transfers have been partial and heavily delayed. As Kim McKee has observed there was insufficient pre-planning for the process and it would appear that hyperbolic claims over the process were made to convince tenants about the merits of transfer without examining the practical difficulties involved with anywhere near enough due diligence. Ultimately, the basic and eminently foreseeable problem is one of cost, with GHA and LHOs haggling over the price of acquisition.

Transforming Communities Glasgow?

A closer focus on one particular GHA joint initiative reveals a striking recent housing privatisation plan via eight area-based regeneration programmes. The Transforming Communities: Glasgow (TCG) programme, formerly the Transformational Regeneration Area (TRA) programme, is led by the GHA, Glasgow City Council (GCC) and the Scottish Government. Initiated in 2007, it covers eight different areas of the city–East Govan/Ibrox, Gallowgate, Laurieston, Maryhill, North Toryglen, Pollokshaws, Red Road/Barmulloch and Sighthill–with the latter claimed to be the largest urban regeneration project in the UK outside of London. Notably, these areas have all been subject to sustained disinvestment, territorial stigmatisation and ill-informed ideological attacks on social housing as an incubator of social problems.

The TCG programme is seen by GCC as a significant opportunity “to transform areas of predominantly social rented stock into new, mixed tenure”, making explicit a typical but unwritten policy assumption that mixed tenure policy should target predominantly social housing areas. In practice, as many critics have shown, the language of ‘mixed communities’ and ‘mixed tenure’ has been at the forefront of ‘gentrification by stealth’, since any ‘mixing’ typically always involves more private and less social housing, and is generally targeted at predominantly social rented neighbourhoods.

The projected shift in the programme from social to private tenure is profound. The figures have been subject to frequent revision, but initial plans envisaged that 11,000 GHA social rented properties would be demolished and replaced by 6,500 homes for private sale and mid-market rent and just 600 new social rented homes. This would represent a staggering overall reduction of 10,400 social rented homes in Glasgow in just one city-wide ‘regeneration’ programme. Around a third of the way through the programme in terms of housing constructed, the current target for new homes has been downgraded to around 5,000 ‘mixed tenure’ new homes, while figures for social rent remain at around 600.

This brutal erasure of social housing by mass demolition has been sanctioned by GHA, GCC and the Scottish Government. ‘Scottish exceptionalism’, with regard to housing policy and practice, does not seem to be so exceptional after all–unless we mean in a negative sense. In such a context, it is clear that a strong independent tenants’ movement in Glasgow is a compelling necessity, but here lies another cost associated with the hegemony of HAs.

The Myth of HA ‘Community Ownership’

HAs have cornered the market in the devil’s lexicon of duplicitous terms such as ‘community ownership’ and ‘tenant participation’. But the narrative of HAs as bold new experiments in local control has always been hyperbolic since ‘community-based housing associations’, as Chik Collins and Peter E. Jones have shown, were already being characterised as ‘the tool of central government’ as early as the 1970s, and a Trojan Horse for the privatisation of public housing. Stock transfer in Glasgow, as elsewhere, was partly sold to tenants on the basis of ‘community ownership’, but the reality for tenants has been more akin to incorporation, regulation, de-politicisation and governmental responsibilisation.

The recuperation of tenants into largely toothless HA tenant committees, legally bound to represent the interests of increasingly corporatised HAs rather than tenants, has drastically undermined independent tenants’ movements across the UK. That HA tenant representation would be ‘primarily symbolic’, and no more than a ‘fig leaf’ covering the real relations of power in HAs, was predicted very early on by Defend Council Housing, and other critical commentators.

In Glasgow, for instance, Gerry Mooney and Lynne Poole have stressed that tenants had no role in the preparation and process of ‘housing stock transfer’ and thus any ‘tenant participation’ post-transfer was clearly circumscribed by pre-transfer decisions over which tenants had no control. Additionally, as Collins and Jones observe, stock transfer was never requested by tenants but rather was always a top-down bureaucratic creature of state policy.

It is possible to draw a parallel here with a radical, rather than liberal, critique of ‘trickle down’ economics: the radical critique is not merely founded on questions of redistribution, or the lack of it, but on the actual control and ownership of economic production and wealth. Likewise, the limits of ‘community ownership’ are not only that tenants have been denied meaningful ‘participation’ in GHA decisions, but that tenants have no real ‘community ownership’, either in a de jure or de facto sense.

It is vital to stress that the mainstream Left has been complicit in housing privatisation in Glasgow. As Collins and Jones have shown, the Labour Party in Glasgow were busy trying to (mis)sell the notion of ‘community ownership’ as an expression of the co-operative tradition to the local labour and trade union movement as early as 1984, through the circulation, dissemination and justification of a briefing paper, entitled ‘The socialist case for community ownership’.

As the authors contend, this proposal directly contradicted what the independent ‘community action’ movement in the city at that point had been agitating for since the 1960s: more power in the hands of local communities, but certainly not the dismantling of collective public provision. Indeed, the community action movement viewed the move as a ‘reactionary’ top-down proposal rather than a bottom-up community approach, thus opposing ‘The socialist case for community ownership’ on actual socialist grounds. At the same time, many in the labour and trade union movement thought it risked ‘complicity with the aims of Thatcher’s government’.

Regardless, the Glasgow District Labour Party proposed the ‘community ownership’ model to central government after the relevant unions dropped their opposition to the plan. Approving the principle of ‘community ownership’, but rejecting the formation of independent co-operatives, central government instead suggested the model of ‘voluntary’ housing associations under the government agency, the Housing Corporation in Scotland (HCiS). In Glasgow, these were characterised as ‘Community-Based Housing Associations’ but they were in fact a ‘tool of central government’ accountable to central government itself.

This model could hardly be justified in terms of socialist co-operation, yet proposals disingenuously proceeded under a bogus discourse of grass-roots experimentation and challenges to housing management paternalism and bureaucratic monolithic landlordism. As such, they represented a precedent for transfer to HAs and it was not long before 25%, 50% and finally, in 1999, 100% housing stock transfer was being proposed. The detrimental results of this transfer, which eventually took place on 2003, I have made all too clear.

Conclusion: Building an Independent Tenants’ Movement

The reality of Scotland’s meagre social housing tenure output, and the erasure of its social housing sector in the long run, gives credence to David J. Madden and Peter Marcuse’s observation in In Defense of Housing that the term ‘affordable’ housing, a favoured term in the HA lexicon, is an ideological tool to legitimize private development: ‘a strategy of the real estate machine rather than a relief from it’. Moreover, the idealised notion of HAs as models of ‘community ownership’ in Glasgow, based on their supposed emergence from housing co-operative principles, was always tenuous, as Collins and Jones have convincingly shown.

In the present, such rosy characterisations have been fundamentally undermined by neoliberal policy, funding cuts, corporate management structures, financialisation and increasing commodification. Contemporary Scotland’s fabled progressive ‘exceptionalism’, in relation to Scotland’s housing policy and practice is mythical. This is reflected in a vast housing privatisation process, and in rapidly dwindling social rent tenure figures for anyone who cares to see.

In this context, an independent tenants’ movement is vital. The formation of Living Rent in Scotland in 2014 is thus extremely important. Not least because it addresses the PRS as well as the social housing sector; a crucial move at a time when the tenant demographic has simultaneously seen a significant decline in the social housing sector and a rapid and volatile increase in the PRS.

For all the reasons above, it is encouraging that Living Rent formed a Tenant’s Union in 2016, which, through members’ dues, will provide a source of funding allowing autonomous and independent development and the avoidance of precisely that incorporation into HA tenant management committees which has befallen the older council housing tenants’ movement. The result of that process is manifest in the current housing crisis, the rapid privatisation of HAs, and their obvious inability to provide a solution to the perennial housing question. HAs, are part of the problem and not the solution. An independent tenants’ movement, by contrast, is a necessary precondition for any progressive housing transformation.

Neil Gray is the editor of a forthcoming book on historical and contemporary housing movements in Britain and Ireland entitled Rent and its Discontents: A Century of Housing Struggle.

This article is a revised version of a chapter that will appear in a forthcoming book, Whatever Happened to Housing Associations?, a collection of chapters by tenants, trade unionists and academics that will be edited by Glyn Robbins and published by Red Roof Publishing.