It turned out fizzy in the endGeeta Nanda’s tenure as chief of Thames Valley Housing Association began in a baptism of fire when the credit crunch struck, but as she tells Mark Cantrell, for those organisations willing to embrace change, there are lessons to be learned in turmoil
You might say, wryly, that Geeta Nanda (pictured) certainly picked her time. When she took the top job at Thames Valley Housing Association (TVHA) back in 2008, all of the old certainties were to be swept away in the sudden calamity of the credit crunch.
At the time, she recounted, TVHA had its largest ever sales programme on the go – over 600 shared ownership homes – and then the “bottom had fallen out of the market”. For Nanda it was certainly a baptism of fire.
“We were all working through the fact that we’d had a big bang, and a big change had happened; you have to roll your sleeves up, place your feet on the ground and work through that,” she said. “So, it was an interesting time to come in to an organisation as a new CEO, but it was good as well because everybody really worked together and we came through it successfully; sometimes you learn the most when an organisation works through problems, rather than when everything is plain sailing.”
In a sense, it’s all been something of a microcosm of the wider housing sector’s experience; those seismic shifts have demanded a fleetness of foot to stay balanced.
“You have to be much more innovative and creative; you can’t do things the same old way because the same old way doesn’t work,” Nanda said. “You can’t have a five year plan which you check every year is working; you’ve got to be a much more dynamic organisation that solves problems and looks for solutions as you go along, to see where the opportunities are, to think more creatively about how you are going to solve them.”
With the launch of Fizzy Living in 2012, TVHA has certainly been putting that creative outlook into practice by becoming one of those organisations exploring the frontiers of diversification to create a ‘mixed economy’ of housing.
Fizzy Living is a commercial venture, a subsidiary created and owned by TVHA, that aims to provide professionally managed market rental homes to “aspirational young professionals” who are otherwise priced out of the conventional private market. What the tenants get is a good quality, well-managed home at a market price they can afford; what TVHA gets is a brand it can build upon, a lever for investment into the business, and an income stream from the profits that can be ploughed back into the mainstream social housing business.
“When we set it up we wanted to have attracted significant external investment into the business within two years – and we’re on track to do that,” Nanda said. “We didn’t want to use our own borrowing balance sheet – our social housing assets – to borrow against in order to build private rented sector [properties]. What we wanted to do was attract in significant investment into a platform that we’ve developed.
“That’s what all investors are looking at: they want to see a model that works, something that they want to invest in, [where] there is a team that can deliver it. The whole thing, for us, about setting up a brand and a platform for Fizzy Living was to make sure that we attract that investment, so we could expand it massively without impacting on our ability to produce more affordable homes.”
Such commercial vehicles – and TVHA is by no means alone in experimenting with such enterprises – are a source of misgiving in some quarters as a potential diversion from the core social business, but Nanda is adamant this doesn’t have to be the case.
“We are very clear about why we’re here and what our social purpose is, and every association I speak to is clear about what their purpose is. What we will have to do is find different ways of making money in order to feed that social purpose and I think that is what organisations are doing,” she said.
“Housing associations have been around a long time and over that time there’s been different grant regimes, different rent regimes, but there’s always been a very strong purpose. I think that purpose is still there; that we widen out who we house just reflects the fact that we’ve got a very different market now.
“There’s a lot of people that do need housing, and there’s a massive need to build more homes and the economic benefits of housing are huge. The purpose is still there. It’s very strong. Some organisations will choose to house a wider group of people, so they’re still meeting housing need, they’ll still have their purpose, they’ll still invest everything back into the organisation.”
Given this is London, where these days even the high-earning high-flyers tend to struggle with housing costs, it makes you wonder how they can possibly make it work. “Well, we’re purchasing properties and building properties in areas that are more affordable – so they are not central London,” said Nanda. “They are on good commuting routes into town. The rents are market rents but they’re based on the ability of somebody earning 30-40K to be able to afford them. We have also developed a sharers model... so we have got people who are earning as low as £14-15K, as well as those who are earning a lot more, into this market.”
For TVHA, then, this is a long-term strategy; it pays its keep but it will only really come into its own over the long term. Meanwhile, the housing crisis continues apace. London’s influence exudes into the surrounding hinterlands. The boundaries become blurred.
As Nanda said: “People don’t think in terms of London borough boundaries, or the boundary of where London stops and the South East starts, they just think about their job, their commute, and we can see that ripple very much with people moving further out and commuting for longer in order to be able to afford a place to live. The prices in London have rocketed far greater than the South East, but we’re seeing that catch up beginning to happen now. You can say London extends a very long way outside its own boundaries.”
Enterprises such as Fizzy Living demonstrate a willingness to actively meet the crisis head on, but of course any one organisation can only do so much. A difference can only come from a sector-wide – a society wide – response, and a concerted one at that. Ultimately, that puts the ball into the politicians’ court; whether in London’s City Hall, or in Westminster’s corridors of power, or in the parochial remit of the council chamber. Here are solutions enabled, or indeed disabled, according to the calculus of politics.
Well, politics often moves in mysterious ways, but one thing the sector certainly needs is less turmoil if it is to brace itself to make a difference; a breathing space rather than yet another wave of change. As Nanda said: “We need things to take effect and to be able to achieve things. If we have another wholesale, massive reform then some of the good things that have come about won’t ever be achieved because we’ll be trying to cope with yet another change.”
It’s time, Nanda said, for politicians to open their ears, stop tinkering, and get out of the way so that the housing sector can get on with the job.
This interview first appeared in the April/May 2014 print edition of Housing magazine. It was subsequently re-published on the Housing Excellence website, 29 May 2014