No such thing as affordable housing on the cheap
About a month ago I warned how national policies could actually mean a lesser number of affordable homes in the long run. It seems these concerns are growing.
Earlier this year the UK government published new guidance in England linking housing and economic need. The reaction has been largely negative.
The big controversy surrounds a clause which encourages councils to “fund schools and other education buildings through developer contributions”.
In other words, Whitehall wants the private sector to make up for a shortfall in Treasury spending on education.
This might sound fine in social terms, but such a one-size-fits-all principle takes no account of how that the house-building industry ranges from multi-million pound developers to a couple of guys with a van and a ladder.
I’ve yet to hear anything definitive as to whether Wales will copy this cash-cow approach but that hasn’t stopped the construction industry from getting twitchy - especially those who feel there are enough homegrown disadvantages in play.
Most SME developers will tell you how they presently encounter a regime of arbitrary and inflated fees by councils just to fulfil what are basically statutory functions. That’s in addition to what are called Section 106 agreements and which link planning consents to payment for community facilities.
Add to that a banking sector averse to lending anything less than £10 million a pop and the risk is that you drive house-builders out of the business faster than you can say ‘negative cash-flow’.
One developer pointed out to me that the regulation introducing sprinklers to new homes – a requirement that does not apply in England – adds around 2% to the overall cost. This may not seem like much but it can be a deal-breaker in market terms.
It’s the same dilemma when it comes to sustainability. The idea of demanding higher energy performance standards sounds great as long as there are matching subsidies involved. It’s not so great when the extra cost has to be passed on to house-buyers.
Then you get the Wales-only requirement for sustainable drainage regulations which are causing affordability headaches for house-builders and housing associations alike. It’s a great idea on paper but a lot less achievable in practice.
The bottom line is that there is no such thing as affordable housing on the cheap. The sooner that bit of reality sinks in at the top, the better for those on the ground.
Be careful what you wish for
There’s a minor sense of relief in some Welsh political circles at the moment – mainly because local elections are only happening in England this year.
The feedback from across Offa’s Dyke is that things are looking grim for mainstream parties. Electors are looking to wreak collateral damage for Westminster’s perceived shortcomings.
The phenomenon of town hall candidates bearing the brunt of a national protest vote is nothing new. The difference this time is that people are looking for someone to blame over Brexit and its attendant contradictions.
Ironically, the question of local accountability – which is what council elections are actually supposed to be about – has rarely been more relevant.
Time was that only a small percentage of what a local authority spent relied on council tax. These days, a shifting ratio means that a lot more comes from residents pockets.
Local elections aren’t due in Wales until 2022. At least Brexit should be done and dusted by then ….. shouldn’t it?