Why is it so difficult to build Social Housing?

The Grenfell tower disaster has put a spotlight on social housing. Arthur looks at why it is so difficult to upgrade the current housing stock.

Money. Money is the reason that most things happen in the world. However, when it comes to the reason almost every council in the United Kingdom is finding it so difficult to build social housing, there are a plethora of reasons…but a lot return to the issue of cash.

Land Shortage

It’s no surprise that on a tiny island, where most of the land is given up to agriculture, there isn’t that much land ready to be developed on and what is, is vastly expensive. The problem is exacerbated in Britain’s historic cities. London has historic landmarks on every corner that are protected and cannot be torn down. Furthermore, London actually has restrictions on where you can build high-rise buildings to protect the views of/from these buildings. This means it is very difficult to find a space to build large projects and, when you do, it is very pricey. Then, you have the option of building on the green belt…that is just a no go right now.

Planning

To buy land in order to build social housing, you need to have investors. A piece of land may go through several different investment companies before it eventually lands with a company that is prepared to build on it. With each company comes a re-zoning process and new plans that must be approved. This is where the issues really start and where the promises that are made in regards to social housing tend to fall flat. The first investor company to buy the lad may promise to provide 40% affordable housing in their redevelopment. The next company will come in and suggest that it will build 25%, but they will build a park and donate some money to a community project. This goes on and on until there is virtually no social or ‘affordable’ housing left in the project but the community is getting a new park and some better roads.

Why?

You guessed it, money. A housing development company would much rather donate a large amount of tax-deductible money than build housing that they can make very little profit on. They can give huge donations to charitable causes and then be able to build a far greater proportion of luxury accommodation that they can then sell or rent and receive a much higher return. This makes sense, they are running a business.

The buck stops at the councils who approve these plans. Each council has a target and a set proportion of social housing that much be built in new developments. However, if they miss their targets there are very few repercussions. Instead, in a time where fiscal frugality is the taste of the day, the council decides to take a quick fix and take the money, allowing them to put more money into road repairs, park maintenance etc. However, this is a very short term way of thinking. The roads won’t matter if people can’t afford to drive on them.

These issues come together and create a huge problem for social housing and the community. The councils now need to take a hard stance to ensure that the current social housing stock is replenished.

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