Introduction
Urban regeneration has a substantial impact to play on all three dimensions of sustainability âoften referred to as the three pillars: society, economics and the environment â or more commonly termed as the triple bottom line (Elkington et al., 2007). It is therefore an activity of considerable importance in achieving a more sustainable society. The UK Government has integrated the goal of sustainability into urban regeneration policies, yet the proliferation of definitions and conceptualisations of sustainability render the term to be so poorly understood and slippery that it can be easily misinterpreted, or at worse, even manipulated.
The new 2016 United Nationsâ (UN) Urban Agenda reaffirms the concept that sustainable cities require both environmental and social sustainability, and with this introduced 17 [interconnected] Sustainable Development Goals (SDGs)that support a better and sustainable future for all by addressing issues relating to poverty, inequality, climate change, environmental degradation, peace and justice (see https://www.un.org/sustainabledevelopment/sustainable-development-goals/). With goal 11 (SDG11) â that of making cities inclusive, safe, resilient and sustainable â a target of sufficient and affordable housing has been set (https://sustainabledevelopment.un.org/sdg11). Despite housingâs central role and importance in ensuring sustainability (Hills, 2007), and despite the importance of both the environmental and social pillars of the triple bottom line in ensuring sustainable development (Elkington et al., 2007), current evaluative methods that support decision making on social housing interventions still fail in capturing all of the socio-environmental spillovers of the UNâs SDG11. This book contributes to addressing this issue by providing decision makers with a new evaluative tool, namely âSuHousingImpactâ, building on and taking forward the Sustainable Return on Investment (SuROI) approach (Bichard, 2015), and allowing the successful capturing of such socio-environmental spillovers in housing-led regeneration schemes.
The book introduces and covers the subject domains of urban regeneration, with a focus on housing-led regeneration, together with sustainable development and evaluation. In addition to this, existing methods of evaluation of housing-led urban regeneration schemes are critiqued. The approach of SuROI (Bichard, 2015) is introduced as an extension of the Social Return on Investment (SROI) methodology, which has been used within the context of the built environment previously (Aspden et al., 2012; Bichard, 2015; Bridgeman et al., 2015, 2016; Watson et al., 2016; Watson and Whitley, 2016).
The research in this book links in with the concept of âsocial innovationâ. Social innovation is a domain which is becoming âincreasingly evident in policy [and] scientific and public debatesâ (Howaldt et al., 2014) and is considered as being âincreasingly influential in both scholarship and policyâ (Moulaert et al., 2013), with a growing consensus emerging amongst practitioners that âwidespread social innovation is required to cope with the significant challenges that societies are facing [both] now and in the futureâ (Howaldt et al., 2014). The concept has been referred to as âa new combination of social practices in certain areas of action or social contexts with the goal of better satisfying or answering social needs and problems than is possible on the basis of existing practicesâ (Ibid, 2014). Specifically, this involves ideas which have been subsequently turned into practical approaches (Evers et al., 2014).
Social innovation approaches have been said to be important for finding solutions to the interconnected challenges of global and sustainable development (Babu and Pinstrup-Andersen, 2009), whilst the significance of methods and technologies has been widely acknowledged to be central to innovation studies (Howaldt et al., 2014).
Such innovation is outlined in this book, which consequently leads to the creation and unveiling of the novel âSuHousingImpactâ tool, useful to sustainably evaluate housing-led urban regeneration schemes in both an ex-ante and ex-post context. This book demonstrates the implementation of the tool on two real historical case studies from a leading housing association based in the North West of England, UK, through two extant housing-led regeneration schemes â a not-for-profit housing association; those schemes being an environmental-led scheme and a high-rise scheme, with results showing that the environmental and social spillovers are largely disregarded because of a gap in the evaluation methods and that room for significant improvements exists. This proves the importance of the âSuHousingImpactâ tool, which allows the unveiling of hidden social and environmental benefits from housing-led urban regeneration schemes and therefore supports a better alignment of current practices to the pursuing of the SDG11. It is hoped that this new tool can be used to better inform and evaluate when compared to previous methods of evaluation in urban regeneration.
Background and context
Economic climate and consequences for housing associations
Housing associations are currently operating under severe financial constraints, which make the decision making process extremely demanding, since every choice needs to be thoroughly assessed in terms of benefits. This situation has become particularly harsh in recent times, while in the past less scarcity of resources allowed more flexibility in choices. Before the economic crash of 2008 in the United Kingdom, housing associations could rely on significant bank financing to fund their development. Banks and other lenders historically provided housing associations with loans in favourable terms. Until the advent of the credit crunch, banks priced loans to housing associations at 20â30 basis points above the London interbank lending rate (House of Commons, Communities and Local Government Committee, 2009). However, once the credit crunch came about, not only did banks charge more for new loans, but they also sought to rewrite the already existing housing association loans they had outstanding. Those housing associations seeking additional financing found that banks demanded rates as high as 300 basis points above LIBOR (London Interbank Offered Rate), often more than ten times higher than their previous rates. A number of lenders refused altogether to lend to housing associations (Hilditch, 2009; House of Commons, Communities and Local Government Committee, 2009). Banks also sharply increased the cost of credit for housing associations, whilst demand for for-sale homes and shared-ownership housing plummeted, reducing revenue for housing associations (Dowler, 2009). More recently as part of the housing white paper, the UK Government has announced that rent decreases (explained further below) are to remain in place until 2020 and that there remains a focus on Right to Buy (UK Government, 2017).
Housing associations had increasingly been building housing for sale in the open market to generate additional revenue to help fund the development of social housing. However, the financial crisis in 2008 left housing associations with thousands of unsold housing units, whilst additionally reducing the market value of the associationsâ housing stock and land holdings. Additionally, housing associationsâ ability to generate funds to support the development of social housing was curtailed, whilst the crisis also reduced the amount of housing acquired from private developers through Section 106 agreements (planning obligations under Section 106 of the UKâs Town and Country Planning Act 1990 is a mechanism which makes a development proposal acceptable in planning terms, that would not otherwise be acceptable). A reduced revenue subsidy for housing, notably via housing benefit, has contributed to the financial difficulties that housing associations currently face. In addition, a reduction of welfare support will impact on the ability of tenants to pay their rent, whilst the cutting of rent paid by tenants by 1% has added to the challenges faced. To cap it all off, the Right to Buy scheme can force associations to sell at huge discounts. Added to this, falling wages and a lack of employment contributes to these issues, all this at a time when social housing is likely to be in even greater demand (Chevin, 2013), putting even more pressure on housing associations. Consequently, housing associations have had to be more economically aware. Poor decision making can have major consequences. It is therefore important to make sure that investment is used efficiently, and that the amounts of money which are available are not wasted.
Presently, the economic climate is now even more demanding; additionally, with the added impact of the recent world pandemic of Covid-19, it is increasingly important that the evaluation of housing-led urban regeneration schemes is of a high standard, and that the conclusions coming about from a particular evaluation are accurate. To this end, it is imperative that all benefits arising from a particular scheme are taken into consideration, and that as much information as possible on the scheme impacts is available for strategic decision makers. However, there is an absence of frameworks available to assess impacts in terms of sustainable development on the built environment (Thomson et al., 2009), or certainly a limited number of such frameworks (DETR, 1998; OECD, 2000); and the absence of appropriate frameworks has often been considered as playing a part in the inability to deliver the desired objectives of urban regeneration schemes (Kazmierczak et al., 2009) which can have negative repercussions, especially when taking into consideration the aforementioned current economic climate, when money is not always readily available and mistakes are potentially costly. Along these lines, Tyler et al. (2013:171) pose the question as to why, despite the resources that many countries commit to urban regeneration, has there been âso little evidence available on the aggregate value of regeneration benefits?â
Economic climate, its effect on housing associations, the resulting problem and potential solution
A housing associationâs core role is to provide housing for those who are in greatest need. The sector in the United Kingdom contains the largest number of professionally managed properties (approximately 3.9 million, 17% of all households; MHLC, 2019), and as such, has a significant role to play in improving the countryâs economic, environmental and social sustainability. Improving the sustainability of existing housing stock is a major challenge facing the UK social housing sector, for which there is little support to navigate the growing and often incongruent information relating to sustainable development and how to operationalise it.
The housing association sector has typically been underpinned in previous years by high levels of capital subsidy from the UK Government (Malpass, 2005), with the majority of revenue being funded indirectly through Housing Benefit (Steele, 2012). In recent times, there has been a change from local councils, to now housing associations developing most rental housing, initially receiving substantial government funding to do so (Schwartz, 2011). Nowadays there involves a greater reliance on private actors, market mechanisms and commercial capital, with the shift being described as a âmigration from the public sector towards the private marketâ (Blessing, 2015:198).
However, despite this new commercial direction, things have become more difficult for housing associations in recent years since the economic crash of 2008 and the economic catastrophe that is Covid-19. According to Evans et al. (2016), the financial crisis âaffected the housing sector the hardestâ.
Specific areas have consequently contributed to the necessity for change in the way housing associations do business, resulting in a more commercial approach being taken. Firstly, a reduced revenue subsidy for housing, notably via housing benefit, has contributed to the financial difficulties that housing associations currently face. In addition, a reduction of welfare support will impact on the ability of tenants to pay their rent. Added to this, falling wages and a lack of employment add to the issues, whilst social housing is likely to be in even greater demand (Chevin, 2013), putting even more pressure on housing associations.
The change to welfare support is another driver for change. In late 2010, the UK Government began a radical overhaul of almost all aspects of welfare support. Central to these reforms was the governmentâs aim to reduce the nationâs benefits bill, particularly in relation to housing benefit. Because housing benefit is no longer paid direct to the housing association via direct debit, this can affect their rental income. In addition, the so-called âbedroom taxâ (in 2016, the UK Government introduced an under-occupancy penalty/charge from the Welfare Reform Act 2012 whereby tenants living in social housing with rooms deemed âspareâ faced a reduction in Housing Benefit, resulting in them being obliged to fund this reduction from their own incomes or face rent arrears and potential eviction) has added to the challenges faced, whilst the Right to Buy scheme can force associations to sell at huge discounts.
Bearing the economic effects of the credit crunch in mind, housing associations have tended to react by attempting to plug monetary gaps via a drive to be more commercial. Chevin (2013:7) writes that many housing associations were looking at accomplishing âgreater value for money and better asset managementâ, together with looking into the possibility of additional income streams. Housing asso...