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Unaffordable Homes vs a National Plan?

London has 1% of the land area of the UK, 13% of the population and over 20% of the economy. And the population of London has just reached a record level.
So it’s not surprising that the cost of housing in London is an issue. Get used to it!
Despite the hype about which new London baby will be the record breaker the reality is that the person that takes London beyond its previous highest population will be an immigrant.
Most likely it will be an immigrant from the north of England or from the European Union.
And these immigrants want to live in London. They don’t want to live an hour or more’s uncomfortable commute from their work and from the bright lights of the city centre. There is a nice app here that shows you commuting distances by public transport as time contours.
The average London commute is about 37.5 minutes each way compared with about 27 minutes for the country as a whole.
Dutch planners regard 35 minutes as the longest acceptable commute time for their biggest cities and plan accordingly.
So the superficially attractive idea that developing low grade Green Belt around stations can deliver a million homes probably isn’t the housing solution that will most improve the quality of life of London’s population. If you use the map app you will see that virtually no Green Belt is within 35 minutes of central London.
So what to do? It was interesting to listen to the recent Newsnight debate, instigated by the Centre of Cities latest report, on Milton Keynes.
Simon Jenkins called Milton Keynes urban planning out of date and noted that as our only well located new town it wasn’t surprising that it was fast growing (18% over the decade 2004-2013 according to centre for cities, mainly on green field land, compared with about 13% for London, 98% Brownfield, and 7.5% for England, 80% Brownfield) and Michael Edwards observed that places like Ebbsfleet and the urban extensions of Bicester lacked the scale to attract universities and therefore to be real cities.
Ebbsfleet and the Graven Hill extension to Bicester are both Brownfield sites and are both considering large numbers of Custom Build homes and both have some locational advantages. Both have or are getting improved rail connections to high growth locations within reasonable proximity (if not reasonable fares). And the neighbourhoods in Ebbsfleet just sneak in to the 35 minute commute to Kings Cross (though not further into central London) and the new Bicester neighbourhoods are within 35 minutes of Oxford when the new train line is operational.
But neither are they about to create attractive cities of 300,000 population.
The winner of the Wolfson economics prize, Urbed, advocated the sustainable expansion of attractive mid sized cities which might include places like Cambridge, Oxford and York. This works with the grain of market demand and inevitably will divert some demand from London.
Their challenge is to deliver sufficient public transport, cycle routes and dense walkable neighbourhoods which negate the need for a car and therefore avoid exacerbating the already insufferable congestion these places already experience. The new Oxford Parkway station with its large car park is not the way to achieve this. Instead it should be the centre of a dense, low car use, walkable neighbourhood serving Oxford.
The Centre for Cities report identified the decade of limited job creation in northern cities. One potential way to take some of the English immigration pressure off London house prices would be to invest heavily in the infrastructure that would deliver competitive advantage to these cities. HS2 isn’t that infrastructure but HS3 and the Northern Powerhouse just might be if combined with investment in the liveability of these cities.
New public transport infrastructure that is fast, frequent and affordable can expand the reach of a strongly attractive centre like London’s. HS2′s likely fare pricing and station locations will limit its ability to do this but Crossrail, Crossrail 2 and the proposed extensions to the Northern and Bakerloo lines do help to open up reasonably accessible locations, with reasonable fares, with the potential for high density walkable neighbourhoods.
In the longer term there is significant potential for existing London suburbs to change, around their stations, from semi detached densities to much more vibrant mixed use walkable neighbourhoods along the lines of those found in inner London in places like Islington and Kensington. The market will eventually deliver this, or at least the density though probably not the quality, but local government intervention will be required if this is to be delivered in the timescales required to address current housing needs.
These options are not either or. They can all make a contribution, if sensibly planned, to the housing and employment needs of the country.
Even Milton Keynes will be densified as it tries to retrofit a sustainable, liveable urban form on its car and fossil fuel reliant plan.
If planning is to be effective it has to be the sort that has hold of the purse strings. That can invest in infrastructure to make places more competitive. And that applies to all levels of Government. It is very hard to divine the spatial growth logic behind national infrastructure plans. How they connect to growing economic sectors. How they build on public transport investment with the critical placemaking, cultural and liveability investment needed to be competitive.
This isn’t a small matter. If some parts of the country cannot deliver job accessible homes fast enough for their growth, or for affordability, while also enhancing their population’s quality of life then the national plan is either absent or insufficient.
Government is not great at that this stuff, being too easily swayed in its investment decisions by party politics. The incoming Government will have choices. It could densify London’s outer suburbs, it could accelerate London’s commuter infrastructure, it could invest in a big way in the Northern Powerhouse public transport and the liveability of the inner urban neighbourhoods of the northern cities. Or it could do all of these things and maybe put off HS2 for another day having secured the route for posterity.
Whatever it does, we can be pretty confident that, relatively, London house prices will still be expensive!

Community Led Urban Regeneration

The regeneration world (in the true definition of physical regeneration ie development that is not viable in the market) pretty much ground to a halt in the UK post 2010 as austerity bit and sources of gap funding (money to meet the deficit between the cost and value of a regeneration project) dried up.

Quality Affordable Housing for All?

One of the biggest issues the country is facing is the question of how to provide quality housing for everyone when not everyone can afford it.

We are currently running a housing benefit bill, public subsidy for housing costs to people on low incomes, of around £25 Bn a year.

Learning From Overseas Housing Markets

The Christmas and New Year holidays, if suitably extended, as they were for me this year, give space to contemplate the worlds of placemaking, housing, planning and regeneration from a greater distance than usual.

I spent the time on a long distance tour of Custom Build. The main thing I learnt was the importance of culture, and the economic concept of persistence, on the structure of housing markets.

Move over Placemaking boys!

I’m increasingly encouraged by the visibility of (mainly young) women in the Placemaking world.

Urbanistas is spreading rapidly across the country led by an ever increasing number of dynamic women in our major cities.

And there has been some great writing on the role of women in our world.

The Right to Custom Build, but no Right to Affordable Housing?

Government is currently consulting on a Right to Build for Custom Build. Confusingly for Googlers this is not the Community Right to Build which is entirely different.

And even more confusingly it uses a different definition of Custom Build to that used by the minister in the house during the debate on the second reading of Richard Bacon MP’s Private Members Bill (which paves the way for the proposed Custom Build Register which is a key part of the consultation and which has cross party support), the day after this consultation was published.

Placemakers – A Duty to Society?

When I was invited to a conference in Dundee on a Friday afternoon on professionalism, place making and people I thought long and hard. I didn’t immediately recognise its importance. It took quite a while to sink in to my small developer brain. But after listening intently to the proceedings it felt to me like the most important challenge we have to solve. Getting it right solves, or at least substantially solves, some of our biggest challenges like climate change and mental ill health.

Housing – Health, Poverty, Employment and Climate Change

Being sceptical about Passivhaus is like being a climate change denier, expect attacks from the evangelicals.

To be clear, I am evangelical about reducing human impact on climate change and am a supporter of reducing energy consumption in new buildings.

Jacobs, Gehl, Moylan, Murrain and Real Life Better Placemaking

I was in Leeds this week, not for the first time, with a group of people with real passion to make their city more economically competitive and to pass on a better place for their children to live.

Estate Renewal – Community Coproduction?

Estate regeneration in London was the subject of a timely Future of London event this week. The London Assembly will shortly be publishing its report into this process in London.

Two forces are currently driving estate regeneration in London; the net present cost of maintenance (and in some cases decent homes standard) and the need for more homes.

The calculations for these two factors are reasonably easy arithmetic.

For maintenance cost, building and quantity surveyors work out what needs doing to the mainly 1960s and 70s, often tower blocks, and what it will cost and accountants subtract the net rental income and calculate a net present cost. Indeed there are well known firms of surveyors hawking around a simple message to local authorities - get rid of the financial underperformers to give yourselves financial headroom in your housing revenue account.

For more homes, urban designers (in practice usually architects so not the same thing at all) work out the capacity of estates within the constraints of planning policies as if the estates were cleared sites. Almost inevitably this results in more homes with estimates at the Future of London conference on the subject this week being that, in London, local authority estates have the capacity for at least 200,000 more homes. It was depressing to hear the development industry at the event mindlessly and boringly advocating crashing on with this approach.

These two calculations are then followed by a third piece of arithmetic. Given the number of homes we can build how many of these can we afford to be affordable. Time and time again the answer is ’not as many as were there in the first place’.

It was clear from the conference that maintaining the number of affordable homes, and maintaining them at the council rents at which they are currently let, is not the priority. The priority is the total number of homes, not, as a minimum, the like for like replacement of tenures and rent levels that were there before (together with any extra market homes that can be fitted in).

This can be justifiable. There is a huge deficit in provision, in inner London, of homes that are affordable to people on average wages. But many would argue that this has to be subject to explicit, voluntary (not forced as has been the practice in some cases) rehousing of existing residents and a calculation of the other social costs of this approach.

None of these equations calculates the most important costs. The costs that aren’t included are many, often because they are harder to calculate, and the two big ones are social costs and environmental costs.

One view is that the embodied carbon in the existing and new buildings is so great that the benefit of more energy efficient buildings will never repay the costs of demolition and new build. It was fascinating, at another event this week, to see the work Peabody are doing at Thamesmead to retrofit this age of stock to close to Passivehaus standards with no demolition.

The social costs are much harder to calculate. In relation to energy alone, it is not enough just to calculate the carbon, it is critical to factor in the costs of fuel poverty, related health costs, winter deaths and so on. But the bigger costs probably relate to health and wellbeing, particularly those connected to mental health and the importance of community. Mental health is a massive cost line in the nation’s expenditure (£70Bn pa) and is substantially impacted by the built environment.

We are currently miles away from being able to get a cost estimate of the social costs of estate regeneration anywhere approaching the accuracy of our estimates of building life cycle costs never mind capital costs. If ever there was a market gap for surveyors or accountants, calculating the value of health and wellbeing is it now that the accountants are close to cornering the market in carbon reporting.

I was taken to task at the Future of London event by the excellent Stephen Platts from Southwark over my description of the Heygate estate renewal as a social disaster. Loretta Lees, now of Leicester University, and an expert in gentrification and the impact of estate renewal has done some research on this but it falls short of trying to put a cost on the impact of the widespread relocation of the previous occupants across the south of England. Most people in senior positions in Southwark now openly acknowledge that the way the early stages of the project were implemented was not best practice and they can very intelligently dissect the lessons learnt, as well as highlighting the benefits to others. It was a shame that the Future of London conference didn’t get the full benefit of this wisdom. There are two sides to the story and both are worth listening to.

There are proxy ways of assessing social costs. Westminster, having been burned by political backlashes in the past, now ballots residents on estate renewal plans. This can give a likelihood of an average benefit rather than cost but it can still disguise those for whom the direct social costs are very high. Brent, for example in their South Kilburn estate renewal, undertake block by block phased rehousing which, done well, seems to even have positive impacts on mental health during the rehousing process although these benefits disappear once the rehousing support for the resident finishes.

These are important lessons. Getting resident consent and ensuring good rehousing support for all must be part of any comprehensive scheme. And some would go further. They would say very resident should re rehoused voluntarily, or, as a minimum, the total social costs and benefits for the project should be positive. While it is almost inevitable that there will be costs, and for some old people these will be life ending, it may be that the costs outweigh the benefits. Even then, decision makers, ideally drawn primarily from the local community, would want to think very carefully about how to mitigate the costs for the losers and whether it was worth undertaking projects where even a few people were going to experience large losses.

There was a lot of detailed learning from the conference. Community consultation techniques should allow every resident who will be impacted to have their individual needs understood and provided for. Evening consultation meetings are not enough. This requires one to one support from the earliest stage of reviewing options through to the completion of a move.

One of the examples quoted where this was done was the Kipling Estate in Southwark managed by the Leathermarket Joint Management Board, a tenant management organisation (TMO) which is self-financing. There they interviewed every resident and worked out the number of new homes that were needed to completely remove over and under occupancy on the estate as well as to cater for individual needs like accessibility. They will also be allowing those residents to customise their own homes and will release more existing bedrooms for Southwark’s allocations than they are building new as a result of providing attractive alternatives for under occupiers (typically older empty nesters not affected by the bedroom tax).

This estate is well managed and maintained so rather than a comprehensive demolition and rebuild the TMO, supported by the local authority, are going for an infill approach where the power of providing homes for their neighbours, who have average incomes of around £9000 per annum, is proving a powerful motivator to support the project, even from those neighbours who will have their view or sunlight impacted.

Another lesson was in relation to leaseholders. Many of these former right to buys are now owned by absentee buy to let landlords. There was little sympathy for these owners with market value plus a bit being the usual compensation but with a clear need for a quicker compulsory acquisition process to avoid these people holding the project to ransom. Owner occupier leaseholders on the other hand were best treated with a direct like for like replacement in the new scheme. While this might result in a much more valuable home this was seen as a necessary, equitable and social cost minimising approach to compensation although it is not one that is recognised as necessary in current legislation and case law.

Similarly, market rent tenants needed special treatment to avoid the social costs of them becoming homeless or requiring substantially increased housing benefit and again the optimum solution for many would be a new home, within the scheme, at the same rent they were previously paying.

One of the particularly interesting trends was for local authorities to take the role of developer. Lambeth, Ealing and Southwark are amongst those doing this, often, as with Lambeth’s Somerleyton Road project which Deputy Mayor for Housing, Richard Blakeway name checked, through a process of coproduction with the local community, and it is increasingly clear that the housing associations and other private sector developers are now in competition with their local authority clients. Pat Hayes of Ealing’s view was that local authorities can buy in the development management services they need, and provide finance, more cheaply than through procuring housing associations and developers.

While few of these lessons apply outside London, where values are lower and so the potential cross subsidy from increasing density and introducing market units is often non-existent, it is important to learn them in London.

The starting point for estate regeneration need not be a decision in the council, it could be a decision by the local community, given all the evidence including a detailed understanding of every resident’s needs and a detailed assessment of social, environmental and financial costs and benefits. And more often than not this is likely to mean infill and retrofit rather than rehousing, demolition and redevelopment will be the preferred outcome.

It will be interesting to see what conclusions the London Assembly reaches on this.