Social Housing United?

Dr Tony GilmourAustralasian Housing InstituteHamilton, 27 September 2010

Presentation Overview

• International perspectives on the ‘social housing’ sector

- Historical development & current balance

- What is it like for housing staff?

- How would a unified sector work? City region examples

• Stock transfer case study – Trafford Housing Trust

• Reflections for Australia

International

Perspectives

Public and Community Housing• Historically, community housing

dominant – philanthropy, model housing companies, co-ops etc.

• Mid 20th Century pre-eminence of large volume public housing

• 1960s: community housing expands through activism (CDCs, co-ops)

• 1970s+ state coordination of community housing - public housing residualised. Grant funding (UK 1974, US 1974 CDBG, Aus 1984)

• 1980s+ Market forces for community housing, and move to mixed funding models (US 1986 LIHTC, UK 1988, Aus 2008 NRAS)

• 1990s+ Stock transfer (UK 1993; Aus 2008) and public housing renewal leading to new management models

US UK Australia

Population (2009 est.) 302 million 60 million 21 million

GDP per capita (2009) US$ 46,400 US$ 35,400 US$ 38,500

Gini Coefficient (2007)Inequality of income distribution – high is more unequal

45.0 34.0 30.5

% tenure: homeowners 68% 70% 70%

% tenure: social rental 3% 20% 5%

% tenure: private rental 29% 10% 25%

Social housing units (approx) 4.6 million 5.1 million 0.3 million

% of above community housing (approx)

30% 50% 10%

Sources: CIA World Factbook (2009); Harvard Joint Center (2007); UK National Statistics (2009); CHFA (2007)

Social Housing Compared

Staff Recruitment & Transfers• Community housing staff join from a variety of backgrounds

(public, private, non-profit), though normally within the same region

• In US recruitment of tenants as staff not uncommon, as community empowerment (25% in Oakland)

• Intra-sector staff movement common between community housing organisations and banks, trade associations, regulators etc. More in US and UK

• In US and Australia, staff movement between public housing and either community housing or network organisations are rare

• UK movement of staff from public to community housing took place as part of stock transfer - less of a choice by staff

• Importance of protecting staff terms on transfer (Transfer of Undertakings Public Employees, TUPE, in UK)

Staff Salaries

• Little reliable data though strong anecdotal evidence that public housing staff paid more than community sector in US & Australia‘I dream of the day when people jump from the public sector to the non-profit sector, rather than they cherry-pick the best ... The public sector fund us and in a way keep the funding down so that we get paid less than they get paid, and that they can recruit from us’ (San Francisco community housing executive)

• Lower salaries often compensated by better perks, flexible terms, working hours, health care (US), tax (Australia), job satisfaction‘Our benefits package is so rich that people can afford to leave positions where they are making more money and go and work for us for a lower base wage’ (San Francisco community housing HR executive)

• By contrast, UK community housing staff are better paid and said to also have enhanced working conditions than public housing

• In all 3 countries, comparable jobs (eg IT, HR, property development) better paid in the private sector than either community or public housing sector

Community Housing Executive Salaries• Seldom disclosed in Australia, compulsory

in UK and US for regulation and charity rules

• CEO of medium sized community housing organisation in San Francisco paid c.A$175,000, in Manchester c.A$250,000. These salaries are comparable with private sector

• UK’s highest paid community housing executive paid £391,000 (Anchor Trust). PM David Cameron paid 36% of that - £142,500 - plus rent-free residence at 10 Downing Street and a government-supplied bike!

• Michael Lennon paid £190,000 when running Glasgow Housing Association

Some Theory: Organisational Fields• Network theory used to understand how organisations inter-

relate: ‘New institutional theory’ from US

• Organisational field: ‘organisations that, in the aggregate, constitute a recognisable area of institutional life’ (DiMaggio & Powell, 1983)

• Do organisations themselves (and the media) think that various social housing providers are part of a common mission?

Public housing

providers

Community housing providers

Private affordable housing

providers

Social housing

Public housing

providers

Community housing providers

Private affordable housing

providers

Drivers of a ‘Social Housing’ Field

• Types of providers supplying/managing publicly subsidised housing: public, private, non-profit, hybrid?

• Does regulation cover all provider types (‘cross domain’), or do certain rules applicable to just one type?

• Are common financing techniques used by all provider types? e.g. who can apply for NRAS incentives?

• How are trade and professional support organisations structured? e.g. who can join NSWFHA, AHI etc?

• Do staff switch between different types of providers? e.g. move from public to community housing organisations?

• Do the media, universities, government, tenants, consultants etc. think the sector is engaged in a common mission

City Region ComparisonsSan Francisco Bay Area Greater Manchester Metropolitan Melbourne

Providers (in order)

Community housing Private developers Public housing

Community housing ALMOs Public housing [minor] Private developers [minor]

Public housing Community housing Private NRAS developers [minor]

Regulation Via tax credit compliance, common to community housing and private developers. Unlike UK & Australia, no housing regulator

‘Cross domain’ regulation of all providers by Tenant Services Authority (TSA) from 2010

Separate regulation for community housing providers. NRAS compliance procedures same for community housing and private developers

Financing Via tax credits, common to community housing and private developers. Public housing financed from Washington DC

Moving towards consistent funding of all providers by Homes and Communities Agency (HCA)

NRAS funding same for community housing and private developers (though tax treatment different). Public housing separate

Trade associations

Inclusive of all providers and wider sector, but not public housing

National Housing Federation (NHF) mainly community housing with ALMOs as associates. Newer trade associations are more inclusive

Peak bodies such as CHFV, NSWFHA exclusively serve community housing members. Also applies to newer trade associations(PowerHousing)

Professional associations

None exist Chartered Institute of Housing (CIH) covers all provider types

Australasian Housing Institute (AHI) cover public and community housing

Case study research

Few community housing employees even mentioned public housing during interviews. Negligible staff movement

Public housing negligible. Main issue is link between community housing and ALMOs, where there is some convergence and staff transfer

Public housing identified as ‘the other’ by community housing staff. Low levels of staff movement between public and community sector

Source: Gilmour, T (2009) ‘Network power: an international comparison of strengthening housing association capacity’, p.245. University of Sydney thesis. Available at www.tonygilmour.com

Research Findings

• Complex pattern – move to a social housing sector not inevitable!

• Regional variations significant - based on tenure patterns and power of organisations (3 city regions all vary from national trend)

• Move to a social housing sector strongest in UK, driven by clear finance/regulatory ‘cross domain’ agenda. Probably an unintended consequence – main motive was increased provider competition

• No evidence of social housing sector in US. In Australia, limited to some staff movement and positioning of AHI

• US and Australia share tax credit/incentive model covering private and community providers. In US, private sector important (75% tax credits), hence some alignment with community housing providers

Case Study: Trafford Housing

• Enthusiastic implementation of New Labour housing policies: Large Scale Voluntary Transfers (LSVT) to community housing, Arms Length Management Organisations (ALMO), Private Finance Initiative (PFI)

• Differences between the county’s 10 LGAs:

- 6 whole-stock ALMOs

- 1 part ALMO and part LSVT

- 1 split-stock LSVT

- 1 whole-stock ‘traditional’ LSVT Trafford

- 1 ‘salami sliced’ LGA of 80,000 homes: 8 LSVTs, an ALMO and 3 PFIs (Manchester City)

• No one single pathway to UK public housing changes

Manchester Housing Transformation

Manchester: City of Revolution

Source: Gilmour, T (2009) p.81. Figures for county of Greater Manchester

Trafford Stock Transfer (1) Background• Located SW Manchester, 220,000 residents. Extremes of

wealth and poverty: mansions, tower blocks & ‘Coronation Street’ terraces

• ‘Tory’ Trafford fell to Labour in 1996. Left feared losing power so LSVT to ‘recreate council housing in exile’

• 2004 tenants vote 73% for transfer to newly formed community housing organisation ‘Trafford Housing Trust’

• Transfer uncontroversial – though often not (union lobbying and ‘Defend Council Housing’). Birmingham and Camden voted ‘no’

• Council received only £4.3 million for the transfer of 10,000 homes, barely covering their legal costs (£430 per property!)

• New management had no intention of being ‘council housing in exile’, and introduced progressive changes

Trafford Housing Transfer (2) Benefits• £454 million investment to reach

‘Decent Homes’ standards by 2010 as only 47% properties ‘decent’ on transfer. Funded 42% from cashflow and 58% by new bank loan

• New board 1/3 councillors, 1/3 tenants, 1/3 professionals. Major power to residents in 5 regions, including discretionary funding

• Tenant satisfaction up from 73% in 2007 to 82% in 2008. Estimated 99% of urgent repairs completed on time

• However, many tenants think they still live in council housing not community housing!

Trafford Housing Transfer (3) Insights• Staff of 270 transferred from public sector in 2005, but

needed to recruit executive team, IT, HR and other support staff

• Total staff 380 in 2008. Of these, 200 transferred and 180 new appointments since 2005. Quite high attrition rates

• Staff moved in 2007 to single employment contracts based on community sector standards. 97% of staff voted in favour‘We inherited a lot of bad practice and in the first year, we seemed to spend a lot of time sacking people… We did have a very big turn over in that first year. The other thing that was happening at that time was that we inherited a very low paid organisation and an organisation that didn’t feel valued and we were on a local authority pay-scale – where everybody got a pay rise every year whether they were good, bad or indifferent which tends to drive a culture of mediocrity’.

‘We’re trying to change our managers from managing tasks to their managing people. So what we said to them is that you’re the reason that your people perform. You’ve got to underpin that performance and it’s your job, your only job to get your people to perform. And I think that’s been a real culture shock to a lot of people. We’ve lost some of our managers who’ve said well actually I don’t really like managing people, I just want to get on with the job’.

‘It was a definite dog. We had people come and tell us it’s a dog, so we knew that … they were using [the transfer] as an opportunity to throw all the shit over the wall’.

‘Transfer allowed a focus only on housing so could build values and focus on services in a different way. A massive change in the culture, far bigger than I could ever have hoped dreamt of or hoped for to be honest’.

Five Myths of UK Stock Transfer• Public housing was given to community housing groups.

Wrong! It was sold where there was a positive value, paid back from loans

• Existing community housing groups built capacity through transfer. Mainly wrong! Most stock went to newly established organisations

• Stock transfer to community housing groups was how UK public housing was renewed. Partly wrong! There were many other options – ALMO, PFI, Community Gateways, council control retained

• LSVT raised vast sums for the Government. Partly wrong! Only true in areas where stock was in good repair, generally not in big cities

• LSVT is all about stock transfer. Partly wrong! Capacity was built through transferring staff, managers, head offices, procedures

• Tenants had no say. Wrong! They voted on the transfer, form 1/3 board directors and had to be ‘engaged’

Reflections for Australia

Can we Learn from Overseas?• Tradition of copying British models and trends (including

AHI), despite considerable differences in sector scale, funding and policy

• British experience ‘de-problemitised’

- Stock transfer only one pathway to reforming public housing

- Community housing increasingly criticised in Britain, Netherlands

- British policy has changed over time

- Regional patterns are diverse

• Australia has more institutional similarities to US in sector scale, funding and state-based devolution

- We may follow US and not see a ‘social housing’ sector

- Unless a major move towards stock transfer

Stock Transfer Pathways

• Australia currently following British approach of ‘small scale’ stock transfers (1970s-1990s). Quite different to the more complex and contested ‘large scale’ British transfers from 1993 (LSVTs)

• Even if we followed Britain LSVTs, Australian outcome different:

- few very large state housing authorities

- salaries higher in the public sector

- less concentrated stock, fewer social problems

- lower tenant income support, less debt possible

• Policy makers should not look at ‘traditional’ transfers like Trafford, but ‘salami slicing’ Manchester - creating smaller organisations

• We should innovate. Arms length companies or 2-stage transfer as interim steps?

2020: Winners and Losers

If we transform the NSW social housing sector:

• Tenants: community housing tenants normally more satisfied. However, new housing organisations may or may not be more accountable – not inevitable - depends on how set up

• Staff: well trained, flexible staff should have more opportunities in a transformed sector. Middle management public sector staff may be challenged. Higher pay in community housing, perhaps excessive?

• Public sector: if loses ownership and/or management role, will continue to be important in coordinating housing strategy

• Support organisations: peak bodies such as NSWFHA will need to broaden base. AHI well positioned in the sector, but must build own capacity and lead expansion of professional training

Social Housing United?

Pawson, H. and Gilmour, T (2010) Transforming Australia’s social housing: pointers from the British stock transfer

experience. Urban Policy and Research 28(3). pp.241-260

tony@elton.com.au www.tonygilmour.com