Affordable housing - within whose means?
According to the Oxford English Dictionary, the term ‘affordable’ describes something which is ‘believed to be within one’s financial means’.
However, given the current spotlight on two housing initiatives which seek to expand the scope of what is within the financial means of people on low to modest incomes – namely affordable rent and the local housing allowance – you’d be forgiven for thinking that ‘affordable’ meant quite the opposite.
Boris Johnson’s proposal to set affordable rents across London at up to 80% of market rents (65% on average) was defeated by 12 votes to 9 at last Tuesday’s London Assembly meeting. The Mayor of London is unperturbed and still plans to push it through – a move which has drawn strong criticism from local councils, including those under Conservative control.
Some have sought to represent the proposal as ‘perverse’, yet, in many ways, it is more akin to keeping the status quo. This is backed up by figures provided by the council’s Labour Group, which indicate that if the full 80% is charged, a family looking for affordable rent in Camden will need a combined salary of £78,743, while the median family income for the borough is closer to £31,000. Head west to Kensington and Chelsea and you’d need a household income of £100,000 a year.
The introduction of affordable rent was heralded as a way of supporting people who had been previously locked out of the housing market by high prices and unobtainable mortgages. Based on these figures, the market remains as unaffordable as ever. On the face of it, proposing a 20% discount on market rents might seem a generous offer, but it means next to nothing if the remaining 80% remains far in excess of what the vast majority of tenants would consider affordable.
Local housing allowance
Last week the DCLG released its latest tranche of homelessness statistics. Perhaps the most notable finding, amongst a cavalcade of grizzly statistics, is that 27% of all acceptances made by local councils now come from applications made by people coming to the end of short-term tenancies, whose landlords have seen fit not to renew them.
As part of the Government’s attempts to rebalance the public purse, Local Housing Allowance (housing benefit for those looking to rent in the private rented sector) has been cut. Where claimants would once have been supported to choose from 50% of the properties in a given area, they are now only able to rent from the cheapest third.
Although it is not possible to prove a direct correlation, it is not hard to see how this change, coupled with a general nervousness around the introduction of Universal Credit and the overall benefits cap, has seen landlords look towards tenants they regard as “lower risk” . In practice, this means people whose income isn’t contingent on fragile social security payments.
Use of the term
Clearly the term ‘affordable’ is a misnomer when applied to both of these measures. Affordable rents when set at 80% are only affordable for the minority, whilst cuts to Local Housing Allowance have left fewer affordable properties than ever before for those in receipt of benefits.
Looked at dispassionately, we might attribute this to a mere linguistic failing. Affordable is, after all, a relative term; an asset will always be affordable to someone regardless of its price. However, when this semantic failing is synonymous with an inability to provide suitable, safe accommodation to large swathes of the general population, the full extent of the problem becomes apparent.
In spite of a general downturn in fortunes, the housing market remains as competitive as ever. Demand frequently outstrips supply in areas of high employment. More and more people are finding that what was once was affordable is now no longer within their financial means.
A serious discussion needs to take place, and the concept of affordability, not just its appropriate verbal use, must be at its heart.
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