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Some Simple Ideas By Michael Taft (@notesonthefront)
25
Oct

Some Simple Ideas By Michael Taft (@notesonthefront)

At the recent One Cork State of the Nation Event ‘Working for a Just Economy’ questions were asked about what could be done locally? Here are three ideas (there will no doubt be other and better ones) which are practical and, most important, realisable at the local level – council level – without need for a change in central government policy. This allows people to campaign on proposals that are within their power to realise, rather than demanding that others do something.

1.            Cost Rental Housing for the Private Rental Sector

Cost rental housing is quite simple:  units (apartments, houses, flats in houses) would be rent on the basis of cost, rather than the market where prices rise as demand outstrips supply or where providers can exploit market conditions to increase rents to unsustainable levels.  From discussions with participants in the meeting it appears that rents in Cork are becoming an issue.  While the recent Daft.ie report shows Cork rents below Dublin levels, they are the fastest rising in the country (at 15 percent in the last year).

Cost rental housing provided by public housing associations is a common feature in continental countries.  Essentially, a public housing association (which is an association established by a local government but commercially independent so that it is ‘off-the-books’) builds/acquires rental units and rents them out on the basis of cost (interest on borrowing, annual maintenance & repair, long-term repayments on capital, etc.).  The only ‘profit’ is a small percentage for a sinking fund to provide for future major contingencies or for expansion of the housing association).  Cost rental is cheaper than newly constructed private units, can provide certainty in rents as they only rise with inflation and can provide strong tenant rights regardless of the law.

The National Economic and Social Council (NESC) is a strong supporter of this mode of rent – and they are a mainstream social partnership body. 

Ideally, the units would be ‘off the books’ but this might take some work.  Therefore, the first demand is for the Cork City Council to conduct a study, in consultation with stakeholders and local knowledge capital, how such a model could be established. In essence, the City Council would set up its own ‘Approved Housing Body’ and work to make it off-balance sheet which would mean that it doesn’t cost the council.   It should be noted that this will face a strong ideological challenge and not just from private landlords fearing ‘competition’; the Chief Executive of the Dublin City Council stated in no uncertain terms that DCC would not be ‘getting in the business of cost-rental’.  This is part of a long-term mind-set which sees public housing provision for the poor (residual housing) with the remainder of the rental sector being provided by the private sector only.  This is not a European model.

A campaign along the lines of ‘Rents for Need, Not for Profit’ could begin to put this issue on the agenda.  The following are some references:

  • Here is the link to the NESC's main discussion document on Social Housing.  http://files.nesc.ie/nesc_reports/en/138_Social_Housing.pdf .  This discusses cost-rental in relation to both social housing and housing in the ‘market’ sector – again, this is the European model whereby there is little distinction between the two.  The summary and Chapter 5 are the relevant sections in this lengthy but highly readable report.

 

 

2.            Promoting Local Democratic Economic Alternatives

This is about bringing a little bit of democracy to the local economy.  The Cleveland Model was launched in this highly depressed, de-industrialised US city with the goal of creating quality, labour-managed enterprises (LMEs).   The Community-Wealth website has substantial information on this.  Preston in the UK took up this idea and adapted to its conditions – and this might be more relevant to an Irish situation.  While in both cases, this was a response to a depressed region, it is universally applicable.

This is not only about developing LMEs but using the council’s procurement process to create ‘social value’ locally, working with local SMEs – not only to create better workplaces and improve wages and working conditions, but to keep money in the local community.

Just as in Preston, Irish local governments are constrained as to what they do – but they can provide resources to identify ‘anchor institutions’ that can assist (non-profit groups, local colleges and universities), provide training and education in LMEs, work with SMEs and the Council to create a ‘social-value’ procurement process, etc. 

This concerns the theme of workplace democracy, and keeping resources local.  This can also be given a ‘green’ edge, developing anti-climate change activities.  Actually, the ‘One Cork’ theme is relevant here as well as ‘Cork for Cork’ (I’m not really great at the coming up with slogans but you get the idea.

Some ideas and links can be found at the Community-Wealth website:  http://community-wealth.org/content/cleveland-model-how-evergreen-cooperatives-are-building-community-wealth

Info on the Preston project can be found here:  http://thenextsystem.org/the-preston-model/ .  Google searches reveal more info.

There are a lot of misconceptions regarding LMEs.  This study shows that LMEs proliferate throughout all sectors in other countries and are just as competitive, if not more, than conventional for-profit private firms:  http://www.uk.coop/sites/default/files/uploads/attachments/worker_co-op_report.pdf

Just to throw in one of my favourites:  municipal enterprises.  These are businesses operating on commercial criteria (and, so, can be ‘off-the-books’) and can be labour-managed, or with management out-sourced, or a co-determination model between employees and employers.  This is another instrument to create economic democracy and can intervene where there is no market or where the market is dominated by ‘low-road’ employers – whether in their treatment of workers, consumers or the social good.  Here is a blogpost on an example from – of all places – a rural, Republic Kentucky town but which nonetheless solved their problem through public ownership:  http://notesonthefront.typepad.com/politicaleconomy/2016/03/a-small-kentucky-town-looks-to-socialism.html

3.            Participatory Budgeting

This concerns democratising the local budgetary process.  Championed by Port Allegre, Brazil, it seeks to involve local communities in devising and managing the local authority budget.  There are various models but essentially it is about local communities participating in a structured way examining the local budget, and putting forward proposals – mostly redirecting priority expenditure and coming up with new revenue ideas.  It can involve a small part of the budget being given over to this exercise where local communities have ‘hard’ control or a review of the entire project where the exercise is one of consultation (but a consultation which councillors and management would have to take seriously).  It’s not just about democracy but it is also a learning exercise for all participants – local communities understanding how a budget works, and officials and representatives learning what communities really want (as opposed to assuming they know).

Participatory Budgeting has a number of ideas and examples:  http://www.participatorybudgeting.org/

There are also new digital tools available to make such consultation more user-friendly which some European cities and civil society groups are experimenting with:  https://www.airesis.us/ and http://thegovlab.org/digital-tools-for-participatory-democracy/ .  A study commissioned by the Scottish government into participatory budgeting digital tools:  http://www.demsoc.org/participatory-budgeting-in-scotland/ .

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