HMOs – a problem that policy forgot

Dr Jenni Cauvainjenni.cauvain@nottingham.ac.uk

With acknowledgements to Stefan Bouzarovski, Future Climate and eaga charitable trust

14 May 2015, Manchester

1. What is Housing in Multiple Occupancy?2. What is the problem?3. How could we plan a progressive response?

“From respectability to invisibility”

Multiple definitions for multiple occupancy

• The Housing Act 2004 (1985)– Private rented properties occupied by three or more people who

make up at least two households and who share some facilities (s254);

• Town and Country Planning (Use Classes) Order 1987 (amended) ‘Use class’ C4 if 3-6 unrelated people share facilities

• Council tax regulations: HMO landlords (rather than occupiers) are liable to pay the tax if two or more people in separate households are sharing

• ‘Beds in sheds’ (e.g. attics, shipping containers and garden sheds, and rooms which are let out in shifts)

HMO typology

• Individual rooms in a shared house/flat (several tenancy contracts)

• Group of sharers (one tenancy contract)• Bedsits (non-self contained flats)• Poorly converted flats (self contained)• Informal/ illegal

(Viitanen and Weatherall 2014)

Energy paymentUtility contract holderExample heating system

Building typology Assessment methodPathway to enforcement/ improvement

“Rooms in a shared house”

“Group of sharers”

“Bedsits” “Poorly converted flats”

“Illegal/informal”

  1 “Illegal/informal” 2 “Rooms in a shared house”

3 “Group of sharers”

4 “Bedsits” 5 “Poorly converted flats”

Shared housing scenario

Informal house/ flat/ room share, tenancy agreements informal, absent, or illegal

Formal house/ flat share (individual tenancies)

Formal house/ flat share (tenants jointly and severally liable)

Bedsits or other non-fully self-contained dwelling units ( individual tenancies). May be hostel/ B&B.

Section 257 HMO: self- contained, converted building non-compliant with building regs (individual tenancies)

Energy payment

Paid pro rata by tenants

Inc in rent Theft of elec.

Paid pro rata by tenants

Inc in rent Paid pro rata by tenants

Inc in rent Individual meter

Inc in rent Paid to landlord separately from rent

Individual meter

Included in rent

Utility contract holder

Tenant Landlord n/a Tenant Landlord Tenant Landlord Tenant Landlord Landlord Tenant Landlord

ExampleHeating system

Portable electric room heaters Gas central heating Gas central heating Electric storage heaters in each unit Various

Building typology

Very varied - non-domestic or domestic properties used as shared accommodation.

Unconverted, self-contained property with tenants each renting a room

Unconverted, self-contained property with tenants renting a house or a flat as a group.

House converted into partially self contained units (ie with mini-kitchen and/or bathroom) sharing some facilities or otherwise not fully self-contained (eg toilet on separate floor).

House converted into fully self-contained units.

Assessment method*

SAP/SBEM SAP SAP SBEM SAP

Pathway to enforcement/ improvement, EPCs

Very challenging. Potentially environmental health officers/ use other frameworks (e.g. council tax, overcrowding) to deal with compliance.

Potentially at the point of rental – but EPC not currently required. Letting agents could be key, also landlord accreditation. Tenant awareness/ behaviour change has potential.

At the point of rental, EPC is required. Letting agents/ could be key, also landlord accreditation. Tenant awareness/ behaviour change has potential.

Potentially through local authority or government agencies referral and/ or HMO licensing (locally agreed standards). EPC not currently required at the point of rental.

At the point of rental, EPC required. Letting agents key, but usually poor quality housing and expensive to retrofit.

Indication of numbers in this group**

By definition, hard to say. Ealing estimates 60000 residents affected in their borough; Slough between 3,000 and 6,000 properties

Census: 0.5% full-time student households, plus 3% ‘other’ multi-person households in England. The 2010/2011 English Housing Survey identifies only 1.1% of homes shared by 2 or more families or more than 3 lone individuals.

Census estimates 0.1% of properties are bedsits. Non-fully self contained flats may be an additional group currently not recognised in official statistics.

4.3% of dwellings are in converted properties, but very far from all will be non-compliant with modern building regs.

1. What is Housing in Multiple Occupancy?2. What is the problem?3. How could we plan a progressive response?

HMO demographies• Students• Young people• Recent migrants• Asylum seekers• Prison and care leavers• Homeless

→ (often vulnerable) people with fewer housing and welfare rights than those in single family accommodation→ the Welfare Reform creates more demand for HMOs “race to the bottom”→ A problem of justice

Out of sight, out of mind

• Under-representation in official systems and statistics depicting mainstream population and housing stock– Census (Simpson and Middleton 1997)– English Housing Survey– CLG HMO database

• Informality and incentives to stay under the radar (e.g. Layard 2012)

What does this mean for energy vulnerability?

People in HMOs aren’t in control of their energy services to the same extent as those in single family housing.

Research and policy on fuel poverty and energy efficiency have overlooked HMOs.

(Deliberate) omission of HMOs from fuel poverty and energy efficiency frameworks

• The Energy Act 2011: PRS minimum standards• Energy Performance Certificates• Fuel poverty definition (10% or ‘low

income/high energy cost’ as per Hills)• HMO licensing and Housing Health and Safety

Rating System (HHSRS)• Green Deal/ ECO

The evidence suggests

• Very poor condition of the HMO housing stock• Marginal status of HMOs and the residents who

‘fall through the cracks’ of policy and regulation• Lack of clarity how key energy and fuel poverty

measures and metrics ought to be applied• Concerted policy effort to identify and improve

the HMO housing stock is needed – instead, we have various loopholes

1. What is Housing in Multiple Occupancy?2. What is the problem?3. How could we plan a progressive response?

Cultural route:Acknowledge and

accept HMOs as part of the ‘normal’ housing

mix

Regulatory route:Close regulatory

loopholes around energy standards

in HMOs

Welfare route:Improve HMO tenants’ rights

Government should aim to achieve a widespread “EPC D” standard for HMOs (amendment to the Energy Act

2011):

• EPCs to be issued to HMO tenants at point of letting;• Official guidance around the methodology to be used

in undertaking energy assessments in HMOs; • Both DECC and CLG should support local authorities

with better resources and data;• A private rented sector “ringfence” within the ECO

programme (+monitoring of take-up)

Local Authorities’ licensing and HHSRS responses:

• Consider additional licensing programmes in areas where there are concentrations of fuel poverty and very energy inefficient HMOs;

• Introduce minimum EPC “D” standard (alongside a requirement for EPCs) as a condition of HMO licensing;

• Take more robust action in requiring insulation and lower cost heating systems in HMOs identified as an excess cold risk in housing health and safety inspections;

• Other (referring) agencies: more active interest in minimum energy standards, education/ awareness

Literature

• Groth, Paul. Living Downtown: The History of Residential Hotels in the United States. University of California Press, 1999.

• Layard, A. (2012) Law and localism: the case of multiple occupancy housing. Legal Studies 32, 551–576

• Simpson, S. and E. Middleton (1997) Who is Missed by a National Census?: A Review of Empirical Results from Australia, Britain, Canada and the USA.