Battle of Ideas: Reform or Revolution in Housing?

On Saturday, 28 October, as part of the Barbican’s Battle of Ideas festival, ASH was part of a panel debate titled Housing: Reform or Revolution? The rest of the panel was composed of Patrik Schumacher, the Principle at Zaha Hadid Architects, who the previous year, at a speech at the World Architecture Festival, had called for estates in Inner London to be demolished to make way for more productive people and their ‘amazing multiplying events’; Kath Scanlon, Assistant Professorial Research Fellow at the London School of Economics, who the same year co-authored a report commissioned by the Berkeley Group recommending their estate redevelopment, Kidbrooke Village, as an example of why London’s housing should be taken out of the control of local authorities and placed in the hands of private developers; Lisa Taylor, Chief Executive of Future London, a policy network which the previous year had published a report recommending that demolishing and redeveloping council estates was one of the keys to addressing London’s housing crisis; and James Woudhuysen, Visiting Professor at London’s South Bank University, who in 2006 on the BBC Breakfast Show had argued that recycling was a symptom of an ‘authoritarian state’ and accused the Green Party of being ‘reactionary’ and ‘anti-human’. This is the text of ASH’s presentation.

1. Reform or revolution?

I want to start with the title of this event: reform or revolution, and look at what this opposition means in practice through a recent image of a new housing development. The image is an advert for the NX Gate apartments in New Cross. It shows a young woman in what I guess advertising executives would call a state of excitement, over which are written the words: ‘The rental revolution is here! Rent from £300 per week’. Developed by Realstar Living, NX Gate rents 2-bedroom apartments from £1,525 per month, not including the numerous service charges. Just down the road from this new development is the Achilles Street estate, where a 2-bedroom council flat costs £414 per month, nearly a quarter as much. Despite this, Lewisham council has plans to demolish this estate and redevelop it along the same lines as NX Gate, making it just one of over 190 such estates that have recently undergone, are undergoing, or are threatened with redevelopment, privatisation and social cleansing by London’s estate regeneration programme. In case we don’t know at whom this ‘revolution’ is being marketed, the Rightmove advert for NX Gate indicates that the new development is 10 minutes from Cannon Street and 12 minutes from Canary Wharf, with Goldsmiths College just around the corner.

In short, the ‘revolution’ in housing is a marketing gimmick, aimed at young bankers looking to buy and international students looking to rent with the bank of mum and dad. So let’s look at the reality behind this gimmick.

2. There is no such thing as a free market

Last year my fellow panelist Patrik Schumacher famously declared that council tenants were being subsidised by the state to live in parts of London they would not otherwise be able to afford, and that he wanted to demolish their homes to make way for what he called ‘his people’. Now, whatever you may think of this programme for the social cleansing of Inner London, the reality is that the UK’s post-war housing estates paid off their construction costs and debt interest years ago, and are actually making a profit for councils and housing associations. Or at least, they would be if they weren’t demolishing so many of them.

Like so many things taken as fact in debates about how to solve the housing crisis, the truth is the exact opposite of what we are told. It is the private sector that is being subsidised by the state through a myriad of schemes: Right to Buy, which has sold 1.8 million council homes, a quarter of which are now owned by private landlords; Housing Benefit, which pays £20 billion a year to subsidise the growing private rental market that has taken their place; Help to Buy, Rent to Buy and Shared Ownership, which are available to households earning £90,000 a year; and more generally with the billions of pounds of public land and assets that are being sold to private developers at a fraction of their market value. The truth is that there is no private housing scheme that is not based on pocketing huge sums of public money.

3. The public sector doesn’t exist

But just as there is no such thing as a free market, so the public sector also doesn’t exist. Is it any wonder that Parliament refuses to regulate the private rental market when 1 in every 5 MPs is a landlords? In the local authorities implementing the estate demolition programme the conflict of interest is even greater. The prime example here is Southwark council, where 1 in 5 councillors are lobbyists for the building industry, and where 6 of the most senior officers responsible for selling the Heygate estate to property developers Lendlease for one-fifteenth of its market value now either work for or with the company.

And the lobbying is not confined to councillors. Kath Scanlon of the London School of Economics, who sits beside me on this panel, was paid by the Berkeley Group to produce a report on Kidbrooke Village, a development built by them on land cleared of over 1,900 demolished council homes and around 5,000 evicted council tenants. Of the 4,500 properties for private sale being built in their place, only 150 are planned for social rent. Despite this, Professor Scanlon’s report recommended that not only our homes but our communities too be handed over to the design and profits of private developers like the Berkeley Group, whose pre-tax profits have quadrupled in just five years from £136 million in 2011 to £531 million in 2016.

In short, our public housing and public land is in the hands of individuals and institutions that mistake stewardship for ownership, and public service for the opportunity to flog our public assets to the highest bidder.

4. Building more homes is not the answer

It is universally agreed that to solve the housing crisis we need to build more homes. However, the housing crisis is not one of supply but of affordability, with 56 per cent of London homes failing to meet this criterion. Now, while the law of supply and demand describes a capitalist dream of competitive markets responding to human needs, London’s financialised housing market, flooded by global capital, is driven by profit margins. House prices in London have risen by 86 per cent since 2009 to an average price of nearly £491,000 in January 2017, fourteen-and-a-half times the average London salary, and in Inner London to £970,000; while rents in London’s private rental market have gone up by 9.6 per cent in the past two years alone to an average of £2,216 per month for a 2-bedroom home, double the national average. Simply building more high-value properties will only push these prices up.

In transport systems this is called ‘induced demand’, when building more roads actually increases traffic. As an example of which, a decade ago the only baker’s on Hackney’s Kingsland High Street was Greggs, where you could buy a loaf for under a quid. Nowadays the street is lined with artisanal bakeries selling loaves at many times that price – and, just as importantly, as of last year Greggs stopped selling loaves to concentrate on take-away health-food fodder for the influx of Dalston hipsters. Not only has the increased number of bakeries in the area increased prices rather than reducing them, but it has also removed the low-cost loaf for the local working-class population. We all know what this process is called: gentrification, which isn’t driven by consumer choice but by market creation. If we leave London’s housing to the market, all we’ll get is the housing equivalent of more artisanal bakeries.

5. There is no housing crisis

The estimated total value of the housing stock in England in January 2017 was £6.8 trillion, an extraordinary figure that has increased by £1.5 trillion in the last three years alone. Equivalent to 3.7 times the gross domestic product of the entire UK, and nearly 60 per cent of the UK’s entire net wealth, the property market now constitutes an economy in itself. Unsurprisingly, £1.7 trillion of that housing stock is in London. The function of new-build properties in London is not to house the 250,000 London households currently on housing waiting lists, or the 240,000 London households with 320,000 children living in overcrowded accommodation, or the 50,000 London households with 78,000 children that are currently homeless and living in temporary accommodation; it is to satisfy the demand of international capital for investment opportunities.

Because of the enormously inflated exchange value of these new-build properties, their use value as homes for Londoners in need of housing is almost zero. On the contrary, the more council estates are demolished to clear the land for their construction, and the more public land is lost to private companies, so the higher the demand for housing grows, the higher the price of the housing being built in their place is driven up, and the louder the demands to demolish more council estates to make way for higher cost housing in their place.

6. Architects for Social Housing

So what’s the answer? Over the past 3 years Architects for Social Housing has designed alternatives to the demolition of 5 estates, increasing their capacity by up to 45 per cent without demolishing a single existing home. Through renting or selling a percentage of the new builds privately we can generate the funds to refurbish the rest of the estate, which has typically been deprived of maintenance for years as part of its managed decline. If the requirement is to build more homes in which Londoners can afford to live, there is no need to demolish the only homes in London to have escaped the speculation in property. Like the government’s austerity measures, London’s programme of estate demolition and redevelopment is not an economic necessity but a political choice.

Simon Elmer
Architects for Social Housing

2 thoughts on “Battle of Ideas: Reform or Revolution in Housing?

  1. Its rare to read such a succinct presentation and such powerful few words about the housing crisis. I have followed the disaster that is the British housing system for years and cannot believe the ignorance and complete disregard for facts which has surrounded the issue. Your work is inspiring and deserves a much broader reach. Best Wishes.

    Like

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