A housing agency is good news - but details count

Today we have what is potentially some very good news. Ten years after Common Weal first set out the model, it finally looks like Scotland may get a National Housing Agency. This has been announced as the intention of the SNP administration if, as looks highly likely, it is elected back to power in May.

Of course, very little details is available and recently government in Scotland is defined not by the delivery of ambitious projects but rather by the complete failure of any project which was ambitious in scale – to include the National Energy Company, National Care Service and Deposit Return Scheme in particular. It must get delivery right this time.

Of the detail that is available, some is encouraging, including large scale affordable housing projects, a focus on rural housing and closer working with the Scottish National Investment Bank. But some others do give some reason for concern.

Particularly worrying is the suggestion that a part of the role of the agency is to unlock land for development. While this might sound unobjectionable, that very much depends on what it means. Will this be three parts 'handing valuable land to commercial developers' to one part mass affordable homes?

This question gets to the heart of the fundamental issue with this whole concept – what exactly is it for? Is it simply to increase volume of housebuilding by any means necessary, probably meaning turbo-charging commercial development? Or is it about rebalancing the housing market towards tenant-and-buyer focussed benefits rather than economic development ones?

To put that another way, there is a fundamental question which can be asked which will reveal whether this agency is a force for good in reshaping the housing market or if it is a conservative force maintaining the status quo – if this initiative is successful, will it increase house prices or reduce them?

This is the contradiction which has been at the heart of housing policy for a long time now. Sometimes it is seen as a social policy focussed on first time buyers, tenants and affordability. Other times it is discussed purely as an economic policy there to boost GDP growth.

If the former priority is followed, it would constraint and actually push down on house prices. If it is the latter ,you would expect policy to inflate house prices. And of course the reality is very much that house prices have continued to outpace inflation in the devolution years.

It is an outright contradiction to believe it can be both these things at once. With housing you cannot create just some housing that is affordable while still inflating the average cost. That is a myth. If you supply significantly more affordable housing in any meaningful way, it would push down on the entire housing market, just like it would in any market.

Reducing housing costs is very much in the interests of most of Scotland and is the only way we will ever tackle the housing emergency – but it is bad for big property developers and it is bad for speculative investors. Generally in situations like this the Scottish Government says that this is a false choice and that both can have their interests served, but then goes on to prioritise the commercial interests.

Nevertheless, this is the structural model Common Weal has been pushing for a decade – a National Investment Bank to supply capital, a housing agency to make the housing sector work for citizens rather than investors by focussing on high-quality, low-cost supply, and a National Infrastructure Company to ensure that public infrastructure is also developed to the highest standard in the national interest.

There is enormous potential in this initiative if the Scottish Government gets it right. It is an exciting opportunity for a much-needed transformation of construction technologies and techniques in Scotland. And it could also give us a chance to revolutionise our currently-poor town and area planning.

So there is much in this to hope for but plenty of recent history to raise concern. It will be at least two years before this agency is working and between now and then, Common Weal will be going all out to provide policy work and thinking which gives us the best chance of creating the best agency we can.

It is ten years too late, but this is an important step forward nontheless.