Londoners being priced out of London by social cleansing

CROYDON COMMENTARY: Building thousands of high-rise high-priced “luxury apartments” to be bought by overseas investors may enhance the bottom line of private property developers, but will do nothing to solve the borough’s housing crisis. By STEVEN DOWNES

London, and Croydon, have a housing crisis which continues to get worse. And with the high demand for homes, private landlords continue to raise their rents. This, against a background of take-home wages falling to levels last seen a decade ago, is forcing ever more working people to subsidise these private landlords by claiming … housing benefit.

Not for ordinary Londoners: flats in Trafalgar Place, where the Heygate Estate used to be, are selling for £350,000

Not for ordinary Londoners: flats in Trafalgar Place, where the Heygate Estate used to be, are selling for £350,000

That’s the conclusion, based on figures from the Department for Work and Pensions published last week, of an article by Carl Brown published on the Inside Housing website.

And what is Croydon Council doing about addressing the scarcity of affordable homes? It is paying an executive director of planning £1,000 a day of public money and sending him off to a £400 a night golf resort in Wales next month to speak at a conference aimed at foreign investors and the buy-to-let market.

There, Paul Spooner will undoubtedly mention the “opportunities” with the 17,000 new homes being built in the borough, some of them as part of public projects, building on public open spaces, and delivering high-rise tower blocks with views over the Croydon Flyover and Wellesley Road, the town centre’s six-lane urban motorway.

London’s borough councils – Labour as well as Tory – are pursuing policies which are making London too expensive for ordinary Londoners to live in. According to that left-wing radical publication The Financial Times, nearly three-quarters of all property purchases in the capital in 2012 were made by overseas investors.

The end-result of this relentless pitch of developing property which does not address the need of working Londoners, but is aimed at sating the demands of rich foreign investors can be seen with the unoccupied £1 million “luxury apartments” at places such as Croydon’s Altitude 25 – still less than half occupied nearly five years after completion – or the ugly eyesore of the unfinished IYLO block at the centre of a Croydon traffic roundabout, which has bankrupted serial developers and which its current owners are now trying to market as the epitome of cool “city living” to unsuspecting investors in Hong Kong.

Altitude 25: Expensive private flats, still largely empty

Altitude 25: Expensive private flats, still largely empty

In some boroughs next to Croydon, what is going on amounts to a social cleansing of whole neighbourhoods, a Yuppie-fication to make areas more appealing to the high rollers from abroad.

In Lambeth, in a policy introduced when Steve Reed OBE, now the Labour MP for Croydon North, was the leader of the council, nearly 100 residents of a housing co-operative, some of whom had lived in Victorian mansion blocks for 30 years, were forcibly evicted, as the Brixton Blog reported here.

According to Londonist.com, in Southwark – which was returned to Labour control in 2010 after a dozen years of LibDems either running the council or there being no overall control – the lease-holders on the Heygate Estate, “in other words, people with an ex-council flat under Right to Buy (not always the original tenant by this stage) – were offered compensation in return for the place being torn down.”

That is when the skewed economics of 21st century public housing policy come into effect: lease-holders of one-bedroom flats were typically offered less than £100,000 in compensation for their homes. Yet mere “studio apartments” in the new development, called Trafalgar Place, start at a breathtaking one-third of a million quid.

According to Londonist, the cheapest flat – in truth a poky bed-sit – available for sale in the development at present is going for £355,000: “For that you get 51m² of internal space: a 3.8m x 3.4m bedroom and open plan kitchen/living area. For £355k. Are you shitting us? No wonder the people who bought their own homes had little choice but to leave their community.”

Londonist notes that the total provision for affordable housing for the scheme is just 25per cent. Someone, somewhere, is making a pile of money from developing land on what was once council homes. Yes, the Heygate was horrible – not for nothing did it provide the back-drop for the south London gangster movie Harry Brown that gave Michael Caine a homecoming of sorts. But Caine’s old “manor”, the area between the Elephant and Castle and East Lane market, what was – admittedly long before Heygate – a typical working class, London community, won’t be home to many real Londoners any more.

Shirley Porter: cunning plan, and a £27m fine from the Law Lords

Shirley Porter: a cunning plan in Westminster, and a £27m fine from the Law Lords

This may not just be accidental social cleansing: it may even be a version of gerrymandering, deliberately using planning laws and public money to change the social make-up of an area in an effort to create a built-in majority for the incumbent council, or even MP.

It was something which got Westminster’s Tory leader Shirley Porter in hot water, and partially explains why she has spent her twilight years in permanent exile from Britain for fear of being banged up in jail or having to give up a large chunk of her £70 million fortune, as ordered by the Law Lords, to re-fund the public cash that she abused.

With the social demographics of Croydon in the last 25 years seeing the northern parliamentary constituency changed from blue to red, seemingly permanently, might it be possible that the Tory burghers at the Town Hall are in some way attempting to gentrify central Croydon to shore up the Conservative-held parliamentary seat there and council wards such as Fairfield?

And who ends up paying for all this? Why, of course the ordinary tax-payers. Not only through the use of public property, but now by having to meet the exorbitant cost of inflated private rents.

For a government dominated by Tories who claim to be against “welfare”, they are doing a bang-up job at forcing ever more people to request public subsidy towards their housing costs. In May this year, there were 40,000 more people claiming housing benefit than there had been in 2012, according to the DWP.

The government’s own figures show that these claimants include increasing numbers of employed people, and employed people who rent privately. Today, nearly 20 per cent of housing benefit claimants are in work, compared to just 13 per cent in 2010.

Since May 2010, an extra 320,738 people in total have claimed housing benefit. The number of employed claimants over the same period is 337,056, which suggests that the number of unemployed claimants has fallen.

The reason for the rise in working claimants is simple: even those in work are considerably worse off now than they were in 2010. Increased public transport costs, higher food prices… Meanwhile, the Office for National Statistics shows wages have fallen back to 2003 levels.

Paul Spooner: is he the Croydon executive who can solve the borough's housing crisis?

Paul Spooner: is he the Croydon executive who can solve the borough’s housing crisis?

And the biggest household expenditure, accommodation costs, is rising quickest of all. A report in June by London Councils said some boroughs have seen rent increases of 20 per cent in the last year, despite local housing allowance caps.

Given his public statements so far, Croydon’s new executive director of planning, Paul Spooner, appears to see his mission as pushing through the high-price high-rise homes schemes of the current Croydon Council administration, and thus deliver juicy profits for their private developer friends, but few of the sort of homes that could resolve the borough’s housing crisis.

What has Labour in Croydon said about this? Apparently, Spooner is very “professional”, which is reassuring to know of someone being paid at a rate of nearly £1,000 per day.

With local elections approaching, housing policy is one of the few areas of local authority activity where the people who run a Town Hall can really make a difference. Croydon Labour has said that if elected next May, it would introduce a private landlord registration scheme, a simple way of policing a sector which is too often dominated by rogues.

With more council-owned properties standing vacant than ever before, Labour has also pledged to act quickly to bring such homes back into use, and where possible to buy empty private properties and add them to the council’s housing stock.This is hardly archly radical, but simply a commonsense move which would help reduce homelessness while also investing public money in bricks and mortar.

After all, and despite the housing crisis, there’s plenty of over-priced empty apartments in Croydon for them to choose from.

  • Inside Croydon: For comment and analysis about Croydon, from inside Croydon
  • Post your comments on this article below. If you have a news story about life in or around Croydon, a residents’ or business association or local event, please email us with full details at inside.croydon@btinternet.com
Advertisements

About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in "Hammersfield", 2014 council elections, Altitude 25, Business, Cane Hill, Croydon Central, Croydon Council, Fairfield, Housing, IYLO, Lambeth Council, Menta Tower, Paul Spooner, Planning, Property, Ruskin Square, Steve Reed MP, Taberner House, URV, Whitgift Centre, Whitgift Foundation and tagged , , , , , , , . Bookmark the permalink.

5 Responses to Londoners being priced out of London by social cleansing

  1. Why do we need affordable homes in the town centre? Shouldn’t demand and supply decide the market price? Why should I pay more for a house and some one else should pay less for a similar house? If one cannot afford to buy a house then shouldn’t buy a house.

    I have been unemployed and in the process of losing my house after paying for 14 years and some one who claims he or she can’t afford is going to get an affordable posh flat in the town centre.

    Council homes should only be for temporary accommodation and once they find a job let them pay the same rent or mortgage the rest of us pay (Or in my case can’t afford so I haven’t paid).

    Councils should be building houses and letting them at market rates rather than letting corrupt landlords making profits.

    Social housing should be for vulnerable people not just asylum seekers (just to clarify I am an asylum seeker and never claimed housing benefit) and foreigners.

    Like

    • “Why do we need affordable homes in the town centre?”

      Our opinion has always been that high-rise blocks in the town centre is wholly inappropriate development. In Lambeth, the new leader of the council there, Lib Peck, is actively campaigning against the conversion of office blocks into flats.

      In Croydon, such development is being done by the private sector as part of the “Master Plan” of Mike Fisher’s Conservative council administration, based on a planning goal set for the borough by London’s Tory Mayor Boris Johnson.

      Such blocks of flats might be office conversions. They often see the developers provide little parking space (using costly land) for their blocks’ occupants’ cars, regardless of the consequences for existing residents and the neighbourhood. They rarely, if ever, see the developers provide additional school places or new GP surgeries and other public amenities in the area.

      “Shouldn’t demand and supply decide the market price?”

      It does. There is a housing shortage in London and the south-east, and that is why house prices continue to rise. This also sees rents rising. The problem for the public purse with this is that rents have risen so much that tenants, many of them in work, now claim housing benefit to be able to afford to live in London. That’s what our article is about, Patrick.

      Thus, the public is paying towards private landlords’ high rents and profits.

      If more council housing was available for rent, this would change the dynamic of the rented sector, in London and elsewhere. Private landlords would not be able to charge so much, nor would they receive so much indirect subsidy through housing benefit. And the public sector would retain as assets the properties in which it was housing the homeless.

      Ideally, this would not be in high-rise town centre developments. But if these sort of properties exist, as the result of a flawed policy from Croydon’s current council, it makes little sense to allow them to stand empty.

      “Councils should be building houses and letting them at market rates rather than letting corrupt landlords making profits.”

      In the main, we’d agree with this point.

      “Social housing should be for vulnerable people not just asylum seekers (just to clarify I am an asylum seeker and never claimed housing benefit) and foreigners.”

      Is this new Croydon Conservative policy, Patrick?

      Like

      • Ratnaraja says:

        I am not a Conservative member at the moment. I may renew my membership soon. Only commenting as a citizen of Croydon and these are my personal views.

        The housing shortage is caused by too many immigrants from Europe and non-EU migrant workers.

        Like

  2. Housing has never worked according to demand and supply in any economy. Hong Kong, one of the World’s most capitalist societies, has one of the biggest public housing programmes.

    From an economics point of view it is obvious that the market mechanism cannot be allowed to operate in isolation. The price mechanism operates to ration goods, which is fine if you are buying luxury goods, but it does not work so well with necessities – it leaves those people who cannot afford to pay the market price homeless.

    In the 1890s, one of the most extensive surveys of housing stock was carried out in the UK. What they found was disgusting and showed that slum conditions contributed to the poor quality of health in the country. Two world wars and the Great Depression confirmed the poor quality of UK health. During WW2 it was seen as a national priority that the stock of human labour should be improved in order to increase the overall wealth of the nation. There was also a fear that if we did not improve living conditions, we would face a revolution.

    In 2013 we have some of the most cramped living accommodation in the developed World. We have an unregulated housing market which produces some dreadful living conditions here in Croydon. We are also in the middle of a skills crisis. Our stock of labour is again relatively unskilled compared to other countries; we have a social apartheid growing between the haves and have nots and those who have access to social mobility and those who do not. Cramped housing retards child development and reduces those children’s opportunities for life – it is wrong to plan to house people in very restricted conditions.

    We have to give people the tools to live life as independent, empowered citizens, not stunted by lack of basic opportunity in their early years. Beveridge understood that, and so did Thatcher – do not lead people down the “Road to Serfdom” by making them dependents on the state for life.

    Like

  3. Ari Henry says:

    The difficulty with having market prices is where do the manual workers live? Anyone coughing up the dosh for a cupboard on the Heygate is not going to pay the block staff the rate necessary to buy a flat. This is how the “trickle down effect” works in reality, with those at the down end forced out of sight and mind.

    With the number of flats remaining the same on the Heygate estate before the deal was made the amount lost each year, for Council Tax and rates, dropped. Southwark Council does not know how much has been lost through rent and ground rent payments during the decant. How the council has accounted for the viability assessment – the way the price was worked out and not market rate – is a total mystery as it is still not available.

    With the figures the council have provided, and those they have, it can only be surmised that the site has been undervalued.

    Like

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.