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.