If you’re earning over £60,000 should the state subsidise your rent?
The government is bringing back to life earlier talk about removing the rent subsidy for those in social housing whose household income is over £60,000.
At the moment, rents in social housing are capped at 80% of the market value, but with around 34,000 homes in England occupied by families with a household income of over £60,000 the government is commencing a consultation on removing the 80% limit for them:
Government research shows that as many as 6,000 social rented homes in England are lived in by people who earn a combined income of more than £100,000, including Bob Crow, leader of the RMT union. At the proposed £60,000 threshold, ministers estimate as many as 34,000 social rented homes in England alone would be affected.
It is being stressed that no one would be evicted from their home, simply that they would have to pay higher rents.
The government claims the economic subsidy provided by sub-market rents for social housing is worth £3,600 a year on average, or £69 a week.
The total cost of this annual subsidy for those above the £60,000 threshold is £122.4m, and the annual subsidy for a £100,000 threshold is £21.6m.
That £122.4 million a year is a significant chunk of money that could go on providing services for those who are really most in need. The risk is that removing the cap generates greater social division as communities become more polarised between rich and poor areas.
So, what do you think of this policy…?
UPDATE: One thing I should add given some of the responses on Twitter. Overall social housing pays for itself, so some people object to the use of “subsidy”. However if you are paying less than the market rent, then you are getting something at a subsidy. Whether that is a profit, break even or loss making subsidy is not the point, you are still getting it at a subsidy. If you are, say, earning £70,000 and in social housing you pay less rent than an identical household in an identical property in the private sector. In other words, you’re being subsidised.
Because you are paying less than the market rent the state is receiving less income than if you had to pay the market rent, and that means the state is getting less money to spend on services for others (or to cut deficits these days).
So much for mixed communities then.
Middle classes are going to be priced out of social housing…
It was the middle classes who provided the social capital to maintain tenants' associations, that are on their knees now, and failing to protect the resources used by the less able Taxing the better educated, better able out of social housing will remove the last support from those less able to protect themselves.
Of course if you want to turn our estates into day care centres for those unable to work, then the institutionalization of social tenants can accelerate.
It starts with 60k PA, then moves to anyone with a job.
Before you know it, the 'ghettoisation 'is complete – and the stigma of living in dense urban housing (which is surprisingly environmentally sustainable) becomes so intense it becomes impossible to get a job if your postcode reads 'housing project' even if you are able bodied.
Given how essential housing is, and how necessary for health, income & well-being, perhaps we should set up a National Housing Service,
The Daily Mail's discourse of 'subsidy' is a way of separating the deserving from the undeserving.
It is flawed: in some respects, social housing is poor value, poor security, poorly resourced, poorly serviced, poorly maintained but cheap.
Oh yeah, and is it going to be easy to assess household incomes – will it simply provide more jobs for bureaucrats, with a massive list of exceptions and exclusions like council tax?
Yes, social housing is broken, after 13 years of pretend socialists watching their capital assets and buy-to-lets accrue in value, instead of building homes for the masses.
Simply put, reducing average income and ability of he tenants will finish it off.
As liberals we should understand that mixed communities are stronger, as they are less vulnerable.