Our regular policy and practice update
14/04/10
Michelle Chivunga, South East Policy and Practice Officer, gives an overview of the key policy issues coming out of this year's annual conference.
We're all waiting to see who comes into power following the elections. Whoever does faces many challenges, especially with limitations on public spending. With this in mind, I thought I'd share some of the messages that came out of this year's CIH South East conference.
Over the last couple of months, the regional committee's work has been dominated by the 21st annual conference which took place in Brighton, 2-4 March. The event was a huge success with key speakers including former Mayor of London, Ken Livingstone; South African Minister of Housing, Bonginkosi Madikazela; Oliver Kamm, columnist for the Times; journalist from the Financial Times, Merryn Somerset-Webb and David Edwards, Regional Director, Homes and Communities Agency.
Here's a brief outline of some of the key messages coming out of the many sessions.
Coping with financial cuts
Richard Capie, CIH Director of Policy and Practice, provided a useful policy update while Steve Amos from Barclays Bank gave delegates an insight into trends within the financial sector and their impact on housing providers. Housing providers face difficult choices as budgets are cut, and the effects of the recession continue to pose real challenges. They need to revisit their business plans and use resources innovatively, without compromising the quality of their services and products.
Tenants' choice remains an important factor - issues around limited choice, mobility, overcrowding, worklessness and deprivation need to be addressed. A clear allocations policy is key. The system remains poorly understood and there is still no real answer for people at the moment who aren't able to access housing.
Providers need to embrace financial inclusion strategies and look beyond the short term, relying less heavily on government funding and developing the skills to explore new funding opportunities, including joint ventures and partnerships.
Recession to recovery - don't panic!
This session was chaired by CIH President, Howard Farrand who emphasised the need to put housing higher up the political agenda and being very clear about the offer that housing has to make.
Journalists Merryn Somerset-Webb and Oliver Kamm provided delegates with a stimulating focus on housing and the economy, highlighting the dynamics of the housing market, financial pressures and the impact on wider macro-economic issues.
Merryn outlined why the trip to recovery will be long and difficult. She described the next five years at least as being very 'nasty' with issues of affordability, fluctuations in economic indicators, conflicts of interest and changes in legislative frameworks having a significant impact.
There was debate around abolishing stamp duty which, to a degree, hinders and impacts on affordability and labour market mobility. Interestingly, following the budget, stamp duty for homes worth up to £250,000 was removed - a positive step for first-time buyers.
And the housing market should take credit for its ability to remain resilient through the recession - many housing providers have developed innovative new models to cope with the difficulties.
Oliver gave an outstanding outline of the recent journey into recession, speaking of the impact of a dysfunctional financial system which is set to scar the economy for years to come. Although the financial sector collapsed to historic levels, asset management divisions coped much better.
His key messages centred on the challenges of the budget deficit, debt crisis and the banking sector's high levels of risk that will continue to impact on the economy as a whole. Housing has obviously suffered significantly but it's critical to understand that the housing market is more of a symptom than a cause of the downturn.
There are real benefits to exploring the opportunities of a healthy rented housing sector and the investment potentials offered by the private sector. Growth will be volatile and cuts in public expenditure necessary to ensure fiscal stimulus. The housing sector doesn't need to be engaged and keep showing its credibility within the market place.
International perspectives
The conference benefited from international representatives from Germany, South Africa, Chicago and Denmark. Different speakers shared varying scenarios of housing experiences in their individual countries. It was clear that in Europe there is less emphasis on home ownership but a strong presence of rented housing which works well in some places.
Germany is dominated by rental housing while social housing forms a tiny proportion. Issues centre on social segregation and, in the near future, limitations in the subsidy for regenerating existing stock will add extra pressure.
The Danish rental market is huge with new-build growth being significantly limited over the last few years because of building regulations. Many issues are outside the housing market sector and, in general, societies have sound savings that has helped many through the recession.
In Chicago, social housing funding is predominantly from central government and demand for federal money has increased project by project. A high proportion of homeowners are in negative equity and, last year, the area saw 15,000 foreclosures which will have huge implications for neighbourhoods and deprivation. Chicago has, however, seen an increase in housing activity with new entrants developing new affordable housing. There is a shift in public policy for more rental housing with less emphasis on home ownership.
The South African housing market falls within a different context. As a developing country it has seen the private sector struggle but, with the onset of the World Cup, there's bound to be increased activity. South Africa has benefited from a significant increase in the national housing budget which will help meet programmes across the nine provinces. There are a minimal number of housing associations and a significant proportion of people purchasing property from their local authorities.
The future focus will be on medium-density housing, increased community engagement projects and the need to build capacity, education and skills.
Download this year's conference PowerPoint presentations
If there are any policy topics or events that you would like covered, please email Michelle on michelle.chivunga@cih.org.