Will Haringey’s HDV tackle homelessness?

It may be a fool’s errand to join the argument about one of London’s major ‘estate regeneration’ schemes. In most of the big schemes it has been almost impossible to distinguish fact from fiction amongst the contradictory claims made by proponents and opponents with equal belligerence. But this time it is Haringey, where I worked for many years in Tottenham, so this one feels personal.

The passions unleashed by Haringey’s decision to set up (with LendLease) a 50/50 joint venture development vehicle (known as the HDV) is exemplified by two respected journalists – I normally like their stuff – who have taken opposite sides. Guardian economics columnist Aditya Chakrabortty is against (here and here) and ex-Guardian writer and London blogger Dave Hill is for (here and here).  Not only are they poles apart, but they have become vituperative, and seem to have different facts let alone opinions.

Not just in Haringey, ‘estate regeneration’ is becoming the trickiest political issue for Labour in London. On the one side there is a genuine argument (articulated here by Shelter amongst others)  that national policy means there is a dearth of options, and that redeveloping lower density and ‘worn-out’ estates on council land to create additional and better housing at much higher densities, mostly at market prices, is the only way of providing sufficient cross-subsidy to enable some social rented and other ‘affordable’ homes to be built. The argument goes that this is better than nothing and that we can’t hope and wait for a Jeremy Corbyn government to come along to get more resources.

On the other side are those who see the policy as an echo of David Cameron’s clarion call in 2016 for the redevelopment of 100 council estates, places he called ‘sink estates’, ‘bleak high-rise buildings’ that ‘are entrenching poverty… isolating and entrapping many of our families and communities’, ending with his ominous sentence ‘I believe that together we can tear down anything that stands in our way’. It is axiomatic that any policy initiated by David Cameron won’t be good for the poor. But Labour councils are accused of adopting similar attitudes, wanting to build glossy new ‘quarters’ and failing to protect their vitally important social rented stock and working-class communities. There are now believed to be well over 100 potential schemes around London. In London housing terms, this is huge.

In Haringey, two polarised sides line up behind the conflicting perspectives. Proponents see the HDV as a transformative investment vehicle that will create jobs, fund a range of community facilities and services, transform the council’s commercial portfolio, and directly tackle the housing crisis, homelessness and bad housing – whilst making big money (profit from development, increased council tax and New Homes Bonus income) for a cash-strapped council. All councils setting up joint venture or Local Housing Companies face similar dilemmas, as discussed by Ross Fraser on Red Brick last week.

Opponents see a fundamentally gentrifying process that will knock down thousands of genuinely affordable council homes and build thousands of homes that will be mainly unaffordable to existing Haringey residents, adding up to the destruction of communities and ‘social cleansing’. The argument goes that adopting regeneration/redevelopment as a means of coping with huge cuts in revenue support grant means that councils are effectively mortgaging the future by making a profit from the land they own, rather than maximising its use for genuinely affordable housing. The opportunity cost is that the land, once developed for this purpose, will no longer be available for a better purpose in the future. The alternative would be to develop more modest and less grandiose plans to build homes on spare land and invest in the existing estates.

Leaving aside the political controversy over councillor selections and whether a 50/50 joint company is privatisation (about which I have opinions but not for this piece), what are the likely outcomes of the HDV in housing output terms? The council has made big claims that the HDV will tackle homelessness and waiting lists. Its HDV webpage starts ‘Our residents need new homes to tackle the rising cost of housing and increased homelessness’. The council seeks the higher moral ground – Alan Strickland, the Cabinet Member for Housing and Regeneration, responded to opposition from local MP Catherine West by arguing ‘We need action now to help the three thousand families in Haringey in temporary accommodation, and the thousands more on our waiting list’ and there have been attacks on opponents for not caring about delivering homes to the homeless for ideological reasons.

It is incumbent on the council to demonstrate that the HDV will achieve these aims, not merely to assert that it will. There certainly seems to be a weakness in the evidence. I have read most of the confusion of documents that make up the HDV proposal, and I am none the wiser on this central question: how exactly will the HDV aid homeless people in Haringey, and how many? Thousands of mainly social rented homes will be knocked down and thousands of mainly private homes will be built. There will be many more homes overall, but, how will the proposed mix of market and sub-market homes tackle homelessness and the needs of people on the waiting list?

The missing number is how many social rented homes there will be at the end of the process. It has been a constant refrain on Red Brick that the type and tenure of new homes is as important as how many homes are built in total. Social rent remains the only truly affordable option for many people on lower incomes, a line of argument that, after a barren few years, is once again becoming common currency in the housing world. Of course, other forms of housing are needed, because housing unaffordability now stretches a long way up the income scale, but in my contention housing policies are unacceptable if they do not improve the chance of a decent home for people in the bottom 10-20% of the income distribution.

Haringey’s own housing market assessment illustrates the point. 30% of the borough’s households have incomes below £20,000 per annum, 50% below £30,000 and 65% below £40,000. Market housing does not meet their needs, and sub-market options only help at the edges. Only 4% of households have incomes above £100,000 per annum. Haringey is not a borough of affluent people just waiting for someone to provide a £700,000 flat for them to buy. Mean household income levels are highest in the West of the Borough and lowest in the East – where most of the estates to be regenerated are situated.

Whatever the wider benefits of HDV, in housing terms the council has not committed to the full replacement of all its social rented homes, let alone a much-needed increase. They have committed to providing existing tenants with a right to return on the same terms as now (rent and security of tenure) but no estimate is made of the number of homes needed to achieve this. I would have thought it was crucial to model this before decisions were taken – some people are keen to return but others prefer one-off permanent rehousing or choose to stay where they have gone temporarily and do not return.

The council’s housing strategy sets an overall aim that 40% of new homes should be ‘affordable’ and it has adopted income-related affordability measures. That is across all development on private and public land and across the whole borough. On council-owned land the proportion of ‘affordable’ homes should be highest, but there appears to be no explicit aim or target or even expectation as to how many of the new HDV homes will be for ‘social rent’ or even ‘similar to social rent’ on an income-related calculation. The council also has a policy (misguided in my view) of not maximising the number of homes for social rent in the east of the borough, in Tottenham, on grounds of achieving a better social and tenure mix. This also has the effect of depressing the number of homes for social rent.

The evidence available suggests there will be fewer homes for social rent at the end compared to the beginning. Surely it is a basic principle that there should be full replacement of all social rented homes knocked down? Sadiq Khan’s decision to refuse permission for Genesis’s Grahame Park   regeneration in Barnet due to the loss of social rented homes demonstrates two points: first how unambitious social housing agencies have been in trying to build for the poorest, and secondly, that the mood is shifting against them. Khan described it as “how not to do estate regeneration” and his own London Plan policies indicate that he would also turn down Haringey’s plans as they stand.

There is a further impact on those in housing need waiting for council homes that is not assessed in any of the HDV documents I have seen. The regeneration process is long and complex, and involves rehousing (‘decanting’ in the jargon) all existing tenants (temporarily with a right of return or permanently for those who do not wish to return). Demand from decants restricts the flow of social rented homes from the general pool to those in housing need, even if the redevelopment programme is carefully phased (eg by building on spare land first). Because they are on the critical path of a major development where delay is costly, decants tend to receive high priority and get first pick. Not only do fewer other people get rehoused, they also tend to get homes which are poorer quality.

Haringey’s housing vulnerability is demonstrated by its own Annual Lettings Plan. This shows that the borough had 3,158 households in temporary accommodation at March 2017 with a further 9,220 households on the housing register. The number of new lettings available to the council has been falling for many years: in 2016/17 it achieved only 522 lettings to meet all forms of need and in 2017/18 only 490 lets are anticipated, with 60 ‘regeneration decants’ amongst those afforded highest priority. The Plan already foresees the share going to homeless households declining from 62% to 34% in a single year.

Supply and demand in future years is not projected, but the number and share going to decants is likely to rise rapidly with the HDV. Far from improving, the prospects for homeless households and people with other urgent housing needs being rehoused will diminish sharply. It will be many years before the regenerated estates make a net contribution to the lettings pool, and it may never happen. I would hazard a guess that Haringey, like some other boroughs, will decide to discharge its homelessness obligations through the private rented rather than the social rented sector. Far from helping the homeless, the homeless will be the primary victims of the decant programme required for the HDV.

As we have seen, so far Sadiq Khan is sticking to the line that projects on this scale must not lead to the loss of social rented homes (although there are still concerns about the definitions that Sadiq is using in the new London Plan). There will be pressure on him to back off but I hope he sticks to his guns, based on past evidence. (see box).

A 2015 GLA study of what actually happened in 50 past regeneration schemes found that they achieved more homes, more market homes, more intermediate homes, but a reduction in social renting.

The Housing Committee’s report – Knock it Down or Do it Up? The challenge of estate regeneration – found:

  • The schemes doubled the total number of homes in the regenerated estates – from 34,213 to 67,601 (nb the final numbers were not all built out at the time of the research).

but there was a huge shift in tenure, with

  • ‘social rent’ declining from 30,431 to 22,135 – a loss of 8,296 or 27%.
  • ‘affordable rent’ increasing from 46 to 1,832
  • ‘intermediate homes’ (for rent or part-sale) increasing from 550 to 7,471
  • ‘market homes’ increasing from 3,186 to 36,163.

It is clear who has benefitted from a doubling of density. Not people on the lowest incomes, but people wishing to rent at higher but sub-market rents and, overwhelmingly, people able to pay the full market rate. From the evidence of the GLA report, it is hard to avoid the conclusion such outcomes constitute ‘gentrification’ – ie on average the people residing there after regeneration are significantly richer than those who lived there before – and poorer people are both fewer as a proportion and in number. Some people think this is a good thing, often on a ‘social mix’ argument that I find wholly spurious. In the schemes looked at by the GLA, over 8,000 social rent homes were not replaced, meaning that 8,000 other households (homeless and waiting list) did not get a home at all. The real housing cost of the schemes was borne by these families – regeneration has been paid for by the homeless and badly housed.

Whatever view you take about reselection and about development vehicles like Haringey’s, in simple housing terms the claim that it will help meet the needs of homeless and waiting list households does not bear much scrutiny. The housing case for the HDV has not been made. 

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9 Responses to Will Haringey’s HDV tackle homelessness?

  1. Ed says:

    This is truly welcome because of the way it is so agonisingly ‘balanced’ and because it deals with the dynamics of the flow of vacancies, a key factor which is so rarely estimated. AsI expected, you find that an estate clearance programme will necessarily divert a lot of the (shrinking) flow of lettings away from the waiting list and from homeless people. If only these data were avaiable for all such schemes. Thank you. Michael Edwards (Haringey Resident & JustSpace.org.uk )

  2. Tim says:

    The anti-HDV people seem to be very selfish. They want to preserve council estates so that a few “chosen” people who have had very low rents and security of tenure for decades can continue to live in relative comfort while many homeless people and those forced to pay high rents in the private rented sector have to suffer.

    Surely it is better that more houses are built which will mean more money for the council via sales of private housing, more housing for the ever growing population (which brings down rents and increases competition for quality rentals) and more council tax collected which will pay for social care for many of the current social housing residents who complain about there being no funding. I doubt that taxpayers are willing to pay more and more council taxes to subsidise the low rent and social care of these residents who probably have better quality housing than many “rich” people in private housing in London. The huge amount of new properties to be built under the Haringey HDV would increase the council tax take considerably.

    It seems a bit spiteful and selfish that residents would rather taxpayers pay for their homes to be refurbished but lock other needy residents out from having their own safe and secure homes when so many extra homes could be built to serve the ever growing population.

    • Hi Tim, thanks for your comment.

      The whole purpose of my article was to check the veracity of one key council claim – that the HDV would help the homeless. From the evidence, there will be fewer social rented homes at the end than at the beginning, and homeless people will be less likely to get council homes because of the long-term need to ‘decant’ estates. It is social rent that provides a real option for people on low incomes, and the stock of social rent matters so much because re-letting that stock when homes become empty is an important source of supply. New homes at market, shared ownership or private rent levels will not help the the lowest paid, they will be extra homes which might have a small impact on the market but they will not meet the council’s claim that the scheme will help the homeless.

      I was not seeking to test the other arguments for the HDV and it is undoubtedly true that the council will benefit from increased income as you say, which will help offset government cuts. Council housing is not subsidised as you suggest, it pays its own way and councils are specifically barred from using council tax to subsidise rents. Social care is needed by people in all tenures, it is not specific to council tenants.

      I do not think this is about ‘selfishness’, it is about finding the best housing strategy. If I thought estate redevelopment would benefit homeless people and hard-pressed private tenants – for example, if there was an increase overall in the number of homes for social rent – then I would be more likely to support it.

      Steve

  3. Zena Brabazon says:

    Thanks Steve for such a thoughtful and balanced article. I sit on the Housing and Regeneraton Scrutiny Panel and, as you no doubt know, we have issued two reports on the HDV. We signalled many of the points in your article, and also in questioning throughout the scrutiny process. Thanks for your additional evidence,

  4. mikeberkoff says:

    Waiting for a future change of government has three faults: 1. Any future election might be years away 2. We cannot predict who would win such an election 3. Given the hugely stressed state of council finance there is no guarantee that a future government will stump up the necessary capital. So looking at the current choices getting loans to build is specifically limited by current government rules and any council housing will be subject to right to buy within a few years. Other options seem to be privatisation, do nothing or make partnerships. Any council must address the housing crisis rather than stick to a bogus ideological purity. Many are homeless or living in substandard conditions. Huge amount of current housing is in dire need of repair or replacement. Doing nothing is a cowardly choice. When I talk to anti HDV people about alternative the best I get is that ‘other’ councils have better ways of dealing with the housing crisis. When I ask for details they go silent. As someone comfortably housed I don’t wish others to lack that basic right. Others should think in those terms.

    • Thanks for the comment, Mike. I was trying hard to steer round the political case for and against but to look strictly at the likely housing outcomes. It’s not easy because the HDV documents have few numbers and scarcely mention social rent (even in relation to Northumberland Park, which is the most advanced).
      An assertion is made that the HDV will help tackle homelessness and the waiting list, but there is no evidence to back this up. Market and most sub-market options are not affordable to most Haringey residents. As it seems likely there will be fewer homes for social rent at the end than the beginning, and that the demands for ‘decanting’ remove rehousing options from other groups of people for many years, my fear is that the HDV will not contribute to meeting the needs of the homeless, and possibly the opposite. How do we balance more better quality but unaffordable homes against fewer but genuinely affordable social rented homes?
      The most basic question in all social policy is who gains and who loses? That has nothing to do with ideological purity, bogus or otherwise. I agree ‘doing nothing’ is not an option but making things worse should not be an option either. Surely it is incumbent on the council to show how its HDV proposals will deliver its promise about tackling homelessness, an issue where I am in the same camp as Sadiq Khan – there should be, at a minimum, no loss of social housing. Until the evidence is forthcoming it is reasonable to be sceptical.
      Steve

      • mikeberkoff says:

        The condition of the area affected means refurbishment is essential. There are many small flats (2 or 3 bedrooms) with lager families. These are 60s developments. The decanting is to take place block by block and return under the same rents and conditions is guaranteed. I have heard Clair Kober, Alan Strickland and others state this. I believe them and there are legal safeguards. The housing stock will increase. No proposal is perfect but we lost the election (this needs to be stressed to some). A council that aims to tackle housing cannot put narrow politicking ahead of people’s needs. In a few years time people will be sleeping on friends sofas or homeless who otherwise could be in proper housing. This is one of those things that are impossible to demonstrate but it would happen. I appreciate the tone of your reply. Unfortunately over the last few months many opposing HDV have been far from reasoreasonable in their attitude to those trying to address these difficult issues.

  5. Barbara Hancock says:

    To send to Jo and Kim ________________________________

  6. colin wiles says:

    Excellent summary Steve. Given Lend Lease’s track record in Southwark I am instinctively suspicious of any public/private partnership with this outfit. Didn’t “red” Kensington and Chelsea refuse the Cale Street/Affinity Sutton regeneration because it meant a net loss of social housing? If the Royal Borough can take such a principled stance, why can’t other boroughs?

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