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If you can put forward a realistic proposal for caring for him, then this is something that should absolutely be considered.
If you don't consent to him being taken into care, the LA will have to apply to court to take him into care. The court will then have to look at all realistic options before making any kind of care order.
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Just be clear that you don't have to agree to anything that you don't think is in the best interests of your son.
As to the housing point - I cannot advise on what your local housing officer will decide - you would need to make an appointment with them to discuss.
I hope this clarifies things?