Should Housing Associations Give Away Houses For Free? (May 2013)

So as well as writing blogs, I like to read other people’s blogs. Here’s one from the CEO of Trafford Housing Trust that I found very thought-provoking from start to finish

I was at a meeting in the Treasury earlier this week, discussing whether, even in today’s financially-constrained world, there were things that the government could do to increase housing supply and do something to address the supply and affordability crisis that deepens every day.

There was a consensus among those at the meeting that the days of housing associations offering a single product to a single type of customer at a single price point needed to be consigned to history. What associations and our customers need are different products at different price points. These products lie on a continuum from social rent to market rent and, in the home-ownership market, products offering different equity stakes. As an aside, it will be interesting to see whether that pluralist, market-orientated consensus resonates with the regulator as their discussion with the sector about risks and ring-fences continues over the summer.

The Treasury discussion got me thinking on the train back North: what were the real limits of the price point continuum and where should housing associations position themselves along it? There are lots of examples from new and emergent sectors of completely different pricing structures. An A-Z of products – from Angry Birds to Zinga’s Farmville – give consumers a free basic product and then make their money by selling premium features and related products which consumers opt to purchase. Could such a “Freemium” approach work in housing?

At first sight the answer might seem to be a resounding no: it’s absurd to think that housing associations can charge no rent for their product! Take time to think about it and you see that there’s a model that might just be affordable, add social value and provide a reliable customer base into the future. It’s based on work already going on in East London through Dot Dot Dot. They let people who do great volunteering live as property guardians in buildings that would otherwise be empty. They turn empty buildings from a blight into an asset – providing a vital security service to property owners, giving their guardians cheap accommodation, and making a meaningful and measurable contribution to communities.

So, what would happen in local communities if every void property that a housing association has was looked after by a Dot Dot Dot type organisation for six months, before then having the void work done and being re-let? There would obviously be the additional void period, but associations would be able to use savings from security measures on empty properties to offset at least a part of that additional cost. For the community there would be added security of knowing somebody responsible was looking after what would otherwise would be an empty and vulnerable property. Not to mention the strength brought by guardians who would bring commitment and energy to volunteering in the area. And, at the end of six months the housing association would have a supply of reliable and trusted customers to take a permanent tenancy.

It might not be perfect, there are questions that need answering, but the thinking we have had so far about the price of our housing has got us to the increasingly untenable situation we are in now. We desperately need new thinking, and the regulatory freedom to adopt it. The “freemium” model offered through models like the one Dot Dot Dot has created might just be part of that thinking – what do you think?

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