Putting tenants in the driving seat

My housing “career” started 40 years ago in the London Borough of Camden. The Chair of Housing was Ken Livingstone and the Director was the legendary William Barnes.

Not only were Camden building 3,000 council homes a year, they also had a well-entrenched structure for resident engagement.

Five District Management Committees comprising councillors and resident groups exercised devolved decision-making over local improvements and investment.

The DMCs also contributed to strategic and policy debates. I left Camden in 1987 but I was pleasantly surprised to see that the DMC system is still running, forty years later. It’s clearly a successful model.

But Camden is sadly the exception to the rule. Some landlords make genuine attempts at resident involvement, others throw in a few gestures, many have cut budgets.

The National Tenant Voice was scrapped in 2010 before it had even drawn breath. Genuine resident involvement is on the ebb, subject to the whim of individual landlords and the government of the day.

It comes and it goes. Scores of mergers have taken place in recent years with hardly any say on the part of residents. The same goes for major investment and development decisions.

There are hundreds of thousands of tenants across the country who voted for stock transfer on the promise of local decision-making and local management only to find, a few years later, that their landlord had been merged upwards into another, larger, landlord, with management decisions now taken hundreds of miles away and local assets stripped and shipped off to remote head offices.

Being a social housing tenant is often like a latter-day form of feudalism.

The current Regulatory Standard on resident engagement is weak.

It states that, “Registered providers shall ensure that tenants are given a wide range of opportunities to influence and be involved in… the formulation of their landlord’s housing-related policies and strategic priorities, the making of decisions about how housing-related services are delivered, including the setting of service standards.”

Many housing providers pay lip service to this or ignore it completely. So what’s to be done?

There is an alternative. An alternative that would embed genuine resident involvement into the housing association sector for generations, safe from the whim of here-today-gone-tomorrow landlords and governments.

Turning tenants into shareholders.

Most housing associations are registered societies, with the FCA. They exist “for the benefit of the community”.

Under their rules, shareholders can elect Board members, call special general meetings, pass resolutions on, for example accepting or rejecting annual accounts, and pass votes of no confidence in the Board or executives.

In other words they have genuine power. But who are these shareholders? In most cases, they are a secret cabal, a rump group of past Board members and interested local people. Voting fodder.

No one pays them much attention. A typical medium-sized housing association would have up to 100 shareholders.

I’ve attended dozens of AGMs and you would be lucky to see 30 at any meeting, with items being nodded through without any discussion or dissent.

It is hardly democracy in action. In some cases, larger landlords have deliberately (and secretly) recruited “friendly” shareholders in order to secure approval for their merger plans.

Yet imagine a world where every tenant was automatically given a £1 share in their association. Or even a world where tenants were encouraged to become shareholders and the Regulatory Standard required a threshold of, say, 15 percent of tenants to be shareholders.

Potentially it could revolutionise the sector. Tenants would have the power to appoint Boards, and to determine strategy, including decisions about merger and investment.

It would invigorate debate and decision-making and turn housing associations into genuinely democratic entities, with tenants at their heart.

Private Limited companies have shareholders, so this change should not affect the ONS classification of housing associations. The only difference would be that shareholding would be nominal and no dividend would be payable, other than a better service for residents, one would hope.

Of course, critics may argue that tenants will only vote in their own interests – for lower rents and service charges, stronger eviction policies, higher standards of repairs and management etc, rather than thinking about their wider responsibilities.

But this is a rather patronising view that ignores the truth that well-informed tenants can take a broad view of their community’s needs. Well run associations, where Boards and Executives are genuinely mindful of their tenants’ interests, would have nothing to fear.

It would improve the quality of decision-making and curb the imperialistic ambitions of some Boards and Senior Executives.

The Regulatory Standards and the NHF model rules could be easily amended to take account of this change. The administrative costs would be negligible and the benefits could be enormous.

 

(This item first appeared in 24 Housing on the 4th October 2018, to coincide with Housing Day)

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