11 March 2015
An address by W Bro Martin Clarke PSGD
MW Pro Grand Master and brethren, I am here today to give a brief presentation on one of the Masonic success stories of the last 40 years. It gives practical assistance to both those with Masonic connections and those without, and therefore combines our undertaking to help Freemasons in need and to make a contribution to the good of freemasonry in general, demonstrating again that Freemasons’ generosity extends outside immediate self interest. I refer to the work of the Masonic Housing Association where tangible results can be seen in the happy faces of those living in its properties.
Its beginnings were charitable in nature. When the 1974 Housing Act provided grants towards the construction of social housing schemes the Royal Masonic Benevolent Institution saw an opportunity to extend its provision of services to encompass what became known as sheltered housing. However the rules prevented RMBI from participation in grants because of its charitable status. It was necessary to create a separate entity. This was done in 1975, alongside the RMBI, but as an independent body and was then called Masonic Charitable Housing. Technically it is not a charity but is registered under the Industrial and Provident Society legislation. However it is also an exempt charity and able to receive and dispense charitable donations. So in one sense it is our fifth – or soon to become our second –charity, but it is financially self supporting and apart from initial donations, has had no call on central charitable funds.
Masonic donations were made – some in cash and some in land – and grants were raised to build 5 properties. Under the Chairmanship of Lord Burnham the first property was built in 1980 in Aylesbury, in the Province of Buckinghamshire, and thereafter 4 more were built between then and 1992 in South Woodham Ferrers in the Province of Essex, Wellingborough in Northamptonshire and Huntingdonshire, Stratford upon Avon in Warwickshire, and Rugeley in Staffordshire, being located in those Provinces which had agreed to be party to the initial objectives. Last year we enlarged the property in Wellingborough with additional accommodation, spending £1 million from accumulated reserves.
I have stressed the Provinces in which the properties are located because the involvement of the Provinces is perhaps the most important aspect of this whole initiative, as I shall describe later.
In round figures the investment in the 5 schemes amounted to £6m in land and buildings financed by Masonic donations of £600k, £4.5m in grants and £900,000 in loans from the Housing Corporation, since repaid. Although we have no formal valuation of the estate, to give a sense of proportion of the investment in today’s money, the properties are worth between £15 and £20 million. We have only £300,000 of borrowings.
What is sheltered housing?
You must forgive me if you already know a lot about Housing Associations and Sheltered Housing in particular, but some may be less familiar.
A Housing Association is a non profit making organisation which provides and manages homes for people who cannot afford to buy a suitable home on the open market. Any surplus is ploughed back into the organisation to maintain existing homes and build new ones. Renting from a housing association remains a cheaper option than renting an equivalent standard of accommodation in the private sector – at least 20% less – and tenants can still receive housing and other benefits if they qualify.
Sheltered housing provides independent living in a smaller and easier to manage home with the opportunity to call on a warden or a call service if there is an emergency, and the provision of facilities for social interaction.
Rents are regulated by Government and are set according to a valuation of each property increased annually by a formula of RPI plus one half of one percent. The weekly rent including a service charge for management of the property, heating and lighting, and the warden, currently ranges from £129 to £164.
This is what Masonic Housing Association is – a housing association providing sheltered accommodation for over 240 people at a modest cost.
What do we provide by way of accommodation?
All accommodation is in self-contained one- or two-person flats under one roof, with a protected main entrance for security. Each tenant has their own front door to their flat. All units have a bedroom, a living room, bathroom and kitchen.
Personal safety and security is of paramount importance to elderly people. It is our policy to provide a warden, in contrast to many sheltered housing schemes that only provide an emergency call system. We provide both.
There is a residents’ lounge and adjoining kitchen, used extensively by the tenants and the local house committees for social functions, well equipped laundries, and guest rooms where friends or relatives can stay for a nominal charge.
We are emphatically not a care home. Care, when needed, is provided by various agencies within each home. We have an understanding with the next of kin that where care cannot be provided satisfactorily in the home, for example with Alzheimer’s, then the tenant needs to go to a care home. In many cases we can use our good connections with RMBI to make a practical transfer but it depends on the geographical location of the next of kin.
Where do our tenants come from?
Grants came with certain obligations which require a proportion of the lettings to nominees of the local housing authority, so we are prevented from letting solely to those with Masonic connections. Broadly speaking the nominations are split 50/50, half from the local authority and half from an open waiting list from direct applications. Those with Masonic connections form a large part of this waiting list.
Local authorities cannot impose nominations as selection of tenants includes an interview to ensure, as far as possible, compatibility within what is quite a close community, with the final decision remaining with local committee. The local authorities understand this and so more often than not we can fill the vacancy from our waiting list.
Currently our tenants range in age from 53 to 103. Their average age on entry is 77 and their average length of tenure is about 7 years.
How it is managed?
As you would expect, MHA has a Board with a range of useful skills drawn from Masons and includes the widow of a Mason. The Board selects new members itself, but the Chief Executive of the Grand Charity keeps an occasional eye on us as an Observer. Members tend to be senior Masons and in recent times we have had 2RW and 2VW Brethren, a number of Grand Officers from both Grand Lodge and MetGL and 4 Past Grand Stewards.
There are two parts to our business model which makes MHA unique.
First, at the local level, apart from one employed warden at each property, the schemes are managed by voluntary house committees of local Freemasons assisted by their wives. The Provincial Grand Master appoints the local chairman, usually a Grand Officer or Provincial Grand Officer, who then appoints other committee members with the approval of the PGM. The Chairmen are ex officio members of the MHA Board.
Each scheme has a surveyor or architect on the committee, usually a Mason, who is responsible for refurbishment, maintenance and long term repairs. We take every opportunity when tenants move out or on to redecorate accommodation. We keep abreast of technological developments in energy supplies, insulation or television, and we build up reserves for long term repair to roofs and boilers.
Secondly, we manage the overall organisation centrally. We have outsourced routine administration to another Housing Association, based in Croydon, which runs its own schemes and performs administrative work for other housing associations. This means we do not have to reinvent the wheel when dealing with regulation, can gain the benefit of scale from common systems, and have up to date expertise. The cost is less than half what it was when we had our own administration here in Great Queen Street and gives us the peace of mind that is required when confronted with regulations, particularly for the elderly like those on disability, health and safety, legionnaires disease, fire risk and evacuation procedures and so on.
The result is a very lean operation financially. As I said earlier rents are regulated, but they are set for housing associations that have to employ a number of people. We get huge financial benefit from the local Masonic volunteers who carry out functions that would otherwise require paid hands.
We have a healthy free cash flow of £450,000 per annum out of which we can replace time expired assets and keep the properties to a high standard. Additionally close contact with local lodges produces donations which are used to enhance the lifestyle of the residents, ranging from social functions to the provision of additional amenities and services.
But of course it is not just financial. The Provinces in which our schemes are based regard them as a jewel in their crown and I know how much enjoyment and satisfaction is derived by the volunteers. And, of course, this transfers itself to the community they serve.
What are our risks and priorities?
1. We need to keep the properties full
Generally we have been very successful in achieving 95% occupancy, the 5% in voids being the time required to refurbish vacated properties for new tenants. There are a number of factors to which we pay attention. Applicants are coming to us later in life. There is an increasing demand from married couples. Increased longevity, better facilities for care in the home, depressed house prices causing a delay in downsizing - they all contribute to this shift in demand. However much we are all likely to live longer, anno domini does have its effect on health, particularly in disease like Alzheimer’s, so as we cannot provide care in such cases, the average length of a tenancy is also likely to be shorter.
Competition is apparent. There are many newer properties built to the higher standard of accommodation now required. We are also looking to see where we can make alterations to the properties to accommodate more couples.
On the plus side the elderly population is growing and the accommodation for them is not growing that fast. Secondly, because of our business model, there is a useful cushion between what we can earn and what we need to earn to keep the properties paying their way.
But this is where you can all help through your communications officers and lodge almoners becoming familiar with what we offer. The Board feels that we have been “under the radar”, except in the Provinces where the properties are located. Hence my gratitude for being given the opportunity to speak to you today. Details of all our properties are on the websites of the Provinces concerned and on Porchway. Shortly we shall be launching our own website. It would be very useful if you could link us to your own Provincial website. This way all Masons can be kept up to date with any developments.
2. Keeping our properties fit for purpose
All of our properties were built to standards applicable at the time. In the older ones the flats are smaller than the current standard ; not that that in itself has deterred applicants, but those flats are not suitable for people with disabilities requiring, for example, the use of a wheelchair. Wherever possible we are refurbishing the flats to make better use of the space available but there are limitations. Currently we are half way through a complete refurbishment of the Wellingborough property.
We are considering building a new property to replace our oldest which is now becoming less suitable for the older tenant and cannot be modified. This would be a very complex transaction possibly requiring us effectively to swap our existing property to avoid repayment of grant and to secure new grants and loans for the new build to the latest standards. We are in early discussions.
We always welcome donations from Lodges. Lodges have supported their local property and we have received donations from unconnected lodges in the past, particularly Grand Stewards’ Lodge, which were put to good use and for which we are grateful.
4. Volunteers for the Board
We need to refresh the Board from time to time. So if you would like to help please get in touch. The address is in the Year Book. These are the matters presently occupying the Board. Other thoughts for the future are;
5. New developments in the Provinces
We are always interested in discussing the possibility of building additional properties in other Masonic Provinces but this is dependent on local interest and land, whether by gift or purchase. Provincial support is essential as our model requires substantial cooperation and enthusiasm from local Masons. The financing would have to be by donations, grant and loans as rents alone are insufficient to finance a project. At present the supply of government finance is limited but our cover for loans is excellent
6. Merger with another Housing Association
Rather than develop afresh there may be possibilities for merger at minimal cost. Again we would look for Provincial support. But above all, we wish to retain our independence.
In its 40 years of life Masonic Housing Association has operated successfully and has sheltered housing of which we can all be very proud. That is a good thing in its own right. It has also shown in practical terms how Freemasons are involved in their local communities providing security, comfort and independence for the elderly. It is a splendid way also in which the Craft reaches out to provide benefits for non-Masons. We face the future with confidence. I am grateful for the opportunity to present to you.