landlords are hurting, please give back your rent cuts
Aug 17 2009 22:49
yes, many of mah fellow muricans are reactionary, unconscious nuts. but if they tried this in nyc, there would be riots.
Quote:
Millions of housing association tenants may be asked to give up rent reductions because of financial pressures facing landlords, it is warned.
the article goes on tho' to describe a program i'm not familiar with, which sounds as though the rent paid by housing association tenants goes to building more low-income housing? do I have that right?
Quote:
"We desperately need the new homes. And as the public finances deteriorate we will need more private borrowing to ensure we can continue to build the new homes."
so is the yearly profit to landlords from these units somehow guaranteed by the govt? (and of course is considered sacred, like, you could never ask them to take a profit cut)
http://news.bbc.co.uk/2/hi/uk_news/8206310.stm
Aug 18 2009 09:38
#2
They are nominally non-profit, but effectively they are privatisation on the cheap.
Aug 18 2009 15:39
#3
Housing Associations were originally set up to provide social housing and financed by central govt. subsidy and rental income (though, iirc, always taking loans from banks). But in last 25 yrs, as social housing has become more disliked by govt., they have been used as a means to part-privatise provision of social housing. 70% of new builds by HAs are for sale or rent at market prices. They have been encouraged to become property speculators; so, post-credit crunch, HAs are now left with unsold stock and outstanding loans since the property crash (some lost out in Icelandic investments etc too). Existing rental income is used as collateral for loans - ie, tenants' homes guarantee the loans that fund speculation.
The article refers to a formula limiting yearly rent rises for social housing - iirc, RPI + 2%. But as most of HA investment has long been for encouraging property ownership rather than social housing for those most in need, their pleas for more cash are frankly bullshit. Though officially having 'charitable' legal status, the main beneficiaries of this 'charity' are the HA bosses who usually earn over £100,000 pa. Both councils and HAs have been getting around the cap on yearly rent rises by whacking up the rip-off service charges charged to tenants.
Jef; HA tenants pay their own rent, though those on low income or unemployed claim Housing Benefit from the local council. Most new HA tenants are nominated by councils from their homeless waiting lists.
Aug 18 2009 16:29
#4
thanks to everyone, now some questions
1: who set up the HAs? was there legislation?
2: who comprises the HAs? are they private developers?
i'm trying to compare these with what i know from nyc housing. it sounds something like mitchell-lama but i'm not sure yet.
Aug 19 2009 08:07
#5
Aug 19 2009 09:14
#6
The HA I have personal experience of - Beaver, based in Lewisham, South London - very quickly moved much of their assets into "shared ownership" schemes during the 1990s. Shared ownership is IMHO a way for these organisations to distance themselves from many of the responsibilities which were formerly held by social housing organisations. While you may only own 25% of the property (and thus pay a "fair rent" on the remaining 75% owned by the HA) you become solely responsible for the upkeep and repair of your property. In LA (Council) housing broken windows, dodgy boilers, rotten floorboards and so on would be prioritised in terms of their H&S criteria and (eventually) be replaced by the council free-of-charge.
The HA would still be responsible for "structural" aspects of the building, insuring the complete building and the upkeep of the public areas such as corridors. However, as Ret pointed out, you pay a service charge to cover this.
It's a double-whammy which obviously trades the illusion of tenant "ownership" for HA "profit". This is the Housing Corporation - the HA umbrella group - doc on this: http://www.housingcorp.gov.uk/upload/pdf/SO_leaflet_20050923114822.pdf
There were a couple of other curious things that happened during this period too: as I was sharing a two-bed flat in a terrace conversion every six months we would be bombarded with letters offering us £15K as a deposit on buying a property if we handed the flat back and gave away any future right to a HC tenancy. I never figured out how that would work if my situation changed given their responsibilities to the disabled, elderly etc. Also, unlike my experience of LA tenancies, they had no obligation to rehouse me in the event of the dissolution of the relationship of the two tenants. ("Sorry, we don't split tenancies"?!)
Finally it's worth making a comparison with Germany. Looking to move to Hamburg I had some friends check out various cheap social housing for me. While I was put off slightly by my friends suggestion that I pay a deposit of 5K euro to move into the equivalent of a HA flat, I soon realised that it made sense - provided you had the deposit - as: the tenancy could be passed on to your partner or child in the event of death (unlike HA and LA properties in the UK) and the HA still took responsibility for most repairs as you were regarded as a tenant. Best of all though was that twice a year, summer and christmas, you were sent approximately 50% of the interest acquired on your deposit to help you through the holiday season.
Aug 19 2009 14:22
#7
thanks for that udo, appreciated.
note to self: always check wiki (i never thought there'd be an article on this). there i read:
Quote:
A feature of Housing Associations is that, although the larger Housing Associations usually have paid staff, a committee or board of management made up of volunteers has overall responsibility for the work of the organisation. A board might include residents, representatives from local authorities and community groups, business people and politicians. There are more than 30,000 voluntary board members running housing associations throughout England.
and from udo's link:
Quote:
What is a housing association?
They are non-profit making organisations who provide and manage
homes for rent and sale for people in housing need who cannot
afford to rent privately or buy. Most housing associations provide
housing with the help of public money given by the Housing
Corporation or a local authority; in some cases, the association may
provide housing using its own money.
and
Quote:
Where does the Housing Corporation fit in?
The Housing Corporation was set up by Parliament in 1964. Our
job is to fund homes built by housing associations from money we
get from central government.
so i think i see how the management works, and the 'landlords' mentioned in the OP are the HAs (who must have formed and put in a bid to the govt to do the developing in the first place, years ago now). development appears to be the job of the National Housing Federation, which represents HA boards (while TAROE represents the tenants' interests). so, the HAs kick money into the NHF, which lets the contracts for new housing, and they claim that the rent reduction will damage their ability to fund new housing starts, because they can't rely on backup money from the HC as much as they used to.
Aug 19 2009 21:14
#8
Quote:
the 'landlords' mentioned in the OP are the HAs
Correct.
Quote:
development appears to be the job of the National Housing Federation, which represents HA boards [...] the HAs kick money into the NHF, which lets the contracts for new housing
No - individual HAs plan development independently (or sometimes in partnership with other developers) and fund it from rental inflow, commercial loans and some funding from the Housing Corporation (the state organisation which oversees HAs). Each HA collects and keeps it own rent from its tenants.
The NHF is just an umbrella Federation for HAs to represent their general collective interests. It doesn't manage or build any housing itself.
Quote:
they claim that the rent reduction will damage their ability to fund new housing starts, because they can't rely on backup money from the HC as much as they used to.
The rent reduction (or non-rise) will lower their income, and though it's true they have been encouraged by the state (via long term Housing Corp. policy) to seek more independent funding, the state would probably still bail out failing HAs in financial difficulty (though maybe not if there were political reasons not to, eg, such as wanting to rid an area of tenants for purposes of gentrification.)
That's how I understand it, anyway...
Aug 19 2009 22:08
#9
smashing, thanks again for taking the time
Ret Marut wrote:
individual HAs plan development independently (or sometimes in partnership with other developers) and fund it from rental inflow, commercial loans and some funding from the Housing Corporation (the state organisation which oversees HAs).
ah. i had it in my head that HAs were in origin local/community groups, i guess enough time has passed for (some of) them to become proper development "companies".
Aug 19 2009 23:21
#10
Quote:
i had it in my head that HAs were in origin local/community groups, i guess enough time has passed for (some of) them to become proper development "companies".
The oldest were set up by Victorian philanthropists (Peabody, Guinness etc) for the "deserving poor". But most are younger, a lot were set up since the 60s-70s - iirc, encouraged by Tory government as a potential alternative to state provision of social housing. The role of HAs has grown massively as successive governments have stopped the building of council (ie, local govt funded and managed) housing and council housing stock continues to be sold off.
Aug 20 2009 22:24
#11
HAs are now getting the rent "reduction" that council tenants got earlier this year. What happened was that rents were due to go up by about £5 a week, but the govt capped it at about £2 a week (though did it after all the letters had gone out). So it's not really a cut, more a smaller increase.
HA and council rents were historically lower than market rents, but for the last decade there has been a government policy to make the 2 converge, to boost the private renting market (see also the indirect help given to buy-to-let landlords). In some areas now council/HA rents are more than private, though of course you get more security once you're past the introductory period. It's also not true that you can't pass on a tenancy in the event of death - someone I know had it happen on the death of their mother, and I believe that was with Beaver's parent company.
Privatisation on the cheap describes most, though probably not all HAs. They are usually run by the great and the good and have a much more stratified management strucutre.
Aug 22 2009 13:21
#12
The 'Housing Corporation' is I understand now rolled up into, and integrated with, 'English Partnerships' and some devolved housing sections of the 'Communities and Local Government' department into a new body called the 'Homes and Communities Agency'.
This will further facilitate the corporate public/private partnership approach to housing regeneration and provision.
Aug 22 2009 13:37
#13
The H&CA - along with new regulatory body the Tenant Services Authority (TSA) - were formed to replace the HC and they've been operational since Dec 08. But it apparently remains to be sorted out just what regulatory powers the TSA will have (consultation ongoing). More likely, the Tories will abolish the TSA and HCA (as another 'unnecessary quango') after the next election and return to something like the HC, where the investor 'regulates' themselves. http://www.insidehousing.co.uk/story.aspx?storycode=6505397
Housing Associations are non profit making organisations that rent houses to people. The rent can be paid by the local council who can't house people because they have sold off their social housing and not built any more. Housing associations used to be viewed in a more positive light, or that could be that I've learnt a bit more about them over the years.