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| 2 minutes read

Exempt accommodation and the law of unintended consequences

The law of unintended consequences, often cited but rarely defined, is that actions of people, and especially of governments and authorities, always have effects that are unanticipated or unintended. 

When I read the Regulator of Social Housing's latest (Monday 14 March) Regulatory Notice about Larch Housing Association, a very small supported housing (exempt accommodation) provider, it made me dwell on how a seemingly pragmatic and sometimes well-intended decision can have huge unintended consequences. 

For those new to Larch, it's been subject to regulatory scrutiny for over two years now, apparently for viability issues. In December 2021 the Regulator attempted to compulsorily de-register Larch as a registered provider (RP) seemingly connected to the fact that only 5 of its 266 properties met the definition of 'social housing'. 

Larch retaliated by lodging an appeal in the High Court which forcibly stayed the Regulator's hand. 

Since then, Larch - still on the register of RPs - has been forced into the specialist housing associations' insolvency proceedings, is currently sitting out a moratorium period with its creditors while the Regulator seeks to engage with it. For the residents of its 261 properties, this must be very challenging and we can only hope the organisation is being supported to transition them to new and appropriate landlords as quickly as possible, so disruption to them is minimised as far as possible.

I don't know Larch specifically but sadly the news that another exempt accommodation provider finds itself on the front page comes as no surprise. The exempt accommodation sector overlaps problematically with the lease-based accommodation sector and, according to the Governmental report on supported housing leaked last week, with the type of landlords it describes as "providers of concern". Whilst #notallEAproviders by any means - there are some providers doing an amazing job of supporting their residents - there are enough of the "other kind" out there to attract the attention of the Government, triggering a Parliamentary investigation and the implementation of various pilot schemes into "ways to better control and regulate exempt and supported housing provision".

This brings me back to unintended consequences. The rise of the exempt accommodation sector corresponds with the Government's deregulation of social housing mid-way through the previous decade. At that time, the intention behind opening up registered provider status to a wider 'type' of organisation included attracting a different type of entrant - investors bringing long-term funding, entrepreneurial organisations including for-profit providers and, sadly, 'providers of concern' who according to the Government's report, are not averse to 'falsifying information', charging extortionately high rates for support services and disguising their profits in order to substantiate claims (which are often then extracted into private pockets). 

Alongside this, the effects of long-term austerity on support agencies and the people they help means that more and more people are falling between the cracks and having to rely on the type of support that these providers are expected - and often fail - to provide. 

The unintended consequences of course are that through a combination of austerity, regulatory change and overwhelming demand a troubled and precarious offshoot of the social housing sector has thrived, supporting - or not supporting - the most vulnerable of our society.

There is some hope: more prominent Governmental scrutiny is going some way towards at least bringing the manifest issues in this area to light, and the pilots may yet offer embryonic solutions. Regulatory change (including the enhanced consumer regulation function) will give residents greater powers to hold their landlords to account (assuming they can be persuaded to exercise them). 

It is slow and stumbling progress though.

Tens of thousands of people who have just left prison, who are fleeing domestic violence, or who are refugees have relied on exempt accommodation to put a roof over their heads. Yet, while many providers provide good-quality accommodation and excellent support for some of the most vulnerable in society, there are others that have abused the system and taken advantage of those most in need.


governance, housing, regulation and charity law, strategic support, exempt accommodation