How social housing can put wealth back into local communities

13 Nov 2020 Nick Garbutt    Last updated: 13 Nov 2020

Pic: Unsplash

In all the excitement that surrounded the announcement of a new housing policy last week, it is important not to forget the enormous role played by Housing Associations in Northern Ireland.

Last week a report was published in England mapping out how Housing Associations can build upon this to help power the recovery of the economy in the wake of the pandemic. It is equally relevant to the proposed landlord arm of the Housing Executive.

The report which was published by CLES, the national organisation for local economies together with the National Housing Federation builds on the community economy model which is gaining traction across the UK and elsewhere.

Many of the initiatives it details are also carried out both in Northern Ireland and England. The importance of the report is how it organises their potential impact into a coherent and potentially transformational programme.

Housing Associations are much more than social landlords and developers. They are also employers, builders, partners to other organisations and placemakers. As such they already wield significant economic power.

Collectively members of the Northern Ireland Federation of Housing Associations employ 3,200 people, have 53,000 homes and contribute £1.6 billion to the local economy every year.

The report describes Housing Associations as anchor institutions within communities. What it means by this is that they have set down an “anchor” in a place and are in a position to help develop local economies. It describes them as “an ethical form of ‘sticky’ capital, housing associations are not beholden to shareholders, and they do not relocate to cheaper climes. They have social purpose and are embedded in and committed to a particular place.”

The thinking behind this is that instead of relying on investment from elsewhere into local economies we should build on what is already there – and keep money circulating locally rather than allow it to haemorrhage out

It sees five areas where this can happen. Much of what is proposed here is already being done, the purpose of the report is to encourage the sector to see how all these activities can fit together with an over-arching purpose.

First is using its financial power locally.

Banks do not serve local communities well, not least because they are beholden to global financial markets. The past decades have seen mass closures of bank branches, fracturing any connection between the financial institutions and the communities that the serve. Lending to small local businesses is stagnating and individuals are struggling. In England community banks are beginning to emerge, in Northern Ireland there is already a successful well-embedded credit union movement with surplus assets. Proponents of community economies want to see Housing Associations working with credit unions to help keep local money circulating locally and investing in local projects through vehicles like the Social Housing Pension Scheme.

Second is through creating fair employment and just labour markets

Social renters are being especially hard hit by Covid-19.

Research has established that they are the most likely to be working in shutdown sectors; the most likely to be key workers facing heightened risk of infection and the least likely to be able to work from home.

Housing Associations already regularly offer employment support, advice and training to residents.

The report suggests: “As and when contracts come up for renewal, you could consider whether you could employ residents to carry out work that was previously contracted out.”

Housing associations have also made rapid progress in implementing the (real) Living Wage – it urges those who have not yet to do so and also to ensure that this also applies to businesses in their supply chains.

Third: Plural ownership of the economy

All too often local economies fail to benefit from economic growth. This is because the wealth created flows out of localities into the hands of shareholders as profits and dividends.

This is a major reason why even in periods of economic growth many local communities are left behind.

 The community wealth building model seeks to counter this by promoting locally owned enterprises which helps to ensure that at least some of the wealth is retained within communities.

Many housing associations already promote local enterprises and help community organisations to flourish. This is important work which, over time, will help empower communities to retain wealth.

Fourth: Progressive procurement of goods and services

The report points out that what Housing Associations buy, through which suppliers has a direct bearing on the livelihoods of individuals and communities. It argues that all should now review their procurement processes.

It states: “As part of this, you could also seek to understand whether your spend is ‘leaking’ out of your local area, and consider whether you could procure from, or support the formation of, local businesses to fill that gap.”

And: “This may mean refreshing the key ‘asks’ in your contracts and social value frameworks in response to new issues arising as a result of coronavirus. While different organisations are at different stages in their journey, at a minimum your organisation will want to be taking steps to ensure you have a social value framework, methods for measuring impact, and a clear focus on ensuring the social value delivered works positively to recover from coronavirus.”

Fifth: Socially just use of land and property

The report wants to see the sector building further on some exciting initiatives which are already underway in some areas around resident schemes such as food growing gardens. There are even some at a more sophisticated stage where locally produced food is sold in community cafes.

And where housing associations have excess land and buildings they cannot utilise it argues that they should consider community asset transfers to community groups or social enterprises.

Much of this work is already being done the report provides a framework and check-list to build upon this and help Housing Associations work together to strengthen local economies by helping them to retain wealth and to reverse the syndrome whereby local people never see the fruits of economic growth.

The community economy model is gaining traction. Northern Ireland is well suited to developing it and there is much to be gained for the sector, social renters and wider society.

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