There’s a very good piece in the FT on the commercialisation of the housing association sector. I’ve referred to the Dutch experience before and it echoes many of the concerns that are being raised here regarding the UK.
I emailed a Dutch friend of mine to ask about their experience of commercialisation in the inclusionary housing sector. He summed quite well how greater autoonomy and commercialisation had played out..
There was one big problem that was reported on from the very beginning: there were no clearly defined aims that could be used to judge effectiveness and efficiency and there was no clear demarcation of the field that housing association should cover. So what do you get if you make organisations independent, give them a huge lump sum and do not impose clear socially defined aims? And there were indeed perverse effects such as disinvestments, investments in non-core activities, land banking, lavish financial behaviour by CEOs and outright fraud. It needs to be said, though, that these are obviously mediagenetic events and behaviours, the majority of the housing associations and CEOs were fully aware of their social obligations.
The FT article suggests that the HCA seem to preparing contingencies for housing associations defaulting on debts, insolvency etc. as they are engaging in commercial development to support (replace?) their social mission. Up to now, the benign housing market has meant that commercial profits have been usually subsidising affordable housing provision but what happens when profits turn to losses – as they surely will some day?