An introduction to Social Policy

Paul Spicker

Housing and urban policy

This file was last updated on June 29, 2014

Housing

Housing policy is usually analysed in economic terms, as a form of market. In theory, markets lead to efficient allocation through a complex process of matching supply and demand. This depends on competition (to bring prices down); good information; the existence of multiple suppliers; and the existence of multiple purchasers. In housing, this theory has limited application. Barlow and Duncan point to

Housing problems

The root of many problems in Europe is a shortage of adequate housing. This statement may seem strange, because most European countries have a crude surplus of houses over households. There are three main reservations to make about that calculation.

Good housing is in short supply. That makes it expensive. Because housing operates in a market, the people who are most likely to be left out will be those who have least resources. People have to live where they can; so they have to live in unfit accommodation, and they may have to accept overcrowding. The shortage also leads to increasing prices, creating problems in the supply of affordable housing.

Homelessness

Photo: Hostel for homeless people
A hostel for homeless people in the 1930s.
(c) Hulton-Getty.

Homelessness is a complex problem; the circumstances of homeless people vary greatly. At root, though, the reasons for homelessness come down to four main issues:

Housing and deprivation

Many of the key issues in deprivation are housing issues. The Breadline Britain surveys, identifying what people thought of as 'essential', came up with answers like a damp free home, heating, indoor toilet, the use of a bath, home decoration, having enough beds and refrigeration - the last two depending on space. [3]

An unpopular estate, with burnt out car.
An unpopular estate, with burnt out car.
Photograph: Paul Spicker

Deprivation is often concentrated. Slum estates occur in both the private and the public sectors. In the private sector, poor people are brought together through the market; those least able to exercise choice end up in the places least to be chosen. The same is true, to some extent, of the public sector. Where applicants for social housing are allowed a choice, the people most able to exercise that choice are those who have the highest incomes and the best housing previously. They are the ones who can wait for a better offer. Social segregation by housing officers has contributed to this process in the past, but it equally happens in the private sector where there this has not happened.

However, deprivation is not only concentrated. Most poor people do not live in poor areas; and most of the people who live in these areas are not poor.

 

Urban policy

The term "urban policy" is used for a wide range of different concerns and activities. The key issues relate to

This does not define a very distinct area of concern, and some issues, like local economic policy, are not certainly "urban" at all.

Urban policy has mainly been distinguished by attempts to treat economic and social issues in localised settings. The characteristic modes of work include

British housing and urban policy

Photo: a council estate in Dundee.

Local authorities provided decent housing for millions of people. The properties in this photo with blue doors are still owned by the council; others have been sold.
Photograph: Paul Spicker

Housing in Britain is commonly classified according to tenure. The main tenures are owner-occupation, local authority housing, registered social landlords (including housing associations and stock transfers), and private rented housing.

Since the beginning of the 20th century, there has been a major change in tenure. Owner occupation has grown from 10% to 67% of the stock; private renting has declined from 90% to less than 10%; and a large social housing sector, mainly represented by council housing, grew to about a third before its reduction to less than a quarter. People on low incomes tend now to be concentrated in social rented housing; the average income of council and housing association tenants is just over a quarter of the income of people who are buying houses with a mortgage.

Owner-occupation

The growth of owner-occupation in Britain is built on a solid legal foundation, stable finance and a history of tax advantages, particularly from the 1960s to the 1990s. The Building Societies were central to this growth. They were founded on a social, co-operative and non-profit making basis, but in the 1990s many became banks, abandoning the mutualist tradition.

Owner-occupiers tend to fall into two main groups. Those who own their house outright are mainly older people, often on fairly low incomes, who have paid off their mortgage. Those who are on higher incomes will generally invest in housing by taking out further mortgages. Whether one is in the process of buying a house or not is strongly related to income.

More recently, a third category of low-income owner-occupation has become more important. Policies to encourage ownership have necessarily been directed at people on lower incomes, because those on higher incomes were already buying. This expansion has led to other problems, including

Photo: Council housing Council housing, and the housing it replaced.(c) Hulton-Getty.

Social housing

Local authority housing grew after World War I; 2 million houses were built before 1939, over 4 million more after the war. Initially, council housing was intended for the "working classes". The main justification for its development after 1919 was the provision of housing for general needs, but after 1930, it became focused on people displaced after slum clearance. The stigma of council housing probably dates from this period: council estates were built in locations where they would not adversely affect the values of owner-occupied property.

After World War II, references to the 'working classes' were removed. The replacement of the housing stock, particularly through clearances, became council housing's main role, with mass building. The subsidies favoured industrial, high-rise building, though this was often more expensive than the alternatives. Quantity was more important than quality. [4]

Housing policy changed after 1970, when political support for council housing was withdrawn by the Conservatives. In the 1970s and 80s, council housing acquired a more residual role, and is now more concerned with welfare issues and special needs. General subsidies have been progressively withdrawn; for most tenants they have been replaced by Housing Benefit. The sale of council housing to tenants, and mass transfers of stock to Registered Social Landlords, have reduced the numbers. [5] As the role of council housing has diminished, Housing Associations have been encouraged to take over the limited opportunities for development.

Private rented housing

Private rented housing declined proportionately after 1919, because the growth of owner-occupation and local authority housing took out a large part of the market. Since the 1920s, it has been cheaper to buy than to rent, and capital values have been dictated by sale to owner-occupiers. As the stock aged, it bore the brunt of clearance. The sector declined numerically from 1945 to the late 1980s. The decline of the sector was marked by poor standards and abuse by landlords. Deregulation in 1957, intended to revitalise the sector, had the reverse effect; it facilitated the exit of landlords from the market. The Rent Acts of the 1960s were designed to protect tenants from abuse and to give them some security. The law was widely disregarded by landlords and by the courts; in so far as regulation did have an effect, it was probably to slow down the rate of decline by preventing landlords from selling. In the 1988, there was further deregulation, which had no immediate effect. There was further deregulation in 1988, with the creation of the shorthold tenancy to allow landlords to obtain vacant posession and resell; it had limited direct effect on supply (the sector has expanded, but most of that expansion happened more than twenty years later).

The sector now consists principally of limited specialist markets, such as student accommodation, the desire of some owners to have some income until they can sell at a favourable rate, and the government's subsidy of rents through Housing Benefit. There also tends to be more private renting in certain areas, when there is a special market for short term lettings, such as holiday lets, or a student population. However, there has been a substantial increase in supply. The principal economic determinants of supply have been not deregulation, but

The combination of factors has led to a marked expansion of the sector since 2007, increasing the size of the sector by 50%.

Problem estates

Photo: An unpopular estate in Dundee.
An unpopular estate, emptied in preparation for demolition.
Photograph: Paul Spicker

The 'worst estates' have become a central focus of policies dealing with 'social exclusion'. Their problems are the problems of poverty. People who are poor live differently: they are stuck at home more, they cannot afford enough heat to avoid damp. Rich people without young children would not have the same problems. Examples of problems in poor areas are:

Urban deprivation and the inner cities

Housing conditions in many cities are particularly unsatisfactory; the houses are old and in poor condition. A series of policies since the late 1960s have focused on the problems of deprivation in inner city areas. Much of the concern with the inner cities grew from an attempt to produce an acceptable racial policy. Despite this, Rex states that ethnic minorities did not get even a proportionate share of resources from policies for the inner cities. [6]

The basic criticisms of inner city policy are:

References

  1. J Barlow, S Duncan, 1994, Success and failure in housing provision, Pergamon.
  2. Source: EUR-life, at www.eurofound.europa.eu
  3. D Gordon, C Pantazis, 1997, Breadline Britain in the 1990s, Avebury.
  4. P Dunleavy, 1981, The politics of mass housing in Britain, OUP.
  5. I Cole, R Furbey, 1994, The eclipse of council housing, Routledge.
  6. J Rex, 1988, The ghetto and the underclass, Avebury.

Further reading

Housing and homelessness, from the British Library Social Welfare Portal