Housing and Planning Bill

Written evidence submitted by Mulberry Housing Co-operative (HPB 92)

1.0 Purpose Of This Submission

1.1 This submission represents the views of Mulberry Housing Co operative to the Public Bill Committee regarding the Housing and Planning Bill.

2.0 Summary

2.1 Mulberry Housing Co Op is a Fully Mutual self-managed, independent co operative of 54 households in Waterloo SE1. Thus it is located in the heart of London where the market rates for homes are significantly higher than the national average – and the current rents paid by the Coop’s members.   We have been a thriving housing co –op for almost 30 years.

2.2 Our properties are in good condition, providing a mix of family houses, one bedroom flats and purpose built disabled units. Our rents are low and this is reflected in the low level of rent arrears we maintain. We receive no public subsidy. Our properties were originally purchased by way of mortgage (fully repaid in 2011). We are currently undertaking a programme of refurbishment to maintain our housing stock. This has been funded from a commercial loan from Lloyds Bank and our cash reserve.

2.3 We provide homes for skilled and key workers, people working in the caring professions and many of the labour force essential to London’s public services. We provide homes for people in housing need from the waiting list of Southwark and Lambeth, including disabled and supported needs tenants.

2.4 We propose that the introduction of Pay to Stay and Right to Buy will destroy our community and be the end of our organisation.

3.0 Sustainability of our Co-operative Model .

3.1 Our co-operative is run by our tenant members. We are responsible for all aspects of managing our properties. This requires a high commitment from our residents and active participation by all who are able. We have an Executive Committee, regular General Meetings and specialist working groups.

3.2 Our Co-op is successful because of the commitment of our members who have years of invaluable experience. Skills are learned and shared over time.

  "The Co-op is also a wonderful business model that’s given amazing service to communities, staff and customers alike. " David Cameron April 2014

3.3 Pay- to Stay will force many of our middle -income skilled, contributing members to move away. As households rise above the threshold more and more tenants will be forced out, resulting in a dearth of skilled members to manage the Co -Op. PTS means that households will be forced to choose between remaining in their homes or breaking up their families as adult children become earners. PTS will introduce significant inequalities between our members as some are faced with rises of up to 700%.

Example: Many of our households have adult children who are earners. One example is a single parent with two adult children who are both working. The combined incomes will force the parent to ask the highest earner to leave. This is the ‘reward’ that this family will get after years of struggling to achieve a University education for the children.

Example: Many of our households are comprised of middle income earners who will be penalised for their years of working to achieve better jobs. For example we have administrative managers who support and care for vunerable family members who would be forced out by PTS thereby creating more demand for care services that are currently provided on a voluntary basis.

3.4 Right to Buy will force us to abandon our model, as members of MHC, we own and rent our properties in common. Put simply, we own our properties collectively and financed this with a joint mortgage. The mortgage was paid entirely through our collective rents.

3.5 Right to Buy will not be an option for a significant proportion of our members, whose age will be prohibitive to obtaining a mortgage. Indeed, a large proportion of our members have paid a collective mortgage over a period of 25years. The government is ignoring the financial contribution these members have made over many years.

3.6 Pay to Stay will force our members who can access personal mortgages leave London in order to afford a place to live. This would cause the breakup of social and support networks that have been developed over decades

4.0 Fundamental Breach of Property and Ownership Principles

4.1 Mulberry is a Fully Mutual Housing Co Operative and we own, through share allocation, the 56 properties and Lease to our land. MHC obtained a mortgage and repaid the same early through our prudent management of our finances. This has been funded solely through the rental income we receive. We already own our homes through our mutual agreement. (Similar to Condominium developments in USA)

4.2 We are currently undertaking a refurbishment programme to bring our properties up to standard and comply with H&S requirements. We have funded this with our reserves and a commercial loan from a high street bank (with all the attendant responsibilities) This means that MHC is not and has never been reliant on public finance, only the rental contributions of our members.

4.3 The government is breaching our freedom and fundamental right of ownership, forcing us to sell our collective properties, telling us how much to charge and making it impossible to manage our own organisation. We receive no on- going subsidy from the public purse. It is not clear what moral or legal right the government has to impose these measures.

5. Disincentive to Work and Blight on Career Progression.

5.1 Our tenants will be unable to afford the massive increases in rents (estimated market rent £48,000pa). This means the rents would have to rise above the household income of the majority, if not all, of our members. To afford this level of rent the household income would have to be in the region of £170,000pa. A household income of £40,000 would trigger rent rises that are impossible to pay for the ordinary workers who make up our Co Op.

5.2 People would be forced to choose between uprooting their homes and leaving their co-operative communities, or making sure their incomes are below the threshold of pay-to- stay. This will result in social and economic exclusion as people conclude they would be better off not working.

5.3 PTS will inevitably cause people to consider the security of their homes when looking at employment options. Any career progression would have to be measured against the security of a one’s home.

6 Social tensions and disharmony for our Community

6.1 We have an established community who are committed to Co-operative values. We provide many benefits to our community with an unusual level of voluntary and mutual support for our members. The introduction of PTS and RTB will change our demographic. There will be a mix of people able to afford the market rent and low earners with no incentive to be Co Operative.

Example: Our members manage our Co op on a voluntary basis, contributing days and hours of their time to the running of the Co- Op ranging from business planning to social events. Our new Board has recently undertaken some 15 hours of training.

Example: Recently an elderly member of our co -op was recovering from an operation and younger members organised to shop and generally provide a support system, to enable the immediate family members some relief from the full time care needed. Undermining our Co Operative values will lead to the demise of such activities.

6.2 PTS will force us to introduce a divisive charging regime that will see neighbours paying vastly different amounts for the same accommodation. This will inevitably lead to a change in expectations, with some members paying more for the same services.

6.3 PTS and RTB will undermine our long held commitment to equality for all our members by our agreed policy charging the same (relevant to size) rents to all members of our Co Op. We will be forced to introduce differentials in direct conflict with our ethos.

6.4 PTS will cause administrative tensions and have implications for our confidentiality- members will have to police the finances of others. We consider this to be a major invasion of privacy.

7. Impact on the Wider community and Exodus of Key Workers

7.1 MHC houses a variety of key workers such as health workers, teachers, and carers. Pay to Stay would lead to an exodus of these workers with jobs being left, children having to leave schools and a general effect on the fabric of the wider community.

7.2 MHC has policies that ensure our vulnerable tenants such as the elderly and disabled are able to access standards of care and support if needed. For example we support our members in accessing agencies such as occupational therapists and Lambeth Disability adaptations services. We also offer a superior repairs service and ensure our vulnerable members have access to vetted repairs service at all times. Such people would have to rely entirely on the public sector if our Co Op is broken up by this legislation.



AMENDMENT 1 FULLY MUTUAL HOUSING CO-OPERATIVES AND THE RIGHT TO BUY: Recognising that members of fully-mutual housing co-operatives already own their own homes and that the Bill as drafted infringes their property rights, the all fully mutual housing co-operatives be exempted from the Right-to-Buy provisions of the Bill


AMENDMENT 2 FULLY MUTUAL HOUSING CO_ OPERAT IVES That fully mutua l Housing Co-operatives should be excluded from the Pay-to-Stay provisions which follow from the Chancellor’s post-election statement  

November 2015

Prepared 26th November 2015