Housing Associations — maybe not what you think?

Hello. It’s a fair bet that most of you have lived in a house or flat at some point. Maybe even now. Your home is a machine for living in. Housing is something we all have a view on. Housing associations though? Maybe you don’t.

So where do housing associations fit in? Why don’t they have the same recognition? What’s their identity? Can we even agree on their name? Its still met with blank looks when I mention I work for one at business events sometimes. Or suspicious looks, it has to be said. The concerns and fears about tenants and what they might do to communities and (let’s be honest) local house prices often surface, and not just at the meetings I go to.

The starting point is they attempt to address a most significant market failure in housing in Britain, and it is not a new problem. Almshouses, the original format, goes back hundreds of years, and there are plenty of Victorian philanthropist social housing endeavours, such as Cadbury’s Bourneville. There is nothing new about poverty, nor some of the attitudes to it in society now. We provide good homes to people who otherwise could not afford them. It requires subsidies, sympathetic regulation and ingenuity to do this well.

Social activism in the seventies was behind the founding of many housing associations and they bear the hallmarks of that time, as do the stock transfer housing associations which were subsequently created when Local Authority properties were transferred to new housing associations. This then allowed the stock transfer housing associations to attract loans, act more commercially and improve the stock in a way that would not otherwise have been possible. Indeed the whole sector has received billions of pounds of lending and similar sums of government grant to achieve their aims and build new homes over the years. Housing is an expensive, complex and sometimes volatile business, and needs support from government and commercial savvy if it is to thrive.

In this short article I will argue that housing associations are a hybrid of all three legacies, and this is one of its great strengths. However the diversity needs to be managed carefully and the identity of housing associations may have suffered as as a result.

Housing associations are like a three legged stool, being part charity, part public sector and part commercial business. Only a small part of the Venn diagram below has an overlap in the middle, as most organisations and colleagues have a tendency to move into one of the three areas when under pressure. Personally I have worked for a charity and a big four accounting firm in my past, so I am least likely to scuttle into the public sector circle, and maybe find it harder to relate to colleagues and organisations who prefer to be in that space, for example.

Notice also that its possible for each of the circles to overlap. Charities and the public sector have an interest in social justice, for example, and interesting collaborations are a feature of many a housing associations I have been involved with.

But it is not the case that one leg of the stool is any better than the other, they all have their pros and cons. The stool becomes unbalanced if the weight of the organisation sits far away from the centre for long periods of time. I can think of a few housing associations which have made this mistake! (Naming no names) Of course the art of this is knowing when a housing association needs to be acting as part of the public sector (in local regeneration schemes as a trusted partner) as a commercial business (raising new finance) or a charity (running employability schemes) for example. Sometimes this is obvious and sometimes less so. Where might a Big Lottery Grant in partnership with Health that reduces the overall operating margin fit in for example? Under which leg of the stool should it be managed?

It also tends to be an open and collaborative sector, which is massively rewarding to work in I find, but can also blur the boundaries of roles and accountability at times. Housing associations can suffer mission creep and as the partner of so many organisations can get pulled in many conflicting directions if not careful.

But perhaps the three legged stool model is its strength and why it has managed to survive so well so far. It allows the sector to weather the storms and reinvent itself periodically when it needs to. If the price for this is an identity that is a little opaque then, so what?

Maybe. Or is it really about societial attitudes to poverty and the discomfort of the average person in even talking about poverty which is the root cause of the identity challenge. I hope to be wrong about this, but I fear I am not.

But surely there is no shame about talking about the market failure around housing or the sector’s valiant (if insufficient) attempts to resolve it. People’s lives are improved after all. Nor should there be shame in pointing out the knock on benefits to other parts of the state, other charities and to businesses as a result of the sector’s existence. So my challenge to the sector is to return to the original purpose and find ways to keep telling the story behind their creation, and highlight the flexible and innovative ways we continue to tackle the massive market failure in housing in the UK. When we use all three legs of the stool to find a balance in the middle we do well.

Experienced Chief Finance Officer -track record in Welsh social housing and third sector. Chartered Accountant (FCA BFP). Views my own - my space for blogging.