Swimming against the high tide

The report of the Fairness Commission in Tower Hamlets, chaired by Dr Giles Fraser and published this week, opens a window on the growing housing stress in London as the capital gentrifies to the growing exclusion of ordinary and poor Londoners.

Every Fairness Commission so far has highlighted housing as a driver of poverty and a growing source of unfairness and inequality. In Tower Hamlets the implications are about as extreme as they can be. On one level Tower Hamlets is a success story: the highest rate of new housebuilding in the country, a huge increase in the number of homes available which is projected to continue, rapid regeneration of large parts of the borough, especially along the river. Yet this has been accompanied by a rapid decline in the proportion of the stock that is social housing – which has halved in 3 decades – and a rapid growth in private renting, now one-third of the stock.

In 1981, my first task as Head of Policy at Shelter was to give evidence to the House of Lords Committee looking at the proposed London Docklands Development Corporation. I got my predictions about the overall likelihood of success completely wrong – the development of a new business district for London on the Isle of Dogs has been stunning. But my other predictions – that the vast fortune being spent in the area would not benefit local people and that the area would be gentrified rather than improved – have been rather more accurate.

As a result, the fastest growing borough now has 23,500 households on the housing register and 1500 households in temporary accommodation, and there continue to be high levels of overcrowding and poverty caused by high housing costs. New homes are completely beyond the reach of local people and the Commission concludes that the impact of the benefit cap and the Affordable Rent model could be ‘particularly devastating’.

The Commission rejects the argument that people on low incomes should be excluded from those parts of London – in fact, most parts of London – that are deemed to be ‘too expensive’. The extreme cases that are constantly quoted by the Tories – and repeated again by Cameron this week – seem to justify the argument that the poor shouldn’t live in Kensington and Chelsea. Other traditionally mixed communities like Pimlico and Covent Garden have been falling to gentrification over many years, but the battle now extends across virtually the whole of Inner London, with prices rising most rapidly in places like Hackney and Lambeth. Nowhere is safe from the property inflation juggernaut as the global rich and super-rich – 60% of new homes in central London are bought by overseas investors – squeeze everyone else out.

The Tower Hamlets Commission make recommendations that will tackle the barriers to increased investment by the council and housing associations, to reduce the growth in buy-to-let especially on council estates, and to better regulate the private rented sector. They argue convincingly for better collaboration between agencies and for more commitment and for measures like additional taxation of empty homes and very high value property. They also support the principle that social rents should be related to local incomes and not to market rents.

The recommendations, if implemented, would make a difference. But it is like rowing against the swell of a high tide surging up the Thames. The London property market is becoming increasingly global, the implications for ordinary Londoners of being ‘a world city’ are becoming clear, and the policies of the key players – the Mayor and the Government – will lead to more gentrification not less.

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2 Responses to Swimming against the high tide

  1. I do not mean to intrude on private (London) grief, but we needed be aware of the burden that London is placing on the rest of the UK (affordable) housing system.

    At a recent Poverty Alliance Scotland conference we heard how the overwhelming driver of the much proclaimed rise in the cost of the UK Housing Benefit budget is London rents – moreover it is private sector London rents. The Housing Benefit bill in Scotland has.meanwhile, hardly risen over the same period – and in ‘regional’ England it has risen nowhere near the levels of London. What a crazy and immoral system; a state welfare system that subsidies the grotesque profits of the over-heated London housing system (rather than, say, a return to providing affordable social rented housing in adequate numbers). The most odious aspect of all this is that it is social rented tenants across the UK that are paying a harsh cost in the form of the Bedroom Tax and associated ‘caps’ for London’s hyper-market.

    Startling data recently came from housing consultants Savills on London, and the constitution of it’s core population. It raises the question of whether London still a constituent part of the UK or an entrepot for nomadic global elites. By inference, is serving the needs of London the same as serving the needs of the UK?

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