The “Create Streets” lot are being mithered by the very serious people again. Dave Hill of the Guardian and Faisal Islam from the Ha! Ha! Poors Channel have been at it since the turn of the year.
London housing crisis: Create Streets? Fine. But who decides? http://t.co/Pz6x2ep2yG
— DaveHill (@DaveHill) January 10, 2014
— Faisal Islam (@faisalislam) January 6, 2014
The main reason seems to be that their Tory in residence, Peter Lilley’s old bag carrier Nicholas Boys Smith, has had a piece in Conservative Home. It must be time to scramble the Unacceptable Behaviour Team.
Says Boys Smith:
The problem is not just that there is limited space but that despite the desperate need for new housing, specific new housing projects often encounter local opposition – with long consequent delays. Just look at the controversy surrounding redevelopment at Earl’s Court or the Heygate Estate in Southwark.
Right. He also says:
However, if the potential long term returns from estate regeneration in London are excellent why is nothing happening? It is partly because the politics of regeneration are so hard. Put simply most people just don’t like most recent developments. It is also because the short term cash flow and returns from this type of estate regeneration are pretty bad. This is due to the cost of demolition, the time required for the additional value of an attractive ‘place’ to feed through fully to sale prices & market rental values and the need to ensure all those in social housing on the current site are re-housed.
He goes on with a policy recommendation or two. First up is some stuff about evil “high rise” (actually, not all the places he mentions are high-rise, or at least they’re no higher than his mate Heneage Stephenson’s 8-10 story projects in Dublin), and a bit of watered-down new urbanism about “connected streets”.
Actually, the architectural stuff is very flaky. We are told that:
current rules in London are even sharply biased against high density streets
the long term returns of developing low density post-war estates as attractive, high-density ‘normal’ and well-connected terraced streets of houses and medium rise flats could be fantastic
conventional high-density street-based developments generate 32 per cent more value per hectare
Many new large scale regenerations are being done at a sort of uber-density that is unpopular
So, to sum up, density is great and we should have more of it, but it’s also unpopular and evil and we should have less of it. Huh. Let’s forget the bullshit and get to the meat.
His big idea is that the Public Works Loan Board, the agency through which the central government finances local councils’ building projects, would lend money to the “owners of large estates” to knock them down and rebuild like he wants. These owners would have the right to sell the new properties privately and also to use Right-to-Buy sales to pay off the loan from the PWLB.
Obviously, if private sales and RTB are meant to pay off the loan, they need to happen. So we’re basically repeating the whole 1980s disaster over again, just for starters. He also suggests that the PWLB, and therefore the Treasury, might take a share of any capital gain on the value of the land and buildings in exchange for charging a lower interest rate:
Possibly rates could be more generous if there was some exposure to any capital value increase in the site
This implies selling or mortgaging the property in order to raise the cash to pay back the Treasury. Given that he would presumably work under Boris Johnson’s “affordable rent” rules (i.e. 80% of average market rates), and he intends to sell a whole lot of units, it is very obvious why there might be “local opposition” – the homes are going and they ain’t coming back. If anyone did manage to stick around, they would only do so by drawing heavily on Local Housing Allowance.
Is this cynical? Not for a moment. Boys Smith has already said that he doesn’t want to re-house the people who live there already:
the need to ensure all those in social housing on the current site are re-housed
And, of course, he wants something doing about their right to object to his plans via the planning process:
specific new housing projects often encounter local opposition – with long consequent delays. Just look at the controversy surrounding redevelopment at Earl’s Court or the Heygate Estate in Southwark
But that’s all right. He doesn’t believe they are real people.
Surely a massive increase of supply of good normal housing that real people want to live in is an idea worth piloting in the budget for March?
The “local opposition” wants to live there; presumably they aren’t really people.
Anyway, so “Create Streets” wants:
1) A carve-out of the planning laws
2) A huge soft loan from government
3) Continuing flows of LHA from government
4) To keep the proceeds of selling public lands
5) To use the coercive powers of the state for its profit
Isn’t this the definition of crony capitalism? And it’s a past modus operandi, too.
We know, after all, that one of “Create Streets”, Mr Heneage, is currently trying to pay off his debt to Ireland’s NAMA, the entity through which Irish taxpayers bought their banks’ bad deals, by offering the land he wanted to cover in 10 story minitowers as payment. And he’s already had three years’ forbearance on interest and principal off the Irish.
No wonder, then, that as Nicholas Boys Smith says:
parts of London which are well-connected and in the form of high-density terraced streets and squares are more valuable, other things being equal, than areas which are not.
Indeed. Being well-connected is always very valuable.