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Londoners being priced out of London by social cleansing

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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

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

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: 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?

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.


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