Bagehot, the Economist’s political columnist, wrote a piece last week on the convergence of right and left wing political opinion on that controversial matter of affordable housing policy in London. Compare Boris’s accusation of ‘Kosovo style cleansing’ with shadow work and pensions minister and Westminster North MP Karen Buck’s declaration that the benefit reforms amount to an attempt by the Tories to rid wealthy parts of London of lower income black, ethnic minority and Muslim women.
That’s a debate we’ll not enter into here, but Karen Buck also points out that this will lead to greater concentrations of deprivation in already poor areas, such as Newham and Barking. Add this to the new approach to affordable housing based on charging tenants 80% of market rents and the flight to cheaper, poorer areas seems inevitable. Our recent study with GVA on the impact of this ‘affordable rent model’ shows that, when applied, viable developments (possible in a few wealthy London boroughs) are effectively unaffordable for many Londoners, yet in places where 80% market rents become affordable, viability goes out of the window.
It’s also worth challenging the frequently held assumption that recipients of Housing Benefit do not work. A study by the University of Cambridge for Shelter breaks down the impact of housing benefit changes by household type, showing that of those placed in ‘severe difficulty’ by the reforms, 17% will be employed, 21% out of work, and the remainder retired, sick or disabled or economically inactive, e.g. raising a family. Often the most deprived areas are ones with poor connections to employment opportunities, meaning that those working claimants may find themselves exposed to more precarious employment prospects if they are forced to move.
And the claim that landlords will lower rents once the distorting effect of housing benefit is removed? Unlikely in London where strong demand from relatively wealthy households, excluded from home ownership by low supply of mortgage credit, and international demand for housing, will mean that any gap left by lower income households moving on will soon be filled.