Local homes for local people

The "local homes for local people" debate has reignited as a result of a report for the EHRC.

I can't see mention of this in Building Britain's Future, but here, from Hansard is what Gordon Brown said on 29th June: "[...] we can now also reform social housing allocation, enabling local authorities to give more priority to local people whose names have been on waiting lists for far too long. [...] We want to see a bigger role and responsibility for local authorities to meet housing needs of people in their areas."

John Healey (7th July) is pushing the increased Local Authority autonomy side of this: "In some areas, they may want to give people who have waited the longest preference. In some areas, they may want to give preference to people who have moved to take up work.They may want, in rural areas, to give preference to those with local connections or their preference may be to reduce overcrowding or attract skilled workers"

Personally, I don't like the politics of this. That aside, in terms of equity "local homes for local people" enshrines the right to live where you are born (residency criteria) or where you work (employment criteria). There is a debate to be had about whether these are sufficiently strong rights to weaken those around housing need (the current criteria). In terms of efficiency there is a strong argument that we need more mobility in the social housing sector not less. "In" quickly when people are in trouble and "out" when their long term situation improves. Further, from a spatial perspective, social housing acts as a very severe constraint on geographical mobility. As such mobility has an important role to play in adjusting to the changing economic geography of the UK economy "local homes for local people" is surely a step backwards.

Housing numbers part 2

I wrote yesterday that I found the housing numbers a little confusing. CLG have kindly provided clarification. So, here goes:

Existing commitments (i.e. before Monday 29/06)
Affordable housing provision (completions) for 09/10 & 10/11: 90,000
Cost 09/10&10/11: £6.4bn

The "housing pledge" gives:
Additional affordable housing starts 09/10 & 10/11: 20,000 with completions not later than 2011/12.
Additional expenditure: £1.5bn in 09/10&10/11 and the remaining £0.6bn in 2011/12 (for a grand total of £2.1bn)

I haven't tried to figure out the details of how the extra £2.1bn is funded.

Housing numbers (numbers numbers)

Just catching up with the news around housing numbers.

Here is BBC news: "investment in housing would be trebled to £2.1bn, funding 110,000 new affordable homes to rent or buy over the next two years and creating 45,000 jobs in construction" Same "extra 110,000" figure in the Guardian

Contrast that with the 2020 group from March calling for "a house building fiscal stimulus package [of] £6.35bn to fund the building of 100,000 social homes over the next two years".

CLG: "£1.5 billion boost will deliver an additional 20,000 new affordable energy efficient homes over the next two years - and a further 10,000 homes delivered through the private sector".

Building Britain's Future: "We have already committed to investing an extra £1.2 billion this year to build new houses. But to ensure that we meet the needs of young families across the country, we will expand this building programme by investing a further £1.5 billion over the next two years to deliver 20,000 additional energy efficient, affordable homes to rent or buy."

So, the 2.1bn figure is £1.5bn announced yesterday plus £400m for kick start and £100m for LAs (the latter two announced in the budget) plus some unidentified 100m? (Or a bad typo on the 1.2bn?) . It could involve the extra £500m for kick start mentioned on the HCA website.

I am not sure where the 110,000 figure comes from. It could be the total figures for next year. I don't think it can be extra numbers funded off the back of the most recent announcements.

All a little confusing ...

Youth unemployment "hotspots"

A new report from the Centre for Cities on youth unemployment makes for depressing reading. Youth unemployment stands at around 900,000 and is set to top the 1m mark. The spatial distribution of increases in youth unemployment is quite uneven.

The report discusses the role of the government's new Future Jobs Fund in tackling rising youth unemployment. Centre for Cities argue that, given the short term nature of the jobs created, this fund is best aimed at places suffering unexpectedly high short run increases in youth unemployment. Other policy initiatives should then continue to focus on longer term structural problems. This seems sensible.

Note, however, that the fund identifies "hotspots" as those places where the rate of unemployment is more than 1.5% above the national average. If Centre for Cities are right, this focus on levels instead of changes is not very useful for identifying places where the policy intervention is most likely to benefit young people.

Is this another example where policy gets it wrong by focusing on places rather than people?

Digital Britain

There is a strong spatial component to the proposals in the Digital Britain reported published yesterday. A 50p a month levy on fixed telephone lines will be used to generate a national fund to ensure universal access to broadband by 2012. A big chunk of this money will be spent on rolling out broadband to rural areas.

Providing high fixed cost public goods to sparsely populated areas often requires government intervention. No individual is going to pay the fixed cost if others can just free-ride on their investment. Of course, broadband is actually quasi-public in that you can restrict access to subscribers. This should make provision easier if the aggregate benefits to rural communities outweigh the costs. A tax on rural communities where this is the case can then be used to provide broadband and solves the public good problem.

What if the aggregate benefits to rural communities do not outweigh the costs of provision. There are then two arguments for doing so. One is an efficiency argument. That there are positive externalities to access to broadband. In aggregate, networks certainly demonstrate these kind of externalities (the internet is more useful now more people use it) but the effects of adding small numbers of people are, well, small. You can try some kind of economic development argument (although remember that the individual benefits to businesses directly affected weren't enough to outweigh the costs, so you are looking for some kind of externality).

Alternatively, you can resort to arguments around equity not efficiency. As I have discussed before, spatial policy is often not a very good tool for tackling equity issues. In the case of broadband we have a fixed rate levy (which is certainly a regressive tax within the group of consumers that have fixed lines and I would assume regressive overall) going to subsidise rural broadband that will benefit a lot of very well off people (as well as helping some rural poor).

One wonders if this is another case where worries about "postcode lotteries" ends up squashing serious debate about spatial policy?

Catching up (with the Regeneration Framework)

It was SERC's annual conference last week (see what you missed here) and I have been tied up with organising that as well as pushing forward some of our long term research. As a result I haven't been keeping up with the policy debate as much as usual lately (nor with this blog).

Taking the opportunity of late Friday afternoon to catch up, I read through "Taking forward the regeneration framework" published earlier this week.

Let's start with a definition: "the Government’s view is that regeneration is a set of activities that reverse economic, social and physical decline in areas where market forces will not do this without support from government". Then an ambition: "Regeneration is central to our ambition to create sustainable places where people want to live, work, and raise a family". So far, so good. Government has an important role to play in urban development. It should help correct for market failures and provide public goods, and some regeneration projects may play this role.

But here's the thorny issue: "[investment will be] targeted – not trying to transform everywhere – but investing where it will have most impact by supporting those communities where the most severe poverty and worklessness persists and where there is the opportunity to deliver long-term change". Despite the assertion that: "[The framework is] built on what we know works" the second part of this (long term change) sounds, at least to this reader, like wishful thinking.

To repeat: It is very unclear that regeneration policy (helping poor areas) makes for good social policy (helping poor people). As the recession means that we now have a lot more of the latter it is important to have a serious debate about whether spending £6.5bn on the former is the right policy response.

Strong Foundations?

The conservatives published their thinking on housing policy yesterday.

The biggest issue that housing policy needs to address is housing supply. They propose to do this by scrapping regional plans and replacing them with increased incentives to develop. The latter part of this is certainly a step in the right direction. But the incentives seem small (central government will provide matched funding of council tax on new properties for 6 years and as this is part funded by scrapping HDPG it is not all additional). It also doesn't address the crucial question of how one could convince local authorities in, say, South Manchester to build more housing that might have large benefits for the city-region as a whole. Some kind of higher level body is needed in these circumstances to internalise the (potentially large) cross boundary externalities and provide the right incentives.

At the same time, the proposal is that back gardens will cease to be brownfield while local communities will get to redefine their own green belt. I imagine the overall effect of these two changes will be to reduce the supply of land and it is not clear whether the incentives would be sufficient to overcome this.

There are proposals involve Local Housing Trusts building houses for local people. Community size can be increased by 1% per year if 90% of the local population is in favour. I assume this is aimed at rural communities. Theoretically this could help with very localised problems, although there will be strong disincentives for existing home owners that border the new development to object, so the 90% criteria could be pretty tough. I also think that local houses for local people is a very unappealing principle.

Piloting "right to move" for existing social tenants sounds interesting. Proposals for more complex intermediate shared ownership schemes are less convincing.

Finally, they will scrap HIPS but retain energy performance certificates. These will now only need to be produced once the sale is agreed but somehow it is claimed that this will still change behaviour. I would suggest more that is needed on that particular line of reasoning.

Overall, then, a mixed bag. Some interesting ideas, some marginal and a few odd ones.