Affordable Housing Need In Scotland
Affordable Housing Needin ScotlandFinal Report – September 2015Ryan Powell, Richard Dunning, Ed Ferrari, Kim McKee
ForewordThere’s a lot to do to make the Scottishhousing market meet the needs andexpectations of people in Scotland.secure tenancies – we believe that there is alsoroom for a range of solutions, including low costhome ownership or newer products like mid-marketrent homes.There’s the challenge of an ageing population andmaking sure the homes we have are right for oldercitizens. There’s the need to protect fragile ruralcommunities by ensuring there’s a mix of housingprovision. Making our homes more energy efficient;improving private renting; supporting betterneighbourhoods – all important priorities.So in scaling up to 12,000 affordable homes, there isplenty of scope for continuing innovation, especially asdifferent areas match the specific needs of theirlocalities to the range of options available. However,that must be in the context of a concerted effort toincrease affordable housing supply through to 2020.That should be the litmus test of housing policy for thenext 5 years.But underlying that mix is a stark fact. We need morehomes. Affordable homes at that. In which people canhave the security of knowing they have somewhere tocall home, which is within their means.This report shows just how much current policy islagging behind that need. Scotland needs at least12,000 affordable homes a year for the next five years.Current programmes, at best, provide only half of that.And it is a longstanding failing as well, spanninggovernments of different hue.Scotland needs 12,000 affordable homes because themarket alone cannot do the job. Those homes can varyas to whose needs they meet. While there is acompelling case for the bedrock of that programme tobe socially rented homes – council or housingassociation homes with below-market rents and withGraeme BrownShelter Scotland We recognise that a programme of this scale is achallenge to national government, to councils, tohousing associations, to builders. But there’s a prizetoo. There’s a jobs and skills boost from upping ourgame on housing supply; the health gains from betterhomes; the critical role of secure and affordablehousing in reducing inequality and child poverty.All of these gains are widely-recognised of course, notleast by government ministers. But it has been a longtime since the rhetoric on the importance of housinghas been matched by programmes of sufficient scale.We are at that point now. The evidence is clear.The benefits are clear. The need is clear.Let’s get on with it!Annie MaugerCIH ScotlandMary TaylorSFHAAffordable Housing Need in Scotland
ContentsAcknowledgementsiList of abbreviationsiiSummaryiii1. Introduction12. The research approach23. Assessing affordable housing need at the local level44. Demographic trends and context65. A pan-Scotland assessment of affordable housing need206. Policy and funding implications407. References49Annex51 2015 Shelter Scotland. All rights reserved. This document is only for your personal, non-commercial use. You may not copy, reproduce, republish,post, distribute, transmit or modify it in any way. This document contains information and policies that were correct at the time of publication.Affordable Housing Need in Scotland
AcknowledgementsWe would like to thank all the local authorityrepresentatives who gave up their time to take part in theresearch detailed in this report. Thanks also to JamesDuffy and the Scottish Housing Best Value Network forproviding us with a forum to share the research with localauthority officers and gather perspectives on it. We arealso grateful for the information and clarifications receivedfrom Andy Park, Charles Brown and Murdo MacPhersonat the Centre for Housing Market Analysis (CHMA) at theScottish Government; and from Pat Cairns at the ScottishHousehold Survey Project Team. Thanks also to EmmaSmith, Louise South and Sarah Ward for theiri administrative support provided to the research ream.This research has also benefited from helpful commentsand suggestions throughout the process from RosemaryBrotchie, Gavin Corbett, Duncan Gray (Shelter Scotland),Ashley Campbell, David Ogilvie (CIH Scotland), DonaldLockhart, Graeme Russell, Mary Taylor and MaureenWatson (SFHA). We would like to record our gratitude fortheir ongoing and valuable support to the research team.Any inaccuracies or omissions that remain in the reportare of course solely our own responsibility.Affordable Housing Need in Scotland
List of abbreviationsARCAnnual Return on the CharterLLP Limited Liability PartnershipsAHSP Affordable Housing Supply ProgrammeMMR Mid-market RentASHE Annual Survey of Hours and EarningsNHT National Housing TrustCCHPR Cambridge Centre for Housing andPlanning ResearchNRS National Records of Scotland(formerly GROS)CHMA Centre for Housing Market AnalysisONS Office for National StatisticsCIH Chartered Institute of HousingPRS Private Rented SectorCSR Comprehensive Spending ReviewPSR Partnership Support for RegenerationECO Energy Company Obligation (Scheme)RSL Registered Social LandlordGROS General Register Office for ScotlandRTB Right to BuyGWSF Glasgow and West of Scotland Forumfor Housing AssociationsSAR Shared Accommodation RateHaTAP Homelessness and TemporaryAccommodation PressureHMO Housing of Multiple OccupationHNDA Housing Need and Demand AssessmentIIF Innovation and Investment FundLAD Local Authority DistrictLBTT Land and Building Transactions TaxLCHO Low-cost HomeownershipLHA Local Housing AllowanceSCORE Scottish Continuous Recording SystemSDPA Strategic Development andPlanning AuthoritySFHA Scottish Federation of Housing AssociationsSHCS Scottish House Conditions SurveySHIP Strategic Housing Investment PlanSHQS Scottish Housing Quality StandardSNP Scottish National PartySRS Social Rented SectorUC Universal CreditLHS Local Housing StrategyAffordable Housing Need in Scotland ii
SummaryIntroductionnnnnnnThis report presents the findings from researchconducted in 2015 which sought to estimate theneed for affordable housing across Scotland as awhole. The research was commissioned by ShelterScotland, the Chartered Institute of HousingScotland and the Scottish Federation of HousingAssociations (SFHA). The study updates a previous,similar exercise conducted almost a decade ago forthe Scottish Government (Bramley et al., 2006).The purpose of this research is to: arrive at anestimate which can inform of the scale of affordablehousing need nationally; and assess the extent towhich Scottish Government housing spending planscan address this need. The focus is therefore on apan-Scotland estimate of affordable housing needwhich can inform housing policy and debate acrossthe sector.This national focus necessitates the development ofan alternative, consistent approach which builds onlocal evidence and the model developed by theCentre for Housing Market Analysis (CHMA) at theScottish Government. In this sense the findingspresented complement the local evidence basederived through the local Housing Need andDemand Assessment (HNDA) process, rather thanchallenge it.The research approachnnnnnnnniii The research was commissioned in December 2014with a primary focus on: the additional affordablehousing required for households whose needs arenot met by the private housing market. The overallaim of the research is to provide Shelter Scotlandand partners – CIH Scotland and SFHA – withrobust evidence on total and affordable housingneed in Scotland.The research was divided into five overlapping stages:policy review; a review of HNDAs; key stakeholderinterviews; a pan-Scotland assessment of housingdemand and need; and analysis and reporting.The pan-Scotland assessment involved thedevelopment of a stock-flow model of the typecommonly used in housing needs assessment in theUK. The model builds on the CHMA Tool producedby the Scottish Government and is presented insection five.Evidence from stakeholder interviews is drawn uponin sensitising the research to a changing localcontext (e.g. welfare reform considerations) and inhighlighting the diversity across Scotland.Assessing affordable housing needat the local levelnnnnnnnn ocal authorities are required by law under theLHousing (Scotland) Act 2001 to produce a LocalHousing Strategy (LHS), underpinned by anassessment of housing need and demand: HNDAsprovide the evidence base for local strategies.Over the last three years the CHMA has developed aHNDA modelling tool to assist local authorities in theanalysis and development of their HNDAs. The toolserves to separate the evidence base on HNDAsfrom policy; streamline and bring greater clarity tothe HNDA process; and provide a clearer methodand approach.Geography is obviously critical to any assessmentof housing need. Yet in practice HNDAs can use arange of different geographies which can haveimplications for sourcing suitable data, and arrivingat an assessment of need. Many stakeholdersreported that housing need tends to be greater themore you disaggregate at the local level.The HNDAs of many local authorities in Scotlandpre-date the development of the CHMA Tool, as wellas recently updated guidance on conductingHNDAs. As a result, there is inevitable variation inthe methodologies and timescales of HNDAs.Demographic trends and contextnnnnnnnnnnThe Scottish housing market has undergonesignificant change since the last assessment ofaffordable housing need at the national level(Bramley et al., 2006).In addition, wide-ranging and on-going welfarereforms since 2011 have impacted on the natureof housing need and demand for many low-incomehouseholds in Scotland (e.g. the bedroom tax hasresulted in increased demand for one-bedroomproperties).Household projections show that the number ofhouseholds in Scotland is growing at a steady rate, asis the Scottish population, underscoring the need foran increase in housing delivery over the longer-term.House prices and market rents show an upwardtrend, the latter have increased steadily andconsistently in recent years, which is perhapsunsurprising given that the social rented sector hascontracted and many households are struggling toaccess homeownership.Overall housebuilding levels are well below theirpeak at 2007 and social housing completions havefallen by 44 per cent from 2010 to 2014 – to just3,217 last year. At the same time, social rentedAffordable Housing Need in Scotland
stocks have been depleted through demolitions andthe Right to Buy.nnnnThough the number of households assessed ashomeless has fallen since a peak in 2010,homelessness is still a pressing issue in manylocal authorities.nnnnnnA statistical model of affordable housing need hasbeen developed. It attempts to balance the need tocreate a model that is robust and evidence-led at thelevel of the country as a whole, with the need to besensitive to an array of potential local issues that willinflect the overall assessment of need.nnnnOur basic principle is that a national assessment ofhousing need cannot simply be the sum of localneeds assessments but must proceed using a set ofcommon assumptions.A main version of the model is detailed in sectionfive – this is termed the ‘Core Model’ as it is builtaround ‘core’ assumptions built into the CHMA Tool.A set of four scenarios are then presented whichprovide bottom- and top-end assessments ofaffordable housing need by varying assumptionsrelated to household formation and affordabilitywithin the overall calculation of needs expected toarise in the future.nnThe assessment of affordable housing need employsa stock-flow model of the type commonly used inhousing needs assessment in the UK. Put simply,the model architecture consists of: Backloghousing needSupply ofaffordablelettingsnnnnTaken together, demographic and housing markettrends in Scotland point to significant housingpressures, with the potential for a worseningsituation in terms of access to affordable housingin the short- to medium-term.A pan-Scotland assessmentof affordable housing neednnrequirement for Scotland over the next five years,though this figure will be significantly higher oncelosses to stock through demolitions andregeneration are taken into account.The core model represents a ‘mid-point’ scenarioin terms of future demographic and house pricechanges, and is considered the most likely to occur.The core model estimates an affordable housingrequirement in Scotland of 12,014 dwellings perannum over five years. This represents 64.2 percent of the expected net increase in households inScotland (18,704) over the next five years.The estimate of overall affordable housing needvaries from 10,435 to 14,678 per annum. It is clearfrom the presentation of the scenarios in sectionfive that the models are more sensitive toassumptions about price inflation than they are toassumptions about migration.Housing needs are not distributed equally acrossScotland, although we note that it is unreasonableto expect needs arising in one part of the countryto be met in another. A classification of localauthorities has been developed driven by measuresof migration self-containment and recent houseprice inflation, which results in four local authoritytypes (see sections four and five).The level of affordable housing need expressed asa proportion of expected net household formationis highest in aggregate in Type 3 areas (95 per cent)and lowest in aggregate in Type 2 areas (11 percent). Type 3 areas are those where recent priceinflation has been strongest and where selfcontainment has been lowest (i.e. areas that haveattracted a higher number of in-migrants). Thiscombination of factors has arguably led to aworsening of affordability in those areas. In contrast,Type 2 areas have experienced the lowest levels ofprice inflation and are relatively self-contained (i.e.the market tends to meet more localised demand).Policy and funding implicationsNewlyarising needGrossaffordablehousingrequirement2012 based household projections that have beenbuilt into the CHMA Tool are used within the model,which results in an average increase in the numberof households in Scotland of 18,704 per annum.This represents the de facto total housingnnnn s a proportion of overall housing need, the need forAaffordable housing is much higher than previouslyestimated. As a result, in discussions about overallhousing supply, far more attention needs to befocused on what is provided, not just how much.This is an important consideration nationally andlocally in terms of specific discussions on land-useplanning, and affordable housing policies within theplanning system.Social housing remains more prevalent in Scotlandthan elsewhere in the UK, and the supply of newaffordable housing remains a stated priority for theScottish Government. It has expressed a commitmentto deliver at least 30,000 affordable homes, of whichat least two-thirds will be for social rent, including5,000 council houses, during the lifetime of thecurrent Parliament (by 2016). This equates to aroundAffordable Housing Need in Scotland iv
6,000 affordable homes per annum over five years:just half of the estimated affordable housingrequirement per year evidenced here.nnnnnnnnnn1.v The Scottish housing system has experiencedsignificant change and pressure over the lastdecade. Households are finding it difficult to realisetheir long-term aspirations towards homeownershipand social lettings have become more concentratedamongst the poorest and most vulnerable sectionsof society. The deregulated private rented sector hasgrown markedly and is emerging as the defaultdestination for many vulnerable households unableto access the social rented sector.nnnnOngoing welfare reform creates risks for thebusiness plans of social landlords already operatingin a difficult economic climate. Social landlords haveexpressed particular concerns over theimplementation of Universal Credit for instance.Other changes to Housing Benefit pose a real threatto the Scottish Government’s aim of increasingaffordable choices for households. Ultimately,reductions in Local Housing Allowance entitlementsserve to increase the gap between Housing Benefitpayments and market rents thereby adding toaffordability pressures for those unable to accesssocial housing.Demographic and housing market trends point tosteady household growth, rising house prices andrents, and increased homelessness. On the otherhand, the social rented sector has contracted andnew affordable supply is at historically low levels.A well-functioning housing system which meets theneeds of all households is pivotal to addressingnational policy outcomes. Yet current AffordableHousing Supply Programme targets fall well short ofthe levels of affordable housing required to addressthe need evidenced here.nnnnAt current subsidy levels of 58k1 per home (for anurban registered social landlord property forexample) an affordable housing programme todeliver 12,000 homes per year – which wouldaddress both the backlog of housing need andnewly arising need over a five year period – wouldcost the Scottish Government around 700m perannum ( 696m). Clearly, addressing housing need inScotland would require additional public investmentover and beyond what is currently committed.Over 1 billion has been allocated from the ScottishGovernment housing supply budget, to localauthority areas across Scotland, for the three yearsto March 2016. This represents roughly 333m peryear; and a shortfall of over 360m if housing need isto realistically be met. However, a return to previousinvestment levels would significantly reduce thatshortfall. Whilst the affordable housing landscapeis more positive in Scotland than elsewhere in theUK, ultimately, delivering such a programme is notcost-free.This is a critical juncture for Scottish housing policy.In England, emphasis has shifted to the privatesector and the encouragement of higher rentintermediate markets. While such initiatives canprove beneficial to some households, this ultimatelyshifts the focus from low-income households – thosein the most acute housing need.The major policy lever in affordable housing deliveryremains the level of housing subsidy. If housing needis to be met, and future housing crises are to beaverted, then the Scottish Government must buildon the national legacy of prioritising affordablehousing investment in the forthcomingComprehensive Spending Review. 58k is the average for rented programmes. To the extent that the programme is a varied one, drawing in low-cost home ownership and mid-market rentproducts, then that average will be lower. However, against that is the likelihood that low rates of subsidy would act as a constraint on expanding housingsupply, so higher rates are likely to be needed to deliver an overall programme of this scale.Affordable Housing Need in Scotland
1. IntroductionThis report presents the findings fromresearch conducted in 2015 whichsought to estimate the need foraffordable housing across Scotlandas a whole.The research was commissioned by Shelter Scotland,the Chartered Institute of Housing Scotland and theScottish Federation of Housing Associations. While allScottish local authorities are required to conduct theirown local housing need and demand assessments(HNDAs), there is currently no up-to-date andconsistent estimate of affordable housing need at thenational scale.The study updates a previous, similar exerciseconducted almost a decade ago for the ScottishGovernment (Bramley et al., 2006). The evidence baseprovided by Bramley et al. was particularly useful to theScottish housing sector in terms of an independent andconsistent measure of affordable housing need acrossthe country as a whole. The Scottish housing market hasobviously undergone significant change since 2006, andthere have also been key changes in the approach tohousing need and demand assessments (HNDAs) sincethat research was undertaken (see section three). Inaddition, wide-ran
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)
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
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.
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 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 .
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
ACCOUNTING 0452/22 Paper 2 October/November 2017 1 hour 45 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name on all the work you hand in. Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, glue or correction .
