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Issue 10 May 1993 RSS

A Dose of Morphine

Debate

The Rise and Fall of Public Sector Housing

On Thursday 12 December 1985, Mrs Lucy Lee, an 89 year old pensioner, cut three birthday cakes in the living room of her sheltered housing unit in Barking to celebrate 100 years of council housing. The cakes, one in the shape of a tower block, one a four-storey maisonette, and one a pair of semi-detached houses, were dreamed up by the Association of Metropolitan Authorities. This organisation represented the urban local authorities most damaged by the withdrawal of funds from public sector housing that had taken place since the Labour Party’s loss of power six years before. Mrs Lee was a providential find; her 71 year old son had seen an AMA advertisement for the oldest council tenant in his local newspaper and put her name forward. She had moved into her first council house in Barking in 1914, only 24 years after the passage of the Housing of the Working Classes Act that enabled local authorities to borrow money from the treasury to buy land and build houses. At the cake-cutting ceremony she recalled her first council house; ‘It was like a dream come true’, she said.

In the years since Lucy Lee moved in, local authorities, the boards of nationalised industries, new towns and housing associations have built nearly seven million homes - their rate of construction ranging from a mere 900 a year before 1914 to more than 250,000 annually in the 60s. Even now, after the heavily discounted sale of two million council houses under ‘Right to Buy’ legislation and a lower rate of new construction than at any time since 1946, the public sector still houses one third of the nation and rehouses 300,000 families a year. The total value of local housing stock - 90% of it, contrary to popular belief, consisting of small, low-rise, traditionally built homes - is estimated at £50-100 billion. The 10% that is unconventionally built, consisting of high-rise estates like Roehampton and Broadwater Farm in London, the now mostly demolished Parkhill and Hyde Park in Sheffield, and the early high density housing areas at Milton Keynes, now belong to a category of their own. Coupled with many types of inter-war and post-war aluminium, steel, asbestos and concrete ‘austerity’ houses, they make up the so-called non-traditional sector, a collection of unwanted dwellings universally dismissed as ‘utopian’ sociological and technological disasters, dragging a £20 billion estimate for maintenance and repairs. Because the appreciating owner-occupied house has been for so long the principal plank in the middle class black economy, it is difficult to remember what it was like when flats and houses were simply consumer goods like telephones or motor cars. Yet only 40 years ago that is what they were. Politicians, builders and householders all thought of housing as a product. Even 20 years ago, ‘advanced technology structures’ and high-rise ‘streets in the air’ won design awards and were treated as objects of pilgrimage by politicians and housing experts from all over the world.

At the end of World War II the majority of people in Britain rented their houses and expected to go on doing so all their lives. They rented them under a system of tenure that was actually less arduous than that enjoyed by the drivers of company cars today. It is interesting to remember this when people argue that ownership is a ‘privileged’, or ‘democratic’ form of tenure, while rental is ‘oppressive’ or ‘feudal’. Today, when half the households in the country are owner-occupiers, half the annual new car registrations are ‘feudal’ company perks. And the same people who would consider themselves to be in a state of ‘feudal’ servitude if they were tenants, would still consider it ‘oppressive’ to have to buy their own car.

This is a paradox that illuminates the way in which any real alternative to the sale and resale of expensive hand-made houses has disappeared from the political agenda. Crowded out by massive mortgage-peddling, alternatives have only now, in the crisis of collapsing property values and growing homelessness, begun to stir again. A walk through the temporary ‘cardboard cities’ of London, with the homeless living in the street in a manner unseen since the 19th century, makes the point very forcibly. There is no good reason why all houses should appreciate like antique furniture. They could be as plentiful as cardboard boxes: they could be produced and sold like cars. Most of this year’s drivers of shiny new Cavaliers and Mondeos do not ‘own’ them, they ‘rent’ the like council tenants. And yet they consider themselves a privileged motoring class.

The idea of mass-producing houses to conquer the problems of homelessness and overcrowding as a social service dates from the aftermath of the Great War of 1914-18. During the war draconian production measures prevented the construction of new housing, and the mobilisation of a huge citizen army gave great power to the soldiery. In Scotland a general increase in rents led to militant rent strikes. Soon the Liberal government was forced to intervene in the private rental market. The result was like a dose of morphine leading to an addiction from which housing has never really recovered.

That aphorism ‘rent control is like a dose of morphine’ was coined by the American housing reformer Edith Elmer Wood in 1931, but there could be no better description of the effect of the Increase of Rent and Mortgage Interest (War Restrictions) Act passed by the British parliament in December 1915. Without doubt this was the most influential piece of British housing legislation of the 20th century. It killed the pain of civil unrest at a stroke, but it also built up a massive problem of dependence for the future. Rent control was both retrospective (rents and mortgage interest rates were fixed at their August 3rd 1914 level), and temporary (it was programmed to expire automatically six months after the end of the war), but it proved impossible to shake off. It is not too much to say that large scale council housing, as well as the vast owner-occupier housing market that choked on it at the end of the 80s, derived from this single piece of legislation.

By November 1918, when the Great War ended, the cost of living had risen 225% above the August 1914 level. With four million men under arms and much of Europe and Ireland in turmoil, no British government dared permit a quadrupling of private rents in accordance with the provisions of the Act. So, by political agreement, the Act remained in force. As a result, no longer able to make a living from their investments, Landlords began to sell properties in their thousands to sitting tenants and a new class of owner-occupiers came into existence. Over the next 40 years, rent controls were to turn landlordism into a dead end instead of a respectable business. Inter-war governments, and notably the first ever Labour administration, concentrated their efforts on the development of a new publicly rented sector instead. Under various subsidy arrangements more than a million council houses were built between the wars. Better managed and maintained than impoverished private estates, they soon came to be regarded as centres of working class privilege.

The impact of the 1939-45 war on the nation’s housing stock was even more severe than that of the Great War. This time the cessation of building joined with the total loss of over 200,000 houses through aerial bombardment to create an appalling shortage of housing by 1945. Elected with a huge majority the Labour Party embarked on a massive public housing programme that added another million council houses by 1951 so that more than 15% of all the dwellings in Britain became publicly owned, more than the proportion in the Soviet Union at that time.

The long period of post-war public sector hegemony was not confined to the simple output of conventional buildings. A vast infrastructure of centrally organised research and development facilities dealing with the space standards, performance requirements and cost control needs of schools, hospitals, housing and factories came into existence during this time that was not to be dismantled until the early Thatcher years. The housing market was not only removed from the control of the small builders who had monopolised it before 1939, but handed over to research teams of public and private sector architects, engineers, large construction firms and even vehicle and aircraft manufacturers.

During the war British fact-finding teams went to the United States to study the creation of the new war-production towns by prefabrication. Modest Building Society proposals for a Housing Association administered programme of traditional housing for private rental were rejected in favour of state funding and ‘new technology’. Just as in America Curtiss Wright aircraft engineers were ready to plough their redundancy pay into ‘housing factories’, so in Britain was the government ready to pay for the design of prefabricated houses to be assembled on the production lines that manufactured Spitfires, Lancasters and military trucks.

It was Winston Churchill, the Tory prime minister of the wartime coalition government, who first announced the Emergency Factory Made or EFM housing programme. In a radio broadcast in March 1944 he announced a Ministry of Works emergency project to build 500,000 ‘new technology’ prefabricated temporary houses directly at the end of the war. ‘The emergency programme is to be treated as a military evolution handled by the government with private industry harnessed in its service’, said Mr Churchill. ‘As much thought will go into the prefabricated housing programme as went to the invasion of Africa’.

In the event military planning proved less successful in dealing with post-war economics than it had in dealing with the enemy. The first prototype to be unveiled was the motor industry contribution, a steel panelled ‘experimental temporary bungalow’ called the ‘Portal’ after the minister of works, Lord Portal. With a floor area of 616 square feet, and an estimated cost of £675 fully furnished, including fitted bathroom, kitchen and refrigerator, the proposed rent for the ‘Portal’ was to be 10 shillings (50p) a week for a life of ten years.

The next house to be revealed was the ‘Arcon’, an asbestos-clad variant of the ‘Portal’ with the same prefabricated kitchen and bathroom capsule. Then came the most sophisticated of an eventual total of no less than 1,400 proposed designs. The ‘AIROH’ house (Aircraft Industries Research Organisation on Housing) was a 675 square foot, ten tonne all-aluminium bungalow assembled from four sections, each to be delivered to the site on a lorry fully furnished right down to the curtains. The proposed rate of production of complete houses was to be an incredible one every twelve minutes. This was possible because the completely equipped and furnished ‘AIROH’ could be assembled from only 2,000 components, while the aircraft it would replace on the production line required 20,000.

In retrospect it is clear that the EFM programme was the nucleus of what might have developed into a ‘new technology’ housing industry. Plans were made to use surplus airfield construction plant for site preparation, and well-publicised records were set for speed of erection before the war ended. In April 1945 an ‘Arcon’ house was completed and handed over to its new occupants by 22 men in under eight hours. In May an ‘AIROH’ was erected on a bombed site in London’s Oxford Street in just four hours.

But the EFM programme was not without its enemies. Even before the end of the war the second reading of the Housing (Temporary Accommoda-tion) Bill, which moved the allocation of £150 million for the production of prefabs, was refused by members who, like many people outside parliament, had come to believe that the ‘Portal’, the ‘Arcon’ and the ‘AIROH’ were intended to be the permanent houses of the future. How far the alarm of the construction industry and the banks and building societies contributed to this myth has never been determined, but the state-funded construction of half a million prefabricated dwellings to be assembled by non-construction industry labour and let at controlled rents, cannot have been a matter of indifference to the organisations that had dominated the housing market for so long. The establishment of a successful prefabricated housing industry based on automotive and aviation technology would have transformed, perhaps forever, the balance that had historically existed between the scarce stock of existing housing and the rate of new construction. In the United States, where the prefabrication boom of the war years left a well-established mobile home industry behind it, annual prefabricated short-life housing completions rose from 37,000 in 1946 to over 500,000 by the early 70s. The existence of such an alternative source of housing in Britain would certainly have eased the tragedy of the homeless ever since.

But it was not to be. In August 1945 it was announced that the ‘Portal’ had been abandoned for lack of steel and the ‘Arcon’ and ‘AIROH’ were both to cost more. Nonetheless the programme continued, together with a renewed emphasis on conventional house building and council purchases from the private rental market still blighted by rent controls. In the event the ‘Prefab’ programme did not greatly contribute to the total of 1.2 million new homes built between 1945 and 1950. Production of the major types for local authorities continued until 1947, but only 170,000 of the 500,000 units promised were completed. Of these the largest number (54,000) were ‘AIROH’ houses, and 46,000 were ‘Arcon’. The remainder were made up of smaller numbers of different designs. By chance one of the high-tech ‘AIROH’ houses went to the mother and father of Neil Kinnock. In 1986 he remembered what it was like: ‘It had a fitted fridge a kitchen table that folded into the wall and a bathroom. Family and friends came visiting to view the wonders. It seemed like living in a spaceship.’

The end of the prefab programme had a curiously modern ring to it, involving the plummeting value of sterling, overseas debts and the balance of payments. In the summer of 1947 the government allowed the exchange rate against the dollar (pegged at $4.80 since before the war) to float. Within five weeks 84 per cent of dollar reserves were gone. Convertibility was abruptly ended but the crisis clearly showed that the allocation of 60% of the country’s resources to house building - which absorbed labour and contributed nothing to exports - was no longer possible. From 1947 until the 31% devaluation of 1949, everything had to be thrown into an export drive.

The last hurrah of the high-technology public sector construction of housing as a social service was the National Plan of 1965, under the provisions of which annual new housing output was to leap from 383,000 completions in 1964 to 500,000 in 1970, with public sector system building programmed to account for 20% of all completions. Unfortunately this ambitious scheme for developing and extending post-war housing strategy also foundered on a balance of payments crisis that forced a sterling devaluation in 1967. With public sector spending already accounting for half the £2 billion turnover of the construction industry and housebuilding accounting for 40% of all new construction, it was clear where the axe would have to fall.

From then until the eclipse of the Labour Party in 1979, the principle of council housing - new or old technology - barely held its own against the meteoric rise of the rapacious new private sector owner-speculator market. The decade to 1979 saw a series of body blows directed against the balance of power that had operated between the sectors since the end of the war. First came the massive private sector property boom of the Heath years, with its clear demonstration of the immediate economic advantages of home ownership over council tenancy. Next came the energy crisis and the years of hyperinflation, dogged by chronic balance of payments problems and the decline of manufacturing industry. The socialist governments of the 70s endeavoured to make good the growing imbalance in trade by launching large capital spending projects based on public borrowing. But the result was near inflationary collapse. In the event the arrival of the North Sea oil revenues that might have funded the effort coincided with their loss of power.

In 1979 the incoming Conservative administration went to work immediately. For reasons of ideology and expediency public housing was chosen as the target for the most dramatic cuts in public spending. Working like a giant pair of scissors, ‘Right to Buy’ legislation permitting the sale of council houses at a discount, and strict controls on expenditure on repairs and new council house construction, rapidly worsened the condition of the public housing stock. By 1989 it was impossible to return to the level of housing expenditure current 10 years before. Worth £8 billion in 1989 terms it would have necessitated a £6 billion annual public sector borrowing requirement, wiping out all the ‘gains’ to the exchequer from ‘Right to Buy’.

Whatever route to privatisation is eventually taken with the rump of surviving council housing, it is not without interest that by the early 90s the the local authorities’ own watchdog organisation, the Audit Commission, was already aware that events had travelled full circle and the eclipse of social housing was again leading to a demand for technical solutions, but this time without the political will to produce them. At an Institute of Housing Conference the Audit Commissioner told delegates: ‘If we are not careful we will find ourselves back where we started and someone in Whitehall will have a bright idea about something called system building’.

What he failed to add was that that might be the best thing that could possibly happen to housing.

Martin Pawley


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Issue 10, May 1993

by Martin Pawley

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