Causes of Rent Arrears in Social Housing - Literature review Example

?Causes of Rent Arrears in Social Housing Introduction Social housing is housing that is generally thought of as being affordable. It is normally owned by the government or some other agency and is rented out to the customer at low prices due to the organization subsidising the prices. Usually, social housing is given to those who are most in need, and this is usually assessed by taking into account several different things, such as number of dependent children, income and job prospects. Sometimes, people who are in social housing have trouble paying their rent and can become in arrears. This is usually due to the low income that the renter is on, but there are other reasons which will be discussed in this essay. The causes of rent arrears in social housing is important because knowing the causes can help show why people have problems, if social housing rental prices need to be lowered, and how the agencies involved can help social housing tenants. Reducing the causes of rent arrears could lower the amount of rent arrears, causing less stress for the tenants and less financial burden on the government or supplying agency. Rent arrears might also lead to homelessness in cases when people have no other option, and this is something that needs to be avoided. The information is also interesting because it will help illustrate some social problems that these people have and this could be used in a wider context to understand social housing and perhaps rent arrears in general. The literature used in this review will be mainly found in housing journals, but some information will be found from other journals if they contain relevant information. Using this information, the essay will uncover the main reasons why people go into arrears on their rent in social housing by finding the key themes in the literature. This review is limited to research since the year 2000 because the most recent research is usually the most relevant to the situation, and the 21st century is interesting in many ways. Key Themes in the Literature One of the main themes in the literature is that rent arrears are a really important reason for many peoples homelessness. Crane (2000) suggests that 7% of all homeless men are homeless because they were evicted for rent arrears from social housing and a 29% more of these were in arrears to other companies. This suggests that many people struggle with financial management in social housing and this one of the main reasons why people get into rent arrears in social housing. There are suggestions that the government should sponsor some education for financial management (Collier, 2005) because this would help reduce one of the main causes of rent arrears. Research by Anderson & Christian (2003) also suggests that a number of people are homeless because they had gotten into rent arrears and often this was in social housing, although it does not give the specific causes of the rent arrears. A related theme is that some people in social housing may just not be able to afford it. Although the government or another agency does subsidise the cost of the rent, it may still be too expensive for some people. These people may have several children, no benefits, no job or many other things. This topic is found in the work of Milligan (2003) who suggests that the problems in Australia with rent arrears are mainly due to these factors and that work needs to be done on providing the housing at an even lower cost if possible. This will be the only way that rent arrears will be less common. This problem was also found in the United Kingdom and talked about by Hills (2007), who again suggested that the costs need to be lowered to make rent arrears less common in the UK. Priemus & Dieleman (2002) show that rent arrears due to the high cost of social housing are found throughout Europe and that prices are rising. More evidence from Yates & Wulff (2000) suggests that the amount of low cost social housing is being reduced meaning that more people are forced to take on housing which is too expensive for them and this could lead to more people having rent arrears in social housing. The evidence finds that this problem is universal and social housing policies may need to be evaluated and more social housing should be made for those people who cannot find or afford any of the options that are already available. These results are interesting because it places the blame for rent arrears onto the agency that is providing them and suggests that further subsidies are needed. This is interesting because many people feel that social housing is too cheap (Pawson, 2006) because it takes money away from other things which people consider necessary like healthcare and education. However, the research in the above studies shows that they are not cheap enough in some cases. This is an example of two conflicting theories about social housing. It is important to note that this research does not give exact figures and it is difficult to know exactly which point of view is the most accurate in this case. Either way, lowering the price of social housing would definitely reduce rent arrears because more people would be able to afford it, and this is something we can know without doing any research. Another theme in the literature is the link between anti-social behaviour and rent arrears. The work of Flint (2004) shows that there is a correlation between these two things and suggests that it might be because the anti-social tenant has less interest in responsibility. The work also suggests that the type of person who commits anti-social behaviour is less likely to know about financial management (see above) and also that they are less likely to be bothered about the threat of going to court. This could be because they already have experience with court because of their recorded anti-social behaviour and so there is no fear about appearing again. This could be a psychological problem. Psychological problems are found in the work of Taylor et al (2007) as a cause of rent arrears, suggesting that some people are just not capable of avoiding debt in this way. This is interesting because it takes away some of the responsibility of the tenant to pay the bills and it means that there is no actual ‘cause’ of the rent arrears that could be changed. It suggests that there will always be a problem with rent arrears in social housing. Another cause of rent arrears is mental illness. This is found in several places in the literature. It is suggested by Rosenheck et al (2001) that about 5% of people in social housing have a mental illness which is higher than in the general population. Mental illness such as depression could cause the tenant to ignore the bill or feel unable to pay them. Other mental illnesses could cause a tenant to be unaware of the rent. Mental disability also accounts for some rent arrears, again shown in the work of Rosenheck et al (2001). Many people with mental disabilities are given social housing because they are unable to get a job due to their situation, so a high proportion of people in social housing have a mental disability and a low income. Some people may be incapable of doing the maths required to work out rent costs and how much money is needed for living costs, leading to rent arrears. Draine et al (2002) suggest a very similar thing. This work says that many people in social housing have a mental illness, mental disability or are found to commit crimes. This type of person will generally be less able to commit to paying rent on a regular basis for whatever reason, it might be ignorance, laziness, inability or other. The work of Rosenheck et al (2001) suggests that this could be targeted by providing councilling and help to those people with mental illness or mental disability in social housing to pay their rent and learn to budget for the other living costs they need. The final theme to be discussed here is commonly given as a cause for rent arrears and this is to do with drug or alcohol abuse. Padgett et al (2006) find that there are higher numbers of substance abusers in social housing for whatever reason. These people will be more likely to be in rent arrears for several reasons. One is that drugs and alcohol are expensive and so much of the money that these people can obtain will be spent on this and not on their rent, leading them to be in arrears. Another reason is that addicts are generally preoccupied with finding their substance of choice and may not register rent as something that is necessary. These findings are backed up by Newman (2001) who again finds that people with mental illness or substance abuse problems are more likely to be in social housing and also more likely to be unable to pay their bills. This suggests that there needs to be some scheme to educate people with these problems in the importance of rent. It also means that there may need to be some form of subsidised rehab for people in social housing because of the increased chance that they will suffer from substance abuse problems. However, introducing a scheme like this or like the budget education one proposed above will cost money and as a result the cost of social housing may rise also. As previously mentioned, many people are in rent arrears because they cannot afford social housing despite its low cost, and raising the price to provide these schemes may cause more problems than it solves. Conclusion To conclude, there are many reasons why people may be in rent arrears in social housing suggested by the literature review above. Because of the wide range of reasons for rent arrears it is difficult to suggest a solution or improvement to the situation, but it is still interesting and useful to know exactly the causes of rent arrears. The main causes seem to be the rising cost of social housing, mental illness, substance abuse and disability, which all are reasons why people may either be not able to afford the rent or be more likely to not understand or ignore the rent notices. In the case where people cannot afford the rent it is obvious that lowering the price will improve the situation of people with rent arrears and probably result in less people being in arrears. In the case of people ignoring rent notices or being unable to understand the importance of rent, the only suggestion is education or giving people in this situation help in solving their rent arrears and reminding them that they have to pay their rent. There are many gaps in the research which mean that further research may give more reasons that people are in rent arrears in social housing. If more research is conducted, there may appear to be one reason that is more important than the others and then the agencies that supply social housing can focus on this reason to help reduce the amount of people in rent arrears. More research needs to be done about exactly how much debt people are in, as this would show how bad the problem is and how much the causes of arrears need to be solved. One of the main reasons why people were in arrears was because the cost of the rent was too much for them and so more research should be conducted into what would be the best price that rent could be at to allow more people to be in social housing without getting rent arrears. Whatever the solution is, and whatever the main reasons are, it is interesting to see that there are so many different reasons as to why people are in rent arrears in social/affordable housing. References Anderson, I., and J. Christian. “Causes of homelessness in the UK: a dynamic analysis.” Journal of community & applied social psychology 13.2 (2003) : 105–118. Print. Collier, P. M. “Governance and the quasi-public organization: a case study of social housing.” Critical Perspectives on Accounting 16.7 (2005) : 929–949. Print. Crane, Maureen, and Anthony M. Warnes. “Evictions and Prolonged Homelessness.” Housing Studies 15.5 (2000) : 757. Draine, J. et al. “Role of social disadvantage in crime, joblessness, and homelessness among persons with serious mental illness.” Psychiatric Services 53.5 (2002) : 565. Print. Flint, John. “The responsible tenant: housing governance and the politics of behaviour.” Housing Studies 19.6 (2004) : 893. Hills, J. “Ends and Means: The future roles of social housing in England.” (2007) : n. pag. Print. Milligan, V. R. “How different? Comparing housing policies and housing affordability consequences for low income households in Australia and the Netherlands.” (2003) : n. pag. Print. Newman, S. J. “Housing attributes and serious mental illness: Implications for research and practice.” Psychiatric Services 52.10 (2001) : 1309. Print. Padgett, D. K, L. Gulcur, and S. Tsemberis. “Housing first services for people who are homeless with co-occurring serious mental illness and substance abuse.” Research on Social Work Practice 16.1 (2006) : 74. Print. Pawson, H. “Restructuring England’s social housing sector since 1989: undermining or underpinning the fundamentals of public housing?” Housing Studies 21.5 (2006) : 767–783. Print. Priemus, H., and F. Dieleman. “Social housing policy in the European Union: past, present and perspectives.” Urban Studies 39.2 (2002) : 191–200. Print. Rosenheck, R. et al. “Service delivery and community: social capital, service systems integration, and outcomes among homeless persons with severe mental illness.” Health Services Research 36.4 (2001) : 691. Print. Taylor, M. P, D. J Pevalin, and J. Todd. “The psychological costs of unsustainable housing commitments.” Psychological medicine 37.07 (2007) : 1027–1036. Print. Yates, J., and M. Wulff. “W (h) ither low cost private rental housing?” Urban Policy and Research 18.1 (2000) : 45–64. Print. Read More