There’s no such thing as a ‘for-profit’ housing association (and anyone who says different is wrong)

A number of organisations have appeared, calling themselves ‘housing associations’ but with business models completely contrary to the core values of housing associations – this is extremely dangerous.

David Orr

By David Orr, Chief Executive of the National Housing Federation

11 May 2018

“Housing association means a society, body of trustees or company: which is established for the purpose of... providing, constructing, improving or managing... housing accommodation and... which does not trade for profit...” This is the definition of a housing association as contained in the 1985 Housing Associations Act

“A non-profit organisation which rents houses and flats to people on low incomes or with particular needs’ is how the Oxford English Dictionary defines us. And GOV.UK says ‘housing associations are independent societies... formed for the purpose of providing low cost social housing for people in housing need on a non-profit-making basis. Any trading surplus is used to maintain existing homes and help finance new homes”.

Of course, housing associations come in many shapes and sizes. Collectively they do all of this – and much more besides. But at the heart of the definitions, indeed at the heart of our mission and purpose, is that we do what we do for the benefit of the community, not to distribute profits to shareholders. Our strong and very positive reputation in the country is built on this understanding.

All of this we know – or at least we thought we did. So why this blog? And why now?

In recent months, a number of organisations have appeared describing themselves as ‘for-profit housing associations.’ This is an oxymoron. If they are for-profit they are not housing associations. If they are housing associations, they are not for-profit. This matters. Our reputation, built over 150 years, is hard won and critical to our present and future success. We cannot allow that reputation to be borrowed and worn like a cloak around the shoulders of organisations which are not housing associations. To do so is knowingly to mislead the public.

This is why this week we have taken action and asked one of the most prominent for-profit providers, SAGE, to stop using the term. They have agreed to do so. This is a positive step, and an acknowledgement that they were misusing the term, but it is also only the beginning of our work to protect the term ‘housing association’ and everything it stands for.  

Many of you reading this blog will know that I have always detested the use of ‘Registered Social Landlord’ or ‘Registered Provider’ as synonyms for housing association. They are bureaucratic jargon  with no meaning or resonance to the outside world, created in legislation to describe our relationship to the state. Our use of them has inhibited and obscured our ability to promote the huge value of our work to our politicians, the press and most importantly to the nation. They are irritating and unhelpful as we become ever better at telling our story and demonstrating our value.

But they are not dangerous. The assertion that an organisation can have the making of profit as its core objective and still be a housing association is dangerous. It is dangerous because it misleads the public. It is dangerous because it will allow some to assert that housing associations are purely commercial. It is dangerous because there is considerable public concern over the activities of some commercial, for-profit organisations in housing. Housing associations reinvest all their surpluses in delivering their social purpose, and do so exclusively for the benefit of the community. We have to protect this distinction.

This is not to suggest that for-profit organisations have no role to play. Many for-profits already make a substantial and honourable contribution. Newcomers might bring something new and different to the table – although I confess I worry that some of the new players seem to have a business model that removes value from our work rather than adding to it. But that’s a debate for another day. For now, let’s be proud of being housing associations, continue to demonstrate that we are driven by social purpose, that we use our commerciality to deliver that social purpose, and that all our profits are reinvested in our homes and communities. It’s a fantastic offer that has the power to change people’s lives. We must guard it jealously.

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