Pay to Stay?
According to the government, there are between 1,000 and 6,000 households in social rented housing in England where the combined family income exceeds £100,000 per year and between 12,000 and 34,000 households earning more than £60,000 per year. The government believes that there is ‘no case for very high earners’ to benefit from subsidised housing and proposes to develop a national strategy to allow landlords to charge a higher rent to these households. (80% of the market rent until primary legislation allows full market rents).
Beginning of the wedge
It is obvious that this will not be a one-shot policy. If someone earning over, say, £100,000 per year has to pay market rent (let’s assume double what someone on income support pays, though it could easily be more, e.g. in central London), then there will be no reason why someone earning £60,000 should not have to pay one and a half times, and someone on £40,000 an uplift of 25%, and so on. It is a return to the means-tested rents which were not uncommon before the war and even after.
The proposals will undermine attempts to create sustainable communities as in Fair and flexible: statutory guidance on social housing allocations for local authorities in England, DCLG, December 2009. The policy is destined to produce sink estates where only those with no or low-paying work will live. This cannot be a good thing, whether for the residents of those estates or more generally and will inevitably lead to an increase in anti-social behaviour (as to which, see our last post, here).
The implications for existing tenants are clear. There will be real pressure not to look for better paid work, if the effect would be to cause rent to increase dramatically. Households will face difficult and unpalatable decisions about what sort of work to look for and accept. There may also be equality issues that will arise, e.g. an incentive for women to stay home and care for the children, rather than go out to work and increase household income.
The wider implications
Imagine how far this principle could extend. If it is right that the better off pay more for their housing, why should they not also pay more for their education? Why should the NHS provide free health care to the wealthy? Perhaps the fire brigade should charge a fee before assisting higher-rate tax payer who finds his/her house on fire? These propositions are absurd on their face. So why is housing treated any differently?
This is a misconceived policy ostensibly aimed at a small number of families and households, which will have far reaching potential consequences. It is a nakedly ideological drive to recast social housing as a welfare benefit only for the poorest and it should be opposed.