Leading Article: Housing policy must link with the market

HOUSING POLICY has a tendency to swing from one extreme to another, leaving the poor in forgotten backwaters of deprivation, washed up by the policies of the government before last. News that the Housing Corporation is to use taxpayers' money to knock down every third house in no-hope terraces in Manchester and Newcastle and turn them into rows of semi-detached houses is bound, therefore, to be dogged by the suspicion that, in one form or another, we have been here before.

Besides, those hardened by the failures of successive waves of fashion in housing are bound to ask: can changing the physical environment solve what are essentially social problems? Terraces became slums and the solution, high-rise concrete Lego, became problem estates.

Nevertheless, the physical environment is bound to influence social well- being. Of course it is true that poverty, drugs, crimes and poor schools can turn any area into a social wasteland. But density is a factor, among human beings as among rats, and so is, above all, diversity. The importance of the Housing Corporation initiative - the Brookside-isation of Coronation Streets - is that it will create houses suitable for families in the middle of areas that are now occupied only by lone parents and single men.

But one of the problems of the Housing Corporation is that it is a one- way ticket into the public sector, with no real mechanism for returning houses to the private market - even at a profit, if its policies are successful in creating more stable and desirable areas. The key to a balanced housing policy is diversity and mixing, rather than polarisation between uniformly rich and uniformly poor zones. The new Housing Corporation initiative is welcome, but the role of the market in identifying low-priced opportunities and exploiting them should also be encouraged.