Housing holds the key to inclusive growth

If last year was a year of political wake-up calls, this year must be used to start fundamentally addressing the way our economic system has excluded too many from the immense wealth it generates. The widespread resentment about the way our politics works, and the way our economy works, must be countered with policies and approaches which make a real different to people’s lives.

The challenge with a question as big as this is where to start. As the RSA's Inclusive Growth Commission concluded earlier this month, housing is fundamental to this national and international debate about how to build a more inclusive country. You just need to look at the map of average household incomes by neighbourhood, adjusted to reflect housing costs, to see that parts of the country with strong economic growth have many people struggling. Quite simply, housing costs make up an increasing proportion of our household spending, and this is more of a struggle for low income households.

Both the data that we have analysed, and the hundreds of people we have spoken to at events up and down the country, point to one thing: the prospects of achieving inclusive growth look a lot more difficult in the context of a housing market which perpetuates social and financial inequalities. We worked with the National Housing Federation, and brought together housing associations in our research, to understand the ways in which housing associations underpin inclusive growth. This points to things they are already doing and areas where they could and should be trying to do more. The conclusions challenge the one-dimensional image of housing associations held by too many politicians, policymakers and members of the public. Specifically: 

• Housing associations manage and maintain homes to allow low pay households to participate in local economies. Strong economies have broad labour markets but expensive housing markets. Housing associations are the most important organisations in keeping housing affordable – if the market can't deliver this, local and national prosperity depends on them. 
• Housing associations help tenants and residents make their most productive contribution to the economy. A growing number of housing associations provide programmes to help residents get into work, and progress in their career. For example, Clarion Housing Group helped 1,000 residents into work last year, Aspire trained 2,000 residents in Staffordshire alone and encouraged apprenticeships within its own supply chain. 
• Housing associations maximise inclusive economic growth within their organisations. Housing associations have a particularly strong record in quality of employment, including Living Wage and employee engagement. They often lead by example, locally.
• Housing associations support the most vulnerable in society to live independently. As well as providing half a million sheltered and supported homes, their proximity to and understanding of resident needs means housing associations are well positioned to relieve strains on frontline public services. From domestic abuse to truancy, local coordination with housing associations can improve social outcomes, allowing the profile of public spending to focus on productive and preventative investments, pro-actively pursuing an inclusive growth agenda. 
• Housing associations build substantial new affordable housing and new market housing. They are major house-builders. In 2015/16 housing associations completed more homes than the private sector in nine local authorities in England, and about 40,000 nationwide. As affordable housing grant declines in future years, larger housing associations are investing themselves – last year investing 10 times what they received in grant. By the end of the decade, housing associations are set to build 50,000 homes annually. Many housing associations will face criticism for 'leaving their roots' or becoming 'assimilated' into the financialised housing market. But until that market changes, new affordable housing growth will be essential in inclusive growth, and housing associations will be leading this.

While the principles and recommendations of the Commission are to design for a long-term transformation, that doesn't mean that existing institutions and approaches are to be abandoned. While a more equitable housing market is a complex policy challenge, and a decades-long objective, we should be thinking entrepreneurially in the short term about how we at least make housing growth more inclusive.

Look out for our upcoming work which considers how those involved in large-scale housing development can use not only a mix of housing, but social infrastructure and civic amenities to promote everyday mixing and meaningful interaction among residents. Inclusive growth means the nation's most affluent thinking differently about homes and neighbourhoods. As National Housing Federation Chief Executive David Orr said at our roundtable: ‘unless we have a coherent understanding of how the whole housing system fits together we won’t solve the problems of the poorest or those just managing in the middle’.

The route to inclusive growth is not one where we can or should expect central government to lead from the front. There is lots the Government, including local government, can do. But a truly inclusive economy and society, locally and nationally, is one where citizens, charities and businesses contribute and lead. Many housing associations are already blazing a trail. There is more for the sector to learn from itself. There is much that housing associations can do within the existing housing system. We hope ‘5 ways housing associations underpin inclusive growth’ inspires many to realise their ambition to deliver.

This blog was first published on the National Housing Federation's website.