Maintenance is the achilles heel of all housing policy. It is all too easy for politicians to make a short term gain at the expense of the maintenance budget. In the 1950s, 60s and 70s it was common for rent controls in both public and private sector housing to be funded, in effect, from the maintenance budget.
In council housing this resulted, quite straightforwardly in council houses being neglected by local politicians who found they could win votes by saying that they would keep rents down. They found that they could subsidise rents by not spending money on maintenance. Council housing became synonymous with decline and neglect.
In the private sector rents were kept down by rent controls imposed on private landlords by local authority “Rent Officers”. Started by Lloyd George in the First World War this temporary measure had escalated and escalated to the point where being a private landlord was a completely hopeless activity. Only by neglecting all maintenance could landlords make any money. The value of rented property plunged. No new stock was added to the market and the term “private landlord” became a byword for the grubbiest, nastiest type of investor.
The condition of the housing stock sank ever lower.
This scene was transformed by the transfer of public sector housing to the voluntary sector, to Housing Associations. Funded by government, social housing was no longer subject to the management of local authorities and the resulting political manipulation. Rent controls were abolished and the free market slowly started to re-establish itself. Over the following decades the private rented sector started to become somewhat more respectable and responsible although it failed to attract institutional investors. Social housing started to be professionally maintained as never before.
Government drives to create a property owning democracy resulted in “social housing”, as public sector housing now became known, being sold off.
In the ups and downs of the economy spurts of repair and maintenance and home improvement, some of it kick started by government subsidy in the form of “improvement grants” starting in the 1960s, helped to transform the condition of private housing over the next couple of decades. Housing Associations were also provided with the means to act as responsible landlords.
Tenemental property, which formed such a major part of the housing provision in Scotland was largely built during a few decades in the nineteenth century. By the mid to late 20th century much of it was reaching the stage where major elements were in need of replacement. Various factors make the maintenance management of this type of property uniquely troublesome.
The main fabric of the building is in common ownership. The arrangements for its management are governed by title deeds prepared when the building was first developed. Sometimes they can be arcane, sometimes inconsistent, sometimes, thanks to changes down the years they no longer make any sense. In the absence of any central responsible entity to run the building, there is inertia among the owners. The owners are a shifting group whose membership is constantly changing as owners buy and sell and who often do not know how to contact each other. The common parts are, mostly, out of sight and out of mind. No one wants to spend money on them.
Many tenemental properties that have been traditionally subject to landlord ownership are still suffering from the legacy of rent control induced lack of maintenance. In areas were owner occupation previously predominated the huge expansion of “buy-to-let” landlords, multi occupied flats and students living in flats away from home, have disrupted the traditional patterns of steady long term ownership. In many stairs there are few if any owner occupiers left.
The Scottish Government introduced the Home Report in 2008 to address the perceived problem of buyers commissioning reports when offering for property. Instead of each owner having a survey carried out the onus was placed on the seller to provide a report on all the main topics that a buyer needs to know before offering for a property. The buyer could instruct their own report but this would generally only happen, if at all, after their offer had received provisional acceptance.
A gaping hole in the Home Report system is the condition of the common fabric of tenemental property. Thanks to the “3m ladder rule” surveyors do not, on the whole, inspect the most important part of a tenemental property, its roof. Surveyors are instructed not to go up a ladder that is longer than 3m. This virtually rules out most roof hatches in nineteenth century tenements. Even if this were to be remedied, surveying the condition of the roof of a whole tenement block would be an onerous task that is not necessarily within the skillset of a valuation surveyor.
Home Reports also give little or no insight into how well organised the owners are when it comes to maintenance.
The Home Report has largely displaced any other form of due diligence. As far as the most important aspects of their purchase is concerned, the external envelope of the building, buyers of tenemental flats are entering into common repairing obligations virtually “blind”.
During the first decade of the 21st century, in Edinburgh, the Council made widespread us of their powers of enforcement to intervene in the maintenance of privately owned tenemental property. This intervention escalated fuelling more and more demand for it. In effect the council became, almost, the monopoly provider of maintenance services to the the private sector tenemental housing market. In due course irregular procurement arrangements,corrupt relationships between council officials and contractors/consultants and the improper use of statutory powers led to the collapse of the system.
The perception among local politicians, beset by constituents who stuck in impossible situations, was that the enforcement system needed to be reinstated.
However for the long term stability of the tenemental property sector it is important that it’s condition should be regulated not by local government officials but by the market. It is in the long term financial interests of tenemental property owners that their assets should be maintained but such is the transience of ownership that it does not always seem to the individual owner that this is the case.
The missing part of the equation is knowledge. If purchasers were advised about the true condition of the common fabric of a tenement and the effectiveness of arrangements for its maintenance when they contemplated the purchase of a flat, this would do much to focus the minds of existing owners, who are all ultimately sellers, on these crucial topics. This leads us back to the woeful inadequacies of the Home Report in relation to tenemental property.
In properties where a huge maintenance deficit has built up, a more interventionist approach will be required. Often there will be a case for grant aid or other incentives to pull property back up to an equilibrium state of repair. However it should be an objective of public policy to make sure that private property owners do not come to rely on public sector “enforcement” where at all possible.