Agenda item - Public Involvement

5.1      There were no Petitions

5.2       Pip Tindall asked the following public question on behalf of Giuseppina Salamone:

“At the March meeting of the Housing Committee, Councillor Randall said that the council would be carrying out Living Rent calculations on the new council housing being developed, and the Head of Housing Strategy and Development promised to report on this work at the June meeting. Councillors wished to find ways to offer new council housing at a Living Rent, rather than an unaffordable 80% of market rent. Do these models include the option to extend the repayment period on the building costs of new homes, so that rents can be lowered without increasing the subsidy required?”

5.3      The Chair replied as follows: 

“A key Housing Strategy priority is support for new housing development that delivers a housing mix the city needs with a particular emphasis on family, Affordable Rent and where feasible, Social Rented housing.

The Government introduced Affordable Rent to help fund the development of new affordable housing using less public subsidy. Those homes developed with Government funding (and some existing homes when vacant), including those funded by use of Right to Buy receipts, are now let at a rent up to 80% of market rent. The extra rent enables the housing provider to borrow more money to pay for building the home in place of higher grant. 

Through our Tenancy Strategy (2013) we are committed to:

·      Ensuring that existing Council tenants will continue to enjoy lifetime tenancies within the existing Social Rent framework, with no conversion of vacant Council homes to Affordable Rent;

·      Keeping Affordable Rents affordable, ensuring that Affordable Rents to be set at the lower of either 80% market rent level or the Local Housing Allowance (LHA) limit.

Local Housing Allowance (LHA) levels that in practice frame tenant rent on new homes built at Affordable Rent have not kept pace with market rents in the city.  LHA levels do not reflect 80% market rent. When compared to (14/15) market rents LHA equates to 78% and 64% of market rent for a one bedroom flat and three bedroom house respectively.

Reduced public subsidy and higher income risks aligned to welfare reform have made borrowing to build homes for rent a much higher risk for Registered Providers with a significant shift away from development of homes for both Social Rent (no new homes planned) and Affordable Rent.

The City Council has responded to these challenges by initiating a programme to develop new affordable council homes for rent on HRA owned land.

Housing Committee unanimously agreed at its meeting on 6 March 2013 that a range of funding, rent and home ownership options should be provided in new housing to be developed on HRA land under the Estate Regeneration Programme in order to ensure that development is viable and to increase the number of new homes the Estate Regeneration Programme can deliver. The report indicated the level of Affordable Rents and the impact these higher rents would have on the number of homes the HRA could develop.

The proposal to this committee for Findon Road is for the scheme to be 100% Affordable Rented homes. The units have been modelled the lower of either 80% market rents level or the Local Housing Allowance (LHA) limit in accordance with the council’s Tenancy Strategy. This means that rents for this scheme are set at LHA levels which are in the region of 60-70% of market rent dependent on the number of bed rooms.  This also means that those tenants in receipt of full housing benefit will have their rents fully covered by benefit.

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There is no agreed formula for calculating a Living Rent and a number of concerns with developing another rent calculation. All rents are currently calculated in line with Government guidance for social rents for 2015. However for illustrative purposes only, a rental figure of £600 per month modelled for the Findon Road scheme and applied to all units regardless of number of bedrooms (based on 1/3 of an average local wage of £22K PA) would increase the subsidy required from the Housing Revenue Account (HRA) from £17K per unit to £71K per unit; an overall increase of £54K per unit.  Over the Findon Road development this is an overall increase of HRA scheme subsidy requirement of around £3.1M.  This is modelled over 40 years which is in line with housing sector standards where schemes are generally modelled on between 30-40 years.”

5.4      Ms Tindall asked if the living rent calculations would be presented at some point.  The Executive Director, Environment, Development and Housing replied that there would be a report to the next meeting of the committee showing the difference between different rental levels.

5.5       RESOLVED- That the Public question be noted.

5.6       The Committee considered the following deputation which had been submitted by Dani Ahrens, Pip Tindall, Leila Erin-Jenkins, Dave Bangs and Giuseppina Salamone. The deputation was presented by Dani Ahrens.  Ms Ahrens was accompanied by two private tenants who spoke about their difficulties in renting in the private sector. 

Private Sector Housing

“We are pleased to see that the committee is discussing private sector housing at today’s meeting. In our campaign we have talked to many people who feel that there is a real crisis in private sector housing in the city, and there is an urgent need to take action to tackle this crisis.

However, we were disappointed that the scrutiny panel’s recommendations do not match the urgency of the problem, and in some cases do not even follow from the evidence presented in the report. For example, the report discusses the need for truly affordable rented housing to be supplied, so that low paid workers can afford to live and work in the city. But recommendation 6 deals only with owner-occupied housing.

Having heard evidence of poor quality in rented housing, particularly that rented by students, the panel recommended a series of voluntary initiatives, led by the universities or by some unspecified agency (Recommendations 12, 13 and 14). While we do not object to these ideas, we think the council could and should take much stronger action.

Recommendations 15 and 16 are similarly weak, in the face of widespread unethical, discriminatory and exploitative practice by both landlords and letting agents.

The fact is that the private rented sector is not a level playing field in which tenants are “customers within a market” who simply need more information to enable them to “make rational evidence-based decisions” (page 21 of scrutiny report). There is a big imbalance of power between tenants and landlords. This is the main factor which determines the choices tenants are able to make.

To give just two examples of how this works, we heard of a case at our regular street stall recently where a tenant asked her landlord to replace an insecure front door at her home. The landlord agreed to do this, and, encouraged by this, she asked for a series of additional repairs, as is her right. The landlord responded by increasing the rent, which was already higher than the tenant’s entitlement to Local Housing Allowance. The repairs have not been done but the tenant has no effective recourse in law because she is not entitled to legal aid.

Another tenant faces homelessness after being evicted from her studio flat when her landlord decided to sell. She is able and willing to pay rent in the private sector, but because she is on disability and housing benefits, no letting agency is prepared to let a property to her. This kind of discrimination is extremely common.

In these circumstances, the council needs to do more than act as an independent arbiter of ethical behaviour. The council must enforce decent minimum standards for all housing in the city, by introducing a comprehensive register of private sector landlords. Landlords should be required to maintain their properties at a set standard of repair, safety and energy efficiency before they can be included on the register and permitted to let out property in Brighton & Hove.

We note that both the Labour and Green Party manifestos included a commitment to a landlord register, and urge the committee to take action to implement this as soon as possible”.

5.7      The Chair replied as follows:

“I would like to thank you for submitting this deputation.

Private rented sector growth was one of the key themes emerging from development and consultation on our new Housing Strategy.  The private rented sector provides a flexible market response to meet housing need.  However, there are issues around affordability and the impact of loss of family homes to housing in multiple-occupation (HMOs).  Many landlords recognise the long term benefits from attracting good tenants to well maintained homes.  However, concerns remain around management and standards in some parts of the sector and challenges around regulatory and investment responses which the council is committed to address.

Our Housing Strategy outlines a range of strategic actions aimed at improving the quality of housing and management in the private rented sector, in particular HMOs.  These actions reflect a number of points raised in this deputation.

Housing Committee today will also consider two reports both directly aligned to our priority of improving private rented housing.

Committee are asked to designate a further seven wards as subject to additional HMO licensing enabling a proactive and consistent approach to addressing issues with management and standards in smaller HMOs.

Committee are also asked to welcome the Scrutiny Panel Report on Private Sector Housing and request a formal response to Panel recommendations be prepared by officers for consideration at a future Housing & New Homes Committee meeting.

Whilst some of the aspirations of this deputation require government legislation, as we examine the Scrutiny Panel’s recommendations, we will work with our partners explore every means at our disposal to make a positive impact where we can.”

5.8       RESOLVED - That the deputation be noted.