Southwark – Peter John – the full ABC interview
November 17th, 2016
UPDATE: Read Heygate profits north of a hundred million by 35%.org
HT @adjournist retweet
This interview has triggered thoughts I’d tried to bury about the entitlement of leaseholders to be treated as fairly as secure tenants on a council estate, complicated by the fact I detest right to buy but count two leaseholders (second generation) among my friends. I will attempt to unravel the interwoven threads of the conflict with reference to the comments of Peter John in the interview linked above.
Anyone who takes an interest in public housing in London will come across these two graphics. I’ve posted them below. The first is from Shelter although I think it originated elsewhere and has been added to over the past few years in order to update it. The second is courtesy of 35% using data obtained by an FOI to Southwark council and shows displacement of leaseholders from the Heygate estate.
Shelter – historical housing supply
Heygate leaseholder displacement
Below is a chart showing tenant displacement. It is noticeably different from the one above. The leaseholders had to go a long way from SE1 to buy something equivalent in size with their CPO compensation.
Heygate tenant displacement
For me the exchange below gets to the nub of the whole estate regeneration problem. The Government, by withdrawing money from councils to build council housing, have hung the councils out to dry and to take the flack for involving developers in their plans as the only way to build new housing some of which is allocated for social rent.
It is disingenuous at best and politically inept at worst for the Tories to put the London boroughs in this position.
Like Pontias Pilate they can wash their hands of the problem and say “ask the boroughs”, who, starved of cash cannot now build new housing without some kind of deal with a developer.
In the exchange below we learn that £6000,000,000 has been withdrawn from affordable housing by the Tories which would previously have been available to fund the building of new social rented housing.
SC: Alright Southwark has set a minimum of thirty five percent of affordable housing stock on new developments why didn’t you get 35% on this deal why let this big Australian developer negotiate you down to twenty-five percent?
PJ: Because at the time that we did the deal in July 2010 the property market in London had collapsed the government had withdrawn £6bn pounds of subsidy from affordable housing which meant that rather than a subsidy of between £120,000 and £150,000 pounds per property for affordable housing you were getting something like £20,000 pounds.
It fundamentally changed the economics of the scheme and so we had to – we could have left it to the planning process and seen what came out in each, at each stage of the planning process but we wanted a guaranteed minimum level of affordable housing and that is what we’ve got twenty-five percent as I say.
Later on in the interview they discuss rents. Something is badly wrong with new developments when they are discussed in terms of market rents. Social or rather council housing used to be priced on income not the market. We need to return to that so nobody ought to be paying more than 30% of their net income in rent.
Setting the rates at a proportion of the market rent is to pander to the private rented sector and has nothing to do with letting homes to people on low incomes.
SC: Ok affordable housing means eighty percent of the market rate doesn’t it? Now in reality there’s very few homes in these new developments for working-class people what what used to be 1,200 homes of social housing will in reality be around 80 now when it comes to social rent won’t it?
PJ: There’s going to be well twenty five percent of the housing across the development is affordable housing that falls into a number of categories, part of it is affordable to buy so shared ownership and half of it is for rent.
The rented housing one and two-bed properties are at fifty percent of market rent and anything above that is at social rents which is about thirty to thirty-five percent of market rent so there are no properties which are being rented at the Elephant & Castle at eighty percent of market rent. Look. The point is nobody wanted to live on the Heygate estate, it was hard to let, it was sink estate housing there is a reason.
At this point in the interview (below) there is a fundamental misunderstanding between the two protaganists. Peter John is speaking quite truthfully about the status of secure tenants have the right to be rehoused in Southwark and Steve C. is trying to make the case that many people have been displaced to the fringes of London but he is not accepting the difference between the two groups of people, and this is important.
PJ: A lot of people who lived on the former Heygate estate have moved to those properties which are very close to the Heygate estate and very happy there. Others moved have moved further within the borough but if you were a tenant on the Heygate estate you had the absolute choice of where you moved to and you do have a right to return. Now not everybody’s going to want to come back but those who do can exercise that right and they are.
SC: But many of them can’t afford to move back in and they’ve moved to the fringes of London and many of these people were.
PJ: No, no, no, if you were a tenant there you you stay within Southwark if that’s what you wanted to do.
SC: If they could find a place that they could afford it?
PJ: No, no, no, absolutely not no you moved as a council tenant to another council property. Now there’s a difference with the leaseholders. If you’re a leaseholder, if you exercised your right to buy then it might be that you found that what we paid in terms of compensation wasn’t enough to rehouse you in Southwark and some people did move outside London.
In my view many leaseholders were ill-advised, unlucky, naive and in some cases even foolish. From the displacement charts above you can see that the leaseholders moved far and wide, where their money would take them, and we can argue forever and a day as to the level of the CPO compensation but on buying under right to buy or even as a second generation purchaser they knowingly bought onto a council estate which had originally been built for council tenants to rent.
There is a reason, when you look for it, why the noise coming from estates in London under threat of redevelopment comes mostly from leaseholders and that is because they don’t have the right to be rehoused in the same borough by the council and will likely not receive enough money in compensation to remain in the borough.
In the case of the original, discount receiving, right to buyers then I can understand the ambition to own your own home, and if you’d been paying rent for decades then yes, I can understand too that that looked like a worthwhile thing to do.
There were other cases, however, where elderly people were persuaded by family members to buy, perhaps ill advisedly, in the hope that those family members would, in due course, receive an inheritance that would not otherwise have come to them, and I have this on good authority from somebody who small remain nameless but nevertheless it has happened.
These unfortunate people when it comes to needing care, find they have disenfranchised themselves from the council care system because they exercised their right to buy and cannot now move from their previously rented council flat into a care home.
Employment
I have to take issue with Peter John here though:-
PJ: I mean one thing to bear in mind over the last six years in Southwark we’ve seen an increase in employment of those aged 16-64 over ten percent over ten percent in contrast to a borough North or the river like Camden one percent increase so we’re getting people into work because we’re seeing investment coming into the borough.
If you displace a large number of working class people of whom a proportion are unemployed and then redevelop an area to attract working people with higher incomes you automatically alter the employment figures.
Holly Street provided a good example of this in action and I think it is disingenuous of Peter John not to acknowledge that effect.
“PS – If you look around Holly Street they all say it is going to be much more than the buildings, it is going to be people but their solution to regenerating the area is, it isn’t about finding work for the existing people in the area it’s about shipping people out and bringing in people who do work and then ‘hey presto look at what we’ve done for the employment rate in the area’”. – Peter Sutton
In years to come we will find out whether Lend Lease did or did not in fact honour their commitment to make the agreed overage payement but by then Peter John will have retired and Lend Lease will be home and dry.
No doubt 35% will still be on the case which is a very good thing.
I leave it as an exercise for the reader to look through the 35% page linked above step by step, with the interview transcript linked here, to see where Peter John may be being “economical with the truth”.
Further reading here -> 35% blog