Affordable housing is often viewed from a social perspective, simply as a vital provider of safe, clean homes for those most in need. Whilst this is undoubtedly the case, the sector’s broader contribution to the growth of local and regional economies tends to go under the radar and this needs highlighting.
Affordability underpins the economic and social wellbeing of households, and the UK’s 1,500 housing associations have a fundamental part to play in local economic wealth building, especially in historically marginalised communities where a large proportion of the sector’s 2.5 million homes are located. Across Liverpool City Region, for example, housing associations own and manage 150,000 homes: that is 22% of all residential properties within the region.
Driven by its mission of growing stronger communities, North West growth and regeneration group Torus embraces inclusive growth as a primary business model objective. As well as tackling the shortage of affordable homes head on, core activities are engineered to enhance the social infrastructure across Torus heartland areas – unlocking regional economic development and place-based competitiveness.
Torus is the North West’s largest stock-holding housing provider, with around 40,000 homes for rent and future ownership, mostly in and around Liverpool, St Helens and Warrington. The group is committed to developing 5,300 new homes over the next five years, working as a key provider for local authorities and other strategic partners to regenerate communities and support wider economic growth.
In part, such growth is driven through investment in existing and new housing. At Torus alone, more than £100m is invested annually to improve existing stock and develop more homes (2018-19: £55m on existing stock and £95m on the development of new homes), as part of a total group spend of around £225m.
This investment directly supports a host of local jobs, from architects to contractors and building materials suppliers. According to National Housing Federation estimates, investing in one affordable home directly supports 2.4 jobs, every home managed by a housing association adds about £6,500 per year to the UK economy, and the sector as a whole contributes more than £6.7b to national GVA.
Other benefits arising from housing are less tangible, but are nonetheless critical to inclusive growth. Housing associations own and manage homes that allow low-paid households to participate in local economies, offering a spectrum of rental and future home ownership properties that are tailored to meet the needs of communities. Evidence suggests the stability of the affordable housing sector helps to reduce the overall volatility of the housing market, as well as tackling the housing crisis and – through tenures such as Shared Ownership and Rent-to-Buy – responding effectively to the government’s renewed focus on rising home ownership.
Fundamentally, affordable housing is about more than homes. Housing associations fulfil a critical employment support function (at a time when public sector services are increasingly stretched), helping local people make their most productive contribution to the economy through apprenticeships and other pathways into full-time work.
Torus, for example, is set up to operate simultaneously as a landlord, property developer, commercial contractor and social entrepreneur. By 2024, the group will invest £5m per year through its charity, Torus Foundation, to deliver initiatives that help residents build skills, get into work, access financial support and boost health and wellbeing. In 2018-19 alone, this helped 643 people into work and unlocked £3.9m in financial gain for 1,630 tenants.
Beyond these core interventions lies an increasing focus on wider growth and regeneration delivered through cross-sector partnerships. Strategic initiatives in progress at local, regional and national levels reflect the sector’s increasing commitment to influence spatial master planning, working together with local and devolved authorities and other key partners including the private sector to balance long-term supply and demand.
Torus operates as a lead strategic partner for Liverpool, St Helens and Warrington Councils, and for the government’s housing accelerator Homes England. As well as enabling the group to deliver on its new-build ambitions (stimulating a 29% uplift to the organisation’s development programme), £66m in Strategic Partnerships – Wave 2 funding is also helping to support the regional economy and, in turn, strengthen local communities.
There were 57,485 affordable homes delivered (completions) in England in 2018-19, an increase of 22 per cent compared to the previous year. Organisations like Torus are challenging the historic one-dimensional image of affordable housing by taking a bolder, more commercially astute, partnership-driven approach to address endemic structural issues – without forgetting core social purpose. Anchored to their local communities, housing providers are in a unique position to support the sustainable growth agenda, locally and nationally.
By joining up top-down policy with a neighbourhood-based philosophy, affordable housing is building a truly inclusive economy, with communities placed firmly in the driving seat.
Steve Coffey is Group CEO of Torus, a member of the Institute of the Economic Development