CAPÍTULO III. SITUACIÓN ACTUAL DE LA EMPRESA Y DIAGNÓSTICO
3.2 ANÁLISIS DE LA INFORMACIÓN
3.2.7 CONCLUSIÓN DEL DIAGNÓSTICO ADMINISTRATIVO
Low Cost Home Ownership (LCHO) has been used alongside a range of other terms, including ‘intermediate tenure’ and ‘affordable home ownership,’ to refer to a set of state-led schemes that emerged during the 1980s to assist households who can’t afford to buy on the open market into owner occupation (National Housing Federation, 2012a; Homes and Communities Agency, 2011b). The term is subsumed within the broader concept of ‘social’ and more recently ‘affordable’ housing
provision, reflecting the move away from traditional rented approaches to
addressing housing needs, to a more diverse array of tenure types, funding sources and housing providers1 (Monk and Whitehead, 2010: 1; Cowan and McDermont, 2006: 1-2). In Britain these have included the use of ‘cheap’ local authority land for housing constructed by private developers and self-builders, homesteading schemes, public housing sold at a discount, improvement for sale, cooperative housing and part-ownership arrangements (Bramley and Dunmore, 1996: 106; Allen, 1982).
Even beneath these subcategories lies considerable variation. The mix and constitution of different LCHO schemes have changed significantly over time, adding a further layer of complexity to an already confusing array of initiatives.
Further, LCHO cross over with a range of other policies that have incentivised households into owner occupation in the UK since the 1950s. These include
1. Cowan and McDermont (2006) track the history of the term ‘social housing’ which came to replace
‘public housing’ in the 1980s as a way to describe the ‘mixed economy’ approach to housing during this time (p2). By 1995 the term had come into popular usage in academic, policy and professional discourses to describe housing provision by housing associations and local authorities (ibid). In the mid 2000s as public subsidies were opened up to private and non-profit providers, and subsidised
ownership and market rent properties became an increasingly important part of provision, there was another shift in housing policy language ‘which now talks in terms of affordable housing … products’
(ibid: 3).
mortgage interest, stamp duty and inheritance tax relief, as well as the deregulation of the financial services sector and the promotion of ‘down-market’ mortgage lending (Booth and Cook 1986a: 2; see chapter two above).
LCHO schemes do not fit neatly within established tenure categories. Although presented as forms of owner occupation rather than rented provision (see chapter six, section 6.2 below), many LCHO initiatives incorporate aspects of social, private and owner occupied housing (Monk and Whitehead, 2010: 2). In order to reflect their intermediate nature a number of studies place LCHO on a spectrum of
housing tenures (Wilcox, 2005: 11; Yates et al. 2004: 5; Whitehead and Yates, 2010:
21). For example, Whitehead and Yates (2010) plot assisted and partial home ownership on a continuum between social rented housing and outright ownership, relating them to household income and explicit subsidy levels. Whilst conceptually useful this approach is problematic on a number of levels. Firstly, as Whitehead and Yates (2010) themselves acknowledge, the narrow definition of subsidy levels implied includes only direct public funding for affordable housing (p20). Indirect subsidies to private housing for rent and owner occupation including housing benefit and tax relief are not factored in. Secondly, this approach does not reflect the shifting composition of LCHO schemes which, as will be explored in depth below, have changed regularly and often reactively in response to economic and political change.
The recognition that LCHO is not a static category reminds us that the stark divisions placed between private renting, owner occupation and social rented housing should not be taken for granted either. As Barlow and Duncan (1988) argue, housing tenures have ‘elastic and variable meanings’ which have shifted in different historical periods, in different contexts and according to who is using them (p221-222). 2 This is clearly illustrated in cross-national comparisons where housing tenures, which appear equivalent, differ in detail and content from country
2. In their much cited article The use and abuse of housing tenure, Barlow and Duncan (1988) argue that housing tenures should not be seen as static or universal categories, but rather as culturally and historically contingent. Tracking the specific English legal lineage of housing tenure, the authors question how and why the term came to be used in a ‘quasi-scientific’ shorthand for a range of wider financial, social, political and economic relations within housing studies literature (p220). Building on other contemporary scholarship questioning tenure ‘fetishism’ (see Gray, 1982 and Kemeny, 1981), the authors argue that housing tenure should not be seen as a determinant of class position (see Rex and Moore, 1967 and Saunders, 1979), social and political behaviour, household wealth or personal and ontological security (Saunders, 1990).
to country (Siksio, 1990). 3 Even within one country, tenure categories used in housing policy and research do not capture diversity in housing arrangements (Hulse, 2008: 216). 4 In the English context the varying position of long leaseholders living in flats, as opposed to freeholders living in houses clearly illustrates this point (Cole and Robinson, 2000). 5 As do the changes in the financing and management of housing over the last 40 years explored in chapter two above, which have led to a breakdown in divisions between ‘private’ and
‘public’ housing types. 6 Further, the meanings attached to housing tenures are also dynamic, as illustrated by the changing status of social and owner occupied housing over the last century. The emergence of shared ownership schemes, which appear to straddle the renting/ownership divide, further illustrate what Ruonavaara (1993) calls the ‘messy real world of housing tenure’ (p4). As a result, the shifting
constitution of LCHO, should not be seen as exceptional but rather part of this contextually dependent dynamism.
3. In a comparison of housing tenure across 9 European countries Siksio (1990) found 42 different kinds of tenure subsumed beneath four main housing groups -owner occupation, cooperative, private rental and public rental (p154).
4. For example, in an Australian context, Hulse (2008) argues that changing patterns of ownership are obscured by static tenure categories. Hulse (2008) explores the increasing diversity in housing arrangements for older people which don’t fit into standard tenure types. For example, households often ‘buy into’ a retirement complex, but their legal arrangement is commonly a lease or licence rather than a title, resulting in a different set of rights and occupancy conditions compared to ‘traditional’
owner occupation (p215-216).
5. As Cole and Robinson (2000) argue, although understood in policy and public discourses as owner occupiers, long leaseholders in England are legally defined as tenants, with responsibilities to pay rent and meet obligations contained in a lease (p596-597).
6. These include the greater role given to private and voluntary sector organisations in social housing provision, the increase in public support for forms of owner occupation, and the indirect subsidy of the private rented sector through the housing benefit system.
3.3. Origins
Although LCHO initiatives tend to be associated with the accelerated post 1980s drive to extend home ownership, national schemes built upon earlier interventions developed at the local level. For example, the sale of council housing at a discount existed prior to the introduction of the Right to Buy in 1980 (Jones, 2007: 136).
Since the 1950s Conservative and Labour governments have given local authorities the freedom to dispose of their housing stock, resulting in the sale of 61,000
council dwellings in England between 1952 and 1970 (Murie and Ferrari, 2003: 5-6), and a further 210,000 properties by 1979 (Jones and Murie, 2006: 31). During the 1970s, in the context of increasing house prices combined with high interest rates, metropolitan councils also pioneered a range of part-ownership schemes (see Appendix one for details of these and subsequent schemes discussed below). In common with later initiatives, they were designed to enable households with low levels of capital to access an appreciating asset, while also reducing the burden of housing costs on local authorities by diverting households from public rented accommodation to dwellings that required lower subsidy levels (Allen, 1982; Booth and Crook, 1986b; Bayly and Swain, 1977). A number of initiatives, including improvement for sale, building for sale and homesteading schemes were also introduced with the aim of rehabilitating decrepit housing stock, to ‘diversify housing tenures,’ ‘halt the exodus of young people’ and ‘bring back skilled workers’
to deprived, inner city neighbourhoods (DoE, 1977 cited in Crook, 1986a: 753;
Crookes and Greenhalgh, 2011; Mullins et al. 2011).
Part-ownership initiatives, in the form of co-ownership societies, were also supported nationally. The 1964 Housing Act established the Housing Corporation to administer funding to housing associations and cooperatives to support co-ownership (Birchall, 1988) as a ‘halfway house’ between renting and owner occupation that ‘combin[ed] the advantages of both’ tenures (DoE, 1971 cited in Crook, 1986a: 64). Despite the construction of 40,000 dwellings by 1979, co-ownership societies only played a marginal role in overall housing provision (Shepherd, 1999; Clapham and Kintrea, 1987: 158).7 In 1974 a working party on
7. Poor quality maintenance and exploitation by management agents, legal conflicts around design and construction defects, complexities involved in calculating the amount of equity departing co-owners were entitled to, and the ambiguous legal status of members who were defined as neither owners or tenants, undermined the viability of the tenure (Bichall, 1988; Conaty et al. 2003: 19; Clapham and Kintrea, 1987).
Cooperative Housing was set up under Harold Campbell to revive the model.
Whilst recommending continued support for co-ownership,8 the report also suggested that more straightforward forms of ‘shared ownership’ needed to be developed as alternatives9 (Lansley, 1979: 193; Department of Environment, 1976).
By 1977 the Labour Government sought to encourage local authorities and housing associations to explore part-ownership arrangements both as a ‘stepping stone to full home ownership’ and as a ‘permanent’ alternative in order to offer households
‘greater control over living conditions and an opportunity to share in capital
appreciation’ (DoE, 1977: 103). These plans were implemented in 1979 through the pilot of shared ownership funded by the Housing Corporation, which built on experience from earlier local authority initiatives.10 Community Leasehold allowed households to purchase a property on a shared ownership basis from a housing association on a 99 year lease financed by a building society mortgage, pay rent on the remaining share and benefit from any increase in property value at sale (Booth and Crook, 1986b: 23). The scheme focused on young single people in inner city areas to give them access to home ownership and to ‘preserve some element of choice’ and mix in areas dominated with properties for rent (Crook 1986a: 647).
The scheme did not allow occupiers to become outright owners so that the property would ‘remain in collective ownership’ and thus become a permanent addition to the widening choice of tenure (ibid: 23). Leasehold Schemes for the Elderly were also introduced to enable older owner occupiers to release equity in their existing home to purchase a new sheltered housing unit from a housing association on a 70 per cent equity share basis (Clark, 1980; Booth and Crook, 1986b; Shepherd, 1999: 35).
8. Following the report, a revived interest in co-ownership culminated in the formation of the Council of Co-ownership Housing Societies in 1976 (Birchall, 1988: 105). Despite this, towards the end of the 1970s members of the Council of Co-ownership Housing Societies sought to demutualise and allow members to become owner-occupiers (ibid). The 1980 Housing Act included provisions to allow societies to dissolve and sell dwellings to members. By May 1981 9 societies had already sold, and 300 more had permission to do so from the Housing Corporation (ibid: 106).
9. Campbell himself experimented with a form of shared ownership in the late 1970s as the Director of the Greater London Secondary Housing Association at Glenkerry House in East London. The local authority retained the freehold and granted a long lease to the housing co-operative. Households could then purchase up to 50 per cent of the value of their dwelling from the co-operative, and could sell on this share at a market valuation on exit (Conaty et al. 2003: 21).
10. The influence of earlier, local authority part ownership schemes can be seen in the DoE’s 1997 housing policy document which cites Birmingham City Council’s ‘half and half’ equity sharing scheme (p103). The report also raised questions about part ownership stemming from the experience of local authorities. This included whether the proportion of rent to ownership should be altered, if occupiers should be responsible for all maintenance costs even if they were only part owners, whether equity sharing was a satisfactory long term tenure, and if equity sharing could be applied to existing public rented stock (ibid: 103-104).
This second scheme marked a slight change of direction in LCHO, illustrating a concern not only to extend home ownership, but also to meet the specific needs of older people by diversifying the type and location of houses for sale (Forrest et al.
1984).
While these initiatives did generate a lot of attention at the time, they did not take off on a large scale (Booth and Crook, 1986b: 23). Although Leasehold Schemes for the Elderly continued, by 1980 only 132 Community Leasehold units had been funded by the Housing Corporation (Crook, 1986a). Allen (1982) identifies a number of political, financial and legal barriers which stood in the way to wider implementation including political opposition by Labour councils to the
introduction of LCHO to replace rented provision,11 a lack of lender confidence in shared ownership/equity schemes, the heavy burden of stamp duty on households who bought their properties in stages, doubts regarding whether dwellings were eligible for public housing grant, and questions about the legality of local authority and housing association shared ownership initiatives (p23). Despite rhetorical support for shared ownership during the late 1970s, the Labour government did not take action to remove these barriers and it fell to the new Conservative
Government, driven by an ideological commitment to extend home ownership, to remove them (Crook, 1986a: 646).
11. Blanket support for local authority housing from the left is an over- simplification. In fact, voices from the far left actively rejected the top-down approach of council housing in favour of tenant owned, and managed co-operative housing during this time. This view is exemplified by Colin Ward in his 1974 book Tenants Take Over where he advocates co-operative self-help strategies (including community self-build) as alternatives to ‘the rival orthodoxies of [state] bureaucracy and of the speculative development industry’ (Ward, 2000: 51).