The presentation…
1. examines the reasons as to why urban regeneration of the ward has been labelled as not getting “any tougher than this”;
2. looks at how the approach to masterplanning by the City of Westminster in 2016/17 differs from the one for the Masterplan previously agreed;
3. gives an account of the City of Westminster’s record on affordable housing delivery;
4. identifies three spirals of social and tenure polarisation at work in Westminster;
5. clarifies the implications of meeting housing targets by resorting almost exclusively to council-owned land;
6. analyses the causes for the concentration of poverty in Church Street;
7. identifies the consequences of the commodification of the social housing stock, illustrated by maps based on publicly available data;
8. provides a thorough tenure and housing market analysis for the regeneration area;
9. delves into the looming policy change regarding tall buildings;
10. concludes by assessing the extent to which the effort of building affordable homes in Westminster will remain at the mercy of national housing policy and by sketching out some policy alternatives.
What’s making Regeneration so tough in the Church Street Ward, City of Westminster?
1. IFHP maxim: United Nations Habitat III New Urban Agenda:
Article 13. “We envisage cities and human settlements that: […]
(b) Are participatory, promote civic engagement, engender a
sense of belonging and ownership among all their inhabitants….”
Some insights from one of the many participating,
engaged inhabitants of the urban regeneration area
Westminster City Council chose not to inform about
this event: Achim von Malotki 1
The Urban Regeneration Area
selected for the IFHP Event
10th – 12th May 2017
2. The London Housing Event is billed as:
So, how tough is it?
And if it really doesn’t get any tougher, what might be
the reasons?
That is what this presentation shall examine….
Be assured, the billing and framing of this exciting IFHP
event is of great interest to all fellow Church Street
volunteers and this presentation illustrates a great deal
of their thoughts… 2
3. What’s making it tough? Could it be the local people in
the regeneration area?
• Residents and local
businesses are pro-
development.
• The Futures Plan was
agreed by Church Street
residents by public vote.
• It is the first phase of the
previous Masterplan for the
area, developed in 2010.
• Aim was ‘to create a better,
more sustainable, more
mixed neighbourhood’ and
deliver more homes.
3
4. As it was then:
4
Futures Plan Charter:
• Remarkably collaborative
planning approach, putting
meaningful engagement of
stakeholders centre-stage.
• “We will involve local
residents as fully as
possible…. and ensure
that everyone has the
opportunity to participate
and contribute their
views and ideas.”
• “A proposal which does
not have the broad
consensus of residents
will not proceed to
planning application.”
5. The Church Street Masterplan since 2010/11:
• The first phase of the Masterplan to deliver 306 new homes alone.
• More planned in the second phase whose main development sites have
also been agreed in principle.
• To accompany the planning process and implementation, a Futures
Steering Group and several working groups with local stakeholders,
residents and businesses were set up, which have been meeting for
almost four years.
• The Futures Plan has active and meaningful resident- and stakeholder
engagement at the core of its strategy: many committed and
knowledgeable individuals have for years pushed for the plans to be
implemented, motivated by the strong desire to see their
neighbourhood improve.
• The transformation of the neighbourhood for the benefit of its
residents and businesses, the creation of sustainable growth and
employment, was regarded also by Westminster City Council (WCC) as
essential, especially given that it is considered to be highly deprived. 5
6. Between 2011 and now: what has NOT changed…
• Continuity on the volunteer side (unlike council staff who have
been exchanged completely)
• The factual situation on the ground:
The majority of residents have remained engaged for seven
years – despite…
very little investment into public realm and implementation of
developments actually happening.
• The London Mayor’s policy guidance: “The fundamental approach
underlying the process should always be to engage early and
meaningfully with existing residents. As the primary stakeholders,
residents of an estate must be given sufficient opportunity to
engage with and shape any proposals that will affect their homes,
and they should be proactively supported to do so.” (Draft Good
Practice Guide to Estate Regeneration.)
6
7. As it is now: The Masterplan 2016/17
What has changed?
IFHP members may ask themselves: why are local people not invited
to or participating in the London Housing Event?
It’s about their neighbourhood after all!
• Contrary to the Masterplan of 2011, the Masterplan of 2016/17 is
being drafted essentially without local stakeholder involvement.
• The Church Street public is told to wait until the finished draft
Masterplan is published, on which it will merely be consulted.
• WCC’s Church Street team has been completely exchanged, often
stripped down to skeleton staff.
• Conclusion: WCC’s masterplanning approach of 2016/17 is top-
down and decidedly non-collaborative.
• All this is astonishing at a time when the Localism Act, empowering
local communities, is in force.
7
8. • Costing up to £93.3m per hectare, acquiring land is often the
major expenditure for central London developments.
• This is why development of affordable housing is now largely
confined to areas where land is in public ownership.
• It’s the main reason why WCC planners never speak of the
need to create ‘mixed communities’ in affluent parts of
Westminster.
• WCC is the predominant land owner in the Church Street ward.
• Added bonus: Church Street only has two small conservation
areas in a borough where these cover 75% of its area. So,
much fewer restrictions on bulk and height of new buildings…
The new [Edgware Road] Housing Zone will: […] “make the most
of the council’s land for development. It will also help other public
sector partners to do the same.“
The London housing crisis and the race for quick fixes:
8
9. And it might be time to make up for a dismal
record on affordable housing delivery…
Westminster City council has underperformed for
decades regarding any category of affordable housing,
particularly social housing:
Affordable housing completions 2011/12 to 2015/16:
• Camden: 1,420
• Islington 2,210
• Lambeth 2,310
• Southwark 3,320
• Tower Hamlets 4,750
• Kensington & Chelsea: 590
• Westminster 780 (Source: DCLG Dec. 2016)9
10. How about the diagnosis? - “There are areas of poverty and
deprivation, right next to areas of extreme affluence.”
That is certainly so. But are the reasons understood?
• It’s characteristic of many, particularly inner London locations, but wildly more
extreme in Westminster.
As we shall see, there are several polarisation spirals at work…
• Local authorities, even Westminster, have to address housing need of those
unable to pay with a much dwindled, largely sold-off social housing stock. This
has become highly residualised, i.e. allocated to those in highest priority
housing need – which often equals having a history of poor physical and/or
mental health.
• On the other hand, almost all non-social housing areas in Westminster are
affluent, prime-property territory, accessible only to those with (often
enormous) inherited property wealth or to investors (often international)
seeking a safe haven and bet for capital gain.
• The polarisation between traditionally deprived, social-housing stock-
dominated neighbourhoods and the rest, is systemic, relying entirely on the
mode of allocation: either ‘need’ or ‘ability to pay’. 10
11. Unoccupied prime property encroaching on Church
Street: 70-76 Bell Street
This is not a
home…
11
It’s a shell for
capital gain, a
storage of
value.
12. ‘LAW’ OF HOUSING NEED:
Only those in deemed in highest
priority need, commonly associated
with poor health, have any chance
of being allocated social housing.
LAW OF THE HOUSING MARKET:
Only those who can afford
Westminster house prices, wealthy
individuals or corporate investors,
can buy.
Regeneration policy attempt: creating
‘mixed communities’ – mixed tenures
12
Westminster: The
polarisation
spiral harder at
work than
anywhere else:
13. Is Westminster City Council serious about
creating ‘mixed communities’?
The theory: Westminster City Plan Policy S15:
• “Residential developments will provide an appropriate mix of
units in terms of size, type, and affordable housing provision to
contribute towards meeting Westminster’s housing needs, and
creating mixed communities.”
The practice
• The development of the site 466-482 Edgware Road in Church
Street is the ‘affordable’ housing component of a development
almost one mile further south: developer Almacantar’s mixed
commercial/luxury flats development at Marble Arch, with flats
overlooking Hyde Park.
• The GLA supported the development in principle, but expressed
concern about the lack of affordable housing on the main site.
The only social mix near Marble Arch will happen on the street!
13
14. Private developers
commonly allowed in
Westminster to discharge
their affordable housing
duty by ‘in lieu’ payments or
to deliver the affordable
housing component of their
developments off-site.
Proclaimed ‘mixed community’-aim
14
Westminster: The
polarisation
spiral and
developers’
viability criteria:
Developers successfully
arguing that their
schemes would be
unviable if they allowed
affordable housing to be
co-located with
developments they build
in upmarket areas.
15. If that was not enough: there is a third polarisation
spiral gearing up: population density
Or: when trying to achieve housing targets, why
resort to the ward that is already the most
densely populated, not just in Westminster, but
in the whole of London?
The Church Street ward with a population
density of 290.20 persons per hectare (LGA)?
15
16. Population density in Westminster
(Source: Local
Government
Association
Website)
Church
Street
16
17. Avoidance of areas with
private landownership,
conservation areas, and a
shrinking, but highly powerful
and well-connected NIMBY-
minded populace.
Concentration of new
housing in already highly
populated areas where land
is publicly owned, with few
conservation areas, and a
local public deemed
incapable of resistance.
Increasing abandonment of the ‘mixed
community’ policy principle in the desperate
drive for greater housing quantities
17
The new
housebuilding
trend in
Westminster:
18. The separation of Church Street from its environs
will increase, not decline…
The Church Street ward is surrounded by
prime property areas with three quarters
of buildings at just three storeys or fewer.
However, these are not singled out for
development.
How come? - Land ownership and land
values are the key reasons…. Something
national housing policy could address,
but does not.
How about access to public transport? Church Street has a Public Transport
Accessibility Level (PTAL) of 34.5.
While much higher than in most parts of London, within Westminster this is
only average, where PTALs range from 66.4 in St. James's to 14.7 in the
Regent's Park ward. A higher PTAL is recognised by urban planners as being
able to support a higher level of sustainable residential quality density.
Church Street’s PTAL hence does not mark it out for increasing density
among Westminster’s twenty wards. 18
19. Talking about conservation areas: where these are few, any
attractive architectural heritage comes at a premium…
Terrace of
Victorian
properties
on Edgware
Road, of
architectural
merit
Church Street
stakeholders
wish to
preserve.
19
20. And then look at the stretch of Edgware Road just north….
20
This lies west
of Church St.
site 2, for
which
development
was already
agreed in
principle.
How would
you rate its
conservation
value by
comparison?
21. Here is what’s really tough: the further concentration of
poverty in Church Street
• Church Street is the ward with the smallest absolute and
relative rise in median incomes between 2001/02 and 2012/13
of all London wards: 16.6%. By contrast, Canning Town south in
Newham, near the ExCel and London City Airport, experienced a
66.2% rise. (Source: GLA Household Income Estimates 2015,
London Datastore website)
• It is one of the few London wards where average incomes have
declined in real terms in the decade prior to 2013 (see following
slide)
• What is has in common with the rest of Westminster is the sharp
difference between mean and median incomes – an indicator of
great income inequality within the ward, with relatively few
households on high incomes skewing the statistic mean upwards.
21
23. This is in spite of the fact that…
Source: Housing in London 2015:
The Evidence Base for the Mayor’s Housing Strategy 23
…due to the
benefit caps
people living in
the private rented
sector receiving
Housing Benefit
had to move out
of costly areas
into those with
lower private
sector rents,
mainly in outer
London.
24. One more reason for why it is tough that WCC does not
tend to explore:
• The fight against windmills: You cannot build as much social
housing in Church Street as is lost through the Right to Buy (RTB).
• Central government has effectively shifted subsidies away from the
social housing sector (grants) to its privatisation (RTB discounts).
• Right to Buy sales were incentivised by increasing discounts on the
sale price to tenants to up to 70%, or £103,900 in London.
• Especially in central London areas RTB has been open to abuse:
private companies have been offering cash incentives (increasingly
over £100,000) to tenants to move out so that the property can be
rented out privately at market rates.
• Interestingly, at the last count, in Westminster 22 % of RTB sales
were to people in receipt of Housing Benefit at the time of
application. Remember: this is a means-tested benefit. The
maximum of savings allowed for claiming it is around £16,000.
24
26. How the Right to Buy plays out in Church Street
• Of the ward’s 4,719 residential properties WCC’s Arms Length
Organisation CityWest Homes (CWH) alone managed 3,030 or
64.2% in 2014. These are divided into two ‘villages’ within the
ward: Church Street and Lisson Green.
• So whatever happens to the existing stock, has a significant effect
on housing parameters overall in Church Street.
• When the Futures Plan was conceived, the properties managed by
CWH were overwhelmingly tenanted, with only 27% leaseholders,
far lower than the 44% in Westminster overall at the time.
• Buyers in the more affluent areas (e.g. Marylebone, St. John’s
Wood) had stayed put as owner-occupiers rather than becoming
absentee landlords.
• By contrast, in the Church Street ward the majority of leaseholder
homes was let to other people.
26
27. Tenure status of CWH-managed properties in the Church
Street ward 2014 in comparison with 2011 (in brackets)
27Source: CWH Village Manager Questionnaire, AVM.
28. Urban regeneration, like in Church Street, tends
to accelerate Right to Buy sales…
• As is clear from the previous table, within just three years 259 council homes for
rent have been lost – more than the Futures Plan will deliver as ‘affordable’
homes.
• Meanwhile in Westminster overall there has been hardly any shift at all, with the
figures for late 2014 showing 45.1 percent leaseholders, 54.9 percent tenants.
Neither has there been much change in the adjacent management ‘villages’ of
Marylebone and St John’s Wood where the share of leaseholds was already high
in 2011.
• The number of leaseholds particularly in the Church Street ‘village’ within the
Church Street ward shot up, increasing its share by 10 percentage points –
almost closing the gap to the Westminster average.
• Large numbers of tenants in London exercise their RTB where and when a
regeneration scheme is announced (Association of London Government 2003: 4).
• Anticipation matters: if an area is destined to receive inward investment and a
rise in its popularity is expected, sitting tenants will be encouraged to buy,
causing what is termed ‘in-situ change’ of the neighbourhood.
28
29. The Right to Buy: it’s not just the privatisation
but the commodification of social housing…
• Privatisation: sitting tenant acquires the flat he/she lives in through
RTB and becomes a lessee (home owner).
• Commodification: formerly publicly owned (hence non-commodity)
housing enters the housing market when the lessee
(sub)lets the home
Or sells it – in Church Street most frequently to a commercial buyer who lets
it.
• In the private rental sector the home turns into a commodity to
extract rent from.
• Owner-occupier homeownership increases only temporarily
through the RTB. In the long term, private renting increases.
• The turnover-rate of privatised homes - originally allocated on
grounds of need – to commodities is particularly rapid in central
London locations like Church Street.
29
30. When the commodification of homes does not
lead to gentrification but to impoverishment…
Gentrification is commonly defined as a phenomenon of urban social change
whereby members of the middle classes change their location preferences to
live in formerly predominantly working class inner-city districts.
In Church Street, however:
• Instead of increasing the share of owner-occupiers, RTB tends to be used
mainly as means for capital gain.
• Majority of buyers tend to either leave the property to (sub)let it privately
or sell it off as soon as possible.
Private tenants (in the un-refurbished council housing stock) -
• Are often from the same ethnic group as the landlord (lessee),
• On comparatively low incomes, often qualifying for Housing Benefit.
• Due to low incomes have to spend a much higher share of their income on
rent for a home of the same (or worse) quality as the council tenant’s next
door.
30
31. The return of landlordism in the shell of the social
housing stock
• With the social housing stock being gradually hollowed out, letting private
homes within social housing blocks can be one of the most lucrative
sources of capital gain to be had anywhere, even if homes are let to
people who would traditionally have qualified for social housing.
• As there is such dire housing need, private tenants, especially those from
immigrant backgrounds, are willing to spend almost any share of their
modest income on rent, just to gain a foothold.
• Indeed, one breadwinner is often not enough. One-bedroom flats have
become family accommodation, for a couple with at least one child, often
two children. Consequences:
Overcrowding.
With lower disposable incomes after housing costs, purchasing power
for local spending is severely limited.
• As private sector tenants they do not qualify for being rehoused if their
homes are demolished. 31
32. It’s not just ownership that changes with RTB –
the communities change too when flats are let privately…
• The neighbourhood will change if homes are let at high rents to a
transient population. Two thirds of private renters in London
reside in their homes for less than three years.
• As private renters tend to spend a large part of their income on
rents (often now above 50%), their purchasing power may be
limited even if they have comparatively high incomes.
• Due to these high rents they are deprived of the chance of ever
owning a home, with often detrimental consequences for their
mental health.
• Recent government legislation explicitly allowed short-term lets in
the private rental sector.
• High population churn will lead to greater numbers of people not
rooted and not participating in the neighbourhood.
32
33. Due to the shift of homes into the private rental sector
Church Street may become poorer still…
Private sector rents in Church Street 2013 (Ward profile 2014):
Median rent for a 1-bedroom flat: £375 per week.
Median rent for a 2-bedroom flat: £550 p/w.
• These are rent levels which put Church Street (probably due to its
central location) near the median private sector rents for
Westminster.
• However: its population is the poorest of all wards. Median
incomes were are just £26,290 in 2012/13, the latest available
data (see following slide).
• Median private sector rents are the highest in Westminster when
compared with median incomes.
This means: If the commodification trend for the existing social
housing stock continues, incomes after housing costs will diminish,
purchasing power will decrease, the ward will become poorer still.33
38. What else is making it tough?
Local house prices mean that the vast majority of the Church Street
population currently renting have been priced out of their
Neighbourhood
House Price Analysis with price-paid Land Registry Dataset
Number of homes sold each year per geographical unit:
38
39. Median house prices in comparison since 1999 (from 1999 to 2011
two-year-intervals, since 2011 annually; YTD: ‘year to date’)
39
Research:
AVM
41. Conclusions from the house price data analysis
• In comparison with 1999 and relative to the original investment made,
ex-council homes in the Church Street ward offered the highest returns
in 2014 of all categories.
• Homes in the Church Street ward overall (that include ex-council
properties) start to outperform in relative terms both Westminster &
Camden and London overall early on, from 2001 consistently until 2014.
• No particular effect due to the inception of the Futures Plan, which
would have left its mark since 2011, is perceptible.
• Substantial profit to be made when former publicly owned dwellings,
purchased at a discount, are resold on the open market. Not only does
the discount benefit the buyer, but homes are commonly also
undervalued.
• Especially when taking into account the RTB discount, acquiring a
council property in Westminster offers capital returns unmatched
anywhere in the capital markets.
41
42. What does this mean for local residents?
• Estimated mean annual household income for Church Street is £44,380,
the median annual household income merely £26,290 (GLA Household
Income Estimates 2014).
• House prices in Church Street, including those formerly part of the
publicly owned stock, are out of reach for but a few of the ward’s
residents.
• Ratio of house prices in Church Street for 2014 versus the local annual
mean household income would be an already unsustainable 10.3, with
regards to the median annual household income a staggering 17.4.
• In other words:
If they do not already own a home, the vast majority of Church Street
residents have effectively been priced out of their own
neighbourhood. Moreover, they are also unable to access the private
housing market (owning or renting) in most other parts of London.
42
43. The ward in ZOOPLA’s property heat map:
The property market is currently suppressed due to the fact that most
properties are publicly owned, occupied by people on sub-market rents.
One way to turn the Church Street area red would be to allow substantial
private development, ideally tall buildings…
43
Even with GLA £2,000,000
recoverable grant funding it
is unlikely that affordable
housing targets will be met
without considerable cross-
subsidy from the sale of
private homes…
44. Talking tall buildings…
WCC’s policy stand, while under review, still holds:
• Westminster City Plan, under POLICY S26 VIEWS:
• “Westminster is not generally appropriate for tall
buildings.”
• Westminster Unitary Development Plan POLICY ENV 13
(E) “The City Council will normally resist proposals which
result in a material loss of daylight/sunlight, particularly to
existing dwellings and educational buildings. In cases
where the resulting level is unacceptable, permission will
be refused.”
THESE POLICIES WERE INTRODUCED FOR VERY GOOD
REASONS OF UNDIMINISHED IMPORTANCE. 44
45. Building new council stock: it might all be for the
birds…
Watch if the Conservatives stick to their previous Election Manifesto:
• What’s the point of building new council-owned social housing if
these good-quality new homes automatically fall into the category of
‘high-value stock’ which will have to be sold off to fund the
extension of the RTB for Housing Association tenants?
• Even if payments were to morph into a ‘high value asset levy’ that
councils would have to pay to the treasury, the funds will have to be
found somewhere – with the sales of assets as most likely source.
• Conservative government has always made sure that councils cannot
escape the RTB rules by creating their own housing companies.
• Westminster Community Homes as a company with charitable aims
will be just as much at the mercy of the Conservative Election
Manifesto as Housing Associations were previously.
45
47. Here are a few suggestions…
Without a radical change of national housing policy the London
housing crisis cannot be brought under control.
• With regards to the Right to Buy, it is understood that this was
introduced to give council tenants an opportunity for upward
mobility. But why grant a taxpayer-funded discount when already
the construction of the property the beneficiaries live in would
not have been possible without subsidy? In terms of social
justice, why should it be fair to give additional support to those
who already enjoy considerably lower rents and much greater
security of tenure than those in the private rental sector?
However, a much more profound change would have to begin with a
redefinition of ‘ownership’ of residential property. As the way we
are housed is fundamental to our lives and withholding
consumption is not a viable option, homes must not be treated and
traded like a commodity similar to any other.
47
48. Suggestions - 2
It often helps to look elsewhere for orientation:
• Interventions in other global cities can be a good indicator for
what might work: Singapore and Hong Kong imposed
considerable levies on foreign property buyers and promptly
turned out to be the only cities with marked declines in prime
property prices (Hudson 2015). This has, however, not affected
their overall ‘pull’ in attracting foreign investment.
• In London the prices of homes increasingly reflect their expected
value relative to other investment assets. In Germany the
definition and scope of home ownership is restricted to that of a
consumer good and the use as a financial asset is strictly tied to a
home’s use value. Leaving a home unoccupied, for example, is
severely penalised in most growing German cities. The type of
investor just seeking capital gain of any sort is deliberately driven
away. 48
49. Suggestions - 3
Critics who blame a slow and inflexible planning system for the
housing shortage conveniently forget that over the last 10 years
planning approvals have been given for approx. 1.5 to 2 times the
actual number of homes finally built. It’s not the lack of planning
permissions forthcoming, but something else that’s preventing homes
from actually being built (see GLA Economic Evidence Base 2016).
It is possible to drive down land values to more sustainable levels
when options for the stock sitting on urban land are restricted to what
a housing market is for: homes to live in. The ‘growth premium’, the
indicator of expected future rent increases, is a key factor for
determining land value. Slowing down the rate of rent rises by
replacing assured shorthold tenancies of just 6-12 months with
considerably longer tenancies as a rule would not only rebalance the
power between landlords and tenants, it would also drive down land
values – opening up other areas for ‘affordable housing’ than merely
those that are publicly owned – even in Westminster. 49
50. Selected References
• Aldred, T. (2010) Arrested Development. London: Centre for Cities.
• Atkinson, R.; Kintrea, K. (2004) Opportunities and Despair, it’s all in there: Practitioner
Experiences and Explanations of Area Effects and Life Chances. Sociology 38 (3), 437-455.
• Cheshire, P. (2017) Turning Houses into Gold: the Failure of British planning. [LSE Blog.]
• Davies, B.; Snelling, C.; Turner, E.; Marquardt, S. (2017) Lessons From Germany: Tenant
Power in the rental Market. London: Institute for Public Policy Research.
• Hudson, N. (2015) The Value of Land. A leveraged Bet on House Prices?
http://www.savills.co.uk/research_articles/186866/188996-0
• Lund, B. (2011) Understanding Housing Policy. Bristol: Policy Press.
• Scanlon, K.; Whitehead, C. (2015) Proposals for Regulation of the private rented Sector:
an Analysis. London: London School of Economics.
Websites:
• DCLG Live Tables of affordable Housing Supply:
https://www.gov.uk/government/statistical-data-sets/live-tables-on-affordable-housing-
supply#history
• GLA Household Income Estimates 2015, London Datastore:
https://data.london.gov.uk/apps_and_analysis/gla-household-income-estimates/
• Local Government Association:
http://reports.esd.org.uk/reports/14?oa=E09000033&pa=E09000033%3AAdministrative50