Canterbury City Council has today unveiled plans to convert the student houses on Parham Road into family accomodation. Whilst we welcome any and all attempts to build genuinely affordable housing, solving our housing problems isn’t simply a question of building more houses – although that would be a start.
As the housing strategy report being presented to Canterbury City Council’s policy and resources committeethis week illustrates, the questions of what, where and how to build are complex.
Sadly, our council remains constrained by central government rules, an over-reliance on the private sector, and its own wilful misjudgements of how to push forward with the resources and tools it has available.Nothing that is proposed is radical enough to make a major shift in the supply and cost of housing.
Not for the first time a lack of imagination and a rigid “market knows best” dogma is preventing the council from doing its job of looking after the interests of the people of the district.
The strategy document is of necessity long and very detailed, so summarising it runs the risk of over-simplifying the key issues, as well as ignoring the expertise which has been put into it by the officers of the council.
However, picking through it shows up some interesting underlying assumptions, some of which are clearly the result of political constraints imposed either by government or the council’s ruling group, and some missed opportunities.
Taken together, all this means that targets are likely to be missed, and the real need for genuinely affordable housing in the district will remain unfulfilled.
Let’s begin with the challenge the council faces. The key issue is population, which is forecast to rise by 14% by 2031. That alone requires 16,000 new homes to be built. For comparison, there are currently only 66,777 homes in the district, so that’s 24% more homes which have to be built in the next 13 years.
In addition, there were 2,312 households (that’s the number of families, not individuals) on the housing needs register in 2017.
The current plan is to meet that demand almost wholly through private sector building. The problem which emerges from that approach is that the need is for smaller homes, especially for the lowest earners and new households, and mostly in the town and city centres.
But of course what developers want to build are three- and four-bedroom houses, mostly in the rural areas, because that’s how they make the most money.
Furthermore, of course, developers only build when it suits them, because what they make money from is the difference in the value of the land when they buy it and when they sell it with a house on top.
Because of the way housing finance works, the nominal value increase shows up on their balance sheets as soon as they get planning permission.
Add into that the inflation in land values as demand for housing grows, and you can see the balance sheet swell without any work being done, while borrowing costs are artificially low.
That’s the joy of capitalism, for you, right there. From that point on building and selling houses is simply the mechanism by which the developers release the value of the land as profit. Which is something they do when it suits their financial position, not when it suits the council.
Now we come to the key issue. In this district, to buy a home in the cheapest 25% of the market would cost THIRTEEN times the income of someone in the lowest 25% of earners. That’s so obviously not affordable that people have no option but to rent. Rents, however, have increased by 20% over a period when earnings have risen by only 6%.
So the council says it will ensure that “all developments…must include 30% Affordable Housing”. Which would be great, except their record over the past three years has only delivered 21%.
So how are they going to meet that target? They don’t say. That gap between a stated aspiration and any realistic mechanisms to achieve it is, sadly, a feature of the strategy.