Social housing: The story of Altgeld Gardens

The Labour movement column

By Anthony Painter

A balanced and thriving community for African American soldiers returning from WWII, Altgeld Gardens in Chicago prospered in the 1950s and 1960s. With a ready supply of jobs from the nearby steel mills and car manufacturing plants, and a mixture of working and middle class families, it provided a lively and aspirational environment for the families who lived there. Throughout the 1960s and subsequently things started to change- very much for the worse.

The good manufacturing jobs started to go but that was a long process that played out over 25 years or so. There was one clear moment when the dynamic of the area really began to change. The US Department of Housing and Urban Development changed its policy towards the letting of public housing. In the late 1960s it determined that rents in public housing henceforth would be a third of the household income. Essentially, this constituted a means test.

Almost immediately the better off families began leaving the area – and this happened not just in Altgeld Gardens but in similar communities across the US. If you were going to be charged a private sector rent, why not upscale and move to a nicer and more convenient neighbourhood? En masse, those families who could afford to did just that. By the 1980s, Altgeld Gardens had become an urban jungle – gangs, drugs, prostitution, violence, guns, murder, pervasive worklessness, collapsing public services, ghettoisation, de facto ethnic segregation, mixed with political manipulation and neglect. You get the picture.

The toxic combination of industrial change and myopic policy driving a desperate social decline left thousands of families bereft of hope and in a state of profound suffering. This was one of the communities that a young Barack Obama served as a community organiser. It even sapped his spirit such was the despair.

Perhaps in amongst a canter round issues of global security and economic policy, David Cameron might take the opportunity to talk with the US President about social policy and the impact that introducing a means-test for public housing can have on communities. He would learn a lot. During a recent Q and A session in his Prime Minister Direct series, he suggested that Council accommodation could be subject to a lease and means-test in the future. His idea i0s far more brutal than that implemented by HUD in 1960s. In all probability it would – and detail is scant – literally drive families with a greater degree of financial security out of an area. As a result, a similar process of ghettoisation would be seen in communities in the UK and that would be a social disaster.

So why would such a policy even be contemplated? Simple. The coalition refuses to use either financial or policy levers to ensure the construction of a sufficient supply of new, affordable housing. Instead, it is blindly stumbling into a debate about allocation. There are 1.8 million people who are waiting for social or council housing because the last government failed in its 13 years in office to sufficiently expand supply. In the end, they got it. And now, with the new administration, the lessons have to be learnt once again. Here’s a prediction: it will end in the same place in a few years’ time and will need to find new mechanisms to stimulate construction of new housing. So why not cut the learning process short?

Bizarrely and in the name of localism – a naïve localism in this case – the coalition refuses to confront the basic issue of housing supply. Instead, it is embarking on an experiment in incentives for local authorities to grant consent for more housing. It may work. I sincerely hope it does. But why take the risk when the need is so acute?

While the coalition will not target numbers of houses to be built, the Labour government did based on housing needs assessment. The failure of the coalition to intervene where local authorities adopt a NIMBY approach is likely to mean a significant shortfall in new houses and, most importantly, affordable housing compounding what is already a major policy failure. A total of 240,000 new houses should be constructed per year in England by 2016 (based on targets set by the last Government) Only 113,000 were completed in the year to March 2010. Peak completions were only 174,000 (in the 12 months to December 2007.)

Those are the numbers. Let’s not, however, make the mistake of Labour in government by focusing too much on those and consider instead the real world impact. What it means in practice – in terms of the impact on everyday lives – is that it is monumentally difficult for anyone other than the wealthiest (and probably with parental backing or an inheritance) to get on the housing ladder. We will deny millions of young families the opportunity to build a secure future for themselves. That is morally suspect – why should one generation be disadvantaged over another? Those who are unlucky enough to live in a NIMBY-ish area will be denied the opportunity to own a home through absolutely no fault of their own – an added extra localist cap on aspiration.

Though Margaret Thatcher never understood that the supply of affordable housing had to be expanded, she did understand the value of expanding a household’s asset base with the right to buy scheme. Even this lesson seems lost on David Cameron.

The failure of almost two million people to secure good quality and affordable housing – even to rent – creates a sense of resentment. We have seen how this can create community tensions and conflict – the rise of the BNP is partly explained by this. And large levels of private debt mixed with house price inflation will continue to present risks to sustainable economic growth. New house-building could contribute to economic growth over the next few years and so would have a positive impact on the deficit – it’s an economic good and the environmental impact can be managed.

On top of that, now comes the council house means test. Only 60 council houses were completed in the first three months of this year. The response of the Prime Minister is to obsess about allocation. It is clear through that the crisis runs deeper than that. By failing to ensure that new housing is there to meet increasing demand- our population is growing, it’s ageing, and we are more likely to live alone for longer- the Coalition is denying the opportunity for millions to fulfil their aspirations. A policy of intervention in local authority decision making costs little but has enormous benefits. There are limits to sensible localism and this is beyond those limits.

Confront allocation without addressing supply and we are risking the creation of more forgotten- and dangerous- communities like Altgeld Gardens. Surely, that can’t be right? To paraphrase another US president: read my lips, build more houses.

Anthony Painter blogs at http://www.anthonypainter.co.uk. There is more about Altgeld Gardens and Chicago in his book Barack Obama: the movement for change