Thursday, July 25, 2013

Why Pickles Has Suspended Welsh Streets Demolition

The Mayor and Liverpool City councillors are cursing Eric Pickles for suspending their decision to demolish the Welsh Streets. Pickles won’t care about their curses of course, the fact that this is the third time ministers have directly intervened in this decade long saga might say something about ministers commitment to localism, but it also says a lot about the way this case has been handled by the council too.

The council like to paint opposition to the Welsh Streets demolition as outside interference by heritage zealots, but they understate the case. No housing scheme in England has proved more controversial or more divisive, and few can have been as eye wateringly expensive. Whatever you might say about Pickles he is no heritage zealot. The truth is he has plenty of other reasons for questioning the decisions made in this case:

He may well feel that the scheme fails to meet housing need. Demolishing 439 houses and building perhaps as few as 153 is a huge loss of the city's housing capacity. A city with a growing population shouldn't be settling for less. Less housing means fewer homes for people. With household sizes in Liverpool getting smaller and housing association rents rising, demand for larger houses is in decline, small houses are what the city needs. Old terraces may be unfashionable but they provide good homes for people on modest incomes. Without them more people, unable to buy homes, become reliant on social housing.

Pickles may think the scheme fails to promote economic growth. A drop in housing capacity means local services and shops struggle, and people have to drive elsewhere to get the services they need. In a city that should be striving for growth this scheme is the opposite - managed decline.

He may wonder what the scheme has done to the community. Over the last ten years 1200 residents have been lured or driven away. The council may claim community support for demolition now, but the truth is after a decade of attrition there is hardly anybody left to oppose it now. 
He no doubt thinks the scheme is incredibly inefficient. When you add up all the public subsidy this scheme has absorbed over the last ten years it totals £35million. A sum of money that could have easily have paid outright for building twice as many new houses on some of the city’s many vacant plots of land, or a programme of refurbishing 1,000 of its empty homes.

Perhaps he will also pause for thought over what caused the problem this scheme seeks to fix. The Welsh Streets were never a wealthy part of the city, but they were home to a functioning community that was far from being in decline. The Welsh Street's demise was artificial, calculated and imposed from above. The last government's ruinous pathfinder programme paid councils vast amounts of money to buy up and demolish old houses.

Nowhere greeted this policy with more eagerness than Liverpool council. Even the minister in charge at the time, John Prescott thought the council's enthusiasm for demolition was obsessive. "They knocked the whole bloody lot down so you had bomb sites everywhere" he said. The huge scale of Liverpool's demolition programme was far beyond its capacity to deliver and the Welsh Streets are a victim and a legacy of that excess.

Much has changed in the decade since this scheme was first imposed on the Welsh Streets, but the scheme itself has remained rigidly unaltered. To the council’s credit it has, in recent months, sought some more imaginative solutions for dealing with empty homes, but it refused to consider them here.
Its unwillingness to compromise has left a scheme that, if unaltered, would manage the decline of a large community into a small social housing estate. With Pickles picking up the tab, there can be little wonder as to why he is questioning it. Liverpool Council and Plus Dane Housing Association should use this opportunity to fix this flawed scheme, not in order to placate Pickles, but because the people of Liverpool deserve no less. 

This artile was first published in the Liverpool Daily Post

Demolishing the Welsh Streets

Liverpool council’s planning committee decision to demolish most of the Welsh Streets and replace it with a far smaller number of larger suburban housing association homes is the latest chapter in the managed decline of one of Britain’s great cities

In its favour at least it is a decison. After virtually a decade of blight and systematic winding down there is now some clarity about how the council wants the empty Welsh Streets dealt with. It’s a relief that the council has been induced into retaining and repairing some of the houses including the well maintained occupied houses in Kelvin Grove and Ringo Starr’s birthplace in Madryn Street. Quite how the council even contemplated destroying this part of its heritage is beyond belief.
But the council approved plan is still controversial and divisive and the long process has strained the community.

Although some action is better than none, the plans are very far from ideal. Whilst new housing, particularly affordable housing should be welcomed, it has come at the expense of a big net loss of housing capacity to the city. A city with a growing population shouldn’t be settling for less. Less housing means fewer homes for people. It means local services and shops struggle to function, and people will have to drive elsewhere to get the services they need.

With household sizes in Liverpool getting smaller and housing association rents rising, demand for larger houses is in decline, small houses are what the city needs. Old terraces may be unfashionable but they provide good homes for people on modest incomes. Without them more people, unable to buy homes, become reliant on social housing

The vision of this scheme is suburbia in the city with car culture replacing local services, Mono-tenure Housing association ownership replacing diverse ownership.

Of course many people do want new homes, but why the council couldn’t have commissioned Plus Dane (the housing association who stand to develop the houses here) to build them on one of the city’s many vacant sites, instead of making them dependent on demolition is unclear.
The effect of this is to give the few remaining residents the false choice of supporting demolition and getting a new house or stay living in a ghost town.

To its credit, the council has in recent months sought some more imaginative solutions for dealing with empty homes, but it refused to consider them here. If the sad story of the Welsh Streets is destined to be a chapter in the ideology of managed decline, let’s hope it’s the last one.

Friday, May 03, 2013

My Article in this month's RICS magazine MODUS

Whatever else you might heave heard; this much is true; bringing empty homes into use won’t solve the housing supply crisis by itself.  But that’s no reason not do it. It’s equally clear that the current rate of house-building isn’t going to solve it either. So we need to think more broadly about increasing housing supply.
Today there are almost 350,000 long-term empty homes in Britain, (and that’s only the ones we know about). In fact, as a nation, if we could be just a little bit more efficient and make sure no home in Britain stayed empty for more than six months, an additional one million people could be housed before we built any more houses at all.

This isn’t a huge ask, and everybody concerned would better off as a result. Owners will benefit from better use of their property, councils will receive additional income and most importantly thousands of families will get a better place to live. With a new government grant scheme, and the National Empty Homes Loans Scheme about to be launched, there has perhaps never been a better time to make this happen.
So what needs to be done? Here are four simple steps:
Whenever property owners anticipate that their property will be vacant for more than 6 months they should make it available to people as short life housing or let it to property guardian companies. A large range of companies and housing cooperatives provide this service. The government should encourage this by offering incentives through the council tax system.
Property owners should take advantage of the grants and loans and get their empty stock renovated. Housing associations, councils and community groups should offer to help them with renovation and management.

Councils must provide help and encouragement to property owners and where necessary take enforcement action. This happens in many places, but still too many councils don’t give it enough priority.  They can’t afford it you might say. But they can. A proper plan for bringing homes into use is actually an income earning activity for councils in England and Wales through the New Homes Bonus.   If councils reinvest the new homes bonus income they receive for empty homes into measures to bring more homes into use, council’s impact will be transformed.

The government should show leadership and get publicly owned properties (including those owned councils and housing associations) into use. There have been improvements in the vacancy rate of publicly owned homes, but it still isn’t good enough. The problem is that there is little scrutiny on public landlords and no real power for local people to put pressure on them .The one right people have is the toothless Community Right to Reclaim Land. This should be beefed up so that the people have a right to buy or rent publicly owned homes that have been left empty for more than 6 months
These steps would cost little more than the money that has already been committed, and could create thousands more homes with no obvious downside. Of course this won’t solve the housing supply crisis by itself, but it’s not a bad place to start.

Friday, March 08, 2013

empty homes to drop to zero next year

The number of empty homes in England is set to drop to zero next year. This may sound improbable, but if you follow current projections of house building rates and household formations it must be true.

Government projections show the number of households in England growing to 27.5 million by 2033. In 2011, the year of the last census, the official statistics showed a surplus of 750,000 dwellings. In other words there were three quarters of a million more homes than households. This neatly coincides with the official number of empty homes that year.

But the population is growing fast and as we are often told, house-building rates are not keeping up. In fact if we were to assume that house building carried on at it’s current rate for next few years (and there is no obvious reason to think that anything else will happen) the surplus will reduce to 200,000 this year and disappear altogether in about November next year.  This scenario would have many effects including me being out of a job!

But this surely cannot be true. If it were, work would already be underway on every single empty building in England. A glance out of my window here towards the Heygate estate would indicate this is very definitely not the case.  In fact, although the numbers of empty homes are linked to housing demand, the effect is quite slow. Empty homes are what economists call an inelastic supply. This means where there is a high level of demand for homes the number of empty ones will reduce, but not by anything like enough to meet all of the demand.  The number of empty homes has indeed decreased in recent years, but never by more than 20,000 in a single year.

There is an old adage that all models are wrong, but some models are useful. As such, the apparent empty homes conundrum will probably be solved when we find out the government household projections were incorrect. If for example, the number of single person households turns to grow at half the rate that the projection indicates, the current housebuilding rate is just right and there will be no shortfall. 

This all goes to show that we shouldn’t get too bogged down in statistics. We all know that real people are facing real housing problems (most of them linked to housing being too expensive). It’s self evident that getting empty homes into use is a useful thing to do in these circumstances but won’t solve all of the problems. Its also certain that it won't work the other way either. I predict another significant drop in empty homes numbers this year, but I would bet my job on it not droppping to anything like zero next year.  

Wednesday, January 09, 2013

Where are they now? The abandoned backdrops to 80's videos

Empty buildings seemed to be a common backdrop for music videos in the 1980s. So I thought it would be interesting to look at a few and see what's happened to the buildings now.

The video for the Human League's Fascination was filmed on the empty streets of Plaistow in East London in 1983. The area was then under the control of the Docklands Development Corporation  a QUANGO tasked with regenerating London’s Docklands. The Victorian houses had been emptied out by the corporation prior to demolition.  As the video starts we see a map of the area with an orange blob indicating “You are Here” As the camera moves in it turns into an ariel view, and it becomes apparent that area covered by the blob really had been painted orange. In fact to make the video, a whole house (No.1 First Avenue), the immediate area of the streets, and an old Austin 1800 car parked outside really were covered in orange paint. The house along with the rest of the houses in the street were demolished a couple of weeks later. Some rather anonymous 1980s semis were built in their place and stand there today. Unfortunately the identikit semis couldn't fit in the triangular shape of the corner plot and so the site of No.1 remains vacant to this day.

Is there a better one than this? The Smiths (or rather Morrissey and a group of lookalikes) cycling through the New Barracks Estate in Salford in 1985. The estate is one of the earliest council estates in the country, built with private patronage in the early twentieth century. Even in its rather forlorn state in the 1980s you can see the quality of the architecture and the layout. The Salford Lads club which appears about half way through is still going strong, and the big houses in the magnificent Regent Square which we see towards the end of the video were renovated, some of the other boarded up houses were demolished and new houses are standing there now. OK I think this video was actually made for "Stop Me if You Think You've Heard this Before" But this song is even more sublime.

Not from the 1980s, but Coldplay's Every Teardrop is a Waterfall, was filmed in the vast abandoned Millennium mills building in West Silvertown in East London. This incredible 10 storey art-deco mill was once Splillers' biggest flour mill, but with the closure of the Royal Docks the mill closed in 1981. It has remained empty ever since. In the 1990s it was briefly considered as a site for a huge aquarium for the Zoological Society of London. As recently as 2009 it was going to be converted into 400 flats under an interesting Terry Farrell scheme. As far as I'm aware there are no current proposals on the table. The mills were also the location for the video for the Arctic Monkeys excellent single "Fluorescent Adult", which regrettably, I deem a bit violent for this blog.

Wednesday, December 12, 2012

Big house builders, Less houses, more profit

You know the argument so I won’t dwell on it. But we need more homes and yet we’re building less. I have argued before that the real problem is affordability not supply, but the government certainly does accept the need to build more. It has been keen to help by creating guarantees and grants and relief from regulation to make it easier for more homes to be built. Its recent initiatives to help house builders include:

  • £20 billion housing guarantee plan
  • £225 million to support large-scale housing sites
  • New buy scheme providing subsidy to allow 95% mortgages on new build homes
  • A holiday for house builders from their obligations to build social housing as part of large housing developments
  • Requirement for all new homes to be zero carbon by 2016 watered down.

So is there any sign that this vast amount of public support for the house building industry is working? Nope. The latest government statistics show that house building is actually in further decline, with housing completions down 6% and housing starts down 10%.  The industry is unapologetic and is asking for yet more help inviting the chancellor to "refine and expand" the measures he's already introduced.
So how have the big builders faired during this (apparently) most  difficult of periods? Here is the latest profit news from the UK’s ten biggest house builders:

  1. Barretts profits up 159% to £111m 
  2. Taylor Wimpey profits up 135% to £78.2m
  3. Persimmon profits up 65% to £98m
  4. Berkley profits up 40% to £142m
  5. Bellway profits up 57% to £103m
  6. Redrow profits up £17m to £30M
  7. Galliford Try profits up 80% to £63m
  8. Bovis profits up 100% to £16m 
  9. Crest Nicholson profits up £34m to £12m
  10. Bloor profits up £18m to £40m

I suspect that most people would be surprised to hear this, but far from having a difficult time, many of these companies are making record profits. How? simply by building fewer homes for higher prices. In their results both Persimmon and Bellway even boast that their average house sale price is the highest it's ever been. It appears suspiciously like the large house builders have happily accepted government support and used  it to shore up their own profits by building a small amount of expensive houses for the small number of people who can actually afford their prices. If I'm right and affordability is the real problem, this hardly feels like the answer.

N.b. the profits data given here is the latest from each company and is a mixture of full and half year reports. Bloor only publish operating profit information for the holding company Bloor holdings.

Tuesday, December 11, 2012

A letter to Graham Jones MP

Dear Graham,

I’ve just seen your latest blog post, and seeing as you were good enough to mention us, I thought it deserved a reply. If I can summarise you make three points:
  1. “It’s a false argument to suggest that those on housing waiting lists are in desperate need for these homes”
  2. Your constituency has declining population and therefore demolishing houses is necessary.
  3. That guacamole eating southerners like me are dictating national policy.

Perhaps I can start with the first point and refer you to the latest published housing statistics for Hyndburn  (source: )

Empty homes: 2565 (the 2nd highest rate in England)
Families on the housing register: 4001
Families housed by council: 96
New homes completed: 0
New homes granted planning permission:0
New homes built by the council:0
New homes built by Housing Associations: 0
New affordable homes built by others: 0
New affordable homes granted planning permission:0

Of course statistics never tell the whole story, and you may well have some more recent (as yet unpublished) data; but it’s pretty hard to support your claims based on this evidence. There clearly is a great deal of housing need, and much as you and I would like these people to be housed in nice new houses, there’s no evidence of any being built or about to be built. Your suggestion of knocking two houses into one is a good one, but I fail to see how demolishing houses in these circumstances helps anybody when there is so little building in prospect.

Your second point is that homes need to be demolished because there is a declining population. I accept this is the case in a few areas, (although the population of Lancashire is projected to rise over the next 20 years) but can you honestly say that none of these houses were decanted?  Can you also be sure that uncertainty over possible demolition did not cause people to move out? . I know if the council kept threatening to bulldoze my house I’d look to move to somewhere where they’d leave me alone. This is important, because if you can’t be certain of these points then it's equally likely that demolition plans have helped create the problem you now cite.

I am of course flattered by your implication that my colleagues and I are driving national policy. As it happens I’m not a southerner, I just happen to live here because (like you) I have a job here. But your invitation to have a debate in a chip shop in the north is perhaps your best idea here. I will however be careful to avoid the Peter Mandelson faux pas and remember that the green slimy stuff is mushy peas not guacamole.

Update 13th December in response to Graham Jones' reply

Dear Graham,

I’m very grateful for your reply. Funnily enough I agree with some of what you say, but perhaps that’s because you are rebutting arguments that I haven’t made.

I’d like to challenge a few points though. Firstly your declining population point: Lancashire county council’s population projections don’t agree with you. They show a slow but steady increase in population for Hyndburn over the next twenty years. But perhaps they haven’t factored in the council’s demolition policy, which, as I’ll come onto, may be a self-fulfilling prophecy.

I’d also like to correct you on our policy on demolition. It isn’t actually true that we're against it on principle; I think it’s a sensible approach sometimes where obsolete housing needs to be replaced. What I’m against is speculative clearance. Knocking people's houses down in the hope that the cheap land it frees up will lure in a  private developer to build something.  

I’m not in favour of public subsidy footing the bill for renovating all empty homes. I do think its pragmatic for government to invest in refurbishing empty homes to create affordable housing. As you know there was a grant program this year that did just that, but I see Hyndburn didn’t apply. However,  another bidding round has just opened, and I’d be more than happy to help the council make an application.

I see that you didn’t comment on my questions about how the houses you want knocked down became empty in the first place. It’s important to point out that a lot of empty houses in ex housing market renewal areas were decanted and the program caused blight leading to many others becoming empty.  Of course the housing market was weak in the first place, but the HMR program poured £2.5bn of taxpayers money in with little obvious benefit, and left a lot of problems like the scale of housing vacancy we are discussing here. . 

You are right on this point, I accept that refurbished empty houses might not be the aspirational choice for all the 4001 families on the councils waiting list, but at least the houses exist and can be readily made into decent homes. Your proposal of knocking them down combined with the area’s nonexistent house building programme would mean that most of the 4001 families won’t get a house at all. Faced with this, what do you think they’ll do? I think they'll move somewhere else, which is why your policy probably is a self-fulfilling prophecy.

Wednesday, November 07, 2012

The Great British Property Scandal

Tonight Channel 4 will broadcast a new Great British Property Scandal TV programme. It follows the progress that has been made over the last eleven months since the original series was broadcast and investigates new scandals that it has uncovered of properties left empty when people need homes. 

These TV shows matter. Even the English housing minister admitted it: “we’re in a housing crisis”. Simply put, there are more people who need homes than homes available to live in. Yet fewer homes are being built at any time since 1928.
The Great British Property Scandal TV series could not have come at a more important time. By late 2011 there was consensus that British housing supply was in a mess, and calls for building more homes were sounding increasingly hollow. But one idea was gaining momentum: if we can’t build enough houses, why not get Britain’s million empty homes back into use? It was not a new idea, my own organisation has been campaigning on this issue for 20 years with some success, but never before had the idea been put so forcibly to the British public, and so publicly to the government.

George Clarke was the man to do it, and over the course of a week in December last year he told the scandalous story of how 1 million homes were lying empty when so many people were left without a decent home at all.

The scandal George exposed was not just that homes were left unoccupied, but that public money was being used to systematically empty and demolish perfectly good houses. Standing in a wasteland that had previously been a street of houses, George berated the system that has left us with 2 million households in housing need and a million homes lying empty.

Of course government policy was never intended to create the housing problems we now face, but there is no escaping the fact that some government housing policy has failed. The Housing Market Renewal Programme started in 2002 aimed to clear streets of old houses in areas where the housing market had collapsed. The aim was that the cleared land would attract developers who would build new homes. Perhaps predictably the cure turned out to be worse than the disease. The acquisition and demolition programme blighted already troubled areas, and the 2008 economic downturn caused developers to lose interest in building replacement houses. With thousands of houses emptied and many more flattened, government funding for the programme was withdrawn last year. Many cities in Northern England are left with a patchwork of derelict land and empty houses.

The scale of the problem should not be doubted. If building new houses was proving difficult this would be no easy fix either. But George’s campaign has attracted huge public support and triggered off action in government too.

In the year since the first Great British Property Scandal series was broadcast, the government has introduced an empty homes grants programme and has helped us set up the National Empty Homes Loans Fund. Low interest loans to help get empty homes back into use in an affordable way will be available, through us, early next year. In the last year similar funds have opened in Wales, Scotland and there will soon be a fund in Northern Ireland too. Councils are being encouraged to charge higher council tax on empty homes to incentivise owners to get them back into use - and councils themselves are being rewarded when they get empties back into use.

Most important of all, other new empty home refurbishment programmes are starting to spring up. The grants and loans programmes are making it possible for long term empty homes to be brought back to life, providing affordable homes for those in need.
The new housing minister has yet to say it, but there can be little doubt that we are still in a housing crisis. Nevertheless the progress on this one issue over the last year has been nothing short of remarkable.

Thursday, September 27, 2012

Don't Build More Homes

My article was published on the Guardian's website earlier in the week with the slightly unfortuante title "Don't Build More Homes" The point I'm making is not that we shouldn't build more homes. I'm convinced we do need more in the South East and a few other parts of England,  the purpose of the article was to examine why they are not getting built.   In my view the current low house building rates are a symptom, the core problem is affordability. Here is the article:

Am I alone in getting bored with the "build more homes" answer to every question in housing? We hear it daily from politicians, housebuilders, and lobby groups as if it were a mantra. Whatever the housing problem, it seems, the only answer is to build more homes and the way to do it is for government to provide more subsidy to housebuilders. In theology, mantras are not supposed to be questioned, but I think it's time we subjected this one to a bit more scrutiny.

Let me first point out that I'm not saying we don't need more homes; quite clearly we do in some parts of the country. But addressing it by finding new ways to subsidise housebuilders has not only failed (housebuilding has fallen to 100,000 units a year), it is counterproductive.
I've visited three countries in the past couple of years that have had big housebuilding programmes: Spain, Ireland and Portugal. What I saw there saddened me. Not only do their building booms appear to have worsened their economic situation, the new homes they produced appear to be having little social benefit.
It strikes me that the major housing problem in the UK is not supply (technically there is a million house surplus in England), but people's ability to afford housing. Median house prices are more than six times median earnings in England – double what most experts think is sustainable.

Essentially people's wealth has not kept up with house prices. Why? Obviously not enough people have seen their incomes rise, but I'd argue that government policy, introduced with the best of intentions, has made the other side of the equation worse. Subsidies to housebuilders, artificially low interest rates, mortgage rescue, bailing out failing banks and subsidies to social housing have all either helped house prices rise faster than they would have done otherwise, or prevented house prices dropping.

The fallacy with building your way out of the problem is that people still can't afford the houses you build. This is what Spain, Ireland and, to a lesser extent, Portugal found. In fact to get the building boom going in the first place they had to offer builders big tax breaks and subsidies, and then offer further subsidies to help people buy them. There is a large lobby in this country to do the same here. Apart from whether we could afford such an approach, I just don't think it works. Housebuilders following subsidy guidelines in Spain and Ireland built houses that people didn't want and couldn't afford. People didn't buy the houses, even when they were subsidised. They remained empty and now, most galling of all, some of them are even being demolished.

You might argue that it's different in England, but it's happened on a small scale here too. The last government's strategy of brownfield development aligned to subsidy programmes like housing market renewal led to a large amount of inner city flat developments. Much of what was built sold slowly and required government bailouts to prevent whole scale abandonment. Even now there are hundreds of empty flats in town centre developments in places like Ipswich. Places which then, and still, claim to have a housing shortage.

It appears that no politician can face it, but the only answer is to let house prices drop to their natural level in relation to incomes. That would require a less-interventionist approach, ignoring the appeals of the housebuilding lobby and having to deal with the consequences of what would undoubtedly be serious human impact through repossessions for example.But after this had happened house prices would be in balance with incomes and people would buy houses again. This would create the demand that would get builders building again.

Friday, March 02, 2012

Stalled development and long walks for the milk

I like this blog, although its rather odd name fails to explain what its about. The pint of milk test was as far as I can remember first coined by think tank IPPR as a theoretical test on the accessibility of new developments to local services. The implication was if it took you more than 10 minutes to walk from the development to a shop where you could buy a pint of milk  it really was cut off and badly located.

Somewhere that almost certainly fails the pint of milk test is IYLO, an unusual building built on a traffic island a good 15 mins walk from Croydon town centre. The glossy website brochure describes IYLO as "Inspiration for Life"  and "the only 100% private development of its size in London" ( a euphemism that I'll explain later). What it fails to mention is that the block of 182 flats is unfinished and 100% empty. Work on the building stopped in 2009 when the developer went bust, it briefly restarted last year but the new owner went bust too.  In an attempt to get things going again the council agreed to drop its social housing requirements (hence the 100% private tag). It apparently worked,  the building was recently sold to a Chinese development company for a knock down £10m (£55k a flat). If you are feeling confident, and don't mind a long walk for the milk you can buy one now, if enough people do the same work will no doubt restart. If not Inspiration for Life may still be a long way off in Croydon.