Developers’ ‘affordable’ homes do little for housing crisis

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The three blocks Menta is developing and Redrow is selling on Cherry Orchard Road. The developers have already proposed “poor doors” to separate their yuppie apartments from the affordable housing that they have agreed to provide

CROYDON COMMENTARY: The housing crisis shows no sign of easing, as home sale prices and rents in London, and Croydon, continue to rise.    DAVID CALLAM identifies a worrying possibility over the council’s action on the Menta development of more yuppie apartments on Cherry Orchard Road

Croydon Council slapped notices on the site of the Menta Redrow development on Cherry Orchard Road just before Christmas, forbidding work from continuing until a £360,000 Community Investment Levy is paid over.

This amounts to complaining about the symptoms and ignoring the disease.

Local authorities were prevented from investing in public housing by Margaret Thatcher and John Major for ideological reasons. Better to create a nation of property owners, they believed, who were then more likely to vote Conservative.

Tony Blair and Gordon Brown maintained the ban on public sector housing, helping to engender the chronic shortage of homes that we have today.

The present Westminster and London governments bang on about “affordable housing”, by which London Mayor Boris Johnson means properties for sale at 80 per cent of market value. By that reckoning, “affordable” must be reckoned to be something like £400,000 for a three-bedroom apartment in a development where such property is being sold off plan for nearly half a million pounds.

But there is silence from both major parties when it comes to any large-scale programme for public housing subsidised from the public purse: unless you give any credence to Ed Miliband’s modest little plan to build fewer houses per year by 2020 than current estimates suggest will otherwise be the case.

Labour leader Ed Miliband: might he really oversee a transformation in house building in Britain?

Labour leader Ed Miliband: might he really oversee a transformation in house-building in Britain?

And without a grand plan, tax payers’ representitives, in the form of naive local government officers, continue to be ripped off by spiv developers who insist that “the market”, which these days means foreign buyers, will not allow them to include significant numbers of really affordable homes in their schemes.

If the local authority challenges the developer, the developer walks away and waits for a more friendly political regime to take control. There is no penalty to them for doing so.

Might it be the case that the Menta company with which Croydon Council signed an agreement to grant planning permission now has no money in its accounts. If that were the case, what would be the point of suing them?

I’m told there is no shortage of accommodation in Greater London, but much of it lies empty and is not fit for human habitation.

The figures are endorsed by Boris Johnson, but there is a point worth noting: that all London’s councils, including Croydon, have the power to requisition empty property, bring it up to standard, let it and collect the rent until they have recovered their costs.

The boroughs use this power sparingly, for fear of upsetting the landlords.

What will Croydon’s Labour council do about reducing the borough’s housing shortage? Is it already too tightly bound by secretive agreements with developers to be able to do anything?

And could a future Labour Government really be trusted to introduce some kind of rent control for our big cities, or find the money for significant public sector house building?

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4 Responses to Developers’ ‘affordable’ homes do little for housing crisis

  1. Rod Davies says:

    There are a number of issues here which may not be connected.

    That Menta Redrow haven’t paid the CIL may simply be due to chaos in their accounting department (stranger things have happened). However, it does not bode particularly well for the East Croydon area if Menta Redrow are in financial difficulty. While I wholeheartedly support the idea of mass construction of social housing in Croydon to create over supply, as it stands at present having the Menta Redrow site sitting vacant for years is not in the area’s interests.

    Behind it all is Croydon’s appallingly inept record in regeneration – to paraphrase Abba Eban, “Croydon has never missed an opportunity to miss an opportunity”. For years it smugly sat back and told itself that it was so unique and special that it had no need to learn or collaborate with adjacent boroughs. For years it wasted resources chasing after city status which was never going to happen (no national government is ever going to approve a borough with a critical transport hub to leave the Greater London area).

    To cap it all it deluded itself into thinking that building a stand-alone replacement for Taberner House was in someway regenerating the town.

    Croydon as a place needs to have a very sober debate about what the future holds and what can be done to reverse the post 1991-1992 decline. Part of that debate includes how does the community secure a town administration capable of taking the town forward as a whole.

  2. Can’t afford? No need of posh flat. I can’t even afford to keep up with my mortgage payments and why should some one else who can’t afford get a posh flat in the centre of Croydon? Why can’t I get a posh flat?

    Pay the market price for house.

    • Not for the first time, Patrick, you’ve missed the point. Entirely.

      This is not about offering “posh flats” to the homeless. This is about the entirely inappropriate housing developments that are going ahead, and which fail to address the overwhelming need for real, affordable homes. Of 2.9 million homes built since 2000, 86 per cent of them have been bought by landlords. This drives up rents and drives up house prices, which is part of the reason you are having such a struggle to pay your mortgage on your over-priced home.

      The Menta Redrow development is aimed at overseas buy-to-let “investors”, to maximise the developers’ profits. It does nothing for the housing crisis in London.

      Unless or until local authorities are given the planning powers to determine what is built in their area is what is required, and also allowed to reinvest the proceeds from right-to-buy sales into building new social housing – reversing Thatcherite policies – then the London housing market will continue to work against providing homes suitable for hard-working Londoners.

      • This is a private housing development and people pay market rates to buy these flats/houses. If foreigners are buying these properties for investments then that should be stopped. The housing crisis is not caused by just lack of new homes. The crisis is caused by the influx of Europeans and refugees who want to live in London and not other cities.

        We cannot keep on building houses for Eastern Europeans and refugees. Perhaps you should visit some of the social housing estates to see the number of foreigners or non natives living there.

        I do agree that social housing is important and the government should do something about it. I don’t agree that the local authorities should get more power. You know very well how our local authorities both the Conservative and Labour have handled the housing crisis. Do you really want Tory Newman and tricky Ricky Gervais to handle the housing crisis in Croydon?

        Social housing should be provided for those in need and not for those in greed. Some people think social housing should be provided so that for generations they can live in it.

        Social housing is for those who cannot afford to pay a mortgage, people who are on lower income and people who cannot work for many reasons. Those who are in social housing who earn more now should move out and give the others a chance. Those with more spare bedrooms should move to a smaller house/flat and give others a chance.

        I don’t agree with the so called right to buy scheme. Social housing is not about profit making and it is about helping vulnerable people. The priority should be to help those who are in need.

        STOP benefits and social housing for Europeans who move to Britain for one year.

        Have I missed the point again ? Though I don’t like saying this I just want to say that I am not against the homeless. Through our church I have also helped an organisation called “floating shelter” and I know how difficult it is to be homeless as I have been there before. I have also live in a council flat as a carer for an elderly relative for a short period.

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