Imagine

I chaired a session on innovation for the Guardian this week. To kick of the post-lunch graveyard slot I asked the audience of about 50 if they thought the housing sector could be characterised as being innovative? Guess how many people said 'yes'? 49? 41? The answer was two - well, more accurately one and a half! This was somewhat depressing - and, more than a little worrying, given the challenges we face over the next few months and years.

Having heard three examples of new approaches to age-old problems from the session speakers I put the delegates to work to consider why we view ourselves as being so..., well, unimaginative. The resultant list of barriers to innovation in our sector was long and detailed and the most significant, in no particular order, were:

- the short-term nature of political decision-making;
- the seemingly endless procession of Ministers taking responsibility for the housing portfolio;
- regulation;
- the lack of competition with few new entrants into our sector;
- a natural tendency to over-complicate ideas;
- conflicting priorities at national and regional levels;
- the lack of a government 'innovation fund';
- bureaucracy - "the dead hand of the civil service";
- the absence of a culture of innovation;
- the lack of visionary leadership on behalf of LA housing strategy functions; and
- the associated reputational risk - a fear that you will be 'shot down in flames'.

This last point is of particular interest to me. In the past CIH has been 'slammed' for considering whether there might, in some circumstances, be an alternative offer to a secure social tenancy for life, I have been wary of appearing too innovative. But CIH prides itself on blue skies policy thinking so I'll leave you with just a few of the 'imagine ifs ?.' that our policy team in England is currently working on - hoping at the very least to be able to engage in a genuine debate as part of our commitment to innovation. Imagine if...

- ALMOs could borrow private finance off balance sheet;
- if there was a national, government-backed equity-release scheme to enable vulnerable owners to bring their homes up to the Decent Homes Standard;
- if every tenant could chose a bespoke package of products and services - and pay a rent reflecting their choice;
- if every house could exist at any point along a continuum from 100% renting to 100% owning - with people able to move backwards and forwards along this continuum in a planned way as their circumstances change;
- if we taught our children about housing in school;
- if we automatically assessed your home if you ended up in hospital as a result of a fall at home or a cold/damp related illness;
- if we powered our domestic heating systems with hydrogen fuel cells (actually Black Country Housing Group already can already do this);
- if the general public asked our Housing Minister to increase capital gains tax and inheritance tax as a way of limiting future house price inflation; and
- if tabloid newspapers never wrote headlines like "council tenant runs off with daughter's boyfriend."

House Proud - A Pre-requisite for Electoral Success?

It's perhaps a little late in January for 'Happy New Years' but I'm prompted to wish this to everyone having just come back from Scotland where I had the pleasure of attending a celebratory dinner for the housing sector.

In the splendid surroundings of Mansfield Traquair in Edinburgh our guest speaker was SNP Minister Alex Neil - and, in addition to describing CIH as a 'wonderful organisation' he also outlined the invaluable links as he saw them between housing and health, housing and education and housing and social mobility. In so doing he was echoing the sentiments underpinning CIH's new campaign - launched at the start of the year in partnership with Inside Housing.

As we prepare for a Westminster election in May the House Proud - making the case for housing campaign is about two things. Firstly it celebrates the successes of our largely un-sung sector in transforming the lives of people like Mrs McGinty. And secondly it demonstrates that good housing is a necessary pre-requisite for healthy citizens, educational achievement, safe communities, our ability to tackle climate change, economic success and our success in responding to the challenges of an aging population.

Week by week CIH and Inside Housing will showcase the ways in which good housing is fundamental to the success of these other political policy priorities - taking our campaign to the media, politicians and the general public on their familiar territory - health, education and anti-social behaviour.

Please sign up in support of House Proud - whether as an individual or as part of an organisation - and be part of this sector-wide campaign to raise the profile of the life-changing work undertaken by housing professionals - we hope Alex Neil will feel able to.

Banking on another boom

Few organisations have the CIH's unique perspective of observing UK wide and international housing issues. In recent months the inter-relationship of housing markets has been highlighted with developments in Ireland.

The Republic of Ireland Government has now published details of its proposed resolution to the banking crisis. The plan is dramatic and exposes the tax payer to huge risk, and is described even by its advocates as 'the least-worst solution'. In announcing the establishment of the National Asset Management Agency (or NAMA), the Irish Finance Minister, Brian Lenihan will create a so-called 'bad bank'; capable of buying toxic development and land loans from Irish banks totalling €90 billion, thus freeing up institutions to lend to the 'real economy'. In effect, the Irish taxpayer will become a massive property and land owner; not just in Ireland, North and South, but in Britain and America where Irish investors pursued their interest during the boom.

The proposals follow months of speculation on the government's response to the banking crisis which has stripped international confidence in Irish institutions, and seen a dramatic reduction in credit made available to businesses and households across the country, thus stalling economic recovery. On the one hand the proposals represent a response to the mistakes of the past. Back then (just two years ago) Ireland's doomed love affair was with land and property; the portfolios of major banks were composed almost entirely of land and property loans. When the boom ended, the loans that had appeared secure, were now deeply risky.

However, the NAMA proposals also speak volumes about how Ireland sees its future, and the level of debt it is prepared to place on future generations.

Put bluntly, Ireland's economic future now rests on another land and development boom. The state will buy the loans not at current market value (which would represent a bargain), but at a price reflecting future values. In doing so, the Irish taxpayer is betting on an upturn in development and land prices.

Much debate will be had over the logic of buying toxic loans at above the current market value, and on the practical implications of this decision; who will make the valuation, and the criteria on which they will be based. It does appear nonsensical to apply an approach that would surely be dismissed by a commercial bank. If a bank bought an impaired loan, wouldn't it buy at the lowest possible price? But whichever way the loans are valued, to reduce the risk for the Irish taxpayer in the future, the state has to hope that the actual future value exceeds the price it paid for the loan- it will have to hope for a future development bubble.

Furthermore, this boom cannot simply be in Ireland; for the state to be free from risk, the Irish Government also need to hope for an upturn in Britain. We know the attraction of British property and land to the Irish investor during the Celtic Tiger; in the years between 2002 and 2006 the annual amount of Irish investment in the international commercial property markets surged fivefold from approximately €2 billion to over €10 billion. It is estimated at a quarter of the assets to be managed by NAMA are in Britain; over €20bn worth of land and development in Britain could end up in the ownership of the Irish state. The Irish taxpayer, suddenly, must become a passionate enthusiast for London Olympics; hoping that land and development assets in the area will enable it to recoup some of its investment. Are taxpayers really comfortable making the future economic health of the nation conditional on a property bubble in another country?

The Irish state has become a land and development agent at an industrial scale, and its future is now predicated on a boom. Fintan O'Toole put it well in the Irish Times; it turns Ireland into a 'nation of speculators'. I thought it was speculation that caused all the trouble in the first place. I am having a very strong sense of déjà vu.

Usually the least constructive approach in a crisis is to allocate blame after the event. But if we don't learn lessons from the past we risk making them all over again. It was the existing tax regime that made it so attractive for developers to over extend themselves, and the regulatory regime that allowed banks to accept interest only payments on huge loans for extended periods, enabling developers to keep buying. Government must ensure that future upturns are less volatile, even if it has a vested interest in them.

To its credit, the Irish government is taking determined action. It had to intervene to shore up the reputation of the nation's banks, and kick start lending, for the sake of the economy. And by introducing NAMA it cannot be accused of taking small measures. But there is no guarantee that NAMA will encourage international lenders to look favourably on Ireland once more, or that banks will use their new-look portfolios to lend again. The biggest calamity is that Ireland has pinned its hopes on a return to boom. In every other country in the EU the prevailing opinion is that volatility should be a thing of the past, yet Ireland appears to be rushing headlong into another land and development cycle, having learned nothing from our previous excesses. Is this really the best solution from the brightest and the best in government?

The sooner Irish policy makers realise that even we cannot always depend on luck, the better for everyone.

The Empty Homes Madness

As you might imagine, I speak at lots of events, and listen intently at many others, on a huge variety of issues and subjects - all interesting - but every so often a topic completely hooks me and I have to rush back to the office to wind everyone up into action.

'Empty homes' is one such topic. Our recent CIH conference on empty homes - run in partnership with the Empty Homes Agency (EHA) and chaired by its inspirational Chief Executive David Ireland - demonstrated again the complete and utter madness of this issue and why we need to get it right.

On the one hand we are adding over 200,000 extra households a year to our current total; there are 1.8 million households already on the waiting list for a social rented home; and an estimated 75,000 owners will have their homes repossessed in 2009. On the other hand levels of new house building have tumbled - with some figures showing as few as 80,000 starts in 2009.

At the same time we have nearly one million - that's 1,000,000 - empty homes in the UK at the moment. And the madness continues.

• When Parliament passed the Housing Act 2004 leading to the introduction of Empty Dwelling Management Orders in 2006, David Ireland and I found ourselves responding to media accusations that rightful inheritances were being stolen by the state (one reason perhaps why only around 20 have been used since then).
  
• In the North East there is a project that pays artists to paint pictures of curtains and ornaments on steel shutters to make it looks as though the house isn't empty.
  
• After 18 months and £250,000 the Treasury has concluded it doesn't have enough information to make a decision about removing the Council Tax discount on second homes.
  
• Admittedly, pre-Credit Crunch foreign investors saw our cities as prime places in which to invest in 'Buy-To-Leave-Empty' flats - which are still empty.
  
• And, the national indicator on empty homes has been lost in the move to the new set of 198 priorities for local authorities.

Like David and the EHA we all need to be angry about empty homes - and more importantly, to turn that anger into action. I've told David that CIH will do what we can to support him in trying to persuade the government and the HCA to develop some effective strategies - and you can help too by letting us know about successes you are having locally in dealing with empties. We already know about the imaginative approaches being developed in Rochdale (led by Darryl Lawrence) and in Leeds (through a fantastic project called Canopy), but I'm sure there is more out there. And, if you want to add to the list of things that we support EHA to campaign on, then please also get in touch. You can either respond here or email christoph.sinn@cih.org

Welcome on Board

With my Housing Association Board hat on - I'm the chair of the Black Country Housing Group (BCHG) - I spent a couple of days earlier this month listening to Anthony Mayer - the chair of the new Tenant Services Authority (TSA) - talking about the move from 'regulation' to 'governance'.

My reaction was to be both excited and terrified in equal measures. From his position on the podium Anthony looked us straight in our collective eye and, in his inimitable way said: 'if we have reasons to be concerned about the performance of your organisation, it's the Board we will be coming to for a little bit of a chitty-chat'.

In case we hadn't got the message, he went on to explain that the TSA expects to have its primary relationship with housing associations and ALMO Boards rather than with Chief Executives. He isn't expecting the TSA staff to regulate the work of employees - he is expecting Boards to exercise robust governance of their organisations.

I think this is fantastic news - to my thinking it's a far more significant victory than the promise of 'light-touch regulation' and offers us the opportunity to have a far more 'adult' relationship with the regulator.

With my CIH hat back on - it's also making a reality of changes that we've been pressing for over the last five years. Before Elton and Cave we did some work on a new approach to regulation - one that was customer-centric and that covered all tenants - no matter who their landlord is.

The scary part is that this new approach really is a wake-up call for housing association and ALMO Boards. Whether we are looking within our own sector - or further afield - there is hardly a major organisational failure that hasn't resulted from poor governance (think Mirror Group pensioners, Enron, WorldCom and Ujima).

This is clearly the time for Boards to do some serious self-examination. To ask themselves 'are we fit for purpose? Are we really in control? In what ways are we accountable to our residents?' It's a question I'll be asking at BCHG, but it's also something CIH will be exploring as I launch a major governance review of our own organisation - the first in many years. Paddy Gray (CIH's next Vice President) will be leading this work and I expect it will result in some significant changes for us. It's also an area of work that CIH and our consultancy, ConsultCIH, will be prioritising as we seek to offer support to the sector to respond to the major changes ahead. ConsultCIH's existing expertise in this area is part our wider commitment to Healthy Organisations - whether that's yours or ours. So my question to you is: are you ready for the TSA's move from regulation to governance?

Reforming the way we do housing by Sarah Webb

I think we all agree that the key to the current problems lies in financial markets and wider economic stability, but we also know that housing was a key cause of many of the problems both here and overseas and we need to use this opportunity to drive forward reforms so that we make changes to create a better approach when the dust settles.

I've been disappointed that the housing reform debate has focused on worklessness and concerns around conditionality. Our housing system is fundamentally broken and it's far too important and wide ranging to be pigeon-holed like that. This week we published a paper called Rethinking Housing setting out our thoughts on some changes and key debates that we need to be having - debates that we've had behind close doors for as long as I can remember, but debates that we need to be having in public and that are well reasoned and rational. Debates about how we can do things better so Mrs McGinty gets an affordable home that meets her needs as they change over time.

CIH, working closely with members across private and social housing sectors, is clear that a number of changes need to take place:

• First, we need a universal housing advice service - at present we help people when they are in crisis or are in acute housing need - housing is the biggest decision most of us make, certainly the biggest financial investment most people make, and underpins so many other things that are important - schools, social lives, employment, community - but our initial planning leaves a lot to be desired.
• We need changes to the private rented sector. In the last decade we have seen a boom in buy to let. We are now seeing that market paralysed. But the private rented sector plays such a key role for people who can't access social housing and can't afford to own. A lot of people who'd actually like to be able to make a different choice. We need to think about how we get can get landlords in to the private rented sector who actually want to be good landlords, and how we can get investors in to the private market who are experienced investors and who can get a good sustainable return over a decent period of time. We need to look at how we can create a vehicle that encourages would be mum and dad landlords to invest in it, rather than wanting to buy directly themselves - whether they want to run a property or not. I think we can look at models like that in Germany - put in place tax incentives for investment in rental housing over 20-30 years, with clear minimum standards and different rental bands. We need to create a strong institutional investment base that we simply don't have here.
• We need changes to the social sector. Over 8 million people live in council and housing association homes - we have 2 million people on waiting lists and the number is growing - but the number of lettings is falling. We shouldn't be afraid to rethink who gets access to social housing and on what terms - we've put reform of this area in the too hard basket for too long. Social housing can play a key role in supporting families but it is still failing too many people - too many people are unemployed, unable to look at any other housing options, and are locked in to benefit traps. We need to change this. We need to have a much better approach that changes with individual's circumstances and supports people in their housing and wider aspirations.
• Changes around ownership. We need better advice about the full range of options that people can consider - not just in the short term but over the life time of their housing career. We also need to look at ideas around flexible tenure. We want to see more and better shared ownership products and ones that can change as people's circumstances do - for example, older people being better able to sell back part of their home when they need to release money - more young people being able to start their housing experience with a share of a home, rather than over stretching themselves with excessive mortgages. We also need to revisit the process of buying and selling a house. It shouldn't take four months of aggravation to sell a home. We all know HIPs is a mess that no one is happy with. It still costs too much and takes too long to buy and sell a home.
• Finally, it is clear that we need changes in how we develop and supply housing. Latest figures from house builders suggest that completion numbers this year will be down to 110,000. With job losses and building work stopping next year we will be looking at around 60,000 homes and perhaps a similar number the year after. We know we need many more homes than that. Even before the credit crunch we weren't building enough of the right types of housing, at the right price. Its time to think about what we could do differently to make sure we don't lose all our capacity, but also to put in place a system that works a lot better than what we had before. We need to look at role of local authorities in shaping land supply. We need to look at wholesale changes to a planning system rather than tinkering round the edges. We need to look at how we can open up the UK house building market to more competition and secure more transparency from all parties about what they are putting in to a scheme and what they are getting out.
  
  It's right to focus on the here and how and stabilise the financial markets - but we should not miss this opportunity to set out what we could do differently in housing in the future. Your thoughts on housing reform are welcome.

Pointing the Finger of Blame

After another shocking week in the financial markets - a week when housing came close to losing the sector's biggest lender, HBOS - the reputation of the financial sector appears never to have been lower.

But it is worth remembering why the financial sector seems to be on the verge of meltdown. The ultimate cause is the chronic downturn in the US housing market. And that's why housing is so unique. Get housing policy wrong and it has the potential to undermine the whole economy.

That brings me back to the moral hazard - an issue I raised in the first Mrs McGinty blog. With so much finger pointing at present it might seem unfair to join the blame game. But we need a fully functioning, fair and robust housing market. Without it we end up with a crisis domino effect from Government, financial institutions, construction companies, estate agents and onwards all the way down to everyday families in danger of losing their homes.

Whilst the credit crunch has brought some issues to the fore, there a many others that need to be aired and resolved. In my first blog I asked whether now was the right time to look at a tighter regulatory framework for mortgage lending. And for the time being, we need to keep asking more questions around the theme of the moral hazard:

• What about our education system that failed to provide them with a key life skill - knowing about the relative costs and benefits of different housing options as part of a personal housing career?
  
• What about the local authority who cut its grant funding to local voluntary sector agencies to provide tenure neutral housing and finance advice?
  
• What about the valuer who was happy to provide an allegedly over-inflated value to the bank - who in turn was happy to accept it - presumably on the basis of 200% house price rises over the previous 10 years?
  
• What about the former Chancellor who, when campaigning to win a third term in government, pledged to create a "home-owning, asset owning democracy" - in which, presumably, there was no room for renting?
  
• What about the neighbour who campaigned against the new build development of affordable housing at the end of the lane?
  
• What about the play-write whose sitcom continually portrays the council tenant as the anti-social ne'r-do-well?
  
• What about the local politician who approved the planning permission for 5-bed executive homes because it would retain 'the right sort of households' in the area?
  
• What about the CIH housing professional who talked at length to their colleagues about the un-sustainability of ever-increasing house prices but who failed to get anyone in government to listen - and, incidentally, was able to borrow £10K to buy a new car on the strength of the rising value of their home?
  
  It strikes me that, whilst the moral hazard argument clearly has some validity, it's much more complicated than that - and, in terms of trying to solve the problem - there is not that much point in just blaming a particular individual.
  
  So, what do we need to do? Well, I don't have all the answers but, I'd like to go back to what should be the beginning of the housing journey - housing advice and education. This month, CIH is supporting Ed Balls' launch of the new Diplomas for 14-19 year olds. We are contributing to the Built Environment Diploma which, whilst it won't yet teach kids all they need to know about how to make a rational housing choice as adults - is an important step along this path.
  
  And, we have already published our latest thinking on the provision of housing advice, which paints a picture of a world in which there is somewhere to go to get objective advice on renting vs. owning, on shared ownership vs. intermediate renting, on private renting vs. social renting etc. We provide people with almost none of this kind of information and then wonder why they make ill-advised decisions.
  
  All this seems obvious and fundamental to me. Your thoughts are welcome.