«Mixed Messages on Mixed incoMes Volume 15, Number 2 • 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and ...»
In the subsequent decade resales became established as properties offering good value for money and in particular took on a role in the wider local housing market as starter homes or homes for households at the beginning of the family cycle. (Jones and Murie, 2006: 141) According to van Ham et al. (2012), the initial stability of RTB neighborhoods is easy to explain, because nearly one-half of the buyers had rented for 20 or more years, and previous moves in the council sector had enabled them to secure relatively desirable dwellings. Few of these early RTB purchasers stated that they wished to move again (van Ham et al., 2012; see also Forrest and Murie 1984a, 1984b; Foulis 1985). Hence, in the initial stages of RTB, stability was mostly associated with sitting tenant buyers who do not affect turnover positively or negatively.
A second and related issue concerns market forces, especially the wider housing market context.
In the previous subsection, on residualization, we established the selective sales patterns of tenants taking up the RTB. The more desirable properties were often in more desirable areas with a strong housing market position. Consequently, RTB sales have been highest in attractive areas where owner occupation was already at relatively high levels and where the initial stock of council housing was smaller. Thus, market forces already played a role in the initial take up rates of RTB by tenants.
Subsequently, the influence of market forces increased when RTB owners offered their dwellings for sale on the housing market. How former RTB dwellings became a part of the market for
owner-occupied housing varied greatly2 (Forrest, Gordon, and Murie, 1996). Munro (2007) mentioned that the extent to which former council houses are integrated into the broader market for owner-occupied housing depends critically on the dwelling location. In pressured housing markets, such as the southeast of England, former council houses integrate quickly into the mainstream housing market. In less pressured markets, this integration usually takes much longer (see also Forrest, Gordon, and Murie, 1996; Pawson and Watkins, 1998). These mechanisms can work out negatively for neighborhood stability in both desirable and undesirable areas. The less desirable areas have lower RTB sales rates and may therefore become even more exposed to high turnover of lettings and the process of residualization (Jones and Murie, 2006). In desirable neighborhoods, initially stable estates could become very transitional because of their role within the wider local housing market. This outcome may happen if these areas become a locus for low-income owner occupiers, risking increases in mortgage foreclosure, sales turnover, and private tenancy (Jones and Murie, 2006). We will return to the issue of private tenancy.
Overall, the size of the social housing sector has decreased significantly, but demand for social housing did not necessarily decrease commensurately. Consequently, waiting lists grew longer, which made it even more difficult to enter social housing (for example, Burrows, 1999; Forrest and Murie, 1988; Pawson and Bramley, 2000; Scottish Government, 2012). Research by Holt Brook, Kinver, and Strachan (2006) showed that tenants particularly have reported reduced access for other tenants to perceived “good” or “stable” neighborhoods. Importantly, the issue of reduced access does not apply only to social housing. Jones and Murie (2006) showed that resales offer good value for money within local housing markets, which attracted buyers from beyond the community who outbid local residents. This outbidding occurred for instance in tourist areas, where resales became second homes or retirement homes (Williams and Twine, 1994).
The third issue concerning the links between neighborhood stability and RTB is selection.
Neighborhood stability may not be primarily the consequence of homeownership but might also be its cause, which runs counter to the common wisdom of stabilization by homeownership. This reversed mechanism seems to operate in various ways in the context of RTB. In particular, Jones and Murie (1999) provided an analysis of RTB effects on neighborhood stability by looking more indepth at the situation in Glasgow, Scotland, and Birmingham, England. Their analyses indeed revealed that residential turnover was less on council housing estates with higher RTB sales levels.
Their data did not show, however, that high sales levels subsequently resulted in lower turnover rates. Jones and Murie concluded that the council estates with high sales levels were likely to be the more stable estates with lower turnover levels before RTB. In a followup analysis 7 years later, they concluded that “the previous social standings of neighbourhoods remain broadly stationary.
The most desirable areas continue to have the lowest level of turnover in their rented sectors and attract the highest level of sales and resales” (Jones and Murie, 2006: 154). In a similar vein, van Ham et al. (2012) suggested that selective sorting into the RTB program (that is, tenants intending to stay as long as possible) might cause those who bought their dwelling to be the least mobile.
From this perspective, the fact that the purchase is the result of a strong preference for staying put, not the purchase itself, caused neighborhood stability (see also King, 2010).
On the matter of regional variation, see the enlightening maps of England in Dunn, Forrest, and Murie (1987: 51) and Forrest, Gordon, and Murie (1996: 130). For Scotland, Scottish Executive (2006: 10–11) includes many clear diagrams on regional variations of tenure as affected by RTB.
A fourth issue is that RTB owners may want to move on again after a while, to trade up in the market for owner-occupied housing. In their recent investigation of the moving behavior of RTB owners in the United Kingdom, van Ham et al. (2012) showed that trading up appears not to be a strong factor. They found that the probability of an RTB owner making a long-distance move falls between those of social renters and traditional owner occupiers. The difference between RTB owners and homeowners or social renters was not significant in their analysis. Furthermore, RTB owners are less satisfied with their dwelling than traditional owners but more satisfied than those in social housing. RTB owners are also the most likely to state that their neighborhood is the reason they want to move, closely followed by social renters (van Ham et al., 2009).
Ownership acquired through RTB may negatively affect neighborhood stability in a fifth way; that is, when for various reasons RTB translates into higher private tenancy levels. A key reason is that RTB purchasers move but keep their properties and let them out, which not only frustrates the objective of increasing local homeownership rates but also facilitates lettings to undesirable tenants (Munro, 2007). The second and connected reason is that private tenants are generally very mobile and create relatively frequent turnover. This issue also brings us to the third type of outcomes that are relevant for understanding the neighborhood effects of RTB: tenure and social mix.
Tenure and Social Mix We previously asserted that creating mixed neighborhoods (through changes in housing tenure and socioeconomic composition of the population) was not an explicit aim of the RTB policy, although it was welcomed as a side effect by the government (Tunstall, 2011). At first sight, selling homes to tenant purchasers seems a straightforward instrument to create mixed neighborhoods.
Three issues, however, refute a simple causal pathway between RTB and social mix. Firstly, RTB initially did not alter the social mix in council housing areas, because sitting tenants purchased their dwellings. Hence, initial RTB takeup by tenants changed only the tenure balance, with the more affluent council tenants selecting into owner occupation. Only when RTB properties were resold on the open market did subsequent purchasers change the socioeconomic and demographic profiles of the local community (Jones and Murie, 2006). The nature of that socioeconomic change was dependent on various factors, of which the market potential of RTB dwellings and their neighborhoods (see the previous subsection) is an important one. Offering former RTB dwellings on the open housing market tapped a wide potential range of buyers.
Survey evidence shows that the resale market is not predominantly a first-time-buyer market. Half of those who have purchased former public sector dwellings were already owner-occupiers at the time. For most of those concerned, buying an ex-RTB property presented an opportunity to trade up in the market in terms of size and type. Nevertheless, for a considerable proportion of first-time buyers, the availability of a former public sector property may have been crucial in facilitating access to home-ownership. Significantly, one-third of this group had previously contemplated social renting. (Pawson and Watkins, 1998: 1291) Other studies of resale purchasers have shown that most moves were over short distances (for example, Pawson et al., 1997). The foregoing suggests various pull factors connected to stages in housing careers. Buyers of former RTB dwellings who had previously contemplated social renting are unlikely to have significantly higher incomes than many council tenants.
Cityscape 109Kleinhans and van Ham
Secondly, RTB sometimes translated into more private tenancy instead of more owner occupation (see the previous subsection). From this point of view, tenure mix has indeed increased, but not in coherence with policy hopes and expectations. According to Scottish Executive (2006), some research has indicated that tenure mix cannot guarantee particular types of mix in the longer term.
The growth of private renting in particular lowers the ability to control the profile of areas.
Whilst communities being newly built would expect to contain a balanced mix of tenure, the Right to Buy mixes tenures in a more random manner. The Right to Buy is a rather blunt tool for mixing communities in this respect.... It is also worth bearing in mind that it is not possible to control the movement of former Right to Buy properties into the private rented sector, and that—without applying rights of pre-emption or housing burdens— this is true for all developments, whether old or new. (Scottish Executive, 2006: 58) Finally, we come to the ambivalent nature of the policy assumptions. Munro (2007) emphasized the dichotomous attitude when considering the role of owner occupiers in estates that were previously predominantly rented. Munro points out the clear policy focus on tenure mix as a positive measure toward creating mixed and sustainable communities, which may simultaneously result in counterproductive social effects, such as increased turnover (by private renters) and instability, and tenant buyers’ low incomes or reluctance hindering participation in or progress of physical renovation by landlords (Munro, 2007). In the next section, we will further explain how the (increasing) tenure mix may affect the nature and quality of social interactions in areas with substantial sale numbers.
Social Interactions As mentioned previously, RTB initially did not alter the social mix in council housing areas, because sitting tenants purchased their dwellings. When resales started to occur, however, relatively young people, often in white-collar occupations, moved into neighborhoods previously dominated by social housing tenants. At this point, the existing social mix became more dynamic. The contrast between the newcomers buying former RTB dwellings and the original council tenants, who were often on social benefits, has regularly resulted in social tensions (Jones and Murie, 2006).
Research by Holt Brook, Kinver, and Strachan (2006) indicated that sitting tenants and RTB buyers had widely varying perceptions of the effect of RTB on neighborhoods. The most common view was that new owners generally took greater care of their properties than tenants. Although some respondents reported that owners also were “better and more involved neighbors,” however, others claimed that owners were more selfish and less concerned about the neighborhood.
This topic relates to a wider field of study; that is, the benefit of mixed communities in terms of social interaction between residents from different tenures (for an extensive overview of associated issues and mechanisms, see Kleinhans, 2004: 377–380). A systematic review of this subject has shown that the evidence is either limited or negative (Bond, Sautkina, and Kearns, 2011). Increased exposure between residents with different values and lifestyles (for example, social renters and owner occupiers) is a common cause of tensions. In the context of RTB, for example, much evidence points at either “peaceful indifference” or tensions between residents of different tenures (Beekman, Lyons, and Scott, 2001; Kleinhans, 2004). Compared with new residential areas or demolition combined with replacement by new units, RTB provided a tenure-mix strategy that did not by definition introduce new faces in neighborhoods. “Far greater levels of cross-tenure networks are to be found
where owner-occupation has arisen in a more organic way as a result of tenants exercising their Right to Buy” (Beekman, Lyons, and Scott, 2001: 59). Related is the finding that residents in an area where mixed tenure arose through RTB had more difficulty in distinguishing the tenure of their neighbors than residents in other study areas (Scottish Executive, 2006). The fact that RTB often did not result in striking visual differences among tenures decreased the opportunity to interpret tenure as a visible marker of the social status of residents.