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Enhancing life chances

November 8, 2011

A social mission. An enterprising spirit. This is the magic combination that government and other funders hope will yield the best return on their investment.

What could social enterprise look like in social housing?

Last spring I had the opportunity to talk to Mark Rogers, the CEO of Circle, a UK social housing provider of 61,500 units – just slightly larger than Toronto Community Housing’s 58,500 units.

Circle sees itself as a leader in stock transfers – the UK movement that shifted 1.3 million units from municipal councils to non-profit housing associations between 1998 and 2008.  Over the past 15 years Circle has grown rapidly through the merger of 9 housing providers – most of them stock transfers. Today, Circle owns and manages housing throughout south-east England, London and the Birmingham area.

Circle’s mission is “enhancing life chances.”

For some tenants, that simply means creating a safe and secure home.  As Rogers said, “We should never under-estimate the contribution a home can make to someone who has gone without one.” But Circle also recognizes that the vast majority of its residents are disadvantaged by disability, age and low income. For Circle, it’s the ability to make a difference in their lives that sets it apart from private landlords.

The support subsidiaries

For vulnerable seniors, for example, there is Invicta Telecare, part of Circle’s commercial arm, Circle Living. Invicta provides 24/7 life-line monitoring for Circle tenants and over 93,000 people across the UK. It also provides such commercial services as an after-hours call centre to over 30 other housing organizations, on-call support for lone workers, and a property alarm service.

For other vulnerable tenants there is Circle Support, a subsidiary that provides tenancy-related supports to 5400+ seniors, youth and people with mental illness. Circle can provide these services in part because it also bids on local government contracts to provide supports to other landlords.

The Housing Exchange

Circle brought a similar enterprising flair to the problem of unit transfers.  Circle had tenants in the wrong-sized units, or living too far from their jobs, school or family. These tenants would sit for years on the transfer list, unable to do anything to achieve their goals except complain. Meanwhile the government was losing millions of pounds each year on welfare payments for people who couldn’t relocate to take up jobs, or on paying for care because family members couldn’t relocate to help out.

In response, Circle set up Housing Exchange Direct, a web-based unit swap. Instead of languishing on a transfer list, tenants could arrange their own unit swaps. The results: Circle cut its vacancy losses and reduced staff time. And 80% of people who had been on the transfer list for an average of two years were able to move within six months of registering for the exchange.

Today the Housing Exchange has partnered with over 50 housing providers to offers swaps nation-wide, and the UK Government is touting home swaps as part of its plans to tackle unemployment.

Increasing property values

Circle is also beginning to discuss how it can improve life chances while generating value for its housing stock. For example, Rogers notes that when a school fails, local property values – including the value of Circle’s own properties – drop. Says Rogers, “If we have 5000 homes near a failing school, we have a double incentive to invest in that school. Our tenants benefit, and so does the value of our property.”

Would Circle ever sell off properties? “Yes,” says Rogers, “but in a controlled way. Our strategy would look at the cash value of properties, but also at the needs of the district. In the UK we’ve seen some villages, and some parts of London, lose all their affordable housing. You need a sensible strategy that includes preserving communities.”

Commercial drive. Not-for-profit mandate

Circle’s combination of commercial drive with a not-for-profit mandate is a bit foreign to Canadian social housing. According to Rogers, the housing sector in the UK used to be similarly constrained. But, he says, “we’ve shown our government that the more freedom and flexibility we’re offered, the more we can deliver.”

Although Circle operates under the eye of a government regulator, its chief accountability is to its customers, not politicians or government regulators.

Circle measures tenant satisfaction every week with phone and email surveys. Overall tenants satisfaction is now at 84%. Circle is now considering how to go beyond customer satisfaction to look at customer loyalty – the sort of relationship that the best companies have with their customers. As Rogers says, “when you get the relationship right, satisfaction goes up, and service costs go down.”

Could it happen here?

In some ways, it already has. From Day One, TCHC created a very innovative environment for itself. It attracted imaginative go-getters ready to try new things, start new enterprises and work with others to revitalize not just TCHC’s own buildings, but entire neighbourhoods.

My question for TCHC is, “What is the vision that is driving you forward today?” At a time when the public sphere is shrinking, I think it is tempting to strip down to the basics, and give up on big ideas.  But if Circle is any indication, it’s the bold commitment to tenants, not hunkering down, that has paid off.

Food for thought.

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