Housing associations embrace the market

Housing associations have been both a target and, in many cases, willing accomplices in the destruction of affordable, social housing for the working class. Last year they posted record surpluses of £2.4 billion, having built more houses for private sale than for social rent.

George Osborne’s summer budget set out cuts to social housing rents of 1% each year for the next four years – a deliberate attempt to starve social housing of funds across the board. Councils across England have already announced plans to shelve the building of 5,500 homes. The National Housing Federation, warns that at least 27,000 new housing association homes will not now be built. The response of at least two of the largest housing associations operating in the southeast is to stop building social housing altogether.

Genesis, which manages 33,000 homes, announced it will now focus on building properties for private sale or rent at full market prices. Its chief executive, Neil Hadden, in tune with the government’s plans, commented: ‘We are not able, or being asked, to provide affordable and social rented accommodation to people who should be looking to the market to solve their own problems.’ When asked if he was concerned that his organisation would no longer meet the needs of the poorest, he replied: ‘That won’t be my problem’ (Inside Housing, 6 August 2015). The Notting Hill Housing Group – another large London landlord – says it will ‘reprofile’ its programme away from affordable rent and towards shared ownership. Its CEO, Kate Davies, in a report for the right-wing Centre for Social Justice, described social housing as: ‘ghettos of the poorest and neediest people...subsidised by the taxpayer’. Social housing, she went on to emphasise ‘is not a desirable destination’.

Big bucks for CEOs

Social housing is now big business and very lucrative for its executives. Chief executives of the biggest 100 housing associations were paid an average of £182,780 this year – a rise of 5.5% on last year’s figure. Bonuses rose 4.7%. The highest paid CEO – Places for People’s David Cowans (£481,507) – justified his fat pay packet by saying that more than half his organisation’s turnover came from businesses outside social housing. The chief executive of East Thames Housing, currently involved in evicting vulnerable young people from the Focus E15 hostel in Newham, was paid £155,000. Notting Hill’s Kate Davies received £220,000. The days of Victorian philanthropy are long past – the CEOs of the Guinness and Peabody Trusts received £269,000 and £223,060 respectively.          

Cat Wiener

FRFI 247 October/November 2015


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