Category Archives: gentrification

A £2bn gamble with public assets

Written by RHN member, Doug Thorpe

In July 2017 Haringey Council is proposing to sign a contract to hand over its land, property, and buildings including much of its Council Housing to a private company created jointly with private development company Lendlease. The Council and Lendlease will each own and control 50% of the company.

Councils have a genuine problem with providing housing. The Right to Buy has led to the selling off of much of the existing housing stock. Cuts in funding, restrictions on the use of money from the sales, and government caps on the amount councils can borrow has all but stopped any new council house building, and restricted the money available to refurbish estates falling into disrepair.

For the Tories this is a deliberate strategy to eradicate social housing. But 13 years of Labour Government also failed to reverse this process, or even to try. Instead, what funding there was, was channelled towards Housing Associations. These are increasingly moving towards the private sector. The majority of Labour Councillors in areas such as Haringey have either embraced the mythology of a third way, where private developers work jointly with local authorities on public projects. (PFI anyone?) Or, they are so demoralised they see no alternative to the market.

HDV

The significance of the Haringey plan is its vast scale – £2billion of public assets being handed over – and the loss of control over the venture. The ownership will be 50:50. No other Council has risked a local development venture on this scale. It is wholesale privatisation of the Council’s housing and public assets. If it goes ahead it may provide a model for the abandonment of Council housing in other areas, particularly other London Boroughs.

The principal is that the Council will put land and property assets into the deal – 17 housing Estates (including large estates Northumberland Park and Broadwater Farm), Schools, Health Facilities, Library, and 500 commercial properties. The private partner will match that with finance and “expertise”. In theory they will share the profits and risks equally. The idea is that 50:50 control will create a ‘deadlock’ in decision making if the partners cannot agree, preventing the private developer making decisions the Council disagrees with. The Council hopes to develop new ‘affordable’ housing and to share in profits that can be ploughed back into Council services. The practice: on housing, profits, risks, and control is likely to be very different.

This is a transfer of public and community assets built up over generations into the private sector – the property, including any new development will be owned by the HDV not the Council. It will be private property.

All the details about how the ‘sharing’ will work have been kept secret (Commercially ‘privileged’ under the tendering process). We do not know how the Council’s property has been valued. You would think that the Council would want to maximise the valuation of its assets, so Lendlease would have to match that with finance. But the Council fears a high valuation would scare Lendlease off. So they are likely to be selling the community short. For instance Northumberland Park Estate has been valued at minus 15 Million (ie the Council effectively will be paying the developer £15 million to take the estate!)

The Council says 40% of new properties will be “affordable”. But that includes “affordable” properties for sale. “Affordable” rental properties will be a much lower proportion, maybe 25%. In reality, experience shows that private developers eventually deliver much lower levels of “affordable” housing than the original plan. They argue the development needs to be viable. In planning terms this means the developer is entitled to take at least 20% profit from the development before passing any on to the Council. They will also use this requirement to ratchet down the amount of social housing well below the current targets. Most of the new build will be private housing for sale at market value.

“Affordability”

“Affordable” housing is itself a misnomer. It can mean up to 80% of market rent or property sale value. Local Housing Allowance average rent valuations for Tottenham are £255.34pw for a two bed flat, £315.12pw for a 3 Bed – 80% of these is £204.72pw & £252.09 respectively, actual market rents are higher. The Council may ‘try’ to offer lower rents – but this shows what could be considered ‘affordable’. Worse however than this, the whole profitability of the venture is based on development forcing up property and rental prices in the area still higher. So the eventual ‘affordable’ levels will need to be even higher, or the project faces losses. Existing Council tenants are not guaranteed that they can return on the same rent and security of tenancy. The Council only says it will make best efforts to ensure this. But if it means what it says, it could write this into the contract with Lendlease. The reason it won’t, is it knows the need to make profits will be the driving force in the project, and Lendlease will not agree “guarantees” that would restrict its ability to make those profits at the expense of any other consideration.

Risk

The risk is huge. Post Brexit, and with London property ‘overheating’ slowing down, a continuing rise in property prices along the lines of recent years is not sustainable. The projections for this have not been audited. The Council’s own Scrutiny Committee recommended further evaluation. But the Cabinet ignored this. If the venture fails, 50% of the losses would have to be paid by Haringey Council Tax payers. Croydon Council Urban Regeneration Vehicle (CCURV) was a similar 50:50 project expected to be about half the size of Haringey’s. But Croydon has backed off from the agreement and is instead using its own housing company for current development. A smaller 50:50 Joint Venture by Tunbridge Wells with John Laing collapsed after 4 years with Council Tax payers having to pick up the debt.

So if the plan works, working class residents won’t be able to afford the new housing; and if it fails, the people of Haringey will be saddled with an unpayable debt. A two Billion Pound Gamble where the existing working class community loses, whatever the outcome.

To add insult to injury, the Council has just confirmed its preferred development partner is Lendlease. A simple Google search reveals Lendlease to be embroiled in corruption cases in Australia & New York. One of its other London developments is at Elephant & Castle – the former Heygate Estate, perhaps THE classic example of social cleansing and dispersal of the community. Lendlease has a history of blacklisting unionised building workers. It claims this was only related to Bovis, a company it swallowed up. But there are more recent reports of Lendlease itself using the blacklist.

Democratic deficit

There has been no meaningful consultation. The Council claims it has consulted through planning and strategy consultations. This buries the question in much larger documents. Effectively what emerges is that residents were asked whether they wanted better housing. Of course they want better housing, better spaces. But nowhere have residents been consulted on demolishing their estates and moving them to a private company.

There has been no ballot of tenants. Even the Council decisions are being made by the smaller Cabinet. The HDV has never been put to the full Council.

The proposed control structure for the HDV is a board of 3 from Lendlease; and on the Council side: only one elected councillor + 2 Council officers. This is supposed to provide a ‘deadlock’ where neither partner can make a decision without the other’s agreement. But few believe that the Council representatives will be able to match the expertise and legal resources Lendlease will have to argue their case, and ensure it skims off the profits it wants to ensure the ‘viability’ of the project.

One of the main campaigning demands against the HDV is for a ballot of all tenants and leaseholders before any estate is put into the scheme, or scheduled for demolition.

Residents

Existing Council tenants will be offered Council tenancies somewhere else in the borough away from their existing community. Even if a right to return is offered, by the time new properties are built the tenants will have put down roots elsewhere. The new rents are likely to be prohibitive. Experience from the Heygate Estate in Southwark was that of 1200 tenants with a ‘right to return’ only 46 did so. The rest were dispersed around the borough or moved away.

Compensation for leaseholders will not be enough to buy one of the new flats, or anything comparable in the area. Private tenants renting on the estates will have no rights and will be made homeless.

The scheme is based on forcing up property prices and rents, meaning even working class private sector renters will be forced out of the area. The Council’s own Equalities assessment says that most black residents will need to ‘get better jobs’ if they hope to remain in the area.

The existing Council tenants needing to be rehoused on other estates will take up all the available vacant properties for years. This will further reduce properties available for housing homeless applicants or those on the housing register. Homeless families will increasingly be exported to temporary accommodation outside London, away from their support networks. Even when new housing is eventually built, it will be beyond the financial reach of homeless applicants.

The plan amounts to social cleansing on a massive scale.

Opposition

A broad based campaign against the HDV has formed that Left Unity is part of. Called ‘The Two Billion Pound Gamble’ it has united tenants, both Constituency Labour Parties, a third of Labour Councillors, Momentum, Trade Unions, the Green Party, housing campaigns and Resident and Leaseholder organisations against the scheme.

10 Labour Councillors who signed a call in of the scheme to the Council’s Scrutiny Committee have been threatened with disciplinary action by the Labour Group leadership. Both local MPs (Catherine West and David Lammy) have expressed concerns.

The campaign has organised several lobbies of the Council and a march, Public Meetings in the areas affected, door-to-door and tube station leafleting and street stalls. It is putting out information about the HDV that the Council has tried to hide, or lied about. Increasingly tenants and residents are joining the campaign.

The District Auditor has been contacted and is launching an investigation into the financing of the scheme. Applications for Judicial review of the Council’s decision making process are being lodged, and the barrister advising judges these to have a good prospect of success.

But all this takes money, an estimated £25,000 for the legal cases alone. The campaign is seeking donations to this JustGiving Crowdfunding Page to help make the legal challenge happen: https://www.justgiving.com/crowdfunding/Haringey-2bn-gamble?utm_id=2&utm_term=y6QAPnqnG

The campaign is organising more events, including public meetings on 18 and 25 April and a May Day event. Details of these and other campaign actions can be found on the 2 Billion Pound Gamble facebook page https://www.facebook.com/2billionpoundgamble/

The Haringey HDV has drastic implications for council housing in other areas, particularly across London. Any assistance that can be given in fighting it, either in people’s time or money, will help defeat it.

 

Doug Thorpe

2 Billion Pound Gamble campaign

 

 

 

 

Estate Regeneration and Good Practice

Last week, the GLA’s window for responses to their ‘Estate Regeneration Good Practice Guide’ – which can be found here – closed. The final document will set out principles that local authorities, housing associations, city hall and developers should look to when considering estate ‘regeneration’ projects – and the ways in which residents can hold them accountable.

Residents, community and campaign groups within the Radical Housing Network, and from the wider housing movement, sent in their responses. This blog summarises some key issues that came out in the responses from groups within and outside of our network. If you sent a response to the GLA which you’d like featured here, get in touch info@radicalhousingnetwork.org.

2x1_housing_regeneration_oceanestate

The (Draft) Guide

The guide sets out three key areas: the purpose of estate regeneration, recommendations about how to consult with residents and the overall ‘deal’ that tenants and leaseholders can expect in regeneration projects.

Responses: Some Key Issues

Demolition Last Resort 

Though the guide does outline demolition as one of a range of options for regeneration – it doesn’t do enough to push back against the current practice of ‘demolish first, ask questions later’ that developers are carrying out all over London.

Submissions, like that from Demolition Watch, stressed that other options for regenerating estates – like upgrading and improving homes, funding the community and repairing local infrastructure should always come first. Demolition should always be a last resort. And when demolition does happen – no social housing should be lost. The guide does make some commitment towards this – but says only projects funded by the GLA will be beholden to the rule of ‘no loss to social housing’ – this needs to be broader and the terms set out clearly for residents to know what kind of power this commitment really has.

The London Tenants Federation pointed out the demonisation of estate residents as scroungers, embodied in policies like ‘Mixed and Balanced Communities’ (London Plan) – where areas with a high number of social housing residents have to be ‘diluted’ with wealthy neighbours – went unchallenged. Policies like these embolden developers to demolish people’s homes without accountability.

Resident Ballots

Several submissions addressed the vague commitments to residents’ democracy, and the importance of resident support for regeneration projects. Though the guide dismissed ballots as an ineffective way of gauging resident support, several submissions pushed back and demanded resident ballots on all regeneration projects. This practice would make concrete commitments to ‘democracy’,  ‘support’ and ‘consultations’ that have systematically failed estate residents thus far.

Demolition Watch even set up a popular petition to the Mayor demanding resident ballots. They still need a few more signatures – and you can sign here.

Clarity – What’s the Use and Application

Sidestepping concrete commitments like these, and trading in vague language, the guide left little clarity about how the final document will actually be used – and what kind of power it really gives residents at all. How will developers be sanctioned if they don’t comply, for example? Several submissions, including that from Fuel Poverty Action,  covered different areas of this topic – something Sian Berry’s submission to the guide also looks at.

Transparency was also raised – with groups arguing that data around the plans and implementation of regeneration projects must be made public.

Impact 

Submissions criticised the guide’s lack of commitment to monitoring and addressing the impact that regeneration has on communities –  Barnet Housing Action, for example, argued that councils should keep a duty of care to residents after they leave a borough if they have been driven out by regeneration.

Environmental and social impact – from the exploitation and environmentally damaging practices of energy companies to the destruction of the social and cultural fabric of an area, were also highlighted, and calls for the GLA to address these issues, with creative solutions for how they could do, were also raised.

Including All Residents

The guides’s focus on particular types of tenure – leaving out freeholders, for example – was challenged, particularly by Barnet Housing Action – who highlighted that this left people with particular types of tenure vulnerable, and encouraged splits in the community – something the guide said it wanted to avoid.

Displacement

Demolition Watch, among others, pointed for the need to monitor the well being of people displaced by regeneration – so that data on the impact of regeneration of people’s lives can be made clear, and councils and developers held to account when people under their care are suffering.

A right to return to their areas, and cash compensation for those whose lives are disrupted, or who are permanently displaced – were also pushed for.

The expertise and campaigning work of grassroots groups affected by regeneration projects came out to shape the guide. Groups provided case studies, critical analysis and pushed for creative and simple policy the GLA could commit to if it really wants to support communities, regenerate rather than destroy areas, and commit to social housing , not social cleansing.

Watch this space to see what happens when the final guide comes out, later this year.

List of all submissions here:

London Tenants Federation: https://thtf.files.wordpress.com/2017/03/draft-response-london-mayor-regeneration-good-practice.pdf

Axe the Housing Act Letter to Mayor:http://www.axethehousingact.org.uk/wp-content/uploads/2016/07/AtHA_letter_LondonMayor_Jan2017_A4_2pp_web.pdf

Demolition Watch: http://media.wix.com/ugd/395633_86a8c7e0ed214958b1bef55aeb9ed1be.pdf

Fuel Poverty Action:

http://radicalhousingnetwork.org/wp-content/uploads/2017/03/Fuel-Poverty-Action-response-to-GLA-Estate-Regeneration-consultation.pdf

Barnet Housing Action:

http://radicalhousingnetwork.org/wp-content/uploads/2017/03/Barnet-Haction-1.pdf

Sian Berry: https://www.london.gov.uk/sites/default/files/final_estate_guidance_response_sianberry_mar2016_0.pdf

 

 

 

 

 

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Timeline of RHN Direct Action 2015

Launch of “Staying Put: An Anti-Gentrification Handbook for Council Estates in London”

The 35-page booklet “Staying Put: An Anti-Gentrification Handbook for Council Estates in London”
was launched at Queen Mary’s University, Mile End on Thursday 12th June, to a packed lecture room of housing activists, campaigners, academics and those affected by the government’s social cleansing policies. Several speakers took the podium to present their campaigns in 10-minutes slots, with strict time-keeping by the facilitator. Those that presented included:

Just Space: pool knowledge & resources for communities facing displacement, and attempt to get academics to do useful research around planning policy. They are especially focused on influencing the London Plan (public hearing in September), which will see mega-development sites destroying many of London’s existing communities.

Elephant Community Network: made up local residents and businesses in the Elephant and Castle area, who have seen several waves of displacement already, eg with the decant of the Heygate Estate. Displacement in one area only creates a ripple effect of displacement in others as people are moved further out.

Research on Displacement at the Alyesbury Estate: a reading of the evidence/ research around tenants displaced from the estate, due to regeneration and social cleansing. Statistics about the people interviewed and voices of those affected were pretty powerful.

Walteron & Elgin Community Homes: a case study on the clever use of existing legislation intended to favour landlords (ie Right to Acquire/ Tenants Choice – repealed 1996) into an opportunity for the estates to create their own democratically-run and managed housing, much to dismay of the government. Hoping to replicate this strategy on the Gibbs Green estate using current Right-To-Transfer legislation.

Cressingham Gardens: their beautiful and vibrant estate on the edge of Brockwell Park has been earmarked for demolition by Lambeth council. They have been looking at various ways to save it (eg applying for conservation status) and fight the council decision. They will be running guided tours in September during Open House.

St Clements Community Land Trust: using the Right-To-Build, they are creating a self-build community in East London. However, the price of land was identified as the biggest stumbling block for any such development, and councils must be pressured into gifting land if more of this is to happen.

Other groups represented/ speaking:
Games Monitor: resource showing how mega-events like the Olympics are used for land-grabs and displacement
Our West Hendon: fighting gentrification regeneration in West Hendon, Barnet [Broken Barnet article on demo when MP Matthew Offord came to visit]

Some points raised during the discussion:

  • Getting organised can lead to positive, limited outcomes, which is the best that can be hoped for at the moment
  • In Newham, the council is fining landlords who house multiple occupants but this has only lead to small landlords forced out in favour of big housing associations, and an indirect form of social cleansing.
  • Commercial space is just as important as housing in sustaining local communities, and both are under threat from regeneration/ gentrification.
  • Need to pressure the Labour Party to commit to public spending on building and maintaining quality social housing for the general election
  • Tory ideas (anti-working class/ demonisation of the poor/ hate campaigns, eg London riots were started in council estates) have become entrenched with all parties/ a broad spectrum of the population. Campaigners need to use media tools to undermine this narrative in order to empower communities under threat.

The booklet, put together by London Tenants Federation, Loretta Lees, Just Space and Southwark Notes Archive Group (SNAG), deals with three key areas:
1) What is gentrification regeneration? (background)
2) What can you do about it? (organising)
3) What are the alternatives? (strategy).

Free copies of the booklet were distributed to the attendees, and the pdf resource has been now been published; please print, distribute and generally make available, as this is a great resource:

http://southwarknotes.wordpress.com/2014/06/13/staying-put-an-anti-gentrification-handbook-for-council-estates-in-london/

The talks were followed by drinks and snacks in the courtyard outside, where mingling and networking happened in the cool, summer evening. Even though smoking was forbidden on the private Queen Mary campus, puffers took the liberty to spark up in defiance of privatisation. The event, feedback and discussion were all positive, but the road ahead still just as daunting….