Tag Archives: MIPIM

Gyms, tiny rooms and massive rent – what we learned about student housing at MIPIM.

by Pearl Ahrens, UCL Cut the Rent

While some of us were outside MIPIM asking delegates to Give Us Back Our Fucking Rent!, others were inside seeing what deals were being done, what people were saying – and what’s going to happen to housing in this country.

Private rental sector and excusing higher rents.

“[We’ll see a] total convergence in real estate generally of housing and the rental sector, of life, work and play not as separate sectors”.

This, according to Matt Yeoman, Director BuckleyGrayYeoman, is the direction of travel for the private rental sector (PRS). He was speaking on a panel about the ‘Future of student housing’.

The upshot of this panel? The future of the PRS is about an increasing similarity with hotels and the hospitality industry. Making renting not about just having a place to live, but about providing a whole inclusive life-experience from the apartment block. This will have a knock-on effect on the private student accommodation sector, and that in turn will impact university-owned halls.

Property providers know the housing crisis is something they have created – Bruce Ritchie, CEO at Residential Land spoke of the “frustration of aspiring young people… most people know where they want to live, it’s just whether they can afford it”. And so, they reap the benefits of their own actions by renting instead of selling, by using the provision of extra services as an excuse to raise rents even further. In the private rental sector, ‘affordable’ doesn’t mean affordable. Affordable Rent means “subject to rent controls that require a rent of no more than 80% of the local market rent (including service charges, where applicable)”[1]

End of halls

Students who don’t get into university-owned halls end up in the private rental sector – a far cry from the ‘halls experience’ where they meet their friends and have the traditional first year of university. Phillip Hillman, chair of JLL UK Alternatives, sees this as a gap in the “immature” private rental market which private student accommodation is filling. For providers, private student accommodation is a great investment – it’s like the fast-growing private rental sector but with a more stable, Brexit-resilient stream of available tenants. Again, the idea is to provide lots of hospitality and built-in services – group study spaces, gyms etc. and cut back on everything else. That students can’t afford these premium apartments is a nuisance providers get around – according to Richard Gabelich, CEO at UK Campus Living Villages (CLV) with this “big focus on affordability, you can get away with smaller bedrooms if you’ve got great study space”. Companies like Richard’s are taking advantage of this opportunity at an extraordinary rate – the proportion of student accommodation administered by private providers went from 18% in 2006 to 41% in 2015/16.[2]. The trend towards providing other services also exists here, as Matt Yeoman said at the panel – “It’s entirely hospitality driven. [If not, it] will fail. [If we keep] upping the bar, [we] will be fine”

This drift towards hospitality ventures means private student accomodation, with these stark takeover rates, are ‘leading’ the way.  “Every PRS scheme we are working on feels like student housing eight to ten years ago”, Yeoman also said.

The problem with all this isn’t simply the provision of social spaces. It’s the social spaces being offered as a ‘luxury option’ and the hike in rents which this necessarily entails. This increase in rent is supposedly legitimised by the expansion of the provision of services, though there’s nothing to stop private student accommodation providers raising the rents to a price above and beyond what it costs to provide those services, and way above and beyond what most students can afford before they are forced to live in dire poverty.

How this relates to universities.

On the part of the universities, it’s difficult to provide enough spaces for all their students in the halls they own, and with gross underfunding from the government, the halls’ rents seem like the perfect source of income, ready and available to tap.The mere existence of private student accommodation allows universities like UCL to excuse their extortionate rents, driving up prices in all accommodation. For example, UCL over-prices all its accommodation to make a surplus which they plough back into the UCL Estates pot. While ‘higher quality means higher price’ attitude of private student accommodation providers is to be expected, one would expect better of universities, considering their duty to students.

If universities were properly funded by the government they wouldn’t have to scrape the pockets of their students to find research funding. However, with talk of lifting the £9000 cap, and with top unis like UCL actively lobbying for less funding from the government, it’s unlikely that they will be adequately funded any time soon. UCL’s former Provost Malcolm Grant was quoted advocating lifting the then £3000 cap all the way back in 2006, so to think that lifting the (now £9000) cap on tuition fees is a sustainable or just solution to funding problems is absurd.

Some of the time, universities and private providers work directly together – in public-private partnerships. The trick of underfunding the public sector until it needs to be ‘saved’ by the private one is at play here, and was acknowledged by the panel. Hillman said that underfunded universities run halls with “half [of student accommodation] well below the standard that universities say is desirable, and the universities have no money, [so] they look to the private sector”. Gabelich, too is fully aware of the difficult situation the government put universities in. He mentioned how the cap on tuition fees is generating funding worries for universities, so private student accomodation provides “an avenue in which they can get capital from the private sector to invest in other areas (like research)… universities are cottoning on more and more to that”.

[1] http://planningguidance.communities.gov.uk/blog/policy/achieving-sustainable-development/annex-2-glossary/

[2] http://www.nusconnect.org.uk/resources/nus-unipol-accommodation-costs-survey-2015

[3] http://www.huffingtonpost.co.uk/entry/student-judges-student-accomodation-awards_uk_580f0d40e4b0f479c0d79810

Making Links between Housing and the Environmental Movement: 2nd Forum on Natural Commons

Attending the conference “2nd Forum on Natural Commons”, held on 2nd June 2014 in London, the author was looking for common ground between the housing and environmental movements, to see what links could be made in the future. Having missed most of the first half, took the following notes for the second:

Carbon/ biodiversity credits/ offsets are financial instruments to provide incentives/ monetary payments for “protecting” eco-systems. However these credits have mostly led to land- & green-grabs, such that areas rich in natural diversity have been turned into private conservation reserves, fenced off for offsetting credits and used to harvest “eco” consumer products. Market-based credits have simply become a means for the commodification of the natural environment, a collusion between science, finance and government based on the flawed assumptions of “the market”; this type of conservation sees all eco-systems as a homogenous mass (so that for example irreplaceable ancient woodland is considered equivalent to any other forest) and the only value of the environment as a means to making profit.

Credits have lead to a redistribution of power in areas affected, with green-grabs, enclosure and “fortress conservation”, in which the indigenous communities are marginalised, and any deliberative process and debate closed down in favour of making money. In Europe and the UK, “independent” (private) verification contractors are paid to create offsets, these offsets then used for speculation and gaming, and areas set aside as offsets are often built on a few years later (issues of maintenance). There are often perverse outcomes from this type of environmental protection, such as the growing desirability of land around national parks, created to protect natural eco-systems, but now the favoured sites for the rich to live in wealthy enclaves. Similarly, “experts” (eg ecologists, geologists) colonise these “commons” and landscapes with rules and regulations to “protect” them, thereby stopping local communities from deriving sustenance/ recreation from them.

Carbon Trade Watch have put together a short report on the global issue of biodiversity credits and their abuse in a “A Fish for a Tree: Understanding the (il)logic behind Biodiversity Offsets”

There is still plenty of land-grabbing in the EU and UK, especially around infrastructure, agricultural and energy policy, a constant battle between large corporates vs small producers, rights of possession vs rights to produce, etc. Resource issues are treated as a technical issue (monetary value), rather than a rights-based issue, and highly centralised land ownership leads to problems of access to land for everyone else. One recent example of this green-grabbing is that of a large solar farm in Sardinia, Italy, where 64ha of prime agricultural land was taken over for a private solar farm, with small farmers forced off the land and given small, one-off compensation payments, while the EU subsidised the solar project to the tune of Euro7 million a year.

Friends of the Earth and FERN have put together an excellent selection of case studies from the UK which demonstrate how biodiversity offsets are used by property developers to defraud communities of their ancient woodlands, green belt, meadows, etc.
“Case studies of biodiversity offsetting: voices from the ground” [foe, FERN; 2 June 2014]

In seeking to draw parallels between housing struggles and environmentalism, the first similarity is their opposition to the prevalent system of rapacious capitalism. Corporates and governments alike cynically manipulate instruments and legislation to promote and protect their own vested interests, using “institutional abuse” to break down resistance to their predetermined agendas; for example in the UK, Social Services currently threaten families under eviction with having their children taken into “care” if they do not comply. Secondly, the centralised and concentrated control of land, power, resources, etc means that there is little scope for alternative models, and where alternatives do exist, they are constantly under threat from encroaching resource-grabs (eg council housing taken over by housing associations and Right-To-Buy).

Governments and corporates are short-termist in their approach, preferring quick wins for profit, tax income, votes, etc. to the detriment of long-term sustainability and human rights; for example the current engineered property bubble will have dire consequences for the economy in the future, while state-backed extreme energy-extraction like fracking is already posing serious threats to human health, potable water resources, climate change, and the industrialisation of the countryside. The collusion between state and capital is global in nature, as illustrated  by two upcoming international summits that will see power brokers carving up common resources and selling them off without any public consultation; in the case of housing this will happen at MIPIM in London in October and in terms of environmental commons, is currently happening through the Trans-Atlantic Trade and Investment Partnership (TTIP), set to be codified into UK law with the Infrastructure Bill.

In housing, as in the environmental movement, there is a concerted and growing grass-roots resistance to the complete disregard for people and planet. In order to succeed, networks from both movements need to start co-ordinating strategies and tactics, share information and research, provide mutual support and find common targets from their respective angles. This unity of purpose created one of the defining moments of the ‘90’s anti-globalisation movement; in Seattle in 1999, during the WTO summit, separate marches of environmentalists, trade unionists, human rights activists, etc converged, united and took action to close down the summit just as state and corporate leaders were unilaterally agreeing the privatisation of national resources. With the latest summits on global privatisation, we are once again called upon to defend what we still have, and actively implement what could be.

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