Government Housing Policy and the effect on Local Authorities Allocation Schemes - Literature review Example

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Government Housing Policy and the Effect on Local ities Allocation Schemes Outline Paragraph On Homelessness Paragraph 2: Situating European Countries on Problem of Homelessness Paragraph 3: Importance and Benefits of Housing Paragraph 4: Social Housing Paragraph 5: Social Housing Comprising 25 Percent of the Total Housing Stock in UK Paragraph 6: Overview of the Social Housing Before and After World War II Paragraph 7: Social Housing on the First Period until the Mid – 1950s Paragraph 8: The Mid – 1950 Social Housing until the 1960s Paragraph 9: The Welcoming of the Private Sectors Paragraph 10: The Early 1970s Paragraph 11: The Increase of Public Rent Housing Paragraph 12: The Start of Thatcher Government Paragraph 13: Social Housing Catering Diverse Population Paragraph 14: The Right to Buy Scheme Paragraph 15: The Increase of Owner – Occupied Sector Paragraph 16: Right to Buy Scheme Benefit to Government Paragraph 17: Decline of Social Housing Construction Paragraph 18: Marked Changes of Social Housing Policy in Thatcher Regime Paragraph 19: Introduction to Criticisms on Social Housing Policies Paragraph 20: The Physical Issue Paragraph 21: Regeneration Plans Paragraph 22: The Spatial Mismatch Paragraph 22: The Demand for Additional Housing Units Paragraph 23: The Ownership Issues Paragraph 24: The Financial Issues Paragraph 25: The Social Issues Though definition of homeless had varied accordingly to different countries, in each nation, there happened to be homeless people. Though the lack of home had been more evident in the third world nations, the first world countries also suffered the problems of homelessness. In the context of the western countries, Hurst (1998) claimed that a large majority of the homeless were usually males. In this regard, indeed, housing was regarded as one among the major concerns of any nation. Meanwhile, various researches were made on housing studies whose directions differed from one another and usually had varied according to the particularity of a country’s situation (Rossi and Weber, 1996; Cox, 1982; Harkness and Newman, 2003). According to Hills (2007: 4), the European countries had been experiencing the same problems of homelessness. In the case of England, the debate around the future of social housing was still on - going. It even had become more active and even more intense than it was for so many years. The housing problems had been focused more among the disadvantaged areas and among those whose economic statuses were much lower among tenants. Housing was much more of a concern for every nation because its impacts had played such very significant roles in the lives of people, not only among those who were belonging to higher income households but most especially among those who were belonging to the lower income households and underserved population. According to Rohe, McCarthy and Van Zandt (2001), a decent-quality and affordable housing was what the smallest unit of society, family, needed in order to go through such improved life outcomes. Through having a proper home, dimensions of different sorts such as income of the household, stability of the family, mental and physical health, participation in the labour market, educational achievement and of course, neighbourhood quality were found to be enjoyable. Thus, it also helped to the contribution of having such sustainable communities by means of the improvement on the physical, economic, environmental, and social health. This was further supported and elaborated by Social Benefits of Homeownership and Stable Housing (2010) as its research findings had stated the view that owning a home caused a wide array of personal and social benefits for families, communities and even for the country as a whole. The significance of the housing sector could not be denied most especially on the social economic level as well as on the long term social and financial advantages given to the individual homeowner. Owning a home allowed each household to accumulate assets as well as social status. As the said research examined the ownership of homes and the impact of stable housing on social outcomes, it had specifically figured out that there existed strong relationship between homeownership and income, education, age, marital status, civic participation, health benefits, public assistance, and others. Thus, it served as grounds for enjoying a number of positive outcomes through social, economic, family and civic levels. Having a home was found out to cause a positive impact on the educational performance of children, to have more active individuals to participate in civic and volunteering activities than those who did not have homes, to contribute on the improvement of individual health, to reduce the number of crimes as well as to lessen the cases of welfare dependency. With the given number of extensive benefits of having a home in families, in local communities, and in the entire nation as well, sustainable homeownership was encouraged and supported by lots of policy makers (Social Benefits of Homeownership and Stable Housing, 2010). According to Whitehead and Scanlon (2007), housing was considered by some governments of the western European countries to be one significant element of social policy. Even if social housing had existed among these nations, there was no existent universal, single and formal definition of the term “social housing” but had varied according to different countries. Across Europe was seen varying definitions of the term based on the dimensions of positions of co-operatives, time limited subsidies, as well as the role of private suppliers. The case of Netherlands and Sweden had seen social housing in the context of ownership – particularly non- profit organisations as well as the local authorities. For Austria and France, it was defined in the relation to the context of who had constructed the houses. While in Germany, it was related on the relevant funding and its financing stream. In Ireland and England, social housing was linked to whether or not rental fees were below the market levels. It is important to note that though in most European countries like Netherlands and England, social housing was in fact, given among those who could not even attend their very own dwelling needs, while in some nations like the case of Austria and Sweden, it was formally accessible to all households. In 2003, Stone also had his views on the evolution, issues, and prospects of social housing in United Kingdom and United States. For the reason that social housing comprised about 25 percent of the totality of housing in UK, he acknowledged that it was considered to play a very big part in the housing stock. More than 5 million low - income households were continuously accommodated by the local authority public housing and non-profit housing association dwellings. However, over the past 2 decades, different issues had disturbed the social housing in UK. There was shortfall of four in every ten local authority council dwelling units to sales, transfers and even demolitions. Though despite these perceived “residualisation” of social housing, still it remained to function an important roles in the lives of the more than 5 million households who were given housing accommodation. Moreover, according to Stone (2003), the historical account of social housing in United Kingdom was marked by a far larger social housing sector. Before the World War II in the late 19th century, Europe considered programs for the cooperative ownership of place of work and residence as essential parts of the critiques of the capitalism. According to Pearson (1988: 1), dwelling and living set - ups of having shared dining room and other joint facilities while retaining individual dwellings and personal space were promoted and encouraged by the cooperative housing movement in Britain. However, because of the World War II, the condition of United Kingdom had changed a lot. According to Stone (2003), UK was challenged by housing shortages. Particularly, due to the bombing experienced by Britain, it had suffered from these shortages longer than the others. There were changes in the social housing policy in United Kingdom. According to Malpass and Murie (1999: 53 – 57), within 20 years after the war, an initial solution given by the local authorities to the deficiency of housing was an additional construction of more than 2.9 million housing units. The first period until the mid - 1950s was mostly dwelling units of above the average quality. These housing units were not given to all but they only had catered the accommodation needs of the deserving working classes. By deserving, they meant those who had been through the war, had political influence and had seized the Labour Party into power as soon as the war ended. However, according to Malpass and Murie (1999: 55), the mid - 1950s was Britain’s social housing policy given to the lower class. Unlike the good and above the average quality houses provided to the working classes in the first period until the mid – 1950s, the local authorities had given the lower income inner city populations housing units of quality at a low level. Part of the housing policy was the slum clearance. This trend of housing policy had continued to expand in the 1960s. But coming along with the housing expansion was still constructed houses which were lacking of its quality as well as its design. In such housing, the low - income and non - white families had grown in numbers. Meanwhile, authorities of United Kingdom welcomed the involvement of private sectors in the housing project by means of a form of policy support. According to Malpass and Murie (1999), this policy support for housing associations was through allowing the public funds to be given to the associations and to set up and establish up – to - date structures needed to facilitate their operation. This would assist the growth and development in UK. However, this assistance of this sort was not supported. After the first phase of activity, the interest to this policy support was lessened. On the one hand, in the early 1970s, the opportunities for UK housing associations were largely changed for the reason that for the first time, the local authorities consented the housing associations to obtain the support provided for the rent of the housing. Not only that, because it was the case that the housing associations in UK had even intensified their roles they played in the government housing policy. Moreover, it was the case that during the development process, this new funding system knew that the associations’ weakness and their very own financial structures. The subsidy system also recognised the fact that these associations were lacking a collection of older assets in order for cross - subsidising the rents. Thus, UK had established a new set of support system in order to fund and sponsor the housing activity. The main housing subsidy was Housing Action Grant (HAG) which had operated as a deficit funding for new establishments and acquisitions as well as upgrading and development of works and conversions (Malpass and Murie, 1999: 75). Furthermore, it was important to note that the public leased housing units had increased notably in Great Britain. From the 12 percent growth in 1945, it had grown to an almost 32 percent of the total dwelling units in 1979 (Malpass and Murie, 1999: 59). In 1979 was the start of the Thatcher government. According to Cole and Furbey (1994: 179), one among the criticisms in this regime was on public housing as a segment of the welfare state. But despite that particular attack on the government, it was the case that UK was still marked with the modest expansion of privately developed social dwelling units (Cole and Furbey, 1994: 179). According to chapter 7 of Cole and Furbey’s account (1994), the particular case of Britain was an evidence of a much larger proportion of housing since its housing units did not just accommodate its citizens. In fact, its housing units had catered the housing needs of a diverse population in terms of its socio – economic statuses and geographical origins. Meanwhile, Forrest and Murie (1988: 56) stated that the council tenants were offered the “right to buy” proposal. This scheme had proposed to extend up to 70 percent financial discounts of the housing unit’s market value for the tenants whose length of residency was 20 years or so, but only if they had come up to a decision to purchase their dwelling units. Moreover, it had the weakest resale control for it only permitted the resale in the following five years. This was shortly reduced to only three years in the market. There were no margins in its charged payment or even requirements in repayment. In Chapters 5 and 6 of Forrest and Murie’s (1988) book on “Selling the Welfare State: The Privatisation of Public Housing,” they acknowledged that the right to buy scheme was indeed one among the most beneficial rights extended to the tenants who could meet the requirements and could manage to pay the home equity loans. This was because of the reason that they could be given the housing units of the best quality located at the locations which people mostly desired. It was also the case that in United Kingdom, between 1981 and 1996 was marked by an increase of the owner - occupied housing from almost 56 percent to 67 percent of the total occupied housing (Malpass and Murie, 1999: 88). According to Malpass and Murie (1999: 89), the transfer of the public sector dwelling reserve, in particular, the “right to buy” scheme, had accounted for the more than half of the gain of the owner - occupied sector. Additionally, the “right to buy” scheme had benefited UK also in such a way that instead of making available the debts to the local authorities, about three-quarter of the accumulated funds through the sale of housing units to its tenants had served to compensate the remaining debts (Dunden, 2001: 140). According to Forrest and Murie (1988: 96 – 97), the net income readily available to the local authorities had served a purpose of starting a budget cut in housing. These net receipts should be spent for maintaining the existing dwelling units instead of constructing new establishments. Indeed, the social housing was in continuous modification in UK. Golland (1998: 7) claimed that the funds intended for general subsidy for construction of public housing was put on reduction. In this case, the production of housing by the local authority was in decline. In most of the 1970s, it had dropped from over 100,000 housing units a year. By the mid - 1980s, it had gone down to a fewer than 30,000 units per year. It was important to note how the social housing had been changing in United Kingdom through time. For the Thatcher regime, the changes were marked by the build - up of the middle – class homeownership, the reduction of the construction of social dwelling units and the “residualising” of public housing. For Harloe (1995: 367), this “residualising” of the social housing had consisted of the three connected dimensions. First was that the amount and ratio of public housing that was noticeably cut. This was done mostly through the transfer of ownership. It also was through the development of dwelling units by the private sectors and ownership of the very little number of construction of housing units. Second was leaving behind mainly the remaining housing units as huge urban projects with construction and preservation of quality at a low level. Last was the transfer of the public dwelling to the people who was regarded as the much poorer and the much lesser white. Even with the given decrease of the entire number of housing units from almost one - third in 1981 to fewer than one – fourth in 1996, it could be said that social housing still had continued to play a big role in the housing sector in this counrty (Malpass and Murie, 1999). With the replacement of government was also a change in the housing policy. Only an increase of support was given by the government to the social and subsidizing housing. But of course, with regards to the housing policies, UK was not free from any criticisms. Among the many social issues of the housing in UK was the physical issue. According to Stone (2003: 12 – 14), with the given number of major problems in housing, levels of attention given to these issues were not even. It was the case that the condition of the council housing estates was neglected. Also, the quality of the newly built housing association reserves was also in question. Much more was the need for additional housing units. According to Malpass and Murie (1999: 92), the onset of the late 1980s until the 1990s was a response of a series of “regeneration” plans by the UK government to the physical problems related to social housing. These series of “regeneration” plans had focused more on such huge, run – down inner – city domains. Such estates had undergone repair as well as demolition as well as replacement. According to UK DETR (2000), in order for the repairs and improvements of the existing dwelling units, the council housing needed an estimate of ? 19 billion. About one - third of this required amount was met by the Blair government. According to Malpass and Murie, 1999: 277), from 1997 – 2002, in order to sponsor the regeneration plans, Blair administration had committed about ? 3.6 billion but this did not include the capital receipts which were mostly from the council housing sales. Based on the UK Office of the Deputy Prime Minister in 2003, Blair government had also given off about ? 2.8 billion at the start of 2003 for the purpose of upgrading the council housing in the following 3 years. According to Durden (2001: 145), the demand for a huge number additional social dwelling unit was undeniable. While an enormous estimation of 650,000 to 700,000 unmet social housing needs was recorded, the number of household units was expected to grow bigger. There were as much as 770,000 unoccupied housing units though these available dwellings were not located where the demands were. Indeed, there was a mismatch on locations. Apparently, moving this large number of people or even houses would not be realistic approach to resolve the spatial incompatibility. Unfortunately, the current rate of construction of social housing which remained to not as much as 30,000 units a year could not meet the estimated demand of about 100,000 to 115,000 new social dwelling units per year with given the continuous growth of households as well as the continuous demolition of some social housing units. If in case the rate of the construction of the social housing would be remarkably improved, still, UK had also experienced the problems of ownership. According to Stone (2003: 14), on about the 5.2 million social dwelling units available, the two – thirds of those were made as the rental units of the local authority while the remaining one - third of those were owned by the UK’s housing associations. Problems of ownership that were experienced in UK had included the indefinite future of council housing, the fast growth of the housing associations as well as the developing role of the private for – profit developers. It was the case that the local council housing was continuously challenged by the strict restriction because of many reasons. Factors included the further losses under the right to buy, the not enough funding for the reconstruction of the existing housing units, the difficulty for large – scale relocation and redevelopment by the housing associations, the pressure of move the management of the un – transferred stock to the private sectors, and also the force to mortgage un – moved stock. Meanwhile, according to Hetherington (2003), as a result of the right to buy social housing policy, about 120,000 housing units per year were sold on the average from 1981 to 1990. However, also as its outcome on the following years was a drop of the rate of loss to an average approximation of 60,000 units per year. On the one hand, it was the case that the purchase of the houses had allowed the tenants to obtain the land ownership and the housing from the local council. However, the case of the selling of flats and maisonettes located within multi – unit establishments was a complicated one. This was for the reason that even if the residents own their units, they were still considered as renters of the council. However, if it was the case that the purchasers had transferred out and leased the units for the purpose of investments or selling to the prospective buyers, then there might be a reduce in interest as well as a decrease of the housing environment’s quality. This had just gone to show the possibility of converting the funded social assets into financial benefits of some. Thus, it also showed the hurried decline of the left social housing reserves (Toynbee, 2002). On the one hand, problems with finances were also concerns of social housing in UK. In fact, the funding for social housing in this nation was really a complex one. Its complexity was marked importantly by fee setting and housing advantage as well as the private capital funding. According to Durden (2001: 141 – 148), aside from serving a purpose of funding the new council housing, the Housing Act of 1988 had also managed to transform the support system for public housing. It had influenced a lot of authorities to increase the payments for the rents abruptly. It was the case that the rental payment in new housing association units were by and large, much expensive than that of the council sector. In 2000, the government even proposed a plan that would influence the further growth of rental fees for both the new housing association and council housing. The increase in the rental fees was contained by the improvement of housing benefits especially to those who did not belong in the paid working force. Certainly, housing benefits were very expensive. Moreover, social housing had also involved social consequences. According to Stone (2003: 22), UK had faced a wide array of social problems due to social housing. With the social problem combined with issues of ownership and financing, dilemmas had been worsened. There were many factors that might drive these social issues. These included changes in the economy, shifts in the demography, tensions in the society and the political interests as well. Issues in social housing in relation to housing policy included the rights of the tenants in social housing, the changes in the demography and marginalisation of society, the affordability, the anti – social behaviour. References: Cole, I, and Robert F. 1994. The eclipse of council housing. London and New York: Routledge. Cox, K. 1982. Housing tenure and neighborhood activism. Urban Affairs Quarterly 18: 107 – 129. Durden, P. 2001. Housing policy.In Stephen P. Savage and Rob Atkinson, eds. Public policy under Blair. London: Palgrave, pp.139-153. Forrest, R. and Murie, A. 1988. Selling the welfare state: the privatisation of public housing. London and New York: Routledge. Golland, A. 1998. Systems of housing supply and housing production in Europe. Aldershot: Ashgate. Harkness, J. and Newman, S. 2003. The effects of homeownership on children: the role of neighborhood characteristics and family income. FRBNY Economic Policy Review. Harloe, M. 1995. The people’s home? Social rented housing in Europe and America. Oxford: Blackwell. Hills, J. 2007. Foreword. In C. Whitehead and K. Scanlon. Social housing in Europe. LSE London: London School of Economics and Political Science. Hurst, C. E. 2001. Social inequality: forms, causes, and consequences. Allyn and Bacon. Malpass, P. and Murie, A. 1999. Housing policy and practice. 5th Edition. Houndsmill and New York: Palgrave. National Association of Realtors, 2010. Social benefits of homeownership and stable housing. National Association of Realtors. Pearson, L. F. 1988. The architectural and social history of cooperative living. London: Macmillan. Rohe, W.M., McCarthy, G. and S. Van Zandt. 2001. The social benefits and costs of homeownership: a critical assessment of the research. Cambridge, MA: Harvard University, Joint Center for Housing Studies. Working Paper LIHO 01.12. Rossi, P. and Weber, E. 1996. The social benefits of homeownership: empirical evidence from the national surveys. Housing Policy Debate 7: 1 - 15. Stone, M. E. 2003. Social housing in the UK and US: evolution, issues and prospects. Toynbee, P. 2002. It’s on the house. The Guardian. Friday May 31. UK Office of the Deputy Prime Minister. 2003. Sustainable communities: building for the future. February. Whitehead, C. and Scanlon, K.2007. Social housing in Europe. LSE London: London School of Economics and Political Science. Read More