The flaws and motivations behind forced ‘regenerations.’ Why market fundamentalism ruins lives; first CPOs and electoral consequences.
Language leaks meaning, gives games away. Even spin doctor’s euphemisms can’t stop it; the truth just shouts louder between double-speak lines. George Orwell would have been physically sick reading politicians’ guidance on estate ‘regeneration.’ All the platitudes about putting residents at the ‘heart’ of ‘meaningful’ decision-making processes mean the exact opposite.
Take Lambeth. London’s flagship ‘Co-operative’ council intends to bulldoze six estates against the will of at least two – Cressingham Gardens and Central Hill – despite its Cabinet agreeing to develop proposals which ‘residents can support;’ and ‘co-produce solutions’ by providing resources to ‘properly investigate all options.’ The borough’s Housing Strategy 2012-16 aimed to give ‘more power to service users’ as ‘citizens.’
Beware of wilfully vague principles. In 2015 Matthew Bennett, then Cabinet Member for Housing, informed South Lambeth estate that a council report would ‘not make any recommendation about the future of your estate.’ ‘This means we will, as a minimum, identify which homes are to be replaced.’ ‘Once these…have been confirmed, we’ll continue to work with you in more detail on the look and feel of the estate.’ ( Cabinet Meeting , Agenda Reports Pack, p361)
This roughly translates as, ‘No recommendations apart from the minor detail of whose homes will disappear, something councillors will approve regardless of what you think. Once that’s been stitched up we’re all ears about whether you’d like swings in a new play space.’ Residents ‘co-produce’ demolition programmes like cattle are citizens at the heart of designing the abattoir process. Try swallowing Bennett’s sense of entitlement. Betraying Co-operative Party principles never occurred to him, although the party has no policy on ballots or forced ‘regenerations,’ nationally or in London . Officers declined to comment.
Joint ventures -vs- council owned companies
Lambeth’s strategy is a salutary case study, precisely because it illustrates inherent flaws despite having better objectives than Southwark’s joint ventures with developers that ‘require’ 20% profit margins, an asset-stripping mistake Haringey seems determined to surpass .
First, some root causes: 56% government cuts in ‘general’ budgets from 2010-18, on top of a £117m reduction in promised Decent Homes Funding that leader Lib Peck campaigned against. In 2012 the council committed £499m to bring its 34,000 housing stock up to Lambeth Homes Standard, then an initial £56m shortfall in its Housing Revenue Account (HRA) was later made worse by imposed rent reductions. A 2014 election promise to build 1,000 council homes assumed several hundred new units from estate demolitions, obviously prejudging consultations. Residents rightly resent this justification, because it came after ‘unviable’ repairs costs, and for implying that opposition selfishly prolongs the suffering of 23,000 people on the housing waiting list.
Lambeth are creating a council ‘controlled’ company, free to borrow outside HRA caps, and devote more revenues from private sales to cross-subsidise new homes at social rents. But the special purpose vehicle (SPV), Homes for Lambeth , will have at least three ‘differentiated subsidiaries.’ Only one of two Registered Providers of affordable housing will be wholly owned by the council. The second is a ‘minority share’ public-private joint venture, a loss of control justified as enabling the borough to spend 30% of its right-to-buy receipts instead of having to pay every penny to the Treasury. A third entity will focus on making profits with private partners yet to be named.
Homes for Lambeth will also ‘generate income for the General Fund to support…the delivery of vital services.’ Lambeth declined to provide details of budget targets, stating: ‘Any surplus generated from the Estate Regeneration programme will be used to support things like more affordable homes.’ The key word is like. Estates are now land assets to be cannibalised, partly as to plug government cuts to services like libraries and social care.
Lord Porter , Conservative Chair of the Local Government Association, frankly admitted to Inside Housing. ‘The government has got us screwed to the floor in terms of income generation.’ Council owned companies are ‘the one way we can maximise our returns.’ They’re also more likely to ‘raise the quality of the private rented sector’ than ‘focus on social housing.’ Legal firm, Trowers and Hamlins, help councils establish Housing Delivery Vehicles . Though aims and structures vary, majority stakeholders call the tune on margins and expect flexible business plans to react to markets. The ability for vehicles to be sold off can also make them more attractive.
Lambeth’s plans won’t be published until November 13th. Outline estate redevelopments aim to ‘optimise’ density to re-provide homes for all tenants and 80% of resident owners, as well as build additional units with 40% at affordable rents – preferably at council levels (£585/month for a two bed flat) – and 60% at private rent (£1,464/month) or sale. All subject to viability.
Why legal safeguards and standard ‘offers’ ruin lives
Despite limited, credible gains inevitable impacts have been downplayed. Re-built estates would be owned by Homes for Lambeth , not the council’s housing department. SPVs can’t offer secure tenancies, so anyone choosing to return loses their rights to manage and transfer to another landlord. In Lambeth the right to buy goes too, an option government rules may ban in future.
Although ‘lifetime assured’ tenancies for returning tenants would be at social rents, costs still rise by 10-25% because 30% of the rent setting formula is based on property values, set to increase by over half . (From £250k to £395k for a 2-bed, 3-person flat on Central Hill). That’s why Sadiq Khan’s draft guidance only requires ‘same or similar’ rents. Any savings in energy bills would be more than wiped out by increased Council Tax and probably service charges for higher-rise flats. Phasing in rent rises won’t stop some being forced to move to council homes in other areas to keep the same rent levels.
Resident leaseholders and freeholders get market value compensation plus 10% Home Loss Payment. Few could afford to buy new flats outright, so they’d be offered shared ownership with no rent charged on the proportion they can’t buy, but only if they can transfer or ‘port’ existing mortgages or take out new ones. Lambeth concede that some won’t be able to – especially the old and those on low incomes. Option C of its Revised Key Guarantees offers ‘with rent’ shared ownership, which could triple housing costs, possibly pricing them out of London, because some won’t be able to get new mortgages to buy other local ex-council flats either.
Fall back options include ‘a rented home’ on rebuilt estates. An independent review by TPAS suggested that vulnerable owners get ‘a council tenancy with the maximum security allowed under current legislation.’ Lambeth ruled this out. A statement explained its alternative; ‘bespoke’ solutions to fit circumstances, from ‘a number of affordable rent options.’ While this should prevent homelessness, housing costs could increase drastically, and anyone failing means tests may only get advice on accessing the private renting sector.
Then there’s succession rights. Shared owners can’t pass on rent-free status, except to resident partners or children. That means when they die some will bequeath unaffordable housing costs instead of a flat. ‘With rent’ shared owners risk eviction for rent arrears, and the potential loss of all the equity built up over a lifetime, an indefensible failing in legal protection.
The ‘right’ to return
Another under-reported fact is landlords’ financial incentive NOT to facilitate a ‘right’ to return. Owners taking early ‘special’ confidential offers to move away increase initial buyout costs but councils or housing associations can then sell off flats nominally allocated for ‘rent-free’ shared owners, or rent them out privately. Either option significantly increases total revenues longer term.
Lambeth may genuinely aim for 80% of owners to return but the standard options will make it impossible for some, and other crucial details have been withheld. Ominously, the ‘tenure mix’ and ‘construction phasing’ have to ensure ‘financial viability.’ This distils the inherent contradiction of private-led schemes based mainly on cross-subsidising affordable homes. To enable tenants to return their replacement homes should be built fist but the overriding imperative is to deliver private units in phase one to reduce up-front costs and borrowing.
Impacts on non-resident owners and their private tenants could be minimal or hard depending on their circumstances. What nearly everyone loses is their community, all the support built up over decades, of neighbours and friends who look after children or get shopping for people with mobility problems. If anyone doubts this unquantifiable value, visit Central Hill or Cressingham Gardens and you’ll understand the amazing efforts they’ve made to save their estates.
Most residents don’t want shiny new flats; often portrayed as lucky gains beyond what their wallets have got a right to expect. What they want is to keep their homes, because they’re preciously affordable and secure, and should last 150 years, not less than fifty. If councils want to bulldoze them to mitigate a housing crisis, what residents need is replacements at no extra cost, but that’s never delivered. Saying lives would be ruined isn’t an exaggeration. Not everyone’s; some. The regulatory ‘no worse off’ principle is a lie, especially in high value areas. It discriminates against the old and the poor, because it accepts market values as God.
Benefitting those most affected should be the first priority. Jeremy Corbyn shouldn’t need to point that out, but he did, because these days their interests are secondary at best, and the standard legal-minimum compensation ‘offers’ prove it. Lambeth have offered some help not strictly required, like funding moving costs in advance instead of only reimbursing receipts. But approval ballots aren’t an unnecessarily benevolent extra. Residents need fair elections, to defend their right to housing and their lives. Who are the best judges of ‘offers?’ Proposals that can’t win majority support don’t deserve to be implemented.
Like most councils, Lambeth’s Social Impact Assessments evaluate proposals against uselessly vague aims. Officers assert that, ‘All residents would experience improved quality of life in the long term.’ The word ‘all’ is a denial of reality, leant credence by pervasive public images of sink estates, which obviously don’t apply to Cressingham Gardens or Central Hill. Go there. Both are well-designed, inside and out.
Disputed repair costs and the curse of lucrative locations
Both also illustrate the irrational flaws of market-driven demolitions in a hostile policy environment; estates aren’t selected primarily on the basis of need or structural problems. The main driver is profit opportunities, to increase density and housing supply, especially in high value areas where market units can provide more cross subsidy. Lucrative locations become a curse. It isn’t a coincidence that Brockwell Park is a communal open space for the whole of Cressingham Gardens. Central Hill has panoramic views of Central London from near Crystal Palace. Both are relatively high density but also low rise, giving scope to pack in more units.
Cressingham Gardens was told that meeting Lambeth Homes Standards would cost an ‘unviable’ £30k/unit, double the boroughs’ £16k average. But a resident commissioned survey argues that bills were artificially inflated by assuming all roofs completely replaced in one hit, when repairs should be phased over many years. Lambeth’s original ‘refurbishment’ estimate was £16m; residents said £8m. On ‘maintenance and repairs’ Lambeth’s own figures show twenty-two estates with higher costs from 2009-12, with annual spending averaging £301k, just 25% of the council’s £1.2m income from rents and service charges. Yet this qualifies as bad value for money.
Lambeth cited their 2013 survey – only published after Freedom of Information requests – as identifying ‘potential structural problems.’ In fact the surveyors found the estate structurally ‘acceptable.’ Its main problem is sheer bad timing, for needing roof repairs – a normal cost after 40-50 years – just when government policies have drained Lambeth’s Housing Revenue Account, exacerbated by mismanagement.
The big picture: affordable housing and ‘no alternatives’
Lambeth wants residents to ‘understand the bigger picture,’ of a housing crisis, but councillors haven’t taken their own advice. Redevelopments always maximise density, therefore no more affordable housing can be built on cleared sites for more than a century. Demolitions now, under austerity, don’t maximise affordable housing. They minimise it. Council owned companies are just less bad than joint ventures. Seen from beyond a four year electoral cycle, Lambeth’s policy fails on its own terms. Councillors’ well-meaning instinct – to make a positive difference while they can – is myopically short-termist. Also, having to decant many tenants to other areas, for reasons explained, would stop the housing waiting list being reduced for several years; a social impact that has not been assessed.
Claims of no alternatives don’t bear scrutiny either. Cressingham Gardens would gladly accept weather-tight repairs until roof cladding can be replaced as needed, at which point the estate would become an even bigger net-contributor to the housing budget. Or they could vote to transfer to a resident-led housing association or co-op, avoiding the need to fund repairs from the council’s housing budget. Or a People’s Plan infill scheme could fund necessary works as well more new council homes than Lambeth’s demolition proposal, at much lower up-front cost. But Lambeth dismisses alternatives, partly because they wouldn’t provide as many homes for private rent or sale as a revenue stream to subsidise non-housing services.
When you damage some peoples’ lives to improve others, the consequences are telling you to draw a line. Lambeth shows where this can end up: any means necessary; refusing to provide full information on projected building costs, or surplus margins, due to ‘commercial confidentiality,’ directly contradicting your own Development Viability policy, which requires both from developers. Even estimates of future service charges and Council Tax bills were redacted from feasibility studies eventually released. There’s a word for organisations that don’t practice what they preach.
One local councillor even told the Cabinet meeting that condemned Central Hill about the ‘appalling conditions’. (Go there. They’re not). Explaining that an ‘elderly brother and sister,’ ‘support demolition,’ when in fact they’re against it. There’s a word for people who deliberately mislead. The only question is which councillor was responsible.
Lambeth awkwardly compared their actions against Sadiq Khan’s new draft guidance of 2016, and found themselves not guilty. Although standards are vague, some have clearly been breached. Information that has influenced decisions on options should be shared as early as possible . (Failed). Residents given early opportunities to shape proposals . (Failed). Consider social/financial costs and benefits. (Whitewashed. Social rent rises were only disclosed in 2015). Consultations should be transparent, meaningful, and responsive (Failed if words mean anything). The most important standard is conspicuously absent from the checklist; ‘resident support.’ Lambeth got unlucky like Cressingham Gardens did; bad timing. Twice. Because then Jeremy Corbyn piped up on TV supporting resident ballots.
Cabinet members must know the impacts on some. Backbench councillors’ only defence is wilful ignorance. Putting your career first doesn’t qualify. That’s why most schemes are morally unjustifiable, under any standards: political (transparency, democracy); planning principles ( sustainable communities); religious (do unto ‘others’). What about social landlord’s first duties as not knocking down good homes or creating poverty?
After Grenfell Tower it would be easy to accuse Lambeth’s leadership of a semi-conscious contempt for people living in social housing, and unfair, because housing their waiting list is a key motivation. What their actions definitely show is a deeply patronising betrayal of constituents they felt they had the right to disregard. Could they admit to a terrible mistake? Probably not. No one could trust them again anyway, and officers would all blow a fuse about moved goal posts and wasted time.
The first Compulsory Purchase Orders are scheduled for confirmation on November 13th; for Westbury, South Lambeth, and Knights Walk. (What do residents think on these smaller estates?). All three are within a GLA Housing Zone. Lambeth got a £10m loan from City Hall to help fund the program. (Will Sadiq Khan intervene?) Cressingham Gardens is due to be progressed ‘soon,’ though delays are likely; contested CPOs make bad press. Central Hill has no timetable yet, possibly because digging out its nuclear-bunker foundations could cause a landslide.
Forced demolitions create ex-Labour voters en masse. Residents of both estates have only received ‘private’ support from a ‘handful’ of Labour councillors, a view confirmed by local party sources. Since Rachel Heywood was de-selected for opposing demolitions and library closures, the ‘Progress-dominated’ Campaign Forum has excluded ‘all critics’ from the councillors approved list for the 2018 elections. Central Hill estate is in Gypsy Hill ward. Branch meetings have seen ‘frequent clashes’ between members and councillors, then, in a 2016 by-election , the Green Party cut a Labour majority of 1,800 to just 36. This wasn’t exactly surprising, given that London Assembly Member, Sian Berry, supported campaigns from the start, and the Greens are the only party with policies that give residents real influence through voting rights.
Both estates feel completely betrayed. In May they stand a good chance of taking their councillors out. Lambeth’s leadership may well be right in assuming limited damage, to six losses at most, but that could prove another miscalculation. The 2015 report on establishing Homes for Lambeth states that ‘Further… commercial development opportunities may also be identified.’ A Lambeth spokesperson explained, ‘There are no plans to add additional estates into the programme at this stage,’ but the Borough’s Plan 2016-2020 commits to deliver 1,000 new council rent homes. Some of these must be additional to the 1,000 promised between 2014-2018, a total partly reliant on estate redevelopments, so future demolitions cannot be ruled out. With local elections only months away having no ‘earmarked’ estates is electorally convenient, but it also means that thousands of households may soon ask themselves, who’s next?
More legal challenges are likely but the Judicial Review that temporarily quashed Cressingham Gardens’ ‘co-production’ process made it clear that councils can decide what they consult about and how. Lambeth was only found guilty of withdrawing non-demolition options half way through, which wasn’t cricket. Lambeth’s barrister protested, ‘there comes a point where it ceases to be consultation and becomes tenant-led decision making.’ God forbid that a Co-operative Labour council could ever stand for that. Forced demolitions are political decisions. Ironically, what may end up stopping some is what Lambeth have denied all along; ballot boxes. If there’s any real justice, two huge street parties in South London are still a real possibility.
To be clear, Lambeth are not being accused of unusually harsh policies. That’s the saddest thing. What does it say about attitudes to people living on social housing estates when obviously inadequate ‘offers’ and municipal self-harm are accepted standard behaviour?
Tony Coyne is a freelance journalist and housing activist living in London