Making Housing Affordable Again
Making HousingAffordable Again:Rebalancing theNation’s Housing SystemFull reportThe final report of the Affordable Housing Commission
About usAffordable Housing CommissionThe Affordable Housing Commission (AHC) is an independent, non-partisan groupestablished by the Smith Institute with the support of the Nationwide Foundation.It is chaired by Lord Best with 14 leading players from across the housing world.Its core objectives are to: examine the causes and effects of the affordability crisis;explore and propose workable solutions (big and small); raise awareness of theconcerns and solutions (among practitioners, decision-makers and the public);engage stakeholders and build a consensus for change.Further information on the Commission can be found atwww.affordablehousingcommission.orgThe Smith InstituteThe Smith Institute is an independent think tank which provides a high-levelforum for thought leadership and debate on public policy and politics. It seeksto engage politicians, senior decision makers, practitioners, academia, opinionformers and commentators on promoting policies for a fairer society.For more information visit: www.smith-institute.org.ukNationwide FoundationAs an independent charity, the Nationwide Foundation influences changes toimprove circumstances for those people in the UK who most need help. Its visionis for everyone in the UK to have access to a decent home that they can afford, andits strategy seeks to improve the lives of people who are disadvantaged becauseof their housing circumstances. To do this, it aims to increase the availability ofdecent affordable homes. The Decent Affordable Homes strategy began in 2013and the Nationwide Foundation is committed to this strategy until 2026.The Nationwide Foundation was established by Nationwide Building Society in1997 as a fully independent foundation. It is a registered charity (no. 1065552) anda company limited by guarantee in England and Wales (no. 3451979).For more information on visit: www.nationwidefoundation.org.ukPublished by the Affordable Housing Commission Affordable Housing Commission March 2020www.affordablehousingcommission.org2Report title to go here
ContentsForeword3Preface4The Affordable Housing Commission5Executive summary9Introduction33PART ONE: Why is housing unaffordable?35PART TWO: Costs and consequences53PART THREE: Defining affordability – who’s affected?63PART FOUR: Rebalancing the housing system71PART FIVE: Affordability: a national priority83PART SIX: Increasing supply of affordable homes91PART SEVEN: Land and planning107PART EIGHT: A mix of social housing119PART NINE: Addressing affordability directly129PART TEN: Making rents affordable147Making housing affordable again3
4PART ELEVEN: Affording housing quality159PART TWELVE: Housing welfare167PART THIRTEEN: Struggling older households173PART FOURTEEN: Frustrated first-time buyers179PART FIFTEEN: Struggling homeowners197PART SIXTEEN: Housing delivery203PART SEVENTEEN: Conclusion and recommendations215Appendices225Endnotes237Making housing affordable again
ForewordAfter 18 months of studying the misery caused by housing affordability problems,the Affordable Housing Commission has not discovered a silver bullet that couldfix everything. But we did unearth an underlying cause of so many householdsstruggling with disproportionate housing costs: it is the switch into the privaterented sector (PRS) - which has more than doubled in size in less than twenty years from both social renting and from home ownership.The scaling back - indeed the halving - of the social housing sector has pushed morepeople into the private rented sector where there is less security and significantlyhigher rents; and the obstacles for potential first time buyers have also confinedmore of them to private renting where they too face less security and, over a lifetime,greater cost.Our report’s extensive list of recommendations, therefore, suggests ways ofrebalancing the nation’s housing to secure more social rented housing and moreaffordable home ownership, for those for whom private renting is not the bestoption.Now we hope to join forces with all housing policy-makers and practitioners whoshare our ambition to end affordability problems in a generation.The Commission is indebted to those who participated in our many seminars,conferences, focus groups, polls and surveys, and to those 90 contributors whosubmitted invaluable evidence. Sincere thanks go to the Nationwide Foundation forsupporting this extensive exercise and to the Smith Institute – to Paul Hackett andPaul Hunter – for researching, scripting and managing the whole process with greatskill and enthusiasm.I am extremely grateful to my fellow Commissioners who have seen this throughto a unanimous report. I hope the reward for everyone’s endeavours will be a widerrecognition by policy makers – not least in forthcoming government White Papersand the next Spending Review – that housing affordability must now rank amongthe nation’s highest priorities.Lord Richard Best, Chair of the Affordable Housing CommissionMaking housing affordable again5
PrefaceThe homes people want, in the places they need to live, are becoming more and moreunaffordable. Ordinary people are struggling with housing costs and for some thismeans being pushed deeper into poverty, leaving no money behind once their rentor mortgage have been paid. For the most vulnerable families and individuals in oursociety, having nowhere suitable to live has lasting and damaging consequences.As a funder committed to long-term system change, our vision is that everyoneshould have access to a decent affordable home. It is to this end that we funded theAffordable Housing Commission.We believe the Commission’s powerful recommendations and robust analysis ofthe housing system, through the lens of affordability, provide an opportunity for realchange. Therefore, we are passionate that the legacy of the Commission should bethe formation of a coalition of the willing. It is our hope that this alliance helps to leadto the creation of a modernised housing system where everyone has choice, freedomand stability.Leigh Pearce, Chief Executive of the Nationwide Foundation6Making housing affordable again
The Affordable HousingCommissionThe Affordable Housing Commission was established in October 2018. It was formedas an independent, non-partisan group established by the Smith Institute with thesupport of the Nationwide Foundation. It is chaired by Lord Richard Best with 14leading players from across the housing world.The Commissioners Lord Richard Best, Chair Claire Ainsley, Executive Director, Joseph Rowntree Foundation Sinéad Butters, Chief Executive, Aspire and Chair, PlaceShapers Ian Fletcher, Director of Policy, British Property Federation Professor Ken Gibb, Director, UK Collaborative Centre for Housing Evidence Robert Grundy, Head of Housing, Savills Kate Henderson, Chief Executive, National Housing Federation Lindsay Judge, Senior Research and Policy Analyst, Resolution Foundation Geeta Nanda, Chief Executive, Metropolitan Housing Association and memberof the London G15 Jo Negrini, Chief Executive, London Borough of Croydon Martin Newman, Co-founder and Co-ordinator, Giroscope Jenny Osbourne, Chief Executive, TPAS – the tenant engagement experts John Slaughter, Director of External Affairs, Home Builders Federation Gavin Smart, Chief Executive, Chartered Institute of Housing Dan Wilson Craw, Chief Executive, Generation RentThe Commissioners are members of the Affordable Housing Commission in apersonal capacity. The views expressed in this report do not necessarily reflect theviews of their organisations.Making housing affordable again7
Terms of referenceThe country is in the middle of an acute and worsening affordable housing crisis.The problem has taken root well beyond the capital and is affecting not justthe young and those on the lowest incomes. Yet housing affordability is poorlyunderstood, and policy makers and politicians have struggled to find any lastingsolutions. The Commission will address these concerns. Its core objectives are to: examine the causes and effects of the affordability crisis and how it relates totenure, place, demographics, incomes, wealth distribution and life chances, aswell as the social and economic impacts; explore and propose workable solutions (big and small); raise awareness of the concerns and solutions (among practitioners, decisionmakers and the public); and engage stakeholders and build a consensus for change.Work programme, reports and activitiesThe Commission embarked on an extensive work programme, which included dataanalysis, quantitative and qualitative research (including focus groups and opinionpolling), a call for evidence, consultation meetings and interviews with stakeholdersand other interested organisations, and a series of events and conferences.The Commission met seven times and Commissioners kept in regular contactremotely, helping with the research, analysis and promotional work. A dedicatedwebsite was established, which hosted the Commission’s reports and included abulletin page on relevant news and research. Call for evidence: the call for evidence was held in the first quarter of 2019. TheCommission received 90 submissions from a cross-section of individuals andorganisations. Research: an extensive literature review was undertaken, alongside data analysisand new research. Polling and focus groups: two national opinion polls were undertaken (withYouGov) in October 2018 and February 2019; and three focus group sessions wereheld in North Birmingham in December 2018 and a deliberative workshop inNorth Birmingham in May 2019. Meetings and interviews: these were held with a wide range of stakeholders,including ministers, parliamentarians, councillors and metro mayors; civilservants, regulators and public agencies; academics, think tanks and experts;business and unions, and housing and planning practitioners, advisers andcampaigners.8Making housing affordable again
Events and conferences: the chair, commissioners and the secretariat spokeat several conferences, including national and regional housing conferences.A series of consultation events were held in London and the regions (in Leeds,Manchester, Bristol, and Birmingham, and with the TCPA in Exeter, Nottingham,Warwick and York).The Commission published several interim reports, including: Defining andMeasuring Housing Affordability – an Alternative Approach (June 2019); Why isHousing Unaffordable: a Literature Review for the Affordable Housing Commission(June 2019); Public Views on Unaffordable Housing: Focus Groups Conducted for theAffordable Housing Commission (February 2019); and Defining Affordability: AHCFocus Groups (February 2019).An animation on housing affordability (co-produced with CaCHE) was released bythe Commission in January 2020 – Why is housing so expensive? It can be viewdon the CaCHE and AHC’s websites and on youtube: https://www.youtube.com/watch?v czywtm0PqfIThe Smith Institute acted as the secretariat to the Commission. The NationwideFoundation sponsored the Commission and supported its work.More information is available from affordablehousingcommission.org/Email: info@affordablehousingcommission.orgTwitter: @AHC HousingMaking housing affordable again9
10Making housing affordable again
Executive summaryOver the past 18 months the independent Affordable Housing Commission hasundertaken a wide-ranging review of housing affordability in England. This – thefinal report, based on considerable evidence and new research – has over 50recommendations covering key supply and demand aspects of affordability acrossall tenures and housing markets.The in-depth analysis and proposals seek to inform, engage and influence thehousing world, politicians and policy makers, as well as the wider public and otherswho are affected, including local government, business, and the voluntary sector.The Affordable Housing Commission is calling on government: to rebalance the housing system to provide affordable housing opportunitiesfor all by 2045; to make affordable housing a national priority and to put it at the centre of anational housing strategy; to adopt a new definition and measures of housing affordability, whichrelate to people’s income and circumstances; to increase investment in new social housing, alongside reforms to helprebalance the system away from the private rented sector to social housing; to constrain rent increases, end Affordable Rent and reform the right to buy; to support first-time buyers stuck in the private rented sector by levellingthe mortgage market, providing targeted support for deposits andincreasing supply; and to improve the safety net for struggling renters and home owners, and tobring all homes up to a safe and decent standard.OverviewThe Commission’s findings and recommendations are intended to help forge across-party consensus. It is not an exercise in apportioning blame – the affordabilitycrisis has been decades in the making. Instead, the Commission has proposedpracticable ways to reduce the hardship and stress caused by the lack of ‘genuinely’affordable existing and new homes.There are no simple answers. As the report illustrates, housing unaffordabilityis related to a host of factors and trends – not least flat income growth andMaking housing affordable again11
low interest rates. However, without action, the situation is likely to worsen, asGeneration Rent ages and more households will have no housing option exceptrenting in the private rented sector (PRS) at costs which can lead to arrears, debts,stress and poor health. There will also be wider societal costs and growing housingbenefit expenditure.Connecting the solutions will be challenging and it is important to ensure that allparts of the housing system – public and private – contribute. Change is happening,but the Commission believes a major adjustment to the housing system is needed.What we are seeking is a “coalition of the willing”. A collective effort, led bygovernment, to make housing affordable again.Affordable housing opportunities for all by 2045A failure to reverse the tenure shift away from social housing and towards the PRSwill place more people under housing stress. The Commission believes it is not rightthat so many households find themselves locked in poverty or under acute housingstress due to their housing costs. It is also unfair that so many struggling privaterenters are being priced out of home ownership.On current trends, in 25 years a further 400,000 social rented homes could be lost.This would shrink social rented housing from its peak of a third of the nation’shomes to just 11%. More people will then have to rely on private landlords.Conversely, if the Commission’s recommendations were carried forward, thensocial housing could increase to over a fifth of the total housing stock, with the PRScontracting over time, perhaps toward its level of a decade ago. Home ownership,meanwhile, would increase. This outcome would help to stabilise the system andallow millions more people to access affordable housing.The Commission recommends that the government commits to ensuring thatno child born today should face living in housing that is unaffordable for themby the time they are likely to form a household of their own. Across tenures, thiswould mean access to affordable housing opportunities for all by 2045.To meet this target, the Commission recommends central governmentworks with local government to draw together a National Housing Strategy,adopting recommendations from this and other reports.Rebalancing the housing systemThe report calls for a rebalancing of provision, notably between the PRS and thesocial housing sector. The Commission holds the view that significant parts of themuch enlarged PRS are not suited to delivering homes for all the households whomust now turn to it, and that the much reduced social housing sector has becometoo small to fulfil the vital role it should be playing.12Making housing affordable again
At the same time, because the building of new homes has been left mostly to themajor housebuilders, and the provision of social housing from councils and housingassociations has been at much reduced levels, a persistent shortfall in affordablesupply has exacerbated the position. High house prices and rents have added tohousing stress and constrained home ownership.These factors have led the Commission to call for both an extensive expansion ofsocial housing provision and additional help so more people can become homeowners. Our recommendations aim to ensure that, over the years ahead, there is notjust more affordable housing for those on lower incomes but also more (sustainable)home ownership for those currently denied the chance to buy. Our overarchingmessage is that whatever tenure people live in, they should have a secure anddecent home at an affordable price.The Commission’s focus group sessions with renters revealed: strong feelings that the system isn’t fair and “favours those with money”; that private renters are “fed up with high rents”; support for intervention in the market, especially rent regulation; a frustration that “saving to buy is impossible”; a need for social housing, which however is seen as “housing for others”; and that new homes are expensive and “not for us”.“Let the landlords sell – we can buy the flats”“Older people have had 40 years of chance, what can we do now for the future?”“All the new houses are cheap and rubbish. They won’t go up in value in 20 years.”Why is housing affordability so important?Housing unaffordability is a significant cause of many of the nation’s social andeconomic ills. It is the lack of affordable housing that so often lies behind theproblems of poverty, homelessness, debt, family breakdown, mental and physicalpoor health. Housing stress also has negative effects on people’s life chances – aswell as on local communities, business, the wider economy and public spending.The Commission’s findings show that: Rent arrears, debt and financial exclusion are major issues for many – becausestruggling renters are trying unsuccessfully to pay their rents. Improvements in standards of living are being held back – because housingMaking housing affordable again13
costs for increasing numbers absorb such a large amount of their income. Many working people are frustrated that they cannot achieve home ownership –because it is impossible for most tenants to save a deposit when rents consumeso much of their income. There has been an increase in the number of young adults reluctantly stayingwith their parents – because the only housing available is in the PRS at rentsthey cannot afford. Housing benefit costs have risen by 40% since 2001 – because rents and housingbenefit costs per claim are higher. Councils in England are faced with households made homeless when their(shorthold) tenancy has been ended – because benefit reductions have meanttenants cannot afford to stay in their private rented accommodation. Numbers of families in highly unsatisfactory temporary accommodation haverisen, at a cost of over 1 billion a year – because those families (in work as well aswith no earnings) cannot afford anywhere to live. Employers cannot recruit and retain the people they need, and productivityis affected – because high housing costs prevent would-be employees frommoving to take up jobs and the workforce is displaced to a greater distance fromthe workplace. Over half of benefit claimants renting privately are in poverty – because therisk of poverty after housing costs increases substantially for those in the PRScompared with those in social housing. Housing inequality is a cause of inter-generational friction – because of thedivide between older owners with appreciating property assets, and a youngergeneration of renters who must devote such a high proportion of their earning
The Affordable Housing Commission (AHC) is an independent, non-partisan group established by the Smith Institute with the support of the Nationwide Foundation. It is chaired by Lord Best with 14 leading players from across the housing world. Its core objectives are to: examine the causes and effects of the affordability crisis;
additional affordable housing provision during 2019-20 (2,470 units). 62% of affordable housing units were delivered with capital grant funding. 1 Rent to Own- Wales units do not conform to the TAN 2 definition of affordable housing and as such have not been included in the total additional affordable housing figure shown in this release.
3. Develop criteria or definitions of affordable housing. 4. Reduce the impact of regulations on affordable housing. 5. Contribute land to affordable housing. 6. Provide financial assistance. 7. Reduce, defer, off-set, or waive development fees for affordable housing. 8. Establish a land banking program to ensure the availability of land for future
Affordable Housing is Overconcentrated Even Among Exempt Municipalities Affordable housing remains incredibly concentrated in Connecticut in a few cities with majority BIPOC (Black, Indigenous, people of color)populations . The affordable housing units located 2021. Looking back again to 2002, 77.4% of all assisted housing was in exempt .
Mercy Housing Sue Reynolds— . Affordable housing developers compete to creatively stretch and utilize a limited pool of public and private financing sources to develop housing. And even though the demand for affordable housing continues to far outstrip our ability to supply housing, the affordable housing industry has changed .
Affordable housing production is primarily managed by the Mayor's Office of Housing and Community Development (MOHCD), which supports residents with affordable housing opportunities and essential services to build strong communities. MOHCD coordinates existing affordable housing in San Francisco and also supports the creation of new
affordable housing. Methodology This paper focuses on affordable housing built with Low-Income Housing Tax Credit (LIHTC) financing. Since 1986, the LIHTC program has been the most important source of funding for the construction of affordable housing. In California, more than 225,000 new units have been funded under the LIHTC
Affordable Housing Need in Scotland ii List of abbreviations ARCAnnual Return on the Charter AHSP Affordable Housing Supply Programme ASHE Annual Survey of Hours and Earnings CCHPR Cambridge Centre for Housing and Planning Research CHMA Centre for Housing Market Analysis CIH Chartered Institute of Housing CSR Comprehensive Spending Review ECO Energy Company Obligation (Scheme)
Island Housing Fund to increase the supply of affordable rural housing, support for mid-market rent initiatives and affordable home ownership. 5. These plans require a two thirds increase in the volume of affordable housing development, as just over 30,000 homes were completed over the previous five years by RSLs and local authorities.
