Monday, 11 November 2013

A Trickle Down Solution to the Spare Bedroom Tax - Using Some Basic Maths

Quite a goodly chunk of the recent South Central Regional conference was devoted to the debates on the HS2 (already covered in one of my policy posts) and the so-called Bedroom Tax. While I have discussed the Bedroom Tax before, I thought it good to elaborate on theme most particularly in relation to the housing policy (or lack thereof) of the party at this time. 

As for the actual debate, I found it pretty amusing, not for what was actually said (though there were a few laughs), but because the arcane discussion of clauses to include and exclude reminded me of the Marx Brothers' famous Contract Scene. On YouTube here for those who have never seen it:

The 800 lb gorilla in the room for me was that the debate was about the amelioration or different modes of application of the tax, and even of its morality, without virtually any mention of the root cause.

As I noted in the previous posting, the problem is the failure in recent decades to construct sufficient one bedroom units. Even now when I read about new social housing developments, the promoters proudly boast of the number of two- and three-bedroom units that the new complexes and estates will contain. This of course does not solve the problem that the Bedroom Tax seeks to rectify (punish?).

There is a number floating around of 660,000 units effected by the Spare Room Subsidy (I shall rather tongue-in-cheek use the official spin). So let's just use this number.. what this implies is that there are 660,000 singles or potentially a maximum of 1.32mn people (in couples) occupying two bedroom (or more social housing). Or in another potential calculation there might be a couple with one other dependent occupying a three bedroom housing unit where there is thus a spare room (so maybe even 1.8mn people).

The exact mix of how the 660,000 units is made up is not a number I have been able to find. But it should be a key number for this debate. So for the reasons of argument we shall posit that there are 660,000 units that are made up of:

  • 400,000 units of two bedrooms or more occupied by a single or a couple
  • 260,000 units of three bedrooms (or more) occupied by a couple and a dependent
This is a lot of units by any measure. In fact if the social housing stock was properly configured and allocated we might have a very substantial number of people in right-sized housing that are currently languishing on waiting lists. Moreover, we are currently building units to house the wait-listed people who could conceivably be catered to within the current housing stock.

What should be our policy beyond mere hand-wringing? Well, Labour have come out and made some hefty projections of how much social housing they would build per annum over a five year term. Like so many of the policy initiatives at their most recent conference it had the look of shooting from the hip: typically unfunded, unelaborated and unnuanced. 

What would be the effect if we committed to the construction of 200,000 units over the term of the next five year parliament? What if that commitment was ONLY to construct one bedroom units? What would be the effect? 

Well, if two hundred thousand singles and couples were moved into right-sized accommodation, then 200,000 units with two or more bedrooms would be freed up. Thus the maths is relatively simple, ergo:

  • 200,000 new residences
  • rehouses between 200,000 and 400,000 people
  • and frees up 200,000 units of two or three bedrooms
  • for potentially 200,000 couples with one dependent or two dependents (i.e. 500,000 or 600,000 people)
  • or 200,000 single parents with one or two dependents (i.e. 400,000 or 600,000 people).

So by building 200,000 net new one bedroom units provides net new housing for between 400,000 to 600,000 people.

The effect of the number of those hit by the Spare Room Subsidy might be even greater. For as couples and singles move into one bedroom accommodation, two bedroom residences would become available for those couples with one dependent to move down from three bedroom units, thus freeing up spaces for larger family groups to occupy. 

OVER AND BEYOND all this, we still have a residual problem of those aged over 65 who are occupying over-sized space. While the Subsidy is clearly designed to give them a free pass, it might also potentially allow a single 66 year old sitting in a two or three bedroom unit until they are into their 80s. Only actuarial calculations (or put more bluntly the Grim Reaper) will fix this problem and the lead time is open-ended..

Clearly tempting such an individual (who might indeed have taken in a lodger or relative) to downsize is going to be a tough task, except if one was able to offer sufficiently tempting one bedroom units that they would voluntarily cede the space they are currently occupying.

All this should be read in context of my previous scribblings on the subject of replacement of the more mediocre examples of the social housing stock that were created in the 1950s and 1960s that are now no longer "fit for purpose".

And I shall finish by noting that verily as I was leaving the conference in High Wycombe that Saturday, what did I spy right in front of me at the exit gate?

... but my favoritest thing in the world... four mediocre 1950s (?) one bedroom units taking up the space that could easily be occupied by 12 (or indeed 20) modern one bedroom units... I rest my case..

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