Our housing correspondent, BARRATT HOLMES, on how a pair of developers investigated for making millions from housing benefits, paid as rents on under-sized flats, have also been generous donors or sponsors of council-run events or to Labour councillors, including Paul Scott and Alison Butler
Croydon Labour’s cosy relationship with property developers has been exposed again with a national newspaper investigation into “permitted development”.
A detailed report on permitted development appeared in yesterday’s Times, featuring two developers who have both made millions of pounds from their businesses in Croydon, and who have either handed over tens of thousands in political donations to the local Labour Party, or paid the Labour-controlled council for event sponsorship.
Permitted development, or PD, is the practice of converting former office buildings into under-sized flats – or what some Croydon Labour councillors have (rightly) condemned as “the slums of the future”. And what a leading architecture figure has condemned as “ghastly little fuck-hutches”.
The Times reported how Caridon, a property group founded by Mario Carrozzo, receives at least £8million in housing benefit payments to house hundreds of tenants in flats as small as one-third of the minimum size which would be required under the planning regime. It is the sort of practice which Labour, nationally and locally, rightly condemns as exploitative of the benefits system.
Yet last month, a grinning Carrozzo was pictured alongside the Mayor of Croydon, Humayun Kabir, and Patsy Cummings, the council’s “BAME champion”.
They were at a party to celebrate the council’s Windrush festivities, and a few quid out of Caridon’s hefty profits had been used to sponsor the launch event. Trebles all round!
“Caridon was delighted to be a sponsor for the Croydon Windrush Celebration 2019 event on Friday,” was tweeted from the property developers’ account.
“Our CEO…”, meaning Carrozzo, “… gave an inspirational speech in honour of the Windrush Generation.” Which must have been nice.
“We are passionate about supporting our community.” Of course they are.
The Times report went on to show quite how Caridon makes its money to be able to afford to “support our community”.
It said: “Landlords are making millions of pounds a year housing children and vulnerable adults in tiny bedsits squeezed into former office buildings.
“The developers have exploited a change in planning rules to convert offices into hundreds of flats without any minimum size requirements, prompting claims from experts that they are building ‘some of the worst homes in Britain’ and the ‘slums of the future’.
“Flats costing £800 a month are as small as 14 sqm (150 sqft), barely bigger than the size of a typical parking space. Families are living on industrial estates and alongside busy roads, with some residents claiming that mould, noise and anti-social behaviour inside the buildings are damaging their health.”
Caridon was not the only developer based in Croydon exposed in The Times article.
Their investigation also looked at the developments run by Anwar Ansari. Ansari was the focus of a previous critical report on the use of permitted development in the Financial Times at the start of the year.
This is the same Anwar Ansari who paid for Tony Newman and his numpties to have an election celebration party after they won control of Croydon Town Hall in 2014. Ansari also provided funding to Blairite MP Yvette Cooper’s failed Labour party leadership bid in 2015, and paid towards Sadiq Khan’s campaign to become Mayor of London.
And it is the same property developer Ansari who has been a regular and generous donor to Croydon councillors Paul Scott and Alison Butler.
Butler is the council cabinet member for housing and is married to Scott, who is the splenetic de facto chair of the council’s planning committee.
None of which is unlawful (provided the politicians have always declared all of the donations received, in cash and in kind), and there has been no suggestion that Ansari, nor Carrozzo, made the donations or sponsored events in order to gain advantage through the planning system. Indeed, thanks to the Tory government’s rule changes on permitted development, they have not had need to do so.
But the situation does raise questions about the conduct of some of the politicians whose careers they have supported.
Last October, two of Ansari’s companies, AA Homes and Housing and Anabow Services Ltd, were fined a combined £32,000 under Croydon Council’s landlord licensing scheme, although both companies had – albeit belatedly – licensed their properties with the council.
Developers like Ansari and Carrozzo have exploited relaxations in the planning rules introduced in 2013 by the Conservative government. As The Times reports, “Under these rules, there are no minimum space stipulations or requirements to ensure adequate daylight, air quality or outdoor amenity space. Some converted flats only have tiny windows as their source of light.
“Flats are often made up of a single room with a bed and kitchen area and a tiny bathroom with a shower, sink and lavatory. Some have highly unusual dimensions and shapes.”
According to Croydon Council’s own figures, 1,074 out of 1,236 units in the borough which were approved under permitted development rights do not meet basic space standards.
Sean Fitzsimons, a Labour councillor in Addiscombe West ward and a consistent and long-term critic of PD said this week, “Croydon council has been concerned about permitted development since 2014, when Labour administration took over. We introduced Article 4 for the town centre,” he said, referring to a regulation which can be used to block PD applications, “but the rules were that many office landlords had already got permission to convert before Article 4 took effect.”
Fitzsimons highlighted a shop on Cherry Orchard Road which had been converted by Caridon. “It was a printer’s before, and the landlord just put up plasterboard against the office windows. No natural light in this studio flat.”
Caridon has completed at least nine big office-to-residential conversions, not all of them in Croydon, creating more than 700 flats. None meets the minimum space guidelines required under the normal planning rules. Some are just one-third of the recommended size.
There is nothing illegal about the business models followed by Caridon and AA Homes. Under the Tory government, they are actively encouraged to run their businesses in this way.
In a double-whammy against the poor and against tax-payers, they rake in their cash in rents on these under-sized homes by charging £800 per month for studio and one-bed flats and between £1,000 and £1,200 per month for two-bed flats, “much of it funded through housing benefit payments”, according to The Times.
“By including cooking facilities and a small bathroom, developers ensure that bedsits are eligible for the full rate of housing benefit intended to pay for a one-bed flat.”
The newspaper quoted one expert as describing such properties as “some of the worst homes in Britain”.
“In cramped, noisy, airless spaces like these, there’s little privacy and no space to store anything. I genuinely believe that living in conditions like this will take a toll on people’s lives,” said Julia Park, the head of housing research at the architects Levitt Bernstein.
The paper quoted a spokesman for the Caridon Group as saying that it maximised “the number of homes in a development [to] help house more people and keep rents affordable”.
A spokesperson for AA Homes said that all their properties were compliant with the latest building and fire regulations.
The question now for Newman and his mates such as Scott and Butler is how long they will, on the one hand, make the sort of public statements which condemn the “slums of the future” such developers have created, while with the other hand continue to accept campaign contributions, donations and sponsorships paid for from the profits made from these very properties?
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