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19 June 2019

Tackling affordability from the foundations

Tackling affordability from the foundations
Affordable rent policy is a key focus as we continue to work with Welsh Government following the Independent Review of Affordable Housing Supply in Wales.

The Welsh Government asks social landlords to demonstrate how they have considered affordability when setting rents, leaving it up to the landlord to define what affordable means. Dan Hayes is a Rent Account Manager at Trivallis, and tells us how they are making sure their tenants are a key part of that decision making.

“At Trivallis, we have over 10,000 properties of different sizes and in different areas of Rhondda Cynon Taf, so a one size fits all approach to affordable rent just didn’t work for us or our tenants.

Taking an average doesn’t consider the range of rents for different property types, or how incomes vary between single-people and families.

In an ideal world, an affordable rent would be based on each person’s personal circumstances, and whilst one organisation has tried this approach it wasn’t a realistic proposition for us. I don’t think any rent setting model will ensure affordability for every tenant in every circumstance, but at Trivallis we wanted to ensure our Living Rents would be affordable particularly for people who are employed and on low incomes, whilst being fair for all tenants.

When we were in the early stages of establishing our Living Rents model, we made sure to involve the opinions of our tenants, those who took part in our surveys told us they thought it would be fairer to base our rents on the incomes of lower earners in each area, when compared to using factors like demand or access to services.

We decided to base our work on the Joseph Rowntree Foundation’s Living Rent (JRF) model; with 28% of individual net lower quartile income for Rhondda Cynon Taff being the foundation.

The Living Rent calculation uses an equivalence scale that takes data based on individuals and adjusts this to apply to families. It’s a key part of the Living Rent methodology, and we used it in combination with our allocations data to decide the differences in rent for each property type.

The diverse nature of Rhonda Cynon Taff is reflected in income and welfare benefit dependency. It was clear we needed to be able to take account of these differences in order to have a more accurate affordability model. So, we have used another layer of household income statistics at a more detailed level to adjust rents above or below the average. This has the added benefit of making the model more reliable as any weaknesses in each data set is neutralised by the other.

We know that increasing rents in some areas will still mean affordability for those tenants, but we have some work to do in order to help others understand our move to the Living Rents Model. We also recognise that getting all of our rents to fit within the model will need to be a phased process over a number of years, and any Welsh Government policy and changes in income levels will dictate the rate of convergence.

Whilst I’m very proud of the work our team has done to deliver this policy, I’m all too aware that time will tell as to whether it actually works for our tenants. However we are confident that we have the right ethos at Trivallis and have followed the wishes of our customers, so for us, next steps will include working with Tai Pawb to monitor the impact on groups that face structural barriers (young, elderly, disabled and those from BME communities), and making sure that the system works for our tenants.”

Read more about the Affordable Housing Review here.

The Affordable Housing Review is a significant moment from the last 30 years. Lots more has happened though! See our timeline below:

View the full timeline here (PDF).