5,000 demolitions make no sense

Does this make sense to you?  Over 5,000 houses are set to be demolished under a programme that was supposed to be for re-housing people.

The programme is the Housing Market Renewal(HMR)Transition Fund. The guidance for the fund (down load avaialble here) said “ It is intended to fund acquisition of homes/ relocation of individuals (with some funding for linked costs eg. relocation expenses) and at the margins some site security or clearance costs.”

Launching the fund, and commenting on the predecessor HMR programme that he had wound up Housing Minister Grant Shapps said “There was widespread public controversy over anobsession with demolition over refurbishment, the lack of transparency of thePathfinder quangos, large profits by developers, the demolition of our nation’sVictorian heritage and perverse incentives being given to run downneighbourhoods.

He added that councils "should not be pursuing large-scale demolition"

And yet that is exactly what councils are doing. Information obtained by Empty Homes under the Freedom of Information Act shows that councils have been awarded funding for demolishing 5,125 homes and renovating just 113.

In our view this is in itself a scandalous waste. Many of these homes could be brought back into use, and the £70m of public funding that is being poured into this exercise could have paid for renovation instead.

What on earth is going on?  Despite the guidance, and despite what ministers have said, councils seem to have got a completely different idea. A source at Hull City Council told Inside Housing “It could not have been made any clearer: this(transition fund) was intended for demolitions.”

Made clearer by whom? According to Inside Housing "Grant Shapps is understood to be concerned by the move, and has ordered a review of how the funding is being spent."

Pathfinder - and you thought it was over

Housing minsiter Grant Shapps has made his views on Housing Market Renewal very clear. He didn’t like it. In fact he disliked it so much that he brought the whole programme to an early end last year.... Or so we thought.

Housing Market Renewal or Pathfinder as it was more commonly known was a large government programme that aimed to regenerate the housing market in nine of the poorest areas of the North and Midlands of England. Between its inception in 2003 and its end last year it spent £2.3bn on demolishing 30,000 houses and causing 15,000 to be built.

Quoting SAVE Britain’s Heritage Shapps said “From the start, pathfinder showed an appetite for destruction....The classic English terraced house was demonised as “obsolete”. Whole neighbourhoods were declared surplus at the keystroke of a consultant’s laptop. Bureaucratic arrogance reduced communities to inmates of a “Zoo”—Zone of Opportunity—for house builders. Statisticians assumed compulsory purchase and eviction for demolition were acceptable measures for householders in a property-owning democracy. Quite predictably, the cure turned out worse than the disease.”

The decision to end Pathfinder was one we supported, although public investment in some of the poorest communities in England should be welcome, the use much of it got put to was in our view counterproductive. The programme that was originally intended to regenerate communities ended up demolishing them. It was also ineffective in reducing the levels of empty homes, despite that being one its major aims.  There are still about 40,000 empty homes in pathfinder areas, about the same as when the programme began.

But stopping Pathfinder has not proved as easy as it sounds. Local authorities had a pipeline of properties lined up for demolition. First an area was “red-lined”, many residents moved out voluntarily, owners were then bought –out , the reluctant ones subjected to compulsory purchase. This land assembly process took years, and so to stop it any point left thousands of people and homes part way through the process.

After strong lobbying from pathfinder councils, the government eventually agreed that simply turning the funding tap off was not enough. They agreed a transition fund that it announced would allow an orderly wind-down and allow people stuck in the middle of it to be re-housed. The fund originally £30m (later topped up to £35m) was agreed for the five worst affected areas: East Lancashire, Hull, Merseyside Stoke, and Teesside. Applications were approved late last year. 

Announcing the funding Grant Shapps was again strident in his criticism of the pathfinder programme:“Under the previous controversial scheme, local communities in some of the most deprived areas of the country were told they would see a transformation of their areas. But in reality, this amounted to bulldozing buildings and knocking down neighbourhoods, pitting neighbour against neighbour, demolishing our Victorian heritage and leaving families trapped in abandoned streets. This programme was a failure and an abject lesson to policy makers."

Given the language and the tone that surrounded this fund, you might very well expect that it would be made available for reversing the pathfinder policy. But to most people’s astonishment the government’s funds are to pay for more of the same. Charles Clover writing in yesterdays’ Sunday Times said   "The bid for Merseyside, which Shapps approved, goes far beyond rescuing isolated households. Under this “exit strategy”, councils on Merseyside will demolish another 2,369 homes by 2018, on top of the 4,489 destroyed already. There are no proposals for refurbishment.”

The approved Teeside bid sets out its ambitions clearly “the individual local authority forward strategies for the majority of these areas in the short-medium term is demolition followed by grassing over until market conditions improve.”

 Pathfinder it seems is far from over.

Why are councils knocking down council houses when there is a shortage of affordable housng?

Sounds barmy doesn't it.  But Nottingham city council have identified nearly 1000, and Birmingham over 1200 homes that they have lined up for demolition. If all councils demolish at the same rate it will mean 60,000 affordable homes are to be demolished across England, with only vague plans that some of them will ever be replaced.
Perhaps even more scandalously it turns out that most of these homes are occupied. The tenants will be evicted and presumabaly put into temporary accommodation.

What could possibly justify this huge upheaval of people and such a big loss of affordable homes? The shocking answer is -  accounting reasons!

The government has decided to allocate it's own housing debt  to councils as part of the scrapping of the HRA subsidy system. Essentially all councils with council homes take a pro-rata share of the government's £23billion housing debt in exchange for keeping rental income on their housing stock. The driver for this was partly councils'  unhappiness with the current system, but surely also a desire from Treasury to remove a huge debt off the public deficit.
The unintended consequence is that councils are seeking to avoid the debt by demolishing houses. Each council house they own will attract around £12,000 of debt.Get rid of a 1000 houses and you avoid £12m debt.

Housing minister Grant Shapps was on You and Yours on Radio 4 with me yesterday sounding reassuring. Although he didn't deny that councils will demolish homes to avoid debt, he said that there was unlikely to be an overall increase in demolitions from this measure.   Hmmm... I'm not convinced. This looks like the policy people missed the consequence of thier policy. I don't like Nottingham and Birmingham's oppurtunism and cynicism, but have no doubt who is really repsonsible for this disastrous policy. Treasury.

Want to know where all the empty homes are? You can't

Imagine for a moment that there is a map of the whole country that shows where every empty home is, how long it has been empty, and who owns it. Imagine too that it is published on-line by the government, it is continually updated and is free to use. Wouldn’t that be amazing for organisations that refurb homes and create affordable housing?

Putting aside the privacy issues for a moment, who should be allowed to use this map? Should it be freely available to everybody?

If not, who?

Imagine no longer. The map actually exists as I described. It’s called the Empty Homes GIS Toolkit and is published by the Homes and Communities Agency. They, in conjunction with Ordnance Survey, who actually own the maps, decided, probably wisely, that access should be restricted. Unless you have signed something called the Public Sector Mapping Agreement you aren’t allowed to see the map.

Who is allowed to sign this agreement? Not, me, and not you, unless you work for what is considered to be a public sector body. This leaves the rather bizarre situation that:

Housing Associations
Housing cooperatives
Housing Charities
Universities …are banned from seeing the map

But Government departments, and local councils, and others including
Royal National Lifeboats
Mountain rescue services
Cancer registries
Areas of Outstanding National Beauty … are allowed full access

Now let's come back to those privacy issues. You wouldn’t want details of empty houses being broadcast to everybody would you? So the line has to be drawn somewhere. That somewhere appears to be between government and non- government organisations. The implication being only government organisations can be trusted with keeping information about property secure.  But a quick look at the list of signatories shows that the UK’s biggest broadcaster, the BBC has full access to the map.

So here is a goldmine of information that could be invaluable to housing associations and other affordable housing providers and help get empty homes back into use. That is hampered by a set of rules that prevent those that could use it actually seeing it. If ever there was a case of nonsensical bureaucratic rules that needed changing it is surely this.

Football wrings the last drops of money from thier communities

From London to Liverpool England’s richest football clubs are wringing the last few drops of money out of their communities by boarding up properties and homes for future developments.

Football is, or at least was, the working mans sport. The great clubs of this country were founded in the gritty working class areas of our towns and cities. The founder members of  the Football league from Blackburn , to Stoke, to Everton were set up where the men lived who worked in the heavy furnaces of Britain’s industrial heartlands.

Life was hard, but for ninety minutes on a Saturday afternoon working men could go and cheer and jeer their team a few minutes walk from where they lived. It created communities and identities for areas that frankly looked pretty much the same. Perhaps in the back of many football supporters’ minds was the remote possibility that they, their son or grandson could one day become a player for the club too. Occasionally it happened; Stanley Matthews was born around the corner from the Victoria ground where he became a legend for Stoke City, Bobby Moore was born just up the road from West Ham in Barking, and Paul Gascoigne was born over the river from Newcastle in Gateshead.

But many things have changed. Football has become a mega business. The Premier league (where Blackburn, Stoke and Everton still play) has become the biggest revenue-generating league in the world. Broadcasting matches to vast worldwide audiences and recruiting vastly paid players from every corner of the globe.

The working class man might well ask what this has all got to do with him and his hometown anymore. First the heavy industry disappeared, then the club moved away from their grimy inner city homes to smart corporate stadiums on the city ring road.  Finally the once remote chance of his son playing for the team disappeared altogether.

The final insult is the dismissive way some of the reaming inner city clubs are landbanking property around their grounds. This week housing minister Grant Shapps criticised Liverpool council and football club for the delay in redeveloping Anfield stadium.  This extraordinary saga has been dragging on for the best part of fifteen years. In the late 1990s Liverpool FC’s neighbours Everton asked the council if they could build a new stadium in the nearby Victorian municipal park; Stanley Park. Not surprisingly the council said no. But in a breathtaking act of cheek Liverpool FC then made the same request but with the added threat that if they didn’t get what they wanted they would move away from Liverpool altogether. Fearing that they would loose vast income from the club the council capitulated. Planning permission was given in 2008, but a change of ownership of the club meant the proposal was put on hold where it still sits. Meanwhile the club keeping its options open had acquired houses around its existing Anfield ground. All of the houses on Kemlyn road were demolished in the early 1990s to make way for a new stand. Homes in nearby Skerries and Lothair Roads were bought up and boarded up. To the club’s credit the Skerries road houses were eventually renovated and sold, but today virtually every house in Lothair road remains empty and boarded up waiting in case the club change their mind again and decide to expand their current stadium.

In London many houses on Tottenham high road stand empty and boarded up following August’s riots and arson. But fifteen have been empty for much longer. They form the frontage of the road behind which Tottenham Hotspur’s White Hart Lane ground sits. The properties were bought by the club for an apparently aborted plan to build a public piazza in front of the ground. These weren’t just any old buildings they included Georgian and Victorian houses many of which are listed buildings. The demolition of buildings like these would in normal circumstances be prohibited, but taking a leaf out of Liverpool’s book the club threatened to walk away altogether if it didn’t get what it wanted. Plans were mooted that the club would move into Wembley stadium and a bid was submitted to set up home on the site of the Olympic stadium.

As the country searches for answers as to why the inner cities erupted into disorder and violence in August, some of the football clubs that once defined these areas might pause for thought.  Have their actions and search for wealth added to the sense of purpose and stability of the areas they represent?  Or have they exploited them and threatened to walk away if they don’t get what they want? The streets of vacant property surrounding football grounds suggest the latter.

Councillor Richard Kemp and Why Houses Must Go.

Grant Shapps has again stepped in to delay the demolition of the Welsh Streets in Liverpool.  This saga has been dragging on now for seven  years. So long in fact that you would be forgiven if you'd forgotten what the point of the demolition was in the first place. So here is Councillor Richard Kemp to explain. Councillor Kemp is the leader of the Liberal Democrats in local government and vice chair of the LGA, a councillor on Liverpool City council and vice chair of a housing association. He is by all accounts a highly respected figure in local government and housing circles. But he has, as one Liverpool resident put it to me last week, “got blood on his hands.” This is of course metaphorical blood. But the polarisation of opinion on housing in Liverpool runs so deep that it would make little difference if it were real blood. Cllr Kemp has not only instigated many of the housing clearance programmes in Liverpool he is actively in favour of continuing the policy of demolishing houses and the Welsh Streets is his next target. In a recent blog post he explains why.

It (housing market renewal demolition) was predicated on a fact – Liverpool has too many two up two down Victorian properties for which there would not be a market to the current extent even if they were modernised.

A worrying start. This isn't a fact, it's an opinion, and one that doesn't stand up to much scrutiny. In areas where homes were modernised such as Chimney Pot Park in Salford the demand has been huge.

Anyway he goes on : We actually went and asked a vital group of people a simple question in 1998, “Why did you move out of Liverpool?” The answer was complex but compelling. They were moving because our services were crap and the housing did not meet their aspirations. They wanted to live in 3 bed roomed detached and semi-detached homes in a nice clean area with a good school. We didn’t provide any of these things.

The comment about crap services is refreshingly honest, but the rest is bizarre. Is this not how cities are supposed to work? People move to the best housing they can afford. They aspire to better housing, and if they can afford it they later move out to semis in the suburbs. The fact people did so in Liverpool is entirely normal. This is not to say that the Welsh Streets were without problems, but it hardly justifys knocking them down.  Had the Welsh streets had been left alone another generation of people would have followed. But the Welsh streets were not left alone. Instead the council consulted residents on whether they should be demolished. Cllr Kemp explains:

They (residents of the Welsh streets) overwhelmingly supported limited demolition. In the Welsh Streets for example after a 3 year consultation process 68% of local residents voted for a demolition programme and only 15% voted against. That’s democracy in action.

Note the word “limited” The consultation actually showed 338 against and only 97 in favour of the near total demolition of the Welsh Streets that is now proposed. It certainly isn’t democracy in action. But what would replace the demolished houses? Kemp explains:

In their place we would create demographically balanced housing with different types of accommodation and different tenures for different people at different times of their life. In other words we would build housing inside which communities could form and neighbourhoods would flourish.

Yet virtually no housing has been built to replace any of the houses that have been demolished in Liverpool. There are no plans for replacement houses in the Welsh streets. No subsidy to pay for new affordable housing. So what was it all for?

In Liverpool 8 if you brought up your children well, gave them a good education there was almost an inevitability that they would move out and take your grand children with them. In other words we had housing policies which by accident or design broke up families and communities because we allowed no flexibility of provision.

So the answer is to demolish the houses and move everybody out guaranteeing the community would be broken up?
Kemp's explanation shows the very strange thinking that led to this bizarre policy. On the one hand diagnosing real social problems and yet prescribing answers that only make things worse. Anyway  it all ought to be academic now. Not only has the government stepped in to try and stop the demolition, they have withdrawn the funding that paid for the whole programme. This might sound bleak, but there is an answer, It's one I have already proposed to the council, and one I will explain in my next post.

The Budget and how the housing sector got it wrong

The budget will no doubt grab headlines for the Chancellor’s neat little fiddle to petrol prices, but I’m more interested in what’s behind some similar footwork on new homes.

The budget introduces First Buy a £250million programme that it is claimed will help first time buyers buy homes. It does this by an equity share scheme that builds up enough capital to create a 25% deposit for a first time buyer. The cost is met partly by the government (10%) , partly by the housebuilder (10%) and partly by the buyer (5%). In this way a first time buyer who can only afford a deposit of 5% of the purchase price of a house can satisfy the lender’s requirement for a 25% deposit.

Commenting on this today, the housing sector is full of medical analogies. Richard Capie of the CIH on the Today programme this morning described it as “an adrenalin shot in the arm for the housebuilding industry which is still in intensive care.“ 

Campbell Robb at Shelter described it this afternoon as “sticking plaster on a broken leg” he went on “We now have a construction industry on its knees and the lowest levels of house building since the 1920s.”

This to me illustrates what is wrong. The housing sector has confused itself with the housebuilding industry. Every housing problem that is raised whether it be homelessness, overcrowding, poor living conditions or affordability the sector’s answer is “ we need to build more houses” Except the housing sector doesn’t actually build any homes. The housebuilding industry does. From the housebuilders point of view this is no doubt great news. They have had their business elevated to a moral necessity by organisations with the public goodwill of Shelter and the credibility of the CIH.

But few people stop to ask two important questions. Why is housebuilding so low?  and if it were to magically accelerate would it really solve all the country’s housing problems?

The answer to the first is easy. Housebuilders aren’t building, because few people are buying. Housebuilding is just a business operating in a market. Right now what it produces is judged by the market to be too expensive, and by lenders to be too risky (because lenders judge houses to be overpriced) .What would any other business do? Obviously drop its prices. But the housebuilding industry sees itself as a special case, and the housing sector reinforces this belief. Instead they think it is the duty of the state to construct new ways for people to afford homes at high prices, and also its duty to take the risk of the inevitable house price drop away from lenders.

The answer to the second question is harder to answer. Let’s just say that a million new homes are built this year (ten times what is predicted). Would it solve lots of housing problems? Given that as I discussed a couple of weeks ago there is no overall housing shortage in this country, who would buy them and who would live in them? As the vast majority of the homes would be for private sale, it is fair to say they wouldn’t be bought by people in housing need. Perhaps there would be a trickle down effect. Perhaps the oversupply of houses would cause overall house prices to drop. All these things are possible. But we would inevitably end up with far more vacant homes (probably about a million more). I think it’s highly likely that homelessness, overcrowding, and poor living conditions would be largely unaffected, but arguably housing affordability might be improved.

So what’s really behind Firstbuy? The package is available to first time buyers who buy new homes. I don’t have figures, but the vast majority of first time buyers buy second hand houses. First Buy is therefore simply a form of subsidy to help the housebuilding industry. Campbell Robb said today “Today’s announcement will help less than one per cent of people struggling to get on the housing ladder, leaving them more likely to win the lottery than be helped through this small-scale scheme.” He may well moan about it now, but by lobbying on behalf of housebuilders for so long the housing sector can hardly complain when the government takes them at their word.

For Sale Stan Laurel's House

The modest childhood homes of two of Britain’s best-known entertainers lie empty. But their fate appears very different.

Here’s Durham council on Stan Laurel’s empty childhood house “the Laurel link is vastly important for attracting tourists and generating money for the local economy.”

And here’s Liverpool council on Ringo star’s empty childhood house "Ringo Starr’s house has no historical significance demolition is the only option.”

It’s interesting to see that Durham council believe that the Laurel connection will lead to greater demand and a greater sale price for the house. We’ll see whether they’re right when the house goes under the auctioneer’s hammer next week.  If they are right, and I’m sure they will be, it will be interesting to see whether Liverpool will seek to learn the lesson, I suspect they won’t.

More Homes Fewer Empty Buildings

Policy Exchange is a think tank that is occasionally brilliant but sometimes bonkers. Who can forget their Cities Unlimited report from two years ago which advocated abandoning northern cities. It achieved the remarkable feat of uniting David Cameron and John Prescott in condemnation. Between them they described it as “barmy”, “the most insulting and ignorant policy I've ever heard” ,“Insane and complete rubbish”


But their latest report "More Homes Fewer Empty Buildings"  for me falls into the brilliant category. In fact it is one of those ideas that is so simple you wonder why nobody has come up with it before.  Allow people to convert empty commercial space into homes without the need for planning permission.  At the moment changing the use of a building into a home requires "change of use" planning permission. Not only is applying for this a bit of a bureaucratic obstacle course, the chance of success is low. Council planning departments are keen to protect employment spaces. A reasonable an important function you might think. But they make no distinction between operating sites that are actually employing people and vacant ones that employ nobody and have little prospect of ever employing anybody again. The truth is the planning system cannot protect employment, that is a function of the economy, it tries to do so by protecting sites, but it is poor proxy that has knock on effects causing redundant offices and rows of boarded up shops. As the report points out, even in the most economically active part of the UK, the South East of England, commercial vacancy rates are running at 17%. The same part of the country that demand and need for housing outstrips supply most dramatically.

As the report says  "We have a significant housing shortage at the same time that a large number of commercial properties are vacant or partly so. Not only is this a prime cause of urban blight, but the shortage of housing, combined with the current low rate of new house building, places a huge and potentially unsustainable burden on young people an family life."
The answer is elegantly simple. Commercial buildings that have been empty for more than a year should be allowed to convert into housing without change of use planning permission.

5 big housing lies and why the public doesn't buy the housing crisis

Earlier this month I was honoured to be a guest of the CIH president at his annual dinner. This huge annual event takes place in the Natural History Museum in London. Tables of the great and good of the housing industry were assembled around the Brontosaurus skeleton and under the gaze of Charles Darwin’s statue. This is always a helpful prompt to speakers enabling them to make self-deprecating jokes about how old they are how their views have had to evolve.

This year the speakers were in fiery form. There was a general theme that public and the media were not taking the housing crisis seriously enough. “Wake up and listen to the profession about the country’s housing crisis” We were told. The messages followed the common orthodoxy of our profession. You’ve no doubt heard them too There are record levels of housing need, record levels of homelessness, a record under-supply of housing,  the backlog in supply is increasing every year. The system is creaking at its seems, This is a time bomb set to explode, we must argue passionately for our industry. It was entirely honourable, but to me, strangely unmoving.

Last year I, along with 5 million others read the entertaining economics book Superfreakanomics. In it the authors; Steven Levitt and Stephen Dubner take a deliberately mischievous look at how things really work. They take the cold facts and come up with unorthodox conclusions. One example considers how the law affects prostitution. They argue that the greater the law cracks down, the more profitable and the more widespread prostitution become. The argument works like this. If the police arrest prostitutes they reduce the supply. The remaining prostitutes can therefore raise their price, making it more lucrative attracting more women to become prostitutes. In other words the orthodoxy of how to deal with prostitution is not only incorrect it's counter productive.

Now I don’t for one moment doubt the genuine belief and commitment of people in the housing industry expressed with such zeal by the CIH president and other speakers at the dinner, but I did wonder what Levitt and Dubner might make of it all. In the absence of persuading them to take a look I decided to try myself. I looked up the data and was slightly surprised to see that almost all of the facts and truths expressed by our industry on a daily basis turn out to be … well untrue. Here they are with references:

Truth 1: There is an undersupply of housing: Untrue, in 2008 there were 22,398,000 dwellings and 21,731,000 households in England a surplus of 667,000 dwellings http://www.communities.gov.uk/documents/housing/xls/table-102.xls

Truth 2: There is a growing shortfall in housing; Untrue, the growth in the number of dwellings in the UK has outpaced the growth in households every year since 1971 http://www.statistics.gov.uk/articles/social_trends/st41-housing.pdf

Truth 3: There are 5 million people in housing need waiting for social housing; Untrue, there are 1.76 million households on council housing registers in England which equates to about 5 million people. But these aren’t waiting lists, many of the households that are on them are in housing need, but others are not, anybody can register and some register in several council areas. Housing registers are a measure of demand for social housing. They are not a measure of housing need. www.communities.gov.uk/documents/housing/xls/141488.xls

Truth 4: Homelessness is increasing: Untrue. Last year 40,000 households were accepted as being homeless by local authorities, 25% down on the previous year and a third of the number in 2003/4 www.communities.gov.uk/documents/housing/xls/141488.xls

Truth 5: Social housing is in decline: Untrue- there has not only been an increase in social housing every year, but since 2003/4 the rate of increase has gone up every year. Last year 33,120 new socially rented homes were added to the stock. http://www.communities.gov.uk/documents/housing/xls/1406060.xls

Is this the reason that the country hasn’t woken up to the housing crisis?

This is not to say there isn't a housing crisis. Many people in this country live in completely unsatisfactory housing conditions. The housing system doesn’t work on all sorts of levels for people. I also acknowledge that although the indicators I have discussed show positive progress, it doesn't mean that progress can be sustained into the future with less public money. But surely what this says is that the housing industry is a success, it's making things better for people. Yes there's a lot more that needs to be done, but if we are going to get people at large to see housing as an issue of national importance we need to break out of the cosy consensus and stop pretending things are worse than they really are. What the industry is saying may not just be incorrect, it might also be counter productive. We shouldn't expect people to believe us if what we say isn't true.