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Reasonable preference and local residence

19.02.2021

By Matt Hutchings QC

Looking back twelve years to 2009, it is tempting to view that year as a golden moment for local authority housing policy makers. That is not to deny the ever-present reality of chronic excess of demand over supply of social housing, or the challenges presented by Government policies of austerity following the banking crash. However, within these practical constraints, the priorities for the allocation of much needed social housing were largely left for local democratic decision.
Then as now, legislation in the shape of Part 6, Housing Act 1996 entrusted the formulation of allocation policy to local housing authorities. The main legislative brake on local discretion was the duty to secure that reasonable preference was given to the classes of people specified in section 167(2) (now section 166A(3)).
Significantly, on 1 March 2009 in R(Ahmad) v Newham LBC, the House of Lords upheld the Newham's allocation scheme as lawful and reasonable. Its approach was to place all applicants within a statutory reasonable preference class into a low priority band with the deciding factor between them being waiting time. A few households with especially pressing housing needs were placed in higher bands. Upholding the scheme, the House of Lords swept aside a line of caselaw which had developed over the previous decade establishing that a lawful allocation scheme had to have a mechanism for identifying which individual households were in the greatest need.
The House of Lords departed from this caselaw primarily on the basis that no such requirement was to be found in the wording of the Act, but also because judges do not have the tools available to make the required policy choices in relation to social housing priorities. Para 46 of Lord Neuberger's speech, warning of the undesirability of the courts' getting involved in questions of priorities in housing allocation policies, probably wins the prize for the passage of any judgment most often quoted in grounds of resistance to housing allocation JRs.
A few years later, the Localism Act 2011 introduced a new power, in section 160ZA(7) of the Housing Act 1996, for local housing authorities to decide who was, and was not, qualified to apply for social housing in their area. This was in accordance with the preamble: "The Bill devolves more powers to councils and neighbourhoods and gives local communities greater control over local decisions like housing and planning." Statutory guidance published the following year, Providing social housing for local people, strongly encouraged authorities to take advantage of their new powers to pursue local priorities, in particular by setting a local residence requirement for qualification for the housing register of at least two years.
Hammersmith & Fulham's allocation scheme was amended in April 2013 to take advantage of these apparent new policy freedoms. It disqualified most applicants to whom the main housing duty had been accepted, (who were therefore within reasonable preference class (b),) provided that they were housed in suitable "long-term" temporary accommodation. The main issue in the case was whether the power to disqualify trumped the reasonable preference duty, or vice-versa. On 6 November 2014, in R(Jakimviciute) v Hammersmith & Fulham LBC, the Court of Appeal held that the latter was the correct answer: the reasonable preference duty prevailed.
The Court of Appeal were also convinced, by submissions skilfully advanced on behalf of the claimant, that Hammersmith & Fulham's scheme breached the reasonable preference duty. Those submissions accepted that authorities could disqualify applicants on the basis of relevant factors such as rent arrears or lack of local residence. However, the Court of Appeal was persuaded that the scheme went too far by disqualifying a large proportion (on the evidence 87%) of applicants in reasonable preference class (b).
As the dust settled on that case, it would have been reasonable to reflect that a balance had been struck between local democracy and priorities on the one hand and the legislative steer in section 166A(3) on the other. Existing caselaw on the limits of the reasonable preference duty left considerable latitude to policy makers. It was established that reasonable preference had to be given to the specified class as a whole, not the individual households within it (see R(Lin) v Barnet LBC [2007] HLR 30) and that it meant a "reasonable head start" which could be nullified by other relevant factors (see R v Wolverhampton MBC, ex p. Watters (1997) 29 HLR 93). Ahmad still held the field in terms of the undesirability of the courts micromanaging allocation priorities.
However, two cases decided by the Administrative Court within a few months of each other in 2015 seemed to take a different course. In R(Alemi) v Westminster CC, Westminster's allocation scheme, which disqualified applicants owed the main housing duty for 12 months following acceptance of the duty, was struck down. It is not entirely clear whether this was on the basis that it "carves out a whole sub-group which is altogether excluded from the potential of being allocated social housing" or because "that sub-group is not defined by reference to differentiating features related to the allocation of housing" (para 32 of the judgment at [2015] PTSR 1339).
Alemi was quickly followed by R(HA) v Ealing LBC, in which a woman towards whom Ealing had accepted the main housing duty on the basis that she was fleeing domestic violence was disqualified from its housing register on the basis of lack of five years' residence in borough. The judicial review succeeded on the ground of unjustified indirect discrimination, but also on the ground that the reasonable preference duty was breached. Goss J stated that:
"Although a residency requirement is an entirely appropriate and encouraged provision in relation to admission onto a social housing list, it must not preclude the class of people who fulfil the reasonable preference criteria." ([2016] PTSR 16 at para 23)
Read literally, it would follow from the above reasoning that it is unlawful for an allocation scheme to disqualify any individual within any of the reasonable preference classes on the basis of lack of local residence. It is difficult to see how this would be consistent with the orthodox interpretation of the reach of the reasonable preference duty and certainly, if correct, given the width of the reasonable preference classes, it would significantly alter the fine balance struck between local discretion and legislative steer. These issues are due to be revisited by the Administrative Court at the end of April this year, in R(Mallon Montero) v Lewisham LBC, in which Matt Hutchings QC represents the London Borough of Lewisham.