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Is being good, good for business?

Emmeline Reynish recently completed an MSc at Cardiff University. As part of her studies she investigated the role of housing associations in delivering community regeneration in the South Wales Valleys. She provides WHQ with an overview of her research and what she discovered. 

Despite their growth, there is still a sense of uncertainty as to what the role of housing associations should be. There is a general consensus amongst housing academics and practitioners that their growth has also given them added responsibility. Although primarily social housing providers, the position of housing associations, often at the heart of the communities they work with, has meant that they are increasingly expanding their role. In addition to providing much needed housing, housing associations are increasingly crucial actors in community regeneration, delivering bottom-up initiatives covering a range of issues including health, employment and education.

My research aimed to find out more about the changing role of housing associations through an analysis of their work in the South Wales Valleys (Caerphilly, Blaenau Gwent, Merthyr Tydfil, RCT and Torfaen).  The research was conducted over a three-month period (June-September 2017) and comprised a series of questionnaires and interviews with all associations with stock in the Valleys (with particular focus on Merthyr Tydfil) as well as national stakeholders including, the Centre for Regeneration Excellence Wales (CREW), Community Housing Cymru (CHC) and the Welsh Local Government Association (WLGA).

The research found that housing associations continue to be characterised in a number of different ways and assume multiple roles, ultimately making their job increasingly more difficult.

‘Agents of the public sector’

There was a consensus amongst all research participants that the remit of housing associations is becoming ever wider, and as CHC put it during its interview, they are increasingly being viewed by government as ‘agents of the public sector’. This is something which was also made apparent through the interviews with associations based in Merthyr Tydfil, with one commenting, that they are being leant on more and more by government and communities to provide a range of services beyond just housing.

The fact that associations are increasingly doing more and expanding their workload has brought with it increased recognition of their work by government bodies including local authorities and the Welsh Government. This was identified by associations themselves and by the WLGA and CHC. Although this recognition is positive, key informants recognised the difficulty for associations to fit their activities within government regeneration frameworks. The criteria are often very stringent and pertain to certain areas, for example town centres, and so flexibility is hampered.

So, whilst it is positive that the work of associations in regeneration practice is steadily becoming more recognised by those in power in Wales this does bring about challenges as they are relied upon more and more. With the increasing strain on their funding streams they are going to be put under pressure on what they are able to deliver and may not be able to meet these expectations. This is exacerbated if they are unable to access government funding due to the way policy has been constructed. If the government wishes to see associations offer more in their communities and contribute to public services, more needs to be done to ensure that they are included in policy and strategy and have more ability to obtain support for their work.

‘Anchor investors’

There is a broad consensus amongst all key informants that associations help Valleys communities by always being willing to invest, both in terms of housebuilding, and providing wider services.  In the interview held with the WLGA it was stated that the core function of stock transfer associations is to encourage investment in the areas that they work. This was found to be a strong foundation of the work of a stock transfer association in Merthyr Tydfil, which stated that it believes that creating opportunities for inward investment is part of the work of associations. It credits the work that it has done with the fact that there is now a Tesco and a Greggs store open on one of its most deprived estates.

The Old Market House in Pontypool was converted into six homes and a commercial space by Bron Afon in partnership with Torfaen

Linked to this idea of anchor investors is a sense of moral obligation. Key informants emphasised the fact that associations will not just retreat and abandon areas in difficulty, but instead work to address the challenges. Whereas private sector businesses depart when times get tough, housing associations do not. Although they are businesses they also have a strong moral foundation which causes them to behave differently to corporate actors. This is supported by the fact that in the email questionnaire I carried out, 78 per cent of participants stated explicitly that they felt that their community projects were part of the core business of their association.

‘Community voices’

When discussing regeneration with all key informants and housing associations a shared opinion was that, no matter what approach is taken to community projects, people need to be at the heart of the process. CREW talked about the fact that people it have engaged when carrying out its work feel that regeneration by and large has always been done tothem, rather than withthem. Applying this to associations’ work, CREW identified that the primary objective of community regeneration initiatives should be to empower people and harness communities to stand on their own two feet rather than creating dependency. Interestingly, during my research no housing associations mentioned dependency as a challenge they face.

The majority of associations also felt that being based within their communities was essential to their work, particularly the effect their visibility has on the perception their residents have of them and the ability of tenants to access their projects.

‘Viable businesses’

Despite the clear moral commitment of associations to the South Wales Valleys area, they must still perate as effective businesses. All of them referenced the importance of delivering value for money and ensuring that any community projects contributed to business objectives.

Ultimately, housing associations (despite sometimes being characterised in a similar way) are not public sector organisations and do not have the same funding mechanisms. As such, they must protect their income if they are to continue to operate. It is clear from my research that investing in the community, allowing people to learn new skills and supporting their wellbeing, is a valuable activity for associations as well as tenants and residents. If tenants feel supported, have access to work and a healthy lifestyle they are more likely to maintain their tenancies, thus protecting the continued work of the association.

The balance between supporting communities and maintaining a corporate strategy can be difficult for housing associations to reconcile, and many research participants highlighted that this need sees priorities and types of activities continually change.

A look to the future

As more pressure is put on housing associations both in terms of delivering more services, and threats to their funding stream, they are increasingly looking at innovative ways to earn income. For some, this is being done through investing in retail premises, others are building homes in more profitable locations (for example, Cardiff Bay) to generate income which can be used to benefit areas in substantial need, such as the South Wales Valleys. This is however, proving to be controversial.

In August 2017, the National Assembly’s Public Accounts Committee held an inquiry into the regulation of housing associations in Wales.

This concluded that they need to be more transparent about their investments, with the inquiry report noting ‘a key issue arising from our evidence were the potential risks associated with diversification and the movement from within the sector away from “traditional” housing association ventures’. When discussing this with the community housing association based in Merthyr Tydfil it was said that they increasingly feel that they are ‘stuck between a rock and hard place’ but that associations developing their offering is both a threat and an opportunity.

CREW stated that one of the most crucial issues in the diversification debate is that it is still unclear what the ‘core business’ of housing associations encapsulates and between different associations there is still a lot of variation

This focus on investment also indicates that they are going to be put under greater scrutiny – and ultimately this could prove to be an opportunity for housing associations to be able to gain further recognition for the wide-ranging work that they do.

The crux of the issue appears to be that the role of housing associations has become very unclear. My research showed that they are important community regenerators, delivering a wealth of bottom-up community projects.  Many identify themselves as ‘more than just a landlord’ but it should be remembered that they are not a homogenous group and there are differences present between national bodies and housing associations themselves about what the focus of their work should be. Public sector agent, anchor investor, community voice, business operative, housing provider; the list is growing.

According to one housing association, its annual survey findings have shown that even tenants have mixed feelings about whether housing associations should be delivering projects beyond housing. CREW believes there is still a running narrative on what housing associations should be, and it is taking years to decide with no clear answer emerging.

The findings of my research also proved this to be the case, which means that in reality, the future of housing associations is very hard to predict.

 Emmeline Reynish completed her MSc in international planning and developmentis now a graduate town planner at Arup. The headline is also the title of her dissertation: Is being good, good for business?

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