Ultra Tory housing policy aims to push poor people out of Barnet

http://www.theguardian.com/society/2015/apr/21/ultra-tory-housing-policy-poor-out-of-barnet

Version 0 of 1.

The prosperous London borough of Barnet has won a reputation as a beacon of municipal small-statism in recent years. Policies such as outsourcing almost all council services have illustrated its resolute, if slightly swivel-eyed, dedication to providing a test-bed for a kind of surburban ultra-Toryism.

Controversy has dogged the project – one of its political architects did not survive the revolution and subsequently denounced it as “fundamentally un-Conservative” – but that has not dimmed Barnet’s ideological fervour. Indeed, its latest proposals show it to be as uncompromising as ever.

Barnet’s revolutionary vanguard has turned its attention to housing. To address what is from any perspective a spectacular local crisis of explosive demand, soaring rents and unaffordable prices, it has decided to allow thousands more homes to be built. Many councils face this problem, but Barnet’s radical draft strategy shows what an extreme Tory approach looks like.

In order to raise funds to enable the council itself to build homes (Barnet built a grand total of three in 2014, after 20 years of not building any, and plans a further 41 by 2016) it has turned not to the capital markets, but the borough’s poorest residents. By using newly acquired powers to raise social rents – currently 30% of market rents – to as much as 80%, it claims it will raise millions to invest in new “affordable” housing (which will then also be let at 80% of market rents).

This will mean a potential rent rise for some existing tenants of 125%, according to the Labour opposition. Or put another way, a family in a two-bedroom council flat in Golders Green currently paying £472 a month would instead pay £1,064 a month, a dizzying increase of £592.

The catastrophic impact of such a rise on many families – it is easy to see a clear path from arrears to eviction to homelessness – is obvious. Barnet counters that, in practice, rents would be set no higher than local housing allowance rates, or 65% of market rent (which is still a doubling of rents) and rises will be phased in over time. This implies that housing benefit, rather than the tenant, would underwrite Barnet’s rent hike. But that does not account for working tenants who do not qualify for full housing benefit, or unemployed tenants affected by the benefit cap; for both groups, debt and eviction would seem probable.

If the tenants in that Golders Green flat left or were evicted, who would move in? It’s not clear: the council’s own rules exclude any household with an income over £36,200 from bidding for a council home. Yet Barnet Labour, using calculations by the housing charity Shelter, reckons a prospective tenant would need a post-tax income of at least £40,000.

As housing law blogger Giles Peaker puts it: “In order to provide social housing we have to make it impossible for anyone who qualifies for social housing to occupy it”.

What we know is that under a future Tory government, to fund housing association right-to-buy, Barnet would be required to sell off the Golders Green flat, and any other of its homes that become vacant, including those it proposes to build. The decline of social housing would accelerate dramatically -172 homes have gone under right to buy in the last two years - and reliance on private-rented housing will grow (37% of right-to-buy properties have ended up with private landlords).

Barnet’s proposal is to get the UK’s housing benefit budget (an extra £78m a year locally, says Labour) to pick up the bill for building homes that the poor cannot afford to rent, and the council would have to sell off under Tory right-to-buy plans. A consequence of the policy (which may attract legal scrutiny) will be the eviction of many of those tenants, likely to be disproportionately women and black and ethnic minorities.

Barnet’s guiding principle is: “Anyone who works and adds value to the community is able to live in Barnet.” “And they’re the people we want!” the council’s Tory housing chair Tom Davey reportedly said when challenged about high housing costs in 2014: “Good Conservative voters!”

Patrick Butler is the Guardian’s social policy editor