The Smith Institute's report looking at the future of housing associations makes for sober reading. While chief executives and advisers seem clear that the housing associations must retain their central purpose of helping low-income families obtain decent homes, they also indicate a policy climate that favours dilution of these activities with commercial ventures. Genesis, a fast-growing mixed-tenure homes developer, commissioned Denise Chevin of the Smith Institute (named after John Smith, not Adam Smith) to produce the report on the future of housing associations. The report from this leading radical policy institute is a response to new government powers giving social housing providers opportunities to adopt new financing and developing strategies, prompting a rethink of the sector’s aims and methods.

Denise Chevin, used extended interviews with fifty housing association chiefs and other experts in London and the South East, produced the following findings:

• The sector broadly welcomes the new freedoms it has been granted, but is concerned about the additional risks housing associations may now be taking on.

• There is a growing emphasis on commercial business, using private returns to subsidise lower rent homes. Most association leaders agree that without a return to capital grants there will be less scope for conventional low-rent social housing, with mixed-income and private-sale projects being favoured.

• There is strong sentiment that homes for private rent should be genuinely additional to social housing provision. Many are worried that in high demand areas “affordable rents” are entirely unaffordable for low income households.

• Pressures to deal with rent arrears while housing benefit is reduced mean that some associations are going to get tough with tenants previously treated generously; the impact on tenant relations has yet to be fully assessed.

• Reductions in grant and bank lending have forced the sector to seek funding on the capital markets. There will be more innovative deals with institutional investors, but this shift to private finance might make it less likely that government will offer capital subsidies in the future.

• The trend to form larger associations by mergers may well continue, perhaps to provide a platform for raising capital rather than because such mergers lead to significant cost savings through more efficient support operations.

The expert opinions presented in the report were not entirely convincing that the sector is well placed to sustain its historic mission of caring for the most hard-pressed families. It is also noteworthy that issues of design and place-making have been pushed into the background during the recent austerity-driven changes. Local campaigners will need to ensure that these social housing leaders continue to deliver sufficient & critically needed social homes across our capital. CPRE London’s Liveable Cities campaign will be looking at this and related London housing challenges over the year ahead.