OK so, we’ve had the Tories’ big idea, Right to Buy in clown shoes, denounced at the same time by the Southwark Renters’ Maoist reading group and the Confederation of British Industry. Truly, the coalition was the golden era of the harebrained scheme and the half-baked thinktank.
But let’s try to keep a straight face. What if the idea isn’t to “move” social housing, but rather to replace it in-situ? Travelling without moving; wasn’t that a Jamiroquai song? The Tories apparently want to sell councils’ most “expensive” homes.
Expensive here is a term of art; as everyone already pointed out, they are already built and don’t cost that much to run. What is expensive here is the land they sit on, which should point us clearly towards London. The idea is that as long as this land is not sold, the local authority is foregoing the money it could get from selling it, and this is a kind of cost. However, the local authority cannot just sell because it has a legal obligation to house people. What to do?
A surface reading of the proposal tells us that the homes sold would be replaced by “cheaper” ones. Most comment on this assumes that this means building new somewhere else, on cheaper land. But as we are now talking about building new, it might also mean building more cheaply, or perhaps more cheaply from the point of view of DCLG, in other words, getting someone else to pay.
Now, the proposal is that 12,000 “expensive” flats would be sold. This, of course, doesn’t clear the land they are built on – right-to-buy property is always leasehold on the council’s land. At the same time, 12,000 more “cheaper” units are meant to be built. These are described as “affordable”, a word that has a specific legal definition – it means that the rent is set at the 80th percentile of market rents in the area, usually about three times the social rent charged by local authorities. In effect, this means that more tenants end up claiming more Local Housing Allowance, a straight transfer from taxpayers to landlords. The NAO has scored the cost of the Tory proposal in LHA at £3.9bn.
The policy statement says that councils will “oversee” the process. Obviously this does not state that they will own the replacements, nor that they will be the client for the job. One way in which it might indeed be “cheaper” from a council or DCLG point of view would be if the job was done by private developers. The money from sales would be used to get the ball rolling, but they would borrow the rest, in the knowledge they could count on a substantial revenue stream from LHA. This might explain the Natalie Bennett-esque weirdness of the numbers involved.
I don’t know about you, but this makes me think about the emerging lobby for “estate regeneration” and the curious entity, “Create Streets”, run by intimate of Peter Lilley and ex-Tory MP, Nicholas Boys Smith, his mate Heneage the Dublin boom-era developer who dumped his losses on the Irish taxpayer, and George Osborne’s old speechwriter.
The idea is that either major London estates get clear-felled, and then rebuilt at much higher density and 80% rents, or else that a lot of new, 80% rent, property gets built as in-fill in the existing ones. Either way, a lot of people lose their existing homes in exchange for promises, and the 80% rents get billed to the central government budget for Local Housing Allowance. A hint that we’re going this way might be the mention of a £1bn fund being set aside for “brownfield”, i.e. urban, projects.
This outfit is seriously under-scrutinised and the reason is that it is hugely well-connected and is paying for a lot of lobby, with God knows who’s money. Here’s Faisal Islam uncritically nodding along. Here’s mysteriously influential unelected pol Andrew Adonis rebranding it “city villages” alongside Gary Yardley of Earl’s Court Project infamy and his ex-Blairite PR man who happens to be all over Tessa Jowell’s campaign for mayor like a nasty rash, in a piece by the Guardian‘s Dave Hill that takes the opportunity to complain about the dirty hippies in fine Iraq War-era style:
On the plus side, City Villages takes on some of the head-bending housing supply issues that much of London’s current, high-profile, oppositional housing activism hasn’t much to say about…Activists are against that too…
He’s sort of aware of the problems, but he just wants to mourn this terrible lack of civility from the internet juicebox mafia. I remember that. Well, Dave, if it’s ideas you’re after you could try the London Labour Housing Group blog. But the last time we did this the government minister responsible’s son ended up owning them all. You can see how some people might be a little tetchy.
The other take-away from this is that clearly the day after the election will be time to pull, roll, and get on the Jowell campaign’s tail. The thing about being oppositional is that you have to learn to like it.