Like Curo, all housing associations need to adapt in order to survive these unprecedented times. Nevertheless “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change”. As we do, let’s keep a tight grip of our values and core purpose; in other words let’s not fiddle with our DNA.
With the sovereign debt crisis and the capitalisation of bank balance sheets likely to take years to resolve, some might say that it’s all too difficult; they might be tempted to let things settle down and for the environment to return to something like it was before. But it won’t ever be like it was and those that don’t respond to change need only look at what happened to IBM.
I am not daunted by the environment; I can see some opportunities for housing associations. In fact, I’ll go beyond that to say that after years of being stereotyped as a sector of last resort, we now have an opportunity to step up and provide services to a wider range of customers, to mainstream what we do in the eyes of middle England and blend our commercial and social skills to deliver even more social good.
Since the late 1970s we have become a nation fixated with home ownership but the current economic context means that buying a home is simply out of the reach of many people; even those on reasonable incomes. Renting seems now the only viable solution and it will probably remain so for the next generation.
Whilst everyone agrees that we need to build more housing, both to meet growing demand and of course to help jump start our economy, there is a distinct lack of capacity to either build or buy new housing. With reductions in government grants, a movement towards “affordable rents” and reductions in the security of tenure, the truth is that the lines between “social” and “private” rent are fast becoming blurred. In time, they will be indistinguishable and the only difference will be the degree and intensity of the support provided.
So, setting aside the way we come to this position, housing associations have a real opportunity to participate fully in the convergence of the rented housing sector; helping push for and popularising renting and giving it a more respectable place in society. A tenure where people want to stay because it’s more flexible, carries fewer risks for the consumer and is well managed.
I know that many housing associations are already committing to increasing their market rented portfolio and that has to be seen as a good thing. As we do, I hope that it helps change the perception of our core residents and that we don’t lose our true selves in the transformation.
But why stop there?
There are other bold things we can do. At Curo, for example, we don’t want to sell the housing stock which no longer works as social housing – either financially or socially. Instead, we have been looking at alternatives such as the obvious conversion to market renting. Where the market renting option has failed financially, we have moved on to explore wider alternatives, such as holiday lets or serviced apartments.
These more creative alternatives provide Curo with the potential to make use of empty or vacant spaces or very poor condition Georgian stock (in our case with historical significance) whilst generating the yields necessary to fund much larger capital investment requirements and, in some cases, driving out additional revenues to support new housing.
These more creative, bolder options also allow us to create new employment opportunities and to work with new partners that are committed to improving local skills and helping local people into work, amongst other things.
However we choose to evolve and adapt in our environment, we should all hold onto our social values and our core purpose of addressing inequalities in society. If we do this, then society will be better for it and we will have a better, more sustainable business model.