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Coffee House

Why a Labour council is selling expensive housing stock

22 August 2012

1:00 PM

22 August 2012

1:00 PM

The Policy Exchange report Ending Expensive Social Tenancies has predictably provoked a renewed debate about council housing and the value of genuinely mixed communities. It was welcomed by the right as providing a potential narrative for ending the automatic claim of the working and non-working poor to live in more salubrious neighbourhoods, whilst some on the left have attacked it as a fundamental attack on the very notion of council housing.

On the basis of my experience as leader of Southwark Council – the largest social landlord in London – I believe the report actually presents us with an opportunity to start talking about what we want our social housing to deliver in future decades, and whether it is time to challenge the direction of so-called ‘affordable housing’.

In Southwark we are making some fairly radical use of our property in order to meet our commitments to bring each one of our council homes up to our own standards for being dry, warm and safe and to build 1,000 new council homes by 2020. What we are doing might initially resemble the Policy Exchange proposals. But in truth it is a very different approach.

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Firstly we are allowing developers to make ‘in lieu’ payments to us rather than build new affordable properties in the borough. Why? Because too often the ‘affordable housing’ they would deliver would be anything but. On one site in north Southwark you would have to be earning around £80,000 to be able to meet the ‘affordable’ rents on site. The introduction of 80 per cent market rents and a shift towards targeting shared ownership housing at middle to higher income households meant we saw a need for new council housing charging significantly lower rents than those now offered by housing associations. To do this, we are using revenue from prime developments to deliver new genuinely affordable housing.

We are also selling some of our more expensive properties as they become vacant when the cost of refurbishing them is uneconomic in comparison to the number of other properties we can bring up to our ‘warm, dry and safe’ standard. Our approach is aimed at ensuring that we retain and increase the amount of council housing which we have in genuinely mixed communities across Southwark.

Council housing remains a valuable form of tenure for many people.  But in order to meet current demand we have to ensure that we manage our housing stock in a dynamic fashion, and not get caught by the notion that retaining existing stock in existing locations must be our only objective.

Cllr Peter John is the Labour leader of Southwark Council.

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