A new study on transfers of UK public housing estates to not-for-profit (NFP) housing providers over three decades gives a wealth of information about how similar transactions in Australia could maximise their potential long-term benefits and best support NFP housing sector growth.
The UK property transfers created NFP housing providers that are dynamic and resilient in the face of economic and social changes, and help the sector’s very substantial input to the national economy, presently accounting for more than two-fifths of all new housebuilding in London and a third of the national total across England.
The research, Transformative transfers: growing capacities in UK social housing, undertaken for AHURI by researchers from RMIT University and the University of Glasgow, also highlights the government-provided institutional support that was critical to the evolution of a sector.
The researchers found that a supportive national policy regime from 1989 to 2010 was a crucially important ingredient of UK success. Key components of this framework included a bond aggregator, coherent regulation, and links between non-profit providers and private funders.
Professor Duncan Maclennan from RMIT University, one of the research authors, says tenant participation was also critical to the success of the UK experience. ‘The requirement that proposed transfers could proceed only when backed by a tenant ballot had a key role in giving NFP ‘successor landlords’ community legitimacy and a mandate for clearly defined change.’
The study established that in working to transform run-down public housing systems, different capacities needed to be developed at different stages, both in housing providers and in government bureaucracies. The stages include during the initial policy planning process; after transfer; in a ‘settling-down’ post-transfer period (two to five years); a consolidation period of up to a decade; and as a mature provider often involving significant changes in roles, staffing, resources and governance.
‘In the UK, property transfers diversified the affordable housing sector, created new routes to private finance, and allowed non-profits to grow to an efficient scale. They were also important in shaping a flexible innovative housing association sector’, says Professor Maclennan.
‘But in recent years UK governments have largely abandoned property transfer policies, and housing associations in England have had to cope with ad hoc policy interventions that have changed their non-profit status and presented major risks to their businesses. We interviewed one despairing Chief Executive of a property transfer housing association formed by central government in 2015 that, within a year of starting, was facing new sitting tenant sales obligations, rent caps and a weakening of tenants’ rent-paying capacity due to benefit cuts. In combination, these changes posed a serious threat to the organisation’s financial viability.’
- The final report is available to download from the AHURI website here