Meeting social housing expectations
02/14/2022
According to the future of public and voluntary sectors whitepaper there are higher expectations and increased pressure on social housing providers.
However, the future can be bright for the organisations that provide crucial and valuable services to society. The sector can provide expert support to those who need it and also play a key part in the levelling up effort.
As Allison Whittington, Head of Housing for Zurich Municipal reminds us, the sole purpose of the social housing sector is to provide safe, stable, and habitable homes for those least able to provide for themselves.
If the past two years experiencing COVID-19 has shown us anything, it has reminded us that a home is much more than a roof over our heads. It is central to how we live our lives, fulfil our dreams, bring up our families and contribute to society. Now home is often where work is, and it has a huge influence over our health and wellbeing too. Social housing gives many more people the opportunity to have settled homes and positive life outcomes.
Balancing priorities
It is the very purpose of social housing that sometimes creates friction, with requirements from outside agencies influencing how providers conduct their business, leaving providers in a dilemma.
Government sees the sector as a key driver for contributing to the levelling up agenda, also highlighting its role in destigmatising social housing. How this can be done without redistributing wealth and opportunities and leaving some behind is unconfirmed as yet.
Importantly, social housing has to meet government targets for new affordable housing, in response to the housing crisis. The drive to develop continues, often resulting in a stark choice for providers to refurbish and improve existing housing or create new developments.
It is also a regulatory requirement for providers to prove financial sustainability, and providers must make commercial decisions that aim for growth and viability, while honouring their social purpose. These can sometimes feel at odds. The priority for providers remains to support customers needs, which have been increasing in volume and complexity.
Financial resilience
Funding and income generation are high on the risk register, after lockdowns resulted in interruptions to development and repairs, and global supply chain issues and skills shortages, which have exacerbated delays. Now housing associations have inflation to consider.
Social housing rents can rise by the consumer price index (CPI) measure of inflation plus 1% (for the next three years), so providers match increases. However, with tenants’ living expenses (particularly energy bills) also rising with inflation, there has to be an assessment of what individuals can tolerate.
“The good news is that providers are good at prioritising and at using resources well. They are focussed and resilient,” says Allison. “The sector works together to overcome the big issues. In the future that may mean changes in business structures, with the sector finding new ways of resolving problems. There is likely to be further consolidation of the sector through acquisitions and mergers.”
Consolidation may be the only way for some organisations to fulfil regulatory and legislative obligations and targets. Although tenants and communities will ultimately benefit, decarbonisation requires a vast, expensive, and complex transition in housing.
Climate change adaptation and mitigation
Allison says expectations are high for the sector in the climate change transition: “With decarbonisation ramping up, the onus should be on providing quality homes that go beyond minimum building requirements and net zero goals. Social housing has the opportunity to innovate and excel, setting the standards for future housing and safe, resilient construction.”
Many organisations have budgets in the business plan for bringing homes to EPC C standard and the transition to non-gas heating in properties, however progress looks slow.
Allison says: “Many providers seem to be waiting to start their programmes of work. It’s understandable that no-one wants to take the chance now, but for the market to develop there have to be early adopters.”
Allison believes a similar attitude applies to building safety. “Organisations don’t know what to deliver. In three, or four-year’s time requirements may change again. Providers don’t want to be out of step. But legislation is not the only consideration on the safety of a building, what does a risk assessment based on the needs of the tenants suggest?
Flood prevention and adaptation is an area of focus for Zurich. There has been more understanding and awareness of the changing risk landscape over the past couple of years. Housing providers should make themselves aware of revised insurer requirements on flood management for property estates.
There are some crucial questions housing customers can ask themselves:
• Are you building on a flood plain?
• Are enough flood mitigation plans built into developments?
• Does that include surface water mitigation?
• Is flood infrastructure included at planning stage?
• Are maintenance processes followed properly?
• Have you made a full declaration to your insurer?
• Can you communicate a plan based on good quality data?
Build Back Better is a new flood approach from Zurich. We use a cost neutral way to improve properties and mitigate future flooding.
Allison: “Housing associations have the ability and the proven track record of delivery to be a force for good in society. They can lead the way. They make a big difference to the way people live. It’s a sector that gets its head down and gets on with it.
Allison and her team can provide risk management and insurance guidance to registered housing providers by contacting us on 0800 232 1901 or info@zurichmunicipal.com
