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Written by Diane Cooper Monday, 15 November 2010 15:22The SFHA has branded a study by Heriot Watt and York Universities...... which claimed that "social landlords can build more new homes for less, "over-simplistic".
The report does not take into account several factors such as the looming costs of improving existing and new-build stock to meet climate change standards, decreasing income through cuts to Housing Benefit, and the wide range of services beyond bricks and mortar which associations and co-operatives provide.
SFHA Chief Executive Mary Taylor said:
"While we are at the forefront of efforts in maximising return on the public pound, the SFHA finds this study and its conclusions to be flawed. It was produced using mainly desk-top modelling, and not tested with the housing providers which it analyses.
"It is over-simplistic, not taking account of the fact that housing standards are rising to address climate change. Nor does it look at the costs of the services provided by housing associations and co-operatives to sustain tenancies. It concentrates on bricks and mortar, not the range of services our sector provides to groups of clients with complex support needs, such as the elderly, or those in rural areas.
"While many associations have reserves, these are earmarked for other purposes such as maintaining and repairing existing properties, meeting legal requirements, improving energy efficiency and alleviating fuel poverty.
"The research was carried out over the summer and does not take into account the impact that the cuts in Housing Benefit are going to have on the income of social landlords, or on tenants' ability to pay their rent. Housing associations and co-operatives build for and rent to those in greatest need, many of whom have low incomes. It does not make sense to put rents beyond the reach of those in low-paid jobs or to rely on Housing Benefit to take the strain. It is more cost-effective in the long run to put decent amount of public subsidy into the construction of homes to keep rents affordable.
"In addition, the comparison the report draws between the public subsidy given to councils with that given to housing associations is deeply flawed. A new house costs the same whoever builds it. Councils receive less direct Government subsidy but have to cross-subsidise - for example throwing in the land for free - in order to build the same house," Ms Taylor continued.
"Moreover, the research does not address the borrowing covenants set by lenders which associations have no control over," she said.
"Housing associations and co-operatives, which as the report notes raise around 40% of the cost of a new-build house from private finance, already provide an excellent social and economic return on investment to the taxpayer. With waiting lists at over 250,000 and unemployment rising, each new home not only provides housing to a family in need, it keeps an average of 19 people in employment.
"We, along with a wide range of housing and other groups in Scotland, are urging the Scottish Government to recognise the strong social and economic benefits of investing in housing in this week's Budget. We are working closely with Government to deliver as many as houses as possible for every pound of public investment but there is no replacement for subsidy if we want the new affordable housing that Scotland needs."
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