Housing associations build more than homes - they strengthen our economic infrastructure
Years of underinvestment and limited understanding have contributed to a deepening crisis
Scotland enters the rest of the 2020s facing slow growth, global instability and increasingly constrained public finances. Yet the demands on government are growing. Few areas illustrate this tension better than housing.
Years of underinvestment and limited understanding of housing as part of a wider system have contributed to a deepening housing polycrisis. But not all investment in housing is equal.
Housing associations are rightly valued for improving social outcomes: creating secure, affordable homes and stronger communities, often in places left behind. But their role is much broader.
They operate across Scotland, investing, employing, procuring, regenerating communities and helping to address market failures. They support better lives while helping local economies function more effectively.
Yet government attention has arguably narrowed towards their social function. It is time to tell the full economic story.
Housing has two distinct economic effects.
Housing as a verb - building, improving, maintaining and managing homes - creating employment, expenditure and supply-chain activity. These effects are relatively well understood.
Housing as a noun - the affordability, security, quality and location of a home - has equally significant consequences for household finances, health, education, labour mobility, workforce participation and productivity. These effects remain poorly measured and too often ignored in policy debate.
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Good housing can reduce pressure on other public services. Poor housing can increase it.
Housing outcomes increasingly shape whether places can attract workers, support businesses and sustain communities.
Yet Scotland still lacks a sufficiently developed evidence base connecting housing investment to these wider economic outcomes.
Our latest research shows that associations already understand these economic impacts but do not consistently measure or communicate them.
The sector needs to measure, assemble and communicate that contribution as a coherent narrative.
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That narrative begins with five interconnected areas.
First, direct economic activity and investment. Housing associations collectively generate substantial turnover, employment, capital investment and supply-chain activity, while procurement can support local businesses, SMEs, apprenticeships and wider community benefits.
Second, place-based economic development. Associations invest in neighbourhoods, restore assets and address market failures, often working alongside local authorities, health bodies, community organisations and private partners.
Third, human capital and labour markets. Associations provide training, apprenticeships and employability support. Secure, affordable housing also helps workers access employment and enables employers to recruit and retain staff, particularly in high-cost urban, rural and island markets.
Fourth, household and financial stability. Affordable rents, secure tenancies, income maximisation, energy support, retrofit and tenancy sustainment can reduce financial insecurity and keep economic value circulating locally.
Fifth, resilience and public-sector cost avoidance. Stable housing can prevent homelessness, reduce demand for more expensive interventions and support better outcomes through adaptations, care, support and telecare.
The evidence is uneven. Financial activity can be demonstrated relatively clearly, while productivity, local economic circulation and public-sector savings require better data and modelling. But the emerging picture is compelling: the economic contribution is real, even if much of it remains invisible in conventional measures.
The challenge now is to turn this emerging evidence into a credible and influential account of housing associations' contribution to Scotland's prosperity.
We recommend the Scottish Federation of Housing Associations works with its members and economic, business and regional-development partners to agree the framework; establish proportionate measures; identify evidence gaps; pilot them across a diverse group of associations; and develop a communications strategy for government, funders, lenders, regulators, local authorities, tenants and communities.
Social housing is not simply a cost to the public purse - it is investment in economic infrastructure.
Susan Murray is Director of the David Hume Institute
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