27 April 2020
Dear Chief Executive Officers,
The Covid-19 crisis and your residents
We are writing to you to urge you and your Boards to take swift action to ensure the welfare of tenants in relation to the Covid-19 crisis.
As you are aware, many tenants have lost much or all of their income since the coronavirus lockdown and face uncertainty about when the job market will recover enough for them to get back on their feet. Many households are quite simply unable to cover their rent as well as food and essentials. Allowing flexibility only over when to pay, rather than suspending rent payments altogether while people’s incomes are decimated by Covid 19, merely postpones the problem. It heaps debt on the shoulders of residents, alongside fear, distress and insecurity.
At this time of crisis, we call on you to display a response that reflects your social purpose to provide secure housing that is within reach of residents with modest incomes.
1. Give rent holidays for those who are in difficulties due to losing either 20%, or all, of their income. Just making a repayment plan does not go far enough as it will merely postpone problems – and possible eviction – until after the end of the crisis. Housing associations should make a rent holiday option publicly available to tenants who are in financial trouble.
2. Give service charge holidays where residents are in difficulty with soaring service charges/huge ’24 hour watch’ costs (because of defective cladding). The Covid 19 crisis will further impact the lives of residents already struggling to pay huge service charge costs due to lack of action on the cladding scandal.
3. Give rent holidays for people making new Universal Credit (UC) applications. The Government has not resolved the difficulties faced by people on UC and the crisis has made things worse. Housing associations should not exacerbate the situation.
4. Halt all evictions for a three month period after the lockdown crisis, as well making tenants aware of government policy that no evictions will be processed before 25 June. Merely postponing evictions will achieve little if someone has had their income cut by the Covid 19 crisis. To prevent homelessness, housing associations must avoid evictions while tenants continue to feel Covid 19’s economic effects.
5. Immediately stop proposed rent increases (due to start on 1 April). It would be unconscionable to raise rents in the middle of such a crisis. Selectively applied ‘hardship funds’ would not compensate for across-the-board rent increases.
6. You and your Board must give consideration now to cutting rents across all your homes.
It is widely accepted that the economic crisis will be severe. Housing associations must start bringing down rents. Soaring rents since the changes in funding in 2010 have been immensely damaging to residents – leaving aside the sale of social rent homes and the disastrous ‘affordable rent’ policies. The entire policy of ratcheting up rents exponentially in order to pay the debts incurred for the construction of largely out-of-reach homes has become ever more incoherent in the current health and economic situation and should be abandoned.
In the context of our demands, we are profoundly concerned about the tone and content of the informal WhatsApp group of some 200 housing association CEOs on issues around Covid 19 of which you may be part. Participating CEOs consistently prioritised the protection of their income stream ahead of the protection of the welfare of tenants.
The CEO group shows itself to be opposed to making it possible for some tenants in real difficulties to pay less, or no rent, through the crisis. The group appears keen not to promote tenant awareness of the government’s three month suspension of legal processing of evictions for rent arrears. CEO’s seem more concerned with getting the messaging right, to ensure compliance however bad the policy The group also refused to countenance stopping the CPI plus 1% April rent increases. There appears to be little concern tor tenants having to face the first of five years of rent increases at a time when the Office of Budget Responsibility forecasts that Britain’s economy could shrink by 35% this spring and unemployment soar by more than 2 million due to the coronavirus crisis. Nothing in the notes indicates that CEOs are analysing or criticising the current operating model for – in particular – the large housing associations: increasing rents to service the debt for the development of largely out-of-reach housing.
This kind of thinking and the advice to tenants on many HA websites is completely out of place in the housing association movement in this moment of crisis. Consensus is growing that it is no longer viable to pursue policies that ensure that the poor pay disproportionately for social ills. The coronavirus crisis is showing up the failings of a broken system. In light of this we ask you to adopt our demands.
Housing Association Residents Action (HARA)
Social Housing Action Campaign (SHAC)