Selling the family silver? Housing associations, institutional logics and the hidden privatisation...
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Transcript of Selling the family silver? Housing associations, institutional logics and the hidden privatisation...
Selling the family silver? Housing associations, institutional logics and the hidden privatisation of
the social rented sector
Dr Nicky MorrisonDepartment of Land Economy
University of Cambridge
Housing Studies Association 2015
“The sale of assets is common with individuals and
states when they run into financial difficulties. First, all the Georgian silver goes, and then all that nice
furniture that used to be in the salon” (Harold Macmillan, Maiden Speech in the House of Lords,
13 November 1984)
UK Prime Minister 1957-63
Structure of presentation
• The policy context: attack on the social housing sector• The research focus: “hidden privatisation”
– Non-profit housing associations (HA) – asset management strategies (AMS)
– Inner London case study
• Research questions – London HAs’ rationale to sell or hold onto valuable assets
• Conceptual framework - Institutional logics & organisational strategies
• Research methods• Empirical findings – work in progress
• Preliminary conclusions
THE CONTEXT:The dismantling of the
English social housing sector
Housing Construction by tenure
Current policy context: Continued attack on social housing sector
Financial austerity & welfare reform- No longer rely on Government grants/ long term bank finance
Policy Exchange (Aug 2012) ‘Ending Expensive social tenancies’- Could raise £5.5b & finance 170,000 new homes in cheaper places..- Grant Shapps MP - “blindly obvious” - sweat assets & sell- Media response / YouGov poll backs ideas…
- “tax payers’ money keeping people in expensive tenancies…”
Policy Exchange(Nov 2014) ‘Freeing Housing associations’-freedom to dispose of stock - Genesis HA – sponsors report..- David Orr (NHF) – need to use assets to create internal subsidies
“judicious sales of existing high value properties when become vacant”
- Brendan Lewis MP – welcomes debate (March 2015).
The backlash.. (and motivation for research)
• Ferrari (2014)• Housing press / MPs• Housing action groups protest e.g SHOUT– Southwark borough £3m council house sale (2014)
The Research project
Research focus• Non-profit Housing Associations
- 10% of total housing stock = 2.4m units- Gross assets £95bn (book value)- Estimated open market value £250bn- Funded by debt (£45m), reserves (£16m) grant (£37m) repayable on asset sale
N.B not geographically fixed/ ability to borrow against assets to develop- Delivered 47,000 affordable homes p.a. Could do more?..
• Homes and Community Agency (HCA) – the regulator ‘Returns on Assets’ (2014) - expectations: proactive AMSNew regulatory framework (April 2015)..”protect public assets”- General consent to dispose..- local authorities nomination rights when HA property becomes empty…
Loss of housing association stock p.a
(HCA Statistical Data Returns section K)
Additions and loss of Housing Association stock in England (2013/4)
2013 2014 2013 2014Newly built 25821 23527 Stock sold to
tenants6223 9839
purchased 5551 5943 Demolitions 4672 5061Disposals 3908 3407
Total additions
31372 29470 Total losses 14803 18307
Total stock 2,650,123 2,666,053
(Source: HCA Statistical Data Returns 2013/4)
Inner London case study
House price change in London boroughs since 1995
London’s spread of housing tenures (Savills 2014)
Research questions
Research Questions
• How are London HAs’ AMS adapting to changes in external operating environment?
• What is HAs’ rationale for disposing or retaining their valuable assets in inner London?
• Are capital receipts used for replacement stock in cheaper locations within London? – the evidence
• What are implications of AMS on socio-spatial segregation in inner London
Conceptual framework
Institutional logics & organisational strategies
• Organisations face similar institutional pressures but respond in different ways (Mullins 2006, Mullins et al 2012)
• Fulfil similar goals but negotiate commercial and social logics differently
• How organisations make AMS decisions in relation to business culture (Gruis et al 2004, Gruis 2008, Morrison 2013)
• Organisational archetypes (Gruis et al 2004, Gruis 2008, Czischke et al 2012, Nieboer & Gruis 2014, Morrison..)
• Draw on Snow & Miles (1978) – Defenders– Prospectors
Asset management strategies
(Morrison 2013)
Research methods
Research methods• Case study research - to examine organisations’ strategies: why taken/how implemented/what
results (Yin 2012)
• Purposive sampling – HCA statistical data returns
• Criteria: - Operating in same market = inner London - Focus on HAs’ asset management strategies- Exploratory – to check “analytic generalisation” (Yin 2012)
• Distinguish:
(i) The defenders - HAs who hold onto valuable assets (i) The prospectors - HAs who sell high performing valuable assets
More nuanced (revisiting Snow and Miles 1978)
(ii) The analysers - HAs who sell under-performing assets as part of systematic review – (inadvertently) high OMV..
Empirical findings – work in progress
Examples of Housing Associations’ street properties in inner London
Earls Court, Kensington & Chelsea
Notting Hill
Housing Associations holding onto valuable assets – the defender
• Use valuable assets as a leverage to secure debt to finance future affordable housing programme
• Would not sell as reduces future borrowing ability – used as security – “growth in capital values disproportionate to other properties”
• If hold over long term produce more homes than short term benefit of one-off sale
• One-off sales to other social landlords so social returns are protected
• Not applied for HCA general consent to dispose..• Defenders – at all costs?
“bird in the hand is worth 2 in the bush..”
Housing association’s disposal of valuable assets
Prospectors• Aggressive stance
“Property is a means to an end”• Strategic “direction of travel” to sell high
performing stock in expensive London areas “market capable of looking after itself”
• Capital receipts recycled into stock improvements/development cheaper locations “need to focus on bigger picture” YET rhetoric versus completion rate evidence…
• CEO wants greater freedoms from HCA/local authorities
• Board support YET potentially loose wider social housing sector & political support.. Out on a limb..
Analysers• Decision based on stock condition NOT
OMV/geographical location• Part of stock performance surveys “fit
for purpose – can’t keep for ever – need to churn existing stock”
• Maintenance & management costs /poor energy efficiency
e.g. older 1b flats - when void consider selling.. “inadvertently high OMV”
• Board approval of strategy – although “tenant representatives are defensive..bring them on board”
• Strategically “bring every one with us – prepare the ground..”
“All Housing associations have same mission to fulfill their charitable objectives. I may disagree with that particular HA’s approach
(to disposal) but I do not disagree with their intention” (CEO analyser HA)
Preliminary conclusions
The consequences of HAs’ actions..• HAs’ asset management strategies often seen as a technical
issues with no real significance..(Morrison 2013)
• Sweat existing assets – “churn” essential component of AMS• Cumulative effects of asset management decisions (hidden
privatisation) alongside government’s explicit privatisation • Selling scarce social assets in expensive areas
- social obligation foregone- potentially widens socio-spatial inequalities- reduces ability to keep lower paid workers & continued
services in inner London (Ferrari 2014)
• Not a given HAs can compete/build replacement stock elsewhere in London – lost opportunity..
• International comparisons: broaden evidence base & debate (Gruis & Nieboer: Holland; Walks: Toronto; Pawson & Milligan - Sydney..)