After my last well-argued rant on why doesn’t Shelter actually provide shelter, high functioning alcoholic and fellow misanthrope Christopher Snowdon set me a simple challenge: Work out how many houses Shelter could have built with its budget in last decade.
Now unfortunately I will already fail in my quest because I can only access Shelter figures going back to the year 2006/07, with figures coming from Shelter’s own annual reports or impact reports. Also, I’m going to cheat and see how many houses Shelter could buy and not build. Small distinction you may say but in this case, it will also make the amount of properties that Shelter own fewer than they would if they purchased land in bulk and therefore this is a conservative estimate of the houses they could provide.
Chris himself has estimated a new build at £100,000, which means Shelter could have 4,100 houses providing shelter to roughly 15,000 people. Not bad but nevertheless, let’s give this a go on a more conservative estimate.
The incoming resources for Shelter over just the last eight years was (rounded up) £410 million. I’ll write that again just in case you missed it, 410 million pounds. That is a hell of a lot of money you will agree. So let’s imagine a scenario: I am now head of Shelter and I am going to make a drastic change to the charity, no longer are we about lobbying or providing helplines and guidance to people but we are in the game of buying houses.
So no more complimentary wine for fringe meetings at party conferences or in Westminster, no more ‘creative directors’ on thirty grand plus, no more jobs for well-meaning graduates with a commitment to being a ‘voice for the voiceless’ and all that crap. No, we are simply going to do exactly what we say on the tin.
Now I would hear no arguments about taking every penny away from lobbying. As I covered last time, the lobbying of Shelter has been one long expensive failure with very few real achievements to its name and even the tiny ones they could claim would be outweighed by providing actual shelter instead.
You could however, make a serious case for defending the guidance and support elements of the charity. As I said before, I have no doubt that some of the work Shelter does is genuinely life changing. However, there is an argument to be had about whether providing houses ourselves would be more beneficial to the greatest number of people.
For example, the benefits of advising one person against their terrible landlord and helping them is commendable but the resources spent on that case are to the benefit of that individual and their family alone. Whereas buying houses in a concentrated location and crashing the cost of rent and raising conditions will force even scummy landlords to improve the conditions for their tenants, even if they (tenants) do not benefit directly from living in Shelter homes. It isn’t enough to just dismiss the cutting of advice lines as just me being a bastard, there is a real argument to be had here about which approach benefits the most people and which has a more positive impact in the long run.
Now that’s said, let’s get into those figures for buying houses. The information I will be using is from the Land Registry House Price Index (here) whose report came out on the 27th Feb 2015. This report is less than two weeks old and the data is as fresh as you are going to get.
The average house price in England and Wales is £179,492. So after we get our calculators out we can say, at the most conservative estimate that Shelter could’ve provided 2284 homes, which minimum of three to a house is over 6800 people in eight years. This is the absolute minimum Shelter could’ve provided and let’s put that in perspective: It would be over 10% of the entire population in the Merthyr Tydfil County Borough, over 50% of the entire town of Ludlow and if combined together would be a thriving community in its own right.
Now why is 2284 houses the minimum amount they could buy? Well for a start this is based on the average cost of housing now. Back in the 2008/09 report, Shelter stated they obtained £51 million and the average house price in England and Wales had fallen off a cliff down to £148,000 in February 2009 (here). So in these circumstances, when a housing bubble collapses this would be the perfect time to expand into the market and as we know that in the long run house prices are only going one way it would’ve been the perfect time for Shelter to move in for the kill.
Secondly and as we all know, there are significant regional variations and variations even within those regions. Returning to the Land Registry HPI report, we can see an average price in the North East is less than six figures today, in 2009 I bet it was even lower.
Here we go then if you are Shelter; you want to do all those constantly talked about platitudes from ‘rebalancing the economy’ to ‘making renting fairer’. Well why weren’t they buying up streets of terraced flats in Darlo and renting them out for an absolute pittance? This would’ve easily grown every year with the investment in the houses increasing their value which can be used to buy more houses, including the small surplus generated from rent.
This is self-sustaining and will always grow, always make a real difference, regardless of whoever is in power. We also haven’t even considered the sheer economies of scale Shelter would have when it comes to negotiating the cost of electricity or gas from firms. Also, consider how the relationship of MP’s and councils changes towards Shelter when they go from lobbyists to serious market players.
There will be in this country several large plots of land or empty areas where a decision has to be made about who takes them on. Is it property developers for student housing or could Shelter step in, spend several million on regeneration and investment for housing then recoup their investment whilst dragging the cost of the housing down in the area and by providing high quality housing, force up standards?
For example, where I am from the old Barracks is being sold off and would require some serious capital but if the money could be found a developer would find a big return on their investment then if they were to buy houses individually. What would there be to stop Shelter making a bid for the land, redesigning the location for a mixture of high quality family homes and flats to give young people independence from their parents whilst making a long term surplus to plough back into more housing projects?
Shelter wouldn’t have to find out about these opportunities because councils and people, knowing Shelter will fund these sorts of projects, will be bombarding Shelter with projects to get involved in across Britain. Bluntly, people will be begging Shelter to provide housing in their area and be in demand, as opposed to Shelter begging politicians.
The money Shelter have at their disposal means that Shelter should’ve started doing this decades ago, they should have done it eight years ago and they should have been doing it yesterday. Still, they have a great opportunity to use their significant financial assets to start to make a long term and positive impact which would also generate another arm of funding so in the long run, we could fund advice and shelter too.
Of course, in reality even I wouldn’t decimate the entire support advice lines and court/ legal representation Shelter provides and nor am I suggesting that it would be smooth sailing, there would be houses that had hidden problems or a bad tenant or the value of the house wouldn’t rise in line with our investment. In the long run though, I’d be confident that a change of strategy would make a massive positive difference and the huge chasm between the successful new strategy and the failed one of lobbying would be as clear as day.
To give up lobbying is not to fail or admit defeat but would be a radical step which would make a powerful difference to people’s lives, whoever is in government. The need to be in close proximity to MP’s to make a difference would disappear and would show to all people who are dispossessed, that actually they do have some power when they act collectively.
None of this will happen of course. Shelter will continue to lobby and tell everyone whose money they take just what a big difference they are making, what an influential voice they have been in the discussion. Still, at least when I finish University and go set up a housing co-op myself I can beg the state and the Big Lottery Fund for cash too with a much stronger case. Why?
Because whilst Shelter talk about the government creating shelter in some comfortable seminar at Westminster, I’ll be in some town actually providing it.