Mutual Housing Offers More than Markets
Social housing is gradually being pushed towards a commercial future of quasi-markets and provision of ‘affordable’ housing for a wider variety of income groups. But a new report argues that mutualism offers an alternative vision for social housing. It charts how marketization of social housing is changing the nature of the sector whereas a mutual future would position tenants and communities at the centre of housing development and management.
Since the days of John Major’s government, social housing has adopted a provider-consumer model where tenants are portrayed as customers and call centre management has mushroomed. The present government has accelerated this process emphasising value for money, which is code for cuts, and the provision of ‘affordable’ housing, with rents set at up to 80 per cent of those charges by the market. This is a long way from the traditional social housing approach and has reached a point where a campaign to save social housing has had to be created. With very little real competition in a sector where demand massively outstrips supply and in which the price mechanism doesn’t operate, market jargon and creeping commercialism are being accepted by many social housing providers - some reluctantly, others less so - as the norm.
Yet the ‘More than Markets’ report, produced by Birmingham-based think tank the Human City Institute, which draws on the work of American Philosopher Michael Sandel, challenges this orthodoxy and proposes another trajectory that stresses increased democracy and community control of social housing. Extending mutualism across UK housing, whether by creation of more co-operatives in the existing social housing stock via transfer to community mutuals as in much of Wales, in Rochdale, Liverpool and Preston, or through new forms of mutual and low-cost home ownership by community land trusts, would enable much-needed democratisation of social housing. It would offer mainly lower income communities to have more of a say in their community’s management and future.
The rational for this proposal comes from applying Sandel’s observations to social housing. He contends that we have witnessed the remaking of social relations in the image of market relations with social goods changing their nature when supplied through the market. Sandel argues that we have been mesmerised by the ability of market systems to deliver greater cost-effectiveness and choice without any evidence being put forward to support these contentions. Our acquiescence to market reasoning and propaganda crowds out alternative ways of delivering services that may actually be more efficient.
This is what research has shown when comparing housing co-operatives with social landlords. Mutual housing has better housing management performance in terms of rent arrears, vacancies and costs, higher levels of tenant satisfaction, and is more effective in building social capital and creating more cohesive communities. So ‘More than Markets’ recommends extending the UK’s 1 per cent mutual housing sector to match European Union norms of 5 to 15 per cent. This would mean mutualising at least 500,000 existing social homes and placing mutualism at the centre of a new social housing building programme.
Alongside, we recommend creating a Tenants Mutual Finance Initiative operating in similar ways to the former Children's Mutual, providing savings and borrowing opportunities for tenants. The Tenants Mutual would not only enable expansion of co-operative approaches in social housing but would fund new affordable housing development and aid renewal of community infrastructure, while providing tenants with affordable credit opportunities. In this way, new housing and community development would be more firmly in the hands of tenants.
Yet none of this is on the policy agenda of the government or the social housing trade associations. In fact, the portrayal of social tenants by some ministers and the media as benefit dependent skivers and the pursuit of a more commercial approach have driven tenant and community-controlled housing to the margins of UK housing policy despite their being numerous and diverse examples of innovation.
We need to campaign for a mutual alternative to the market model, where housing is recognised as a common resource that can be organised ways to benefit disadvantaged communities, with a different set of rights and responsibilities from those applied to a provider-customer relationship. Social housing should be about ‘more than markets’. It is about people, community, democracy and homes - the essence of mutualism.