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Shelter backs subsidies for the rich over new homes for those in need

The housing "charity" Shelter does not provide shelter for anyone. It does not own a single home. It is a political lobbying outfit. That's bad enough. Still worse is that it lobbies against policies that would reduce homelessness.

A stark example is Shelter's response to the Government's decision to allow councils and housing associations to charge market rents to rich tenants. The numbers can be argued over but the impact of the Government's proposals can only be to increase the supply of housing for those who need it. If, when asked to pay a market rent, the wealthy tenant move out that frees up a property.  If they stay and pay a higher rent that means money is available for new building.

The Government says:

All additional income arising from the policy will be available for reinvestment in affordable housing.
We would generally expect providers to use it to help fund new affordable housing, helping to meet housing need.

Shelter opposes the policy on the grounds it "would be of limited value in addressing housing need."  It adds:

"In our view, the real solution is to provide more genuinely affordable housing, rather than creating an additional bureaucratic burden for social landlords to charge higher rents to the tiny proportion of social renters who have worked hard and done well."

An extraordinary position for them. They acknowledge that the change would provide some benefit to the homeless yet oppose the change as the help would be "limited."

Also isn't it rather insulting to council and housing association tenants to say that only a "tiny proportion" have "worked hard and done well"?

It's all relative I suppose. It might only be a tiny proportion earning as much as Shelter's chief executive Campbell Robb, who used to work for the Labour Party, and is paid £120,000 a year.

However most non-pensioner households in the "social rent" sector are working. It is quite true that far too many are not. 42.8 per cent are "workless" according to the latest figures. In 2010 it was 49 per cent. So a majority, an increasing majority, of non-pensioner social rent households are occupied by those who work. Have only "a tiny proportion" of them "done well"?

In this context "done well" means well enough to pay the full market rent rather than have it subsidised. Shelter quotes figures of earning £80,000 a year or £100,000 a year to justify the "tiny proportion" reference. However, the Government has chosen a figure of £60,000. Social landlords will be able to charge their tenants who earn more than that a year, up to a full market rent. If all choose to do it the Government estimates up to 21,000 households would pay higher rent. That compares with currently 55,000 homeless households - defined as being stuck in temporary accomodation. Those, remember, are the people Shelter are supposed to want to help.

Clearly if those 21,000 who are faced with paying a higher rent decide to move out then the vacated property becomes available to those in need. If they exercise the right to buy, the proceeds could provide a new home for a homeless family. If the wealthy tenant stays put and carries on renting, the benefit is more gradual but still positive. In London the difference between a social rent and market rent is £5,300 a year. The Centre for London estimates that if 15,000 tenants paid the higher rent that would provide an extra £30 million a year - which could pay for another 300 new homes every year.

So that is what Shelter is fighting against.

By contrast the Centre for London would like the subsidy to start tapering off below £60,000. Their policy would be applied to fund an extra 3,000 homes a year. They would charge higher rents to 115,000 of the 750,000 London households in social rent. As their income increased their rent would increase only gradually in order to prevent a pay rise leaving anyone worse off. It would be the same principle as the Housing Benefit tapering off when those on low incomes get a pay rise.

So far as what is happening outside London, where living costs are often much lower the case for a lower figure than £60,000 is even stronger.

We shall see how many social landlords make use of the flexibility they are being given to charge higher rents to the rich. The more that take the opportunity, the greater the number of homeless that can be helped. Why is Shelter more concerned with maintaining rent subsidies for Bob Crow and Frank Dobson?


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