A Trickle Down Solution to the Spare Bedroom Tax - Using Some Basic Maths

Quite a goodly chunk of the recent South Central Regional conference was devoted to the debates on the HS2 (already covered in one of my policy posts) and the so-called Bedroom Tax. While I have discussed the Bedroom Tax before, I thought it good to elaborate on theme most particularly in relation to the housing policy (or lack thereof) of the party at this time. 

As for the actual debate, I found it pretty amusing, not for what was actually said (though there were a few laughs), but because the arcane discussion of clauses to include and exclude reminded me of the Marx Brothers' famous Contract Scene. On YouTube here for those who have never seen it:

http://www.youtube.com/watch?v=G_Sy6oiJbEk

The 800 lb gorilla in the room for me was that the debate was about the amelioration or different modes of application of the tax, and even of its morality, without virtually any mention of the root cause.

As I noted in the previous posting, the problem is the failure in recent decades to construct sufficient one bedroom units. Even now when I read about new social housing developments, the promoters proudly boast of the number of two- and three-bedroom units that the new complexes and estates will contain. This of course does not solve the problem that the Bedroom Tax seeks to rectify (punish?).

There is a number floating around of 660,000 units effected by the Spare Room Subsidy (I shall rather tongue-in-cheek use the official spin). So let's just use this number.. what this implies is that there are 660,000 singles or potentially a maximum of 1.32mn people (in couples) occupying two bedroom (or more social housing). Or in another potential calculation there might be a couple with one other dependent occupying a three bedroom housing unit where there is thus a spare room (so maybe even 1.8mn people).

The exact mix of how the 660,000 units is made up is not a number I have been able to find. But it should be a key number for this debate. So for the reasons of argument we shall posit that there are 660,000 units that are made up of:

• 400,000 units of two bedrooms or more occupied by a single or a couple

• 260,000 units of three bedrooms (or more) occupied by a couple and a dependent

This is a lot of units by any measure. In fact if the social housing stock was properly configured and allocated we might have a very substantial number of people in right-sized housing that are currently languishing on waiting lists. Moreover, we are currently building units to house the wait-listed people who could conceivably be catered to within the current housing stock.

What should be our policy beyond mere hand-wringing? Well, Labour have come out and made some hefty projections of how much social housing they would build per annum over a five year term. Like so many of the policy initiatives at their most recent conference it had the look of shooting from the hip: typically unfunded, unelaborated and unnuanced. 

What would be the effect if we committed to the construction of 200,000 units over the term of the next five year parliament? What if that commitment was ONLY to construct one bedroom units? What would be the effect? 

Well, if two hundred thousand singles and couples were moved into right-sized accommodation, then 200,000 units with two or more bedrooms would be freed up. Thus the maths is relatively simple, ergo:

• 200,000 new residences
• rehouses between 200,000 and 400,000 people
• and frees up 200,000 units of two or three bedrooms
• for potentially 200,000 couples with one dependent or two dependents (i.e. 500,000 or 600,000 people)
• or 200,000 single parents with one or two dependents (i.e. 400,000 or 600,000 people).

So by building 200,000 net new one bedroom units provides net new housing for between 400,000 to 600,000 people.

The effect of the number of those hit by the Spare Room Subsidy might be even greater. For as couples and singles move into one bedroom accommodation, two bedroom residences would become available for those couples with one dependent to move down from three bedroom units, thus freeing up spaces for larger family groups to occupy. 

OVER AND BEYOND all this, we still have a residual problem of those aged over 65 who are occupying over-sized space. While the Subsidy is clearly designed to give them a free pass, it might also potentially allow a single 66 year old sitting in a two or three bedroom unit until they are into their 80s. Only actuarial calculations (or put more bluntly the Grim Reaper) will fix this problem and the lead time is open-ended..

Clearly tempting such an individual (who might indeed have taken in a lodger or relative) to downsize is going to be a tough task, except if one was able to offer sufficiently tempting one bedroom units that they would voluntarily cede the space they are currently occupying.

All this should be read in context of my previous scribblings on the subject of replacement of the more mediocre examples of the social housing stock that were created in the 1950s and 1960s that are now no longer "fit for purpose".

And I shall finish by noting that verily as I was leaving the conference in High Wycombe that Saturday, what did I spy right in front of me at the exit gate?

... but my favoritest thing in the world... four mediocre 1950s (?) one bedroom units taking up the space that could easily be occupied by 12 (or indeed 20) modern one bedroom units... I rest my case..

Park Site Homes - Britain's Favelas?

Recent months have seen a frenzy of crossed accusations and abuse in response to the comments about the Bedroom Tax made by the Brazilian, Raquel Rolnik  who spoke out in her capacity as the United Nations special rapporteur on housing. Many rounded upon the fact that someone from that country was not in a position to speak due to the woeful state of housing in Brazil. Having been to Brazil's major cities, there can be little rebuff to the claim that Brazil's major cities make a very good claim to be among the world's most squalid. However it was not a comparison of housing stock that Ms Rolnik was making but rather a comment on the Bedroom Tax and its intrusive nature. Frankly the tax is bizarre and attempts tackles the problem of people sitting in oversized homes provided at public expense from the wrong angle altogether. 

What the argument did prompt for me was thoughts about Park Site Homes as they are so glamorously named in this country. In the US, where we lived for over a decade they are less prosaically named "trailer parks" and they are synonymous with squalor and second- and third-rate housing models. 

Indeed, to call someone "trailer trash" is about the biggest social put-down possible in the US. Yet somehow the Park Site Home "industry" in the UK has managed to maintain a vaguely chintzy, if not chi-chi image. However, having a rather prominent trailer park just down the road from us in the upscale villages of the City of Winchester's rural parts constantly focuses the mind on the sheer incongruity of this model in the UK. I well recall when the local newspaper of Morris County, New Jersey, where we lived, trumpeted the fact when the last trailer park in the county closed early last decade. Trailer parks in the US imagination are typical of Tennessee and Arkansas, though they exist all over the country. Their denizens are Walmart customers at worst and at best, Walmart employees. Warren Buffet owns a stake in one of the largest builders of these structures and likes to called them "manufactured housing". They are rarely regarded as a local feature to boast of. 

Park Site Homes in their UK manifestation are bungalow-style residential properties, that are in reality large caravans without wheels, usually sited on private estates. There are over two thousand park home sites within the UK, primarily but not exclusively centred in rural areas, with an estimated quarter of a million residents (that means voters as well).

The thing that strikes us as strangest about this proliferation across rural England is that these essentially flimsy and non-lasting structures should have spread in the face of planning regimes that scarcely allow established residents and farmers to put up a scarecrow or a mailbox to their own liking. And yet in their midst they find tightly crammed aluminium and glass boxes which consume as much of local services as any two-up two-down residence but only pay a fraction of the amount of municipal rates because the values are so low. In the part of Winchester City Council's domain where the trailer park is located the value of a one bedroom apartment would be £120,000, while the trailer homes change hands for £70,000.

http://www.zoopla.co.uk/for-sale/details/30283012

Stephen Gilbert, LibDem MP for St Austell & Newquay has been a strong commentator on the phenomenon.

http://www.libdemvoice.org/stephen-gilbert-mp-writes-park-home-residents-must-be-looked-after-properly-26546.html

As Gilbert notes most of the residents are elderly and many are vulnerable, with many park homes sites setting a minimum ‘near’ retirement age as a condition of residence. The industry heavily markets itself towards ‘property rich – cash poor’ senior citizens. Ironically the Park Site Home industry caters exactly for the group that is not ensconced in over-sized council or Housing Association properties (and thus bedeviled by the Bedroom Tax). This is the elderly home owner who wants to downsize and free up capital (for eventual nursing home costs?). We cannot be too simplistic either for while the South and South-West may be almost exclusively the elderly, other northern parts may just be a case of those with less access to council housing (working or low-wage) for whom the trailer park is the cheapest alternative. And this has been what has made the US trailer park industry what it is today, occupied by families rather than elderly couples. How long (if not already) before "buy to let" becomes more the norm with rack-renters accumulating cheap trailer homes in this country and renting them out to all comers.   

Gilbert also notes that anyone can own a trailer park, and as things currently stand a long criminal history or prior evidence of malpractice within the industry is no barrier to an individual buying and running a park. Unscrupulous site owners can make a quick profit by getting people to sell their homes at much less than they are worth and can bully, harass, intimidate residents into doing this. A recent survey found that almost two-thirds of park home residents reported living under unacceptable conditions and half said they were living under the regime of an unscrupulous park owner.

We would also note that an industry with such flimsy construction (and in the US the words "tornado" and "trailer park" are often linked) have an in-built obsolescence. How many 40 year old caravans do you see on the road? Well in ten years a lot of wheel-less caravans parked in Park Home Sites across the UK will be crossing this age threshold. Imagine a typical example. A trailer home first acquired and set up in the early 1980s. Might be bought in 2000 by a retiring couple. The husband dies in 2010, the widow lives on until 2022. By this stage, we have an aluminium shed with some mod-cons inside that is pushing 40-years of age. No-one would question the longevity of a house from 1982 but what would be the live-expectancy of this structure in a trailer park where all the other structures are similarly "over the hill". How does a town inspector assess the habitability of such a structure when he is comparing it to the brick semi-detached residences in the rest of his remit? Does he condemn it? Does he even visit it? Is it just hauled  away and a new one plumped down on-site?

Indeed, what evolution is there in Park Site Homes. Brazilian favelas started out made from tin and cardboard and some still are made of that but many have now evolved into hills-side eyries with views over Rio's beaches. They have brick or breeze-block walls and tiled roofs. Paradoxically a favela residence staked out on a muddy hillside in 1982 might very well be much more spacious and solidly constructed in 2013 than many a UK Park Site Home at this point in time. 

Stephen Gilbert claims that: "Park homes are an important part of the housing mix and meet a real need – we need to make sure though that the regulatory regime properly looks after park home residents". We would beg to disagree though that Park Site Homes should exist at all in the UK. Its true they exist but is it desirable in the UK.. no.. is it fixable... yes..

Clearly there is a need for medium to high-density dwellings for the elderly in the South and South-west. Who is doing something about it? Neither the councils nor the national government...What next...we sanction living in cardboard boxes under motorway bridges? A start would be a moratorium on all trailer parks with no new approvals ever...

There should be a policy to eliminate ALL Park Site housing from the UK. The paradox is that owners may find they cannot redevelop their sites for the desired housing styles, meanwhile residents need to find a place to live somewhere... 250,000 people cannot be tossed on the streets. regulations should allow the redevelopment of trailer parks at a higher density, provided residents are allocated affordable housing within the complexes.

The issue of underpayment of taxes to councils for the residents in the trailer parks also needs to be addressed... are park site operators being levied enough on their common revenues and gains from the operation of the sites?

The sheer number of people involved in this dilemma means that it is not an issue that should be ignored. That councils have let prime territory for development be corralled for shoddy housing models that would not normally be allowed within their area of control is an anomaly and double standard  Indeed it even raises issues of governance and, dare we say it, corruption. How else does such a gross breach of planning rules make it through without palms having been greased?

When it comes down it the Park Site Home movement is yet another indictment of the total failure of UK urban planning since the Second World War. Time for the LibDems to set a goal for the elimination of all Park Site Homes as a priority by 2025.