Yesterday Housing Minister Grant Shapps announced that he proposed to allow councils and registered social landlords to require new tenants to leave their home after just two years if their income rises above a certain level.
At a time when the government is trying to increase the incentive for the unemployed to get a job, this proposal will do exactly the opposite. People are hardly likely to want to get a job if they risk losing their home as a result.
The plan risks removing the ‘social glue’ that often helps to hold communities on social housing estates together. On the estates around where I live in Lambeth in south London it is generally the more long-term, prosperous tenants who help run the tenants' and residents' associations and serve as informal community leaders.
Forcing these tenants out would cause irreparable damage to these communities, leading to estates where low aspiration and intergenerational poverty are entrenched by poor school performance and limited experience of the labour market.
In 1949 Nye Bevan said that one of the aims of post-war social housing policy was to preserve ‘the living tapestry of the mixed community’. As late as 1979 more than 20% of those in the top 10% of earners lived in council housing.
But as a result of ‘right to buy’ and the growth of owner occupation, by 2004-5 less than 5% of households in the top half of the income distribution were in social housing. This plan will be the final nail in the coffin of Bevan's vision of mixed communities.
It clearly is not ‘fair’ that people who perhaps went through temporarily difficult circumstances at some point in their life, should be entitled to housing at below-market rents for the rest of their lives. But the solution is not to threaten them with eviction from their homes – it is to increase their rent.
At the thinktank CentreForum we have proposed just such an approach in a recent paper, drawing on the experience of Hong Kong. There, after ten years in subsidised public rental housing, households are required to declare household income biennially and rental levels can be adjusted up to market levels.
Of course, some tenants might choose to move, but that would be their choice, not a decision imposed on them. The increased rental income could then be used to help fund new social housing.
The period before which income is assessed needs to be sufficiently long to avoid being too great a disincentive to get work and sufficiently short that people do not benefit from sub-market rents for too long. Ten (or even five) years seems about right - not two.
Chris Nicholson is director and chief executive of CentreForum
