Is regeneration bringing slums back to London?

 At a time when millions of Londoners need affordable housing, local authorities are knocking it down and replacing it with luxury flats.

Toby Hill
17 October 2014

When St Katherine’s Docks were built on the Thames in 1828, 1250 houses were demolished, leaving 11,300 people – mostly port workers living in ramshackle slums - dispossessed without compensation.

In today’s London, this process has a glitzy new name: regeneration. Every year, its proponents and beneficiaries gather at MIPIM, the world’s largest property fair, where developers, investors and politicians network, strike deals and discuss opportunities. Usually, MIPIM is held once a year in Cannes – familiar waters for the super-rich, who sail their yachts into their personal docking spots and throw them open for lavish networking parties. But this October, an additional event is taking place in the Olympia Conference Centre in London.

To understand why the projects initiated at MIPIM can be compared to pre-Victorian slum clearances, let’s begin by travelling south, from Kensington Olympia to the Heygate council estate in Elephant and Castle. Heygate has become the paradigmatic example of the MIPIM-model of regeneration. Lend Lease, an Australian developer with several stalls at October’s event, are in the process of demolishing the estate to make room for 2400 luxury flats. For thirty years, Heygate provided Southwark with 1200 social-rented dwellings; the new development will contain 79.

Heygate’s former tenants have been moved out of their homes to make way for their richer replacements. Those who refused were dealt with via a Compulsory Purchase Order. Average compensation for a one-bedroom flat was £95,480; the cheapest equivalents in the new development will cost £310,000. Consequently, the vast majority have been scattered across south London.

At a public inquiry into the process, former Heygate leaseholder Terry Redpath traveled in from Sidcup to describe how he was affected. “I could no longer afford to stay in the area,” he said. “The compensation I was offered plus £45,000 of life savings bought me a terraced property 15 miles out of London.”

Heygate encapsulates how regeneration works – and why social cleansing is a more accurate term. At a time when millions of Londoners are in acute need of affordable housing, local authorities are knocking it down and replacing it with luxury flats. An affluent professional class moves in and, assisted by hedge fund managers with no intention of living in the homes they buy, entirely displaces the existing community. As Michael Edwards, Senior Lecturer at UCL’s Bartlett School of Planning, said at the public inquiry: “What is called ‘regeneration’ typically has perverse, unintended, negative effects of displacing precisely those people whose deprivation was taken as the justification for regeneration.”

Southwark Council is far from alone in encouraging this. Opposite Kensington Olympia, an £8 billion redevelopment involves the demolition of 22-acres of council housing to make room for 6000 luxury flats. The starting (and, for most of us, startling) price for a one-bedroom flat in the new development is £595,000. No additional social housing is being built but, on the plus side, a massive 11 per cent of the new builds will meet ‘affordable housing’ quotas.

But what do these quotas actually mean? They limit rental price to 80 per cent of the local market rate. According to the estate agent Foxton’s, the average rent for a one-bedroom flat in Earl’s Court is £476 a week. So a one-bedroom flat in the Earl’s Court development could be rented out at £380 a week – £1500 a month - and still be described as ‘affordable’. Bear that in mind the next time you hear Boris Johnson wittering on about affordable housing.

Or, if you prefer a more topical example, consider the background to the activism of the Focus E15 Mothers in Newham. In the wake of the Olympics, the local Council cleared the Carpenters Estate so it could sell the land to developers to build, yes, more luxury flats. At the same time, the Council was busy cutting its funding for homeless young people and telling those affected to leave their friends, families, studies and schooling and move 200 miles to Manchester or Birmingham.

Unfortunately for Newham Council, the deal fell through, with the result that their decision to place the desires of international investors above the needs of its most vulnerable residents was displayed in blazing lights: six hundred council homes sat empty as vulnerable young people were told to leave the borough or expect to become homeless.   

There are many such examples, with more emerging at an astonishing rate. As I was writing this article, Eric Pickles confirmed a Compulsory Purchase Order for the £150 million ‘regeneration’ of Shepherd’s Bush Market. In doing so, Pickles overrode the decision of a public inquiry led by planning inspector Ava Wood. Wood’s report had concluded that, "guarantees and safeguards are not sufficiently robust to be assured that genuine opportunities exist for current traders or shopkeepers (or similarly diverse businesses) to continue trading in the market." 

Together, these examples mark the first ripples of a wave that is set to engulf London over the next few decades. Londoners reading this have probably heard of Johnson’s decision to turn the Royal Mail’s Mount Pleasant sorting office into 700 luxury apartments. This is just the tip of the breaker: a survey by the New London Architecture think-tank showed that, of 236 buildings of more than 20 storeys that are either planned or under construction, 75 per cent are luxury flats.

Nourished by all this activity, an entire industry has sprung up dedicated to helping developers sidestep planning requirements that are intended to control a project’s impact on the local community. In every instance I’ve cited, the amount of social and affordable housing, along with the size of the levy paid to the local authority, has been eroded as time has gone on.

This is a microcosm of the way in which inequality undermines democracy throughout our society. The more that money is concentrated in certain hands, the more companies are set up whose entire raison d’etre is to give ever greater and more innovative advantages to the individuals and corporations able to pay for their services.

In the context of real estate, plush consultancies exist solely to help developers circumnavigate specific sections of national planning policy. And they’re good at what they do. Councils, forced by spending cuts to court the private sector, are in no position to send their ragged troops into battle against the immense legal artillery developers can deploy. Much easier to make a strategic marriage – and after all, doing so has its own benefits. In the case of Southwark Council and Lend Lease, wedding gifts included two tickets to the Olympics, worth £1,600 each, and an all-inclusive trip to one of MIPIM’s opulent jamborees in Cannes.

Originally, the Heygate regeneration plan encompassed 1200 social units, where existing residents were to be re-housed. On this model, 28.5% of the new dwellings would have been social housing. But, among the many changes negotiated by Lend Lease, the number of social units was reduced to 79 – 3% of the total. Instead of getting the houses they were promised in early consultations, disgruntled residents were offered ‘happiness therapy’ with the guru Robert Holden, author of the best-selling book Shift Happens!

A similar situation occurred in Haringey, where developers NDP are conducting a £400 million regeneration of Tottenham Hotspur’s football stadium. Initially, the project included an affordable housing component of 100 homes, and a Section 106 contribution – a levy intended to offset the impact of the project on the local area – of £16 million. By the time plans for the development were finalised, the 100 affordable homes had been ditched and replaced with 285 flats solely for private sale. Oh, and the Section 106 levy had been slashed to £477,000.

Understandably, in light of this wheeling and dealing, some local authorities have sought to be stricter about the projects they approve. Down by the river in Deptford, Convoy’s Wharf – site of the first Royal Dockyard, established by King Henry VIII in 1513, and a key location in the history of the East India Company - caught the eye of the Hong Kong-based mega-developer Hutchinson Whampoa.

Hutchinson drew up plans to build three vertiginous towers on the site. Lewisham Council opposed the development due to a lack of affordable housing. But this wasn’t enough to stop it. The developers took their claim over Lewisham’s head and went directly to Boris Johnson, who waved it through after a single three-hour session. It’s useful to bear this anecdote in mind, in case you meet anyone yet to notice the real, steel-edged interests glinting beneath Boris’s bobbing straw-topped head.

Meanwhile, as council estates are razed and affordable housing quotas bypassed, a housing crisis is engulfing the rest of the capital. 344,000 households in London are waiting for a council home. People affected by this crisis can’t afford to buy at the cheapest end of the city’s housing market, let alone enter a gladiatorial theatre where a one-bedroom flat costs £600,000. Most Londoners find themselves with no influence over the way their city changes, powerless to resist a process that is selling off public land and pushing the poorest of them out of their homes.

This crisis is summed up in a superb LRB essay by James Meek, titled Where Will We Live? Meek talks to a woman in Tower Hamlets who is being forced out of the home she’s lived in for 30 years by the bedroom tax. Her husband died, so her two-bedroom council flat now has a ‘spare room’. She is set to join a borough waiting list for a one-bedroom flat that currently runs to 10,000 people. Last year, 840 became available.

This, then, is the social backdrop to MIPIM’s champagne-soaked debut in London. Johnson is the event’s keynote speaker. Southwark Council officials will be out on a jolly, trotting along the South Bank to enjoy a day of lavishness and star treatment far from the usual experience of working in local government.

The best that can be said for any of this is that at least London’s poor are faring better today than the dock workers booted from their homes without compensation back in 1828. But we shouldn’t become complacent, or fall into an uncritical acceptance of the myth that western history is progressive. As James Meek argued in the LRB, the modern history of housing in London may yet prove to be cyclical rather than linear. The mounting tension of the housing crisis has to find some outlet, some resolution.

In The Road to Wigan Pier, Orwell is outraged that over a quarter of a Lancashire miner’s monthly wage goes on rent - a proportion that would strike many 21st century Londoners as a bargain. Untold thousands are sharing small rooms with several other people, or living in half-converted sheds, garages and outhouses. A couple of years ago, Newham’s now-beleaguered Mayor Robin Wales was shocked to find a family paying to live in a walk-in freezer. Nearby, he discovered 38 people living in a single family home. His solution seems to be to cleanse the poor from his borough. Really, he should be asking: are the regeneration projects he supports bringing slums back to London?


A shortened version of this article appeared in Left Foot Forward.

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