The housing sector could do more to protect the environment – but the government needs to level the playing field

Paul Hackett is Chief Executive of Optivo
Paul Hackett is Chief Executive of Optivo

Paul Hackett, 26 October 2020

In an NHF roundtable with Kate Henderson and a group of housing association chief executives, I recently met the Minister for Business, Energy and Clean Growth, Kwasi Kwarteng, to discuss the social housing sector’s commitment to helping achieve the government’s goal of reducing carbon emissions to net zero by 2050. This meeting is indicative of the strong alignment between the government and housing associations on the green agenda. So much of what housing associations do is about sustainability – whether that’s championing social equity, running business models predicated on patient, long term returns, or improving the environmental sustainability of our homes and neighbourhoods.

As long term investors in communities, we’re able to think beyond short term economic expediency, to create social, economic and environmental value over the long term. This applies to homebuilding as well as to the way we manage homes and neighbourhoods. We’re constantly balancing the investment needs of existing homes with the need to build more affordable housing for those in need. For many housing associations, our financial plans have been significantly affected by the need to increase investment in building safety highlighted by the Grenfell tragedy and the recommendations of the Hackitt review. This essential investment means less capacity for building new homes.

The challenge of decarbonising the sector’s 2.5 million homes will also impact on financial capacity. That’s why many of us are calling for the government to level the playing field and introduce an industry-wide zero carbon new build standard. This would accelerate the transition to zero carbon standards for all new homes much sooner. By improving the environmental performance of new homes we’ll significantly reduce the cost of retrofitting over the next 30 years. This will mean less disruption and less impact on future development programmes than if we delay.

So why don’t housing associations just do this anyway – couldn’t we start building to a higher standard straight away? The answer comes back to trade-offs and balancing the social, economic and environmental aspects of sustainability. If the sector tried to build all new homes to zero carbon ahead of the rest of the industry, we’d be uncompetitive in the land market. That means we’d be able to secure fewer sites and build less affordable housing.

Meanwhile, we’re still facing the worst housing crisis in a generation. Given the extent of homelessness and the fact that millions of people live in substandard, unaffordable and overcrowded housing, any actions that would reduce affordable homebuilding are difficult to justify. In addition, a bleak outlook for private sector homebuilding means housing associations need to play a bigger role, supporting the supply chain to avoid subcontractor insolvencies and the loss to the industry of skills and jobs. So the tendency is to prioritise social and economic sustainability. Levelling the playing field would mean we can collectively do more to protect the environment, with land values adjusting to the new reality.

Another reason we’re calling on the government to introduce an industry-wide zero carbon new build standard is to reap the benefits of innovation and scale that are only possible if the entire homebuilding industry steps up at the same time. Necessity is the mother of invention. Raising new build standards will require the industry to adapt as efficiently as possible. Without this collective effort, achieving the step change needed will be difficult.

What housing associations do has never been so important. We’re determined to work with the government to ensure the social, economic and environmental aspects of sustainability are addressed in equal measure.