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Blue sky thinking: modern housing development built with sustainable materials in Harlow, Essex. Photograph: Alamy
Blue sky thinking: modern housing development built with sustainable materials in Harlow, Essex. Photograph: Alamy

Housing innovation funds can provide creative spark in a stagnant sector

This article is more than 10 years old
Hannah Fearn
A funding pot to encourage new ideas could make a difference for the UK, but only if we learn lessons from abroad

Last week's Lords debate on housing rattled through the issues at lightening speed: development figures, planning regulation, protecting the green belt, welfare reform and that almighty white elephant, the bedroom tax. The benches stuck to the party line, Conservative peers holding fast to the "fairness" paradigm as damning figures flew at them from their opposite numbers.

Amid all this, one remark from former trade unionist Baroness Dean stood out. What she'd like to see, she told the upper chamber, is a housing innovation fund to encourage experimentation in new ways of developing and managing affordable housing.

As the (rather tedious) adage goes, if you always do what you've always done then you'll always get what you've always got. For social housing providers, this is as much a strength as it is a straitjacket. With public funding drying up fast, there is greater demand for innovative ideas. Straightforward development models, however, offer predictable results in a time of housing crisis. No wonder we often need an incentive to innovate.

A housing innovation fund for England could apply that incentive, in the form of financial and other support for successful bidders. It would also offer an opportunity for real experimentation: for once, it would be a necessary condition of funding.

Other governments have already tried using housing innovation pots of their own, each with a unique focus, and with varying results. A fund for Massachusetts, still open to bids, asks housing providers to focus on specific issues including single room occupancy, employer-supported accommodation, co-operative housing and shelters for women fleeing domestic violence. It offers a sum totalling just 50% of development costs. Whether the models are sustainable after experimentation will be interesting to follow.

In New Zealand, a $73.9m (£43.9) innovation fund was established in the 2000s to find new ways of meeting the housing needs of the poorest citizens unable to meet their own housing costs and those with specific housing needs such as Maori groups and Pacific peoples, older people and those with disabilities.

The fund was used to find sustainable, non-government funded housing models – and an evaluation of the project claimed some success. Local authorities that would have discontinued the provision of social housing kept doing so because of the fund. Modernisation of the housing sector was prompted by the fund. However, when it came to community-based housing models, sustainability was still under question. With such small projects funded, it's hard to extrapolate across a wider housing market.

In Scotland, the government offered a one-year "challenge fund". The majority of units provided through the 31 successful bids were for mid-market rent, despite the fact that most bids came from either councils or housing associations, indicating an appetite for diversification. However, few bids came from new partners such as community groups or financial organisations. The challenge failed to spark wider interest in tackling the housing problem.

So what could an English innovation fund learn from these experiences? First, the pot needs to be designed in a way that encourages new people and organisations to find solutions to our housing crisis. We need to make sure that it's not just the same old faces, the housing sector stalwarts, who are excited by the opportunity to bid.

Second, there must be a promise to roll out any successful innovation-funded scheme on a national level. The pot itself will always be small, and the projects it funds will never prove to doubters that innovation can be done in housing at scale.

If government commits to rolling out the most successful project from the innovation fund portfolio at scale, together with the support of the original partner, we will have a meaningful exercise in innovation which can make a demonstrable difference in the quest to meet our housing needs.

Want your say? Email housingnetwork@theguardian.com

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