Monday, 28 May 2012

Brighton's Housing Crisis – and the Socialist Alternative

In this “age of austerity” the government plans to reverse public spending to 1998 levels. Mervyn King, Governor of the Bank of England, anticipates that by 2015 the economy will only be at 2002 levels of growth, meaning a lost decade. Officially unemployment stands at 2.67million.

Andrew Clarke, Mid-Sussex UNISON Branch Secretary (personal capacity) 

Asda estimates consumers have £13 less per week than they did a year ago. This is a result of the onslaught of cuts meaning job losses, slashed pay and conditions. While we face these attacks and further cuts, leading more and more of us to struggle to make ends meet, the bosses’ that caused this crisis have seen their bonuses go up by 187% since 2002! The working-class and poor are being attacked through cuts to jobs, wages, pensions, benefits and their standards of living in general. But running through this constant bombardment is the issue of housing.

Even before the economic crash of 2007/8, the crisis in housing within the UK was acute. While public sector workers have faced below inflation pay rises (in effect a pay cut) the TUC reported last year that there are almost twice as many people now earning a third less than the median compared with 1977 and a significant number of workers have felt no financial benefit from the doubling in the size of the British economy over the past 30 years. So while wages have stagnated for many over the years house price inflation ran at around 5%, with the waiting lists for the dwindling social housing stock spiralling, and most working people finding it impossible to get onto the housing ladder. But this problem has only become worse following the crisis.

Brighton and Hove

In Brighton, working class people are hit harder than most in respect of housing costs and housing quality. Despite being in the “affluent” South-East, wages in Brighton remain below the national average, even more so when the rich millionaires are taken out of the equation, with the average wage around £16,000. Take into account the average price of purchasing a new house being over £240,000, and only 43 out of 2,542 properties in the entire of Brighton on the market at under £100,000 and the it becomes clear why so many people feel that there is no way onto the housing ladder.

Brighton has the sixth largest private rented sector in the country, one third of which are badly heated, out of date or poorly maintained, meaning 36,400 people are living in standards below those of government defined decency. Landlords have little incentive to improve the quality of private housing stock as the city is such a desirable place to live they can easily find new tenants. The estimated cost of bringing these homes up to standard is £138.9 million, or £3,810 per property. Compared to the profits made by private landlords this is a drop in the ocean and yet tens of thousands suffer as a result of their greed. 312 families applied to the council for homelessness last year.

New Builds

The ever deepening housing crisis has been revealed by new build figures. They show that the number of new homes built in 2010/11 in England has slumped to 121,200 - the lowest number since 1923 and 6% down on last year. London saw the largest decrease in new homes, with a 27% fall on the previous year. Meanwhile there was an increase in the number of mobile homes and 'temporary dwellings'.
But the rate of building for “affordable” homes is even lower. Between April and September 2010 there were just 13,626 new 'affordable' homes built, the lowest since 1945 and between April and September 2011 there were a paltry 454; 259 for social rent and 195 for low-cost home ownership. Even the definition of “affordable” can be challenged. Developers are required to make around 30% of new builds “affordable”, however, these rarely, if ever, go to supplementing the Council stock and instead are handed over to private housing associations or become low-cost housing with the rent subsidised for the first few years.
The council house waiting list in Brighton stands at 12,000, with nationally five million people on council house waiting lists. And meanwhile, due to the fall in the property market, 200,000 construction workers’ skills are wasted in the dole queue!
It is the lack of affordable housing that means more people are already stuck in private rented homes, paying rising rents and knowing landlords can boot them whenever they choose. Not only do 1.5 million of these private rented homes fail the government decent homes standard, 71,000 homes are actually dangerous and had serious 'Category 1' hazards (unfit for human habitation).
New housing proposals, announced the Con-Dems on 21 November, are woefully inadequate. They come nowhere near reversing earlier cuts to a budget that was already delivering historically low amounts of new housing. The government cancelled the £4 billion 'new homes fund' replacing it with a paltry £400 million.
Housing Benefit
The attack on Housing Benefit will have a devastating effect not just on the most vulnerable but on families and young workers too. The Housing Benefit cuts overall add up to £2.4billion of 'savings'. This is a drop in the ocean when compared to the cost of bailing out the banks at £850billion or even that Vodafone alone were let off a tax bill of £7billion. The benefit cap, the changes to the Single Accommodation Rate for young people and the changes in how benefits are calculated will force hundreds of thousands to move as the gap between their rent and their benefits grows.

The government’s own figures show that nationally 88,000 young people will be affected by the changes to the Single Accommodation Rate, which means people under 35 cannot claim housing benefit for a flat, forcing them to live in shared accommodation. Reports also show that this kind of accommodation is in desperately short supply in many areas and even where it does exist there is prejudice from many private sector landlords to deal with anyone claiming benefits.

The government’s answer is to insist that cutting Housing Benefit levels will cause landlords to reduce what they charge. But predictably, most landlords are saying the opposite. In areas with cheaper rents especially around London and in the South East, landlords are anticipating that the Housing Benefit changes will create greater demand. As people are forced into those areas from Central London and other high rent areas, the landlords see it as an opportunity to put rents up! There are also massive knock-on effects that these changes will have on local services as more people move into an area while local government funding is being cut.

Hastings among other destinations, will be affected by the sudden rise in residents leaving London after the benefit changes go through. However more than 40% of Hastings' workforce is employed in the public sector, unemployment is already high, and in 2010 more than 2,000 people were registered in need of housing; need that was not already being met.
Shelter expected 35,000 people to be turfed out of their homes between November and Christmas 2011. Homelessness is rising and overcrowding is rocketing as people are stuck in expensive and insecure privately rented housing. The number of homeless people in Brighton has nearly doubled over the course of 2011. Leaked government memos show they think 40,000 could be homeless simply as a result of the first round of benefit changes. More than 1,500 Sussex households faced repossession last year according to Ministry of Justice figures, with 220 taking place in Brighton last year.
Overcrowded family
565,000 households are living in overcrowded conditions in England according to Shelter (2009)
No wonder then that there has been an increase in the amount of squatters occupying empty and derelict properties. This has prompted the government to clamp down further. Currently, the only situation where squatting is illegal is if the squatter refuses to vacate a property that is due to or is already occupied. The new law will make squatting a criminal offence rather than a civil offence and end the lengthy process of home owners having to fight legal battles in the civil courts in order to evict squatters. It will allow police to force entry and arrest anyone who has occupied a property. Squatters could even face a prison sentence under the plans if prosecuted. Hove MP Mike Weatherly firmly supports these law changes.
A call has been made by SNOB (Squatters Network of Brighton), backed by the Green Party, for licensed squats. This would mean an agreement between the squatters and the landlord allowing squatters to stay in the property until it is needed by the landlord in exchange for improvements and maintenance. While this will be a big help in many cases, it is still a very precarious existence. Not everyone in need of housing will be willing or comfortable starting a squat. A huge question mark would hang over the heads of squatters waiting for a license and over those with a license waiting for the landlord to 'bring the property back into use'. It can only be a temporary and imperfect answer to the housing crisis. 

In America the Occupy Homes movement is taking back empty properties and returning families and individuals to their homes after foreclosure. Squatting can be an important weapon not only against existing homelessness but against a further rise in people losing their homes to protect bank profits. However that campaign must be linked to the wider question of house-building, renovation and making unused properties available, and provided as a social right at genuinely affordable mortgage or rental rates. Council housing stock needs to be expanded and removed from housing association control, properly funded and run democratically by tenants. The Socialist Party campaigns for a new mass workers party in Britain that can build a national movement to improve the availability of housing to poor and working-class people. Such a party (or even a socialist led council, as in Liverpool in the 1980's), alongside an upsurge of workers' struggle especially in the construction sector, can force the expansion of housing stock and build the strength and organisation of the working-class; an essential requirement for opposing all cuts. 
Such a campaign will also strike a blow at the big landlords. Despite many landlords specifically excluding prospective tenants on benefits due to prejudice, housing benefit is in effect a subsidy to landlords. Spending on Housing Benefit really started to rise as private sector rents were deregulated and landlords were allowed to charge what they liked. In 1979, it was 12% of  all government spending on housing - by 1997 it had grown to 69%. If affordable and decent social housing were freely available not only would a mass house-building and renovation program create jobs, but it would provide homes to those in need, undercut and go a long way to eliminating the stranglehold of big landlords.
End the Housing Crisis

The city of Brighton and Hove already has over 1,000 empty homes (BHCC Jan 2011) which can be brought back into use through existing legislation including Compulsory Purchase Orders and handed over to the supplement the Council’s dwindling stock. This will have to be publicly owned and run democratically by tenants, the local council and the trade unions. It has previously been suggested that co-ops or private housing associations can take on these properties, however, this would be an open door for private companies to profit from housing, cutting corners and raising rents. Council housing stock to be allocated on the basis of need to those on the housing waiting list. In 2007 Brighton & Hove council housing tenants dealt a huge blow to New Labour's rampant privatisation agenda with a 77% vote in favour of staying as council tenants and reject a new private housing association as their landlords.

But bringing empty properties back into use would only solve part of the problem. The demand for new affordable family homes needs to be addressed. The Green leaders of the Council should then look to the Militant (forerunner of the Socialist Party) and their leadership of Liverpool City Council during the 1980’s. By defying Thatcher’s cuts and setting a needs budget based on the demands and requirements of the working people of Liverpool, the socialist led Council received £60m from the Thatcher government and with it built 5,000 new homes, together with leisure centres and community facilities and in the process created 12,000 new jobs. (P. Taaffe – Liverpool: A City That Dared to Fight)

Crisis of Capitalism

As Marx explained, economic recession is an inherent part of the crisis ridden capitalist system, however, it was the inflation of house and real estate prices, most notably in the USA which pushed the unstable and unsustainable system into meltdown. In search of high profit rates a phenomenal amount of speculative finance flowed into the housing market. The poor and vulnerable were preyed upon by banks in an effort to open up a market for finance as the economy worked its way to the end of its rope. In the past two decades, with the shift towards finance as the key motor of global capitalism, bubbles emerged in markets like housing. Housing is a basic necessity in life and will always be in high demand, but with the low rate of new-builds and the lack of social and affordable housing, price inflation can easily be triggered. This spiral reinforced the growing market for cheap and exploitative mortgages and more and more homes rise out of the average price range.

Capitalism, faced with a profits crisis in the early to mid 1970's, waged a social war against the working-class in an attempt to return their system to profit. Neo-liberalism over the past two decades has seen attacks take place against the wages and conditions of the working-class while the economy expands, these attacks are currently going into overdrive under the Tory government. Workers wages as a share of GDP by 2011 had dropped to 53.8%. This meant that workers were taking home £60 billion less in 2011 than they would have if the wage share had remained at 1978 levels. This amounted to a cumulative loss of approximately £1.3 trillion (figures from the TUC).

Only one tenth of the proposed cuts have been implemented by this government so far. However the price of returning capitalism to profit has been steep for the working-class. A deep irony plagues the capitalist system in Britain, Europe and America; that transferring even more wealth from the working to the capitalist class is undermining the economy itself, with demand falling as incomes decline. Yet they have no idea how to resist the destructiveness of their own system, so they embrace it instead.

The economy shows how insane and outdated the capitalist system is, and this is clearest of all in housing. No greater example of this can be given than in East London. Due to the Olympics increasing reports say that people are being forced to move during the month or face rent increases and clauses are being written into new contracts saying tenants have to be away for the Olympic month. Shelter said “It’s a strong possibility that a large number of East London tenants may face eviction, rent hikes and losing their homes as a result of the Olympics.” Yet again, like Beijing and Johannesburg, the Olympic games highlights the inequality of capitalism.

We call on the Green councillors or Brighton and Hove, and councillors around the country to follow the legacy of the socialist councillors in Liverpool in the 1980’s and fight for funding to be returned to the city in order to embark on a house building and renovation programme to provide additional council housing stock, bring back into public ownership all empty, derelict and redundant properties and to defend the rights of squatters who have no option but to take their housing needs into their own hands.

There is a desperate need for the economy to be run under a democratic and rational plan to reflect the genuine needs of ordinary people rather than the profits of a tiny minority. The alternative is a democratically organised socialist society able to address the needs of the masses, not line the pockets of the millionaires. 

We call for:
  • A mass house building programme and renovation scheme should be used to create jobs and apprenticeships on trade union pay rates, that can alleviate the current crisis.
  • A living minimum wage for all – no youth rate.
  • Reverse all job cuts. We didn’t cause the crisis, we shouldn’t have to pay for it with job cuts.
  • No cuts to homelessness services.
  • Councils take over and reopen empty properties as affordable housing.
  • All housing and housing benefit cuts should be reversed.
  • Councils and councillors that claim to be against the cuts should refuse to implement them.
  • No age discrimination in benefit entitlement. Young people don’t have lower rent and bills so we shouldn’t have lower benefits!
  • The provision of high quality and affordable housing.
  • No shortcuts in new buildings. Legislation to prevent developers building tiny cramped houses.
  • All new council housing should meet the minimum recommended space requirements.
  • Rents should be capped at an affordable level. Councils to check on this.
  • Councils and the government should build affordable housing.
  • Banks and building giants should be forced to provide cheap, no or low interest mortgages. When they refuse we demand they should be fully nationalised and run them to meet social need.
  • People should be offered the opportunity for mortgages to turn into affordable rents.
  • Councils should set up hotlines and enforcement officers to report and tackle rogue landlords who are trying to force tenants out during the Olympic period.
  • After the Olympics, it’s infrastructure should be used to benefit the low paid and young. With the Olympic village used to provide affordable housing and pools and areas opened for public use with low costs.
  • Tax the super-rich! For a socialist government to take into public ownership the top 150 companies and banks that dominate the British economy, and run them under democratic working-class control and management. Compensation to be paid only on the basis of proven need.
  • A democratic socialist plan of production based on the interests of the overwhelming majority of people, and in a way that safeguards the environment

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