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Choice Based Letting
November 2005
As an increasing number of social landlords begin to consider adopting a ‘choice based letting’ (CBL) system, SCSH wants to ensure that the interests of homeless people, and those at risk of homelessness, are not diminished. This briefing outlines some questions which should be addressed by any organisation considering a ‘choice based system.’
As the new homelessness framework begins to bed in, it is extremely important that allocation policies of all social landlords assist in meeting its objectives. These include tackling the whole needs of homeless people and seeking to find long term sustainable solutions to their homelessness.
In the climate of increasing numbers of local authorities looking to transfer their housing stock to registered social landlords, it is vital that the combination of loss of control of housing stock and potential changes to letting systems do not together put some homeless people at a disadvantage.
SCSH has a number of issues with CBL:
For almost all social landlords allocations policies are a rationing system in the situation where overall demand for housing outstrips supply. Within their stock, though, many social landlords have areas of low demand or which are hard to let as well as areas which are extremely popular. In the popular areas allocation is largely about ensuring an objective and fair rationing system.
In low demand areas a significant element for some landlords is to try to improve stability, reduce turnover and increase letting, to enable regeneration, and in addition to house those in the greatest need whilst seeking to ensure ‘balanced communities’.
Landlords normally have a number of objectives when considering a change in allocation policies. In most cases there is not a single over-riding issue but a combination of several management objectives.
The usual current points based letting system is felt by some people to be complicated and it is not clear to tenants why someone was allocated a house ahead of them. Because most traditional systems are based on needs, a person can find themselves dropping down the priority list for housing because others with more pressing needs have applied.
Most ‘choice based ‘ systems use much more crude measures of need than points systems, using four or five quite broad bands of need but which are simpler to understand. Determining priority within those bands of need is usually determined by length of time registered (i.e. waiting time).
It could be argued that the simplicity of the scheme really amounts to the marrying of two very crude measures (a basic banding and waiting time). The real question is whether that affects who is and is not being housed, and whether those who really are in the greatest need of social housing get the houses they require. In other words, can a simple scheme differentiate sufficiently between various needs?
The arguments which have been used over the years against using waiting time as an important factor in allocation policies are as valid today as they have ever been. It is not clear why those arguments are essentially being overlooked in most CBL schemes.
Most schemes, because of their crude banding systems, will be unlikely to be able to address cumulative multiple needs sensitively i.e. placing those with a diverse range of needs above those with a single need.
Indeed, under the choice system, given the new homelessness legislation and the obligation on councils to house homeless people in priority need (soon to be almost all homeless people) in permanent accommodation, local authorities have to have a parallel system operating in case the homeless person does not win their bid for a home under CBL.
In Registered Social Landlords (RSLs) the situation is similar where they will be under an obligation to house those homeless people referred to them under Section 5 of the Housing (Scotland) Act 2001. Again, they will have to find a means of guaranteeing the allocation of a home to homeless people.
So the question then is, is it simpler, more transparent and less bureaucratic to have two parallel systems operating simultaneously than one integrated allocations system?
Secondly, does the increased reliance on waiting time mean that those with needs who can afford to wait to have them addressed get priority? What happens to those with urgent needs who can’t wait?
What happens to young people or people from ethnic minority groups, for example, who may not be able to accrue as much waiting time?
Undoubtedly CBL can empower applicants more than a traditional points system, in that they can choose whether they wish to be in the running for a particular house.
However it can also be frustrating and disempowering if the applicant does not understand the parameters of their choice. They may be extremely proactive but continually unsuccessful – not necessarily because they are ‘bidding too high’ for properties they are unlikely to get – but because others choose to bid who have been on the list a bit longer.
It is even more concerning for those with poor literacy or low self esteem, for whom continual rejection may be particularly damaging.
Although homeless people tend to be given ‘priority passes’ and placing in a high needs band, they are often restricted in the choices they can make, for example by the imposition of a time restriction on the priority pass. They may be forced to make a successful bid within a limited time, say 6 weeks, or lose their priority, while other applicants can wait for a house which suits them and which they want to bid for.
Although this is often presented as improving the position for homeless people, the restrictions can leave homeless people disempowered in relation to other bidders, who have time to wait and make a real choice.
Early reports from choice schemes suggest that CBL schemes are popular with existing tenants, with councillors and general waiting list applicants. Waiting time for many of them is seen as a simple and ‘fair’ way of differentiating between applicants, and offers hope of rising up the waiting list.
There has been very little work undertaken amongst those with high levels of need. Shelter reports (A Question of Choice – 2005) on two specific consultations with high needs groups in London who found choice to be ‘frustrating’ and to ‘give a misleading picture of the choice really available.’
The question for SCSH is not how popular the scheme is with those already housed, but whether the allocation system is housing those it is intended to house.
There is a clear tension within the social rented sector between those who believe that a social rented house should be a mainstream tenure of choice (as it was in the 50s and 60s), and those who believe that because of its relative short supply (mainly due to the right to buy) it has become essentially welfare housing for households in the greatest need. SCSH believes that social rented housing should have a broader role than housing people in greatest need. However, whatever stance is taken, in developing allocation policies landlords need to recognise the changing role of social housing as its size diminishes, and consider who it should be housing, given these constraints.
There is some evidence to support the view that CBL can help reduce void rates in hard to let areas, and that people are less likely to abandon a property if they have chosen it. Certainly, with traditional allocation systems, people are more likely never to move into a property which they are allocated and which they have no wish whatsoever to stay in. However, the question is whether the ‘choice’ system tackles that in the best manner, or whether by talking through housing options with applicants and making allocations based on what they will be prepared to accept the needs based systems can be equally or more effective than CBL.
People staying longer in areas which have been run down and blighted by quick turnover of properties can certainly assist in regeneration. So it is clear that an element of empowerment is beneficial and desirable.
The question is: are there more effective ways of ensuring those in greatest need are housed whilst ensuring that there is an element of empowerment and choice, which will also reduce void rates and abandonments? The ‘estate agency approach’ where applicants get information about the house and the area, accompanied viewing and a proper housing options discussion, which realistically manages expectations, can be integrated with needs based schemes to help ensure greater stability and greater empowerment of the applicant in their allocation.
The arguments in relation to harder to let areas do not transfer to more popular areas. Where thirty or forty people are bidding for a popular house there needs to be some form of allocation or ‘rationing’ policy. In most CBL systems waiting time is the deciding factor (after a very rough grading of need into three or four categories).
This could lead to houses in popular areas mainly being let to those who can afford to wait, leading to stable communities, but not necessarily to ‘balanced’ communities, and potentially leading to the exclusion of those who can’t afford to wait – in other words skewing the balance of the community. It is unclear, even if CBL is used, why waiting time should be the deciding factor rather than a more sensitive assessment of need.
Given that 23% of the Scottish adult population has difficulties with literacy and numeracy, CBL poses problems for a significant proportion of applicants. Without special arrangements those with poor literacy are at a disadvantage in a system based on being proactive with multiple and repeated applications. Ironically, the situation may not be so bad for those who are most vulnerable, who may have advocates or support workers assisting them with independent living skills. The problem is more likely to lie with those who have literacy problems, slight learning disability, depression or other less acute or visible disadvantages.
The damage which can be caused to people who have already faced a number of rejections and knock backs in their lives should not be overlooked. There is a danger that, rather than face a series of rejections of bids, this vulnerable group may look to the private rented sector or disappear from housing lists, when they should be housed in the social rented sector.
Experience suggests that at the set up stage for CBL most schemes refer to investing savings from reduced bureaucracy in new services to assist vulnerable people. The reality rarely matches the rhetoric. While some schemes have staff who will assist vulnerable people, there is a real question about how and when the vulnerability is assessed or noticed. This is a particular issue for those at the lower end of vulnerability discussed above.
Under adapted needs based systems, only one application is necessary, which would be combined with a housing options interview, accompanied visit etc which may be more suitable for this group of people.
Increasingly, social landlords have been seeking to build Common Housing Registers – a common housing list to which each can apply its own allocation policy. This initiative is intended to remove the need for housing applicants to fill in a large number of application forms - one for each of the diverse range of social landlords in a locality.
The value of Common Housing Registers is more questionable where landlords offer a proactive bid-based CBL scheme. It is even more complex if there is more than one landlord operating a CBL scheme in the area. Although an applicant will have to fill out a single application form to get registered with each landlord, he or she may well have to make bids to a number of different landlords every couple of weeks until they are housed. This will result in far more forms to fill in than under traditional points based schemes – the opposite of the intention of the CHR. In one sense it simply transfers the bureaucracy of allocation from the housing provider to the applicant.
The consequences for homeless people largely depend on the priority banding they are awarded. If (as in some schemes) homeless people are in a separate band above everyone else, of course they may benefit from the system. If they are further down the ‘needs ladder’ they may face problems. This is especially the case if (as in most schemes) waiting time or time on the list is the deciding factor where there is more than one bid for accommodation. Homeless people will rarely have the ability to accrue waiting time points, since their needs are usually urgent and immediate.
Some schemes impose a limited time in which homeless people can bid whilst keeping their homeless priority level. That condition puts a time restriction on homeless people which no other applicant faces, effectively setting homeless people apart. It also runs counter to one of the key elements of the scheme – that a person proactively chooses whether they wish to make a bid or not. The effect is likely to result in homeless people accessing properties in the least popular areas.
Regardless of their success in bidding under the choice scheme, local authorities have a duty to ensure priority need homeless people are housed in permanent accommodation. Experience from England (Shelter 2005) shows that very often such offers of accommodation are in the poorest areas.
The combination of the above factors runs counter to the principles of Scotland’s homelessness framework where homeless people’s needs should be assessed holistically and every effort made to find a sustainable solution.
For RSLs the situation may get more complicated. The Housing (Scotland) Act 2001 instigated Section 5 referrals, where a local authority can seek assistance from an RSL in fulfilling its homelessness duties, and the RSL cannot reasonably refuse. Some homeless people will be housed via Section 5 Referrals (and some RSL’s have made those referred to them a top priority under CBL).
However it is important that a section 5 referral is not the only means by which a homeless person can get homeless priority under the choice based system. What about non statutorily homeless people, whom RSL’s have a long standing record of housing to date?
How does the applicant know what it is reasonable to bid for? Background information about many of the schemes suggests applicants will find it easy to see which properties they are likely to be able to get access to. Experience shows this is not the case in many areas. There is a parallel element of feeling unfairly treated between traditional systems and CBL systems. In the former, it is said that applicants do not understand how they slip down the waiting list because someone with greater needs than them has joined the list. Under CBL there is a kind of lottery where it all depends whether (and how many) people bid for the house you want. One week you might be the only bidder – the next there might be twenty. Knowing where to pitch a bid, or indeed which week to make the bid (start of school holidays?) could be described as a form of gambling based on a combination of partial knowledge and informed guesswork. The CBL system gives added advantage to those, for example, who have local knowledge, have the ability to go and see advertised properties or (depending on how the scheme is advertised) have access to the internet. It is extremely important to consider how to ensure that those who are excluded from these advantages are given a fair and equitable chance to access properties.
The key to any allocation system is that it should house those you intend to house and ration scarce resources fairly in the way intended by the landlord. They should therefore not be set in tablets of stone, but subject to continuous monitoring and review, and be open to change if they are not achieving the desired objectives.
Certain key questions need to be addressed before embarking on CBL
CBL may not empower applicants as much as it implies. Indeed it may disempower certain groups including homeless people. Empowerment does not have to mean regular and proactive ‘bidding’, it can be based on better information collected at application, housing options interviews, an ‘estate agency’ approach to describing properties and the areas in which they are located and simply not offering lets to people who are going to refuse them. The needs of the significant number of applicants with low level literacy, learning disability, addictions etc must be addressed (and may be better addressed by traditional letting schemes).
Waiting time remains an unfair and crude method of distinguishing between the needs of applicants, rewarding those who can afford to wait and placing certain groups at a disadvantage.
The whole term ‘choice based lettings’ raises expectations among tenants that the profile of who is being housed, and where they are housed will change. Unless the profile of lettings is wrong at present, that should not be an expectation.
Simplicity has to be balanced against meaningful assessment of needs. Both traditional and CBL schemes can have similar levels of transparency. Under points based systems it is easy to make public the points level at which a particular property was let (which will vary). Similarly under CBL the level of need and waiting time can be published, but this too will vary according to how many choose on a particular occasion to bid for a house).
It is important to be clear about who social rented housing is for and to continue to monitor and ensure that whatever scheme is in operation meets those objectives.
© 2005 Scottish Council for Single Homeless
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