Caught between a rock and a hard place
The issue …
There is a desperate need for more homes for people with a learning disability and other long-term disabilities – homes offering independence, but with support. Good quality homes to meet people’s physical and emotional needs. But mainstream housing associations aren’t building them.
Into the void have come private equity firms, tying not-for-profit organisations into long leases, with guaranteed returns for investors. The money is coming from the welfare benefits system, reliant on often extremely high rents and exemptions to normal housing benefit rules.
The Regulator for Social Housing has gradually ramped up the pressure on these arrangements, designating at least 10 of these ‘lease-based providers’ non-compliant with core regulatory requirements.
Why has this scenario arisen? And what can we do about it?
Advance is a specialist housing association, focusing on the provision of housing, care and support for people who need it – predominantly people with a learning disability and people with mental health conditions. We have a successful programme to purchase properties for shared ownership – Home Ownership for people with a Long-term Disability (HOLD). But this is not suitable for everyone.
We really want to develop more supported housing to rent, for our client groups, but we struggle to get schemes to stack up financially. Our preference is to take the ‘mainstream route’, to bid for capital subsidy from Homes England and to charge social rents or affordable rents, as defined by government. But we typically need at least 80% subsidy to make the finances work on a small, bespoke scheme providing suitable self-contained accommodation for people with a learning disability. That might equate to around £160,000 subsidy per unit, and that kind of grant level is not available.
Why are development costs so high for this type of housing? The reasons are many: small schemes without economy of scale; high space requirements to accommodate disabilities; high levels of communal space for tenants and staff; high specifications required in individual properties to meet needs related to disability and behaviour; additional costs of fixtures and fittings such as lifts; hoist tracking; wet-rooms or adapted bathrooms; need for sizeable outdoor space to meet emotional and behavioural needs; additional fire safety measures such as misting systems. The list goes on. The point is that good quality housing needs adequate funding, both capital and revenue.
Learning Disability and Autism Housing Network
Advance is really pleased to be a founder member of the recently formed Learning Disability and Autism Housing Network (LDAHN), working alongside other like-minded providers. We are pushing for a policy framework to enable the development of quality homes and housing services, specifically for people with learning disabilities and autism. In March the LDAHN launched its Charter, including four ‘calls to action’.
A call to action
I would like to focus on one of those calls to action, which goes some way to answering the questions I posed initially about why the current problematic scenario has arisen and what we can we do about it. The Charter calls for:
A rent standard that supports the commissioning and funding of new supported housing for people with high support needs.
The ‘rent standard’ sets out the rules for what social housing providers can charge. The rules allow rents in supported housing to be 5% above what can be charged in non-supported housing. Experience over the years has shown that is just not sufficient given the additional needs of our customers and the development costs I have outlined.
There is an exception allowed for. Higher rents, with no specified cap, can be charged in properties that meet the definition of ‘specialised supported housing’ (SSH). But in this case no capital subsidy from Homes England can be used.
There is no middle ground. We are really caught between a rock and a hard place. Either apply for capital subsidy but don’t get enough of it for the finances to stack up on social rents; or forego subsidy and charge much higher rents, reliant on housing benefit exemptions.
This problem is not theoretical. It is borne out by many years of experience across the country.
We need a realistic discussion about what could work to enable delivery of supported rented housing for people with a learning disability or autism. The solution is not that complicated.
There must be an acceptance that higher rents are often required, with a costed justification for why. Significantly higher than the 5% additional tolerance currently allowed. This needs to be supported by agreement that Homes England grant can still be used to support delivery. In this way we can bring the development of housing for people with a learning disability back into the mainstream. Making it possible for organisations like Advance – and everyone else in the LDAHN – to do what they desperately want and need to do: develop good quality, affordable homes, offering independence and support, that meet the physical and emotional needs of people with a learning disability and other long-term disabilities.
Executive Director of Housing
Advance Housing & Support