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Two forces are currently driving estate regeneration in London; the net present cost of maintenance (and in some cases decent homes standard) and the need for more homes.
The calculations for these two factors are reasonably easy arithmetic.
For maintenance cost, building and quantity surveyors work out what needs doing to the mainly 1960s and 70s, often tower blocks, and what it will cost and accountants subtract the net rental income and calculate a net present cost. Indeed there are well known firms of surveyors hawking around a simple message to local authorities - get rid of the financial underperformers to give yourselves financial headroom in your housing revenue account.
For more homes, urban designers (in practice usually architects so not the same thing at all) work out the capacity of estates within the constraints of planning policies as if the estates were cleared sites. Almost inevitably this results in more homes with estimates at the Future of London conference on the subject this week being that, in London, local authority estates have the capacity for at least 200,000 more homes. It was depressing to hear the development industry at the event mindlessly and boringly advocating crashing on with this approach.
These two calculations are then followed by a third piece of arithmetic. Given the number of homes we can build how many of these can we afford to be affordable. Time and time again the answer is ’not as many as were there in the first place’.
It was clear from the conference that maintaining the number of affordable homes, and maintaining them at the council rents at which they are currently let, is not the priority. The priority is the total number of homes, not, as a minimum, the like for like replacement of tenures and rent levels that were there before (together with any extra market homes that can be fitted in).
This can be justifiable. There is a huge deficit in provision, in inner London, of homes that are affordable to people on average wages. But many would argue that this has to be subject to explicit, voluntary (not forced as has been the practice in some cases) rehousing of existing residents and a calculation of the other social costs of this approach.
None of these equations calculates the most important costs. The costs that aren’t included are many, often because they are harder to calculate, and the two big ones are social costs and environmental costs.
One view is that the embodied carbon in the existing and new buildings is so great that the benefit of more energy efficient buildings will never repay the costs of demolition and new build. It was fascinating, at another event this week, to see the work Peabody are doing at Thamesmead to retrofit this age of stock to close to Passivehaus standards with no demolition.
The social costs are much harder to calculate. In relation to energy alone, it is not enough just to calculate the carbon, it is critical to factor in the costs of fuel poverty, related health costs, winter deaths and so on. But the bigger costs probably relate to health and wellbeing, particularly those connected to mental health and the importance of community. Mental health is a massive cost line in the nation’s expenditure (£70Bn pa) and is substantially impacted by the built environment.
We are currently miles away from being able to get a cost estimate of the social costs of estate regeneration anywhere approaching the accuracy of our estimates of building life cycle costs never mind capital costs. If ever there was a market gap for surveyors or accountants, calculating the value of health and wellbeing is it now that the accountants are close to cornering the market in carbon reporting.
I was taken to task at the Future of London event by the excellent Stephen Platts from Southwark over my description of the Heygate estate renewal as a social disaster. Loretta Lees, now of Leicester University, and an expert in gentrification and the impact of estate renewal has done some research on this but it falls short of trying to put a cost on the impact of the widespread relocation of the previous occupants across the south of England. Most people in senior positions in Southwark now openly acknowledge that the way the early stages of the project were implemented was not best practice and they can very intelligently dissect the lessons learnt, as well as highlighting the benefits to others. It was a shame that the Future of London conference didn’t get the full benefit of this wisdom. There are two sides to the story and both are worth listening to.
There are proxy ways of assessing social costs. Westminster, having been burned by political backlashes in the past, now ballots residents on estate renewal plans. This can give a likelihood of an average benefit rather than cost but it can still disguise those for whom the direct social costs are very high. Brent, for example in their South Kilburn estate renewal, undertake block by block phased rehousing which, done well, seems to even have positive impacts on mental health during the rehousing process although these benefits disappear once the rehousing support for the resident finishes.
These are important lessons. Getting resident consent and ensuring good rehousing support for all must be part of any comprehensive scheme. And some would go further. They would say very resident should re rehoused voluntarily, or, as a minimum, the total social costs and benefits for the project should be positive. While it is almost inevitable that there will be costs, and for some old people these will be life ending, it may be that the costs outweigh the benefits. Even then, decision makers, ideally drawn primarily from the local community, would want to think very carefully about how to mitigate the costs for the losers and whether it was worth undertaking projects where even a few people were going to experience large losses.
There was a lot of detailed learning from the conference. Community consultation techniques should allow every resident who will be impacted to have their individual needs understood and provided for. Evening consultation meetings are not enough. This requires one to one support from the earliest stage of reviewing options through to the completion of a move.
One of the examples quoted where this was done was the Kipling Estate in Southwark managed by the Leathermarket Joint Management Board, a tenant management organisation (TMO) which is self-financing. There they interviewed every resident and worked out the number of new homes that were needed to completely remove over and under occupancy on the estate as well as to cater for individual needs like accessibility. They will also be allowing those residents to customise their own homes and will release more existing bedrooms for Southwark’s allocations than they are building new as a result of providing attractive alternatives for under occupiers (typically older empty nesters not affected by the bedroom tax).
This estate is well managed and maintained so rather than a comprehensive demolition and rebuild the TMO, supported by the local authority, are going for an infill approach where the power of providing homes for their neighbours, who have average incomes of around £9000 per annum, is proving a powerful motivator to support the project, even from those neighbours who will have their view or sunlight impacted.
Another lesson was in relation to leaseholders. Many of these former right to buys are now owned by absentee buy to let landlords. There was little sympathy for these owners with market value plus a bit being the usual compensation but with a clear need for a quicker compulsory acquisition process to avoid these people holding the project to ransom. Owner occupier leaseholders on the other hand were best treated with a direct like for like replacement in the new scheme. While this might result in a much more valuable home this was seen as a necessary, equitable and social cost minimising approach to compensation although it is not one that is recognised as necessary in current legislation and case law.
Similarly, market rent tenants needed special treatment to avoid the social costs of them becoming homeless or requiring substantially increased housing benefit and again the optimum solution for many would be a new home, within the scheme, at the same rent they were previously paying.
One of the particularly interesting trends was for local authorities to take the role of developer. Lambeth, Ealing and Southwark are amongst those doing this, often, as with Lambeth’s Somerleyton Road project which Deputy Mayor for Housing, Richard Blakeway name checked, through a process of coproduction with the local community, and it is increasingly clear that the housing associations and other private sector developers are now in competition with their local authority clients. Pat Hayes of Ealing’s view was that local authorities can buy in the development management services they need, and provide finance, more cheaply than through procuring housing associations and developers.
While few of these lessons apply outside London, where values are lower and so the potential cross subsidy from increasing density and introducing market units is often non-existent, it is important to learn them in London.
The starting point for estate regeneration need not be a decision in the council, it could be a decision by the local community, given all the evidence including a detailed understanding of every resident’s needs and a detailed assessment of social, environmental and financial costs and benefits. And more often than not this is likely to mean infill and retrofit rather than rehousing, demolition and redevelopment will be the preferred outcome.
It will be interesting to see what conclusions the London Assembly reaches on this.
I attended an event organised by the Legatum Institute this week. I’m sure that some would describe Legatum as a shadowy right wing think tank and I must admit that, having not come across them before, I am struggling to understand quite where they fit on the political spectrum. They do however have some blog relevant programmes of work including the global Prosperity Index (they use the word prosperity instead of the better understood word wellbeing) and, closer to home, a fascinating Architecture of Prosperity programme. One of their recent events on wellbeing, built environment, creativity and mental health with the former planning minister sounds really interesting.
The world of Custom Build housing in England has gone ever so slightly mad this week. The launch of the Lyons review of housing was followed by the publication of the Government’s Right to Build consultation and then by the second reading of the dynamic Richard Bacon MP’s Custom Build Register private members bill which has cross party support and sailed through its second reading.
This week saw an important report published by the All Party Parliamentary Group on Wellbeing. Despite being limited in scope, the inquiry considered how policy could enhance wellbeing without increasing public spending, it made some strong recommendations in relation to the planning system.
I’ve spent some more time this week with people trying to innovate in the built environment. The UKGBC did some great work a couple of years ago as part of an ongoing encouragement to the industry to build a culture to innovate solutions to the pressing problems of our time.
This week it was organisations like the Department of Business, Innovation and Skills on behalf of the Construction Industry Council and Innovate UK with the Future Cities Catapult who were pursuing a similar course.
I had a fascinating conversation recently with two of the leading academics in the field of development appraisal, and in particular its application in the planning system, Pete Wyatt and Pat McAllister.
The Labour Party conference this week had a strangely subdued atmosphere for the last one before a General Election. It probably didn’t help being sandwiched between the Scottish Referendum result and the recall of Parliament to take us to war again.
I had a really interesting discussion with an innovative London local authority and two innovators in the world of housing recently. We were discussing how best to do estate regeneration given the considerable difficulties with, and community opposition to, the current prevalent practice of the top down, developer or housing association led approach.
To my shame, and despite an upbringing which involved spending time across the Tay in Fife, until last week I had never been to Dundee. This is particularly bad because Dundee has the look of one of the most successful regeneration, place making and city building projects in the UK in the last decade.