Wrong to buy
If you had a nifty innovation that had turned 500,000 public housing renters into homeowners, wouldn’t you trumpet it?
Apparently, not if you were Scottish, or at least that’s what one would infer from a proposed policy change in the
SNP TO BAN NEW-BUILD HOME SALES TO TENANTS
The right to buy new council and housing association homes is to be scrapped as part of “radical proposals” to tackle
The landmark policy introduced by Margaret Thatcher in the 1980s has led to nearly 500,000 homes being bought by their tenants.
And, like most of my policies, I stood by it my entire term
I’m on record, in studying the curious Yank, as liking right to buy:
2. Housing Associations (very large, geographically concentrated, long-lived and sophisticated beyond ours).
3. Corporate financing applied to affordable housing portfolios.
4. Stock transfer.
5. Right-to-buy.
[Click for a brief dictionary translating English housing terms into American.]
“Sir, I see no value whatsoever in translating things into American.”
Here’s how the
First introduced in 1980, the Right to Buy scheme is aimed at secure tenants of local authorities (councils) and those assured tenants of registered social landlords/housing associations who previously held secure tenancies with local authorities. It is open to virtually any secure tenant who can afford to buy.
Tenants must have at least two years tenancy with a public sector body (or five years in the case of new public sector tenants who took up their tenancies after
Some properties are exempt from the Right to Buy. These include dwellings occupied in connection with a tenant’s employment, and housing specially provided for older people and (in certain cases) people with disabilities.
In short, at least conceptually, it couldn’t be simpler. The homeowner who buys her flat remains part of the complex, and has in effect a personal condo within a larger development, which conveys the normal rights of ownership.
Can you tell which garage is owned by a right-to-buy resident?
No wonder it’s popular. So why are some Scots proposing to abolish it?
It has also been blamed for helping to create a dramatic shortage of homes as thousands struggle to get on the housing ladder and more Scots become homeless.
Here’s where I went on mental tilt.
All my lights lit up
Like stock transfer, which simply changes a property’s ownership from public (local council) to private (non-profit) without gaining or losing any intrinsic affordability, right-to-buy has no impact on supply. When a family changes from being a renter to being a homeowner, nobody actually moves out: one house is occupied by one family. So how could turning some people into homeowners create a shortage of homes?
Aberdeenshire Council lost between 300 and 350 homes a year as a result, but it is only able to build around 250.
Those 300-350 houses a year didn’t suddenly become vacant — they’re occupied by happy homeowners.
Nope, still occupied
As homeownership changes behavior for the better, isn’t this good for Aberdeenshire?
[Housing demand is elastic, and it’s possible that the homeowners gradually become smaller households, leading to increased demand. — Ed. Yes, but nobody is making that argument. — Auth.]
As part of yesterday’s announcement by Health Secretary Nicola Sturgeon, the Scottish Government urged councils and developers to build at least 35,000 properties a year by the middle of the next decade.
I’m all for building more affordable housing –as we say at AHI, More Housing Is Good– but what does this have to do with right-to-buy?
The Scottish Parliament’s Presiding Officer Alex Fergusson delivered a sharp rebuke to the government after BBC news reports gave details of the announcement before Ms Sturgeon’s statement.
Does this look like a man who would deliver a sharp rebuke?
He ruled she could not give her planned speech after the breach of the rule that parliament should be first to hear ministerial statements.
Despite the row, the details of the announcement were welcomed, especially the end of the right to buy on new-build social housing.
That sounds as if the government has decided not to rescind the right from existing residents, but rather to eliminate the conversion option on new properties. If I’m inferring correctly, that’s a shrewd political move, since any individual who could have bought yesterday and now cannot, would be quite understandably irate and uninterested in arguments about larger policy implications.
I had rights, and now I’ve lost them!
The government published a discussion document, Firm Foundations - The Future of Housing in Scotland, laying out its proposals to increase housing supply and choice.
It includes offering yet-to-be-decided financial incentives to local authorities to build new council housing.
Ay, there’s the rub — since affordable housing always costs money, the government factory always produces laws first, money second.
Double double, budget trouble
Housing costs, we’re in a muddle
The government plans to give councils more flexibility to use the private rented sector to help the homeless.
For would-be homeowners, a scheme called Lift (Low-cost Initiative for First Time buyers) would provide a mixture of government grants, shared equity schemes, and mortgage-related products.
Just out of curiosity, isn’t it inconsistent to create, on the one hand, new incentives to enable people to buy in the market, and on the other to take away the absolutely most successful first-time home buyer program
“There you go again, using logic.”
A new “Scottish Sustainable Communities Initiative” would encourage councils and others to bring forward proposals for new settlements to meet demand in particular areas.
The Treasury is to be asked to consider writing off council housing debt - currently amounting to £2 billion.
That’ll help some — roughly £2,000,000,000 worth.
The government is to give further consideration to its plans to give first-time buyers a £2,000 grant. But lenders have “serious doubt” that it will improve affordability.
I’d say it will improve affordability to the tune of £2,000, or about 1.5% (judging by this BBC chart showing an average Scottish home price of roughly £150,000).
Ms Sturgeon said a “fresh approach” was needed to provide affordable housing.
“The current rate of new housing building - 25,000 new houses a year - is simply inadequate,” she said.
“It can and must increase if
She said she intends to end the 30-year rundown of local authority housing stock by the right-to-buy legislation.
“Local authorities see little point building new houses for rent if they are lost through the right to buy. Many housing associations share this view,” said Ms Sturgeon.
Sturgeon sees little point in right to buy
I will impute to Ms. Sturgeon awareness that such thinking is utterly illogical, since it presupposes that there is absolutely no link whatever between the rental market and the homeownership market, when in fact markets are a continuum of tenures and price points.
Aberdeenshire Council leader Anne Robertson said: “We in Aberdeenshire experience serious shortages of affordable housing. Providing affordable homes is one of our top priorities. Anything that the government is going to do to finance and support these initiatives we would welcome, but we have to see the detail.”
Be very careful around housing programs
Yes, more money is good.
Highland Council housing chairwoman Margaret Davidson said: “Over the years, the right to buy has limited access to affordable housing and has been the biggest barrier to sustaining communities and reducing homelessness so we welcome an end to this practice with all new social housing.”
A spokesman for Aberdeen City Council said it has acted to protect some of its housing stock by seeking authorisation to suspend the right to buy in high-demand areas for the next five years.
Ah ha!
That’s the real problem — displacement and gentrification — much more than increased homelessness. And remember, whoever buys it is the same family. Displacement occurs only upon resale. This is very woolly thinking.
“I’ll not interrupt this blog post for a pound“
Archie Stoddart, director of the homeless organisation Shelter Scotland, welcomed the government’s proposals, but demanded an assurance about affordable housing.
“These 35,000 homes a year will include all housing, from million-pound mansions to maisonettes, or homes to buy or to rent,” he said.
“We believe this must include 10,000 affordable homes for rent.”
Right-to-buy certainly shifts some of the stock from rental to homeownership. In this it displaces some of the new-build homeownership that would otherwise occur, and the move reduces the percentage of stock that is rental. Ergo, if you have a right-to-buy scheme, you should be building new affordable rental as much as you can. That doesn’t make right to buy bad, it makes more rental production good.
And under-funding is the ugly
Tory health spokeswoman Mary Scanlon said the right to buy had provided 480,000 families with their own homes and increased their labour mobility.
Scanlon wants Labour to be mobile?
Alas, Ms. Scanlon, homeownership tends to decrease labor mobility.
She asked: “Why should future generations be denied this choice, given that there is no research to prove that abolishing the right to buy frees up more affordable housing?”
Obviously units that are not homeownership are rental, at affordable rates. But let’s give Ms. Scanlon a mulligan in her phrasing and credit her with understanding that right-to-buy doesn’t reduce supply.
“Could you ask that last question again?”
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