Are Housing Associations a Poor Deal for the Needy? Not-for-Profit Organisations May Be Compounding the Property Crisis Instead of Solving It
Byline: ROSS CLARK
For Maxine Gregory, her husband John and their four children, the Willow Park Housing Trust is a caring but businesslike organisation. It has transformed the estate, in Portway, Manchester, where they live.
Formerly dirty and crime-infested, the area is now a pleasant place to make a home. 'It's much safer and nicer to look at now than when it was owned by Manchester City Council,' says Maxine, 45.
'Now, everyone keeps their gardens tidy, we have wardens patrolling day and night and the youth centre has been turned into a community centre.' As well as improving the area, the trust saves Maxine the expense of renting from a private landlord.
'I pay [pounds sterling]66 a week for my house,' she says. 'A friend, who rents a similar home privately, pays [pounds sterling]120.' With homeownership beginning to fall for the first time since 1945, an increasing number are becoming reliant on housing associations - the not-for-profit organisations that have taken over social housing from local authorities.
They have helped shape the fabric of every town and city. In some, they have replaced tower blocks with terrace houses and walled gardens, in others they run smart blocks of affordable housing almost indistinguishable from the luxury blocks they nestle alongside.
Once hostile to anything that undermined council housing, Labour has now embraced housing associations' growth, encouraging the transfer of housing stock from local authorities.
While councils are banned from borrowing money to build homes, the associations have splashed out with the aid of Private Finance Initiatives.
In 1980, 7.7 per cent of social housing units belonged to associations, the rest were owned by local authorities. By 2005, the 1.6million association properties made up 45 per cent of social housing units.
But for Peter King, an academic at De Montfort University in Leicester, who grew up in a council house but now owns his own home, housing associations are part of the problem, not the solution to a growing housing crisis.
In his paper Choice And The End Of Social Housing, he argues that housing associations are an expensive way to ensure the low-paid remain stigmatised by living in social housing. Rather than hand money to associations, he suggests paying means-tested housing benefit so the lowpaid can rent privately.
'A lot of associations promote welfare dependency,' he says. …