Urban Regeneration and Renaissance in England: Tensions, Exclusions and Market Responses
p. 163-184
Résumé
This Chapter sets out the main directions of housing policy and housing debates in England since the election of the New Labour government in 1997. Housing is no longer best regarded as the wobbly pillar of the welfare State. Indeed home ownership is now a central pillar of the modem British welfare State which is no longer based on the formula emerging after 1945 and associated with Beveridge. Although the expressed aims of housing policy have increasingly been to address affordability problems the paper argues that these problems and inequalities of asset ownership are endemic in the model. A different approach may also be needed in the future as the impact of the credit crunch in 2008 has introduced an unexpected element into housing problems in Britain.
Texte intégral
1 Urban Regeneration and Renaissance have become very prominent features of the urban and housing policy debate in England since 1997 and there is an apparent consensus over these issues. This paper outlines the policy agenda but suggests that, as we move from the rhetoric and policy statements towards delivery and implementation, a range of tensions are more apparent. Some key issues concerning the roles of residents, displacement and trickle down, rather than being emerging tensions, are evidence of an underlying timidity in the approach adopted. The paper refers to the background before 1997 and identifies four key elements that have combined to raise the profile and priority attached to housing policy. It then identifies a series of tensions associated with the new approach and with market responses to the policy and concludes that the gaps in policy and delivery remain significant.
Building a new agenda: regeneration and renaissance
2The background to this paper is the rediscovery of a policy agenda associated with regeneration and urban policy following a period in which such policies were unfashionable. Most of the eighteen years of Conservative government between 1979 and 1997 were associated with the diminishing importance of housing and fragmentation of urban policy (Oatley, 1998). Deregulation and privatisation had marked the policy approach of the 1980s and early 1990s and the abandonment of regional policy and abolition of the GLC and metropolitan counties signalled a withdrawal from coherent regional and local economic planning and policy and a reliance on market processes and the trickle-down effects from market development. There were some high profile initiatives including Urban Development Corporations, missionary expeditions to Merseyside and elsewhere following urban disturbances and property-led activities including Estate Action and Housing Action Trusts. None of these had as much impact on the State of English cities as did changes in the management of the economy, rising income inequality, the erosion of welfare benefits and changes in taxation and employment. There was a step change in social and spatial inequality and this was evident within cities and major urban areas.
3By the mid-1990s, there was some reflection on this legacy, increasing concern about international competitiveness and an active debate about where to house household growth in England (a projected average of 155,000 per annum 1996-2021-or more). The failure to involve large parts of the urban population in the mainstream of the economy was also increasingly seen as a drag on the economy and requiring policy intervention rather than being accepted as an unavoidable, natural consequence of the operation of the market. The review of urban policy completed in 1994 (Robson et al, 1994) identified the lack of integration of existing policies as rendering them ineffective. The response was a revived role for new Government Offices in the Regions and the amalgamation of a number of separate funding streams to support a new Single Regeneration Budget (SRB) first introduced in 1995. The approach needed was a broadly based regeneration strategy with targets to achieve measurable success within a geographical area; and it meant funding the best strategies that were most effective in involving employment, training, education, housing and other elements rather than funding strategies that relied on any one of these or being persuaded simply to channel funding to where the problems were greatest. To this extent, there was a rethink: but there were no additional resources for regeneration and geographical targeting still betrayed a view that there were pockets of poverty rather than more widespread problems meriting a different geographical focus.
4The New Labour government elected in 1997 committed itself to the spending plans set out by the previous government. Nevertheless it broke the mould by strengthening regional institutions (with devolution to Scotland and Wales and the establishment of new Regional Development Agencies in each of the English regions) and acknowledging problems of social exclusion. The competitiveness of British cities globally and regionally was explicitly recognised as a key to economic success and the cities agenda moved firmly to the heart of government policy. The establishment in August 1997 of a Social Exclusion Unit (SEU) to coordinate government’s efforts to tackle the problems of social exclusion in the UK involved a striking change of language and recognition of problems of poverty that had been scornfully denied by previous Conservative governments. While there was consistency with the approach established through the Single Regeneration Budget with emphasis on holistic policy approaches to economic and community regeneration the SEU was explicitly needed to deal with some of the failures of the welfare State.
Over the last generation, this has become a more divided country... the poorest neighbourhoods have tended to become more rundown, more prone to crime, and more cut off from the labour market... They have become no go areas for some and no exit zones for others. (NRU, 1998: 9)
5The priorities identified by the Social Exclusion Unit appeared to avoid housing and, for example, the New Deal for Communities programmes explicitly excluded housing investment. The flexibility of the term social exclusion also left some uncertainty over what could be expected. Despite the rhetoric of joined up thinking it appeared that many of the mainstream policies continued to take little account of the spatial and social issues highlighted in the social exclusion agenda. For example, approaches to rents and subsidy for housing seemed likely to increase segregation and took no account of differences in regional housing markets and patterns of demand. Both the housing and social exclusion agendas also continued to be largely built on assumptions that neighbourhood and estate problems were best addressed through small area (neighbourhood) approaches concentrating on management and behaviour.
6Against this background the present paper identifies four key strands that have transformed the presentation of housing and related urban policy since 1997.
Urban Renaissance
7The Urban Task Force (1999) was chaired by Lord Rogers, a leading British architect, and its lengthy report, Towards an Urban Renaissance (1999), set out to counteract urban sprawl through high-density development. It drew inspiration from the examples of high quality urban design in high density developments in European cities. It addressed where the projected 4.4 million new households to be formed by 2021 would live but turned its back on evidence that people’s choices were often for rural and suburban low density housing. The report argued that mixed tenure development, and high quality design, would secure the long-term sustainability of urban areas.
Housing Supply
8In 2000 a Housing Green Paper (DETR, 2000) set out the future direction of housing policy. The continuity with the previous decades was signified by the language of choice that appeared throughout and particularly in choice based lettings schemes, the continuation of the Right to Buy, additional options to transfer stock from local authorities to housing associations, a new “decent homes” programme and the convergence of social housing rents in different market areas to reflect market differentials. There was no reform of housing benefit in spite of the continuing growth in costs. The most significant signals of change were in the changed attitude to homelessness and to the development of a decent homes standard and targets to reach this by 2010.
9The approach to affordability problems did not change significantly but there were some new proposals for key workers. Concern about housing affordability problems became more prominent through the subsequent period. Labour had continued to see the planning System as the principal way in which it could ensure that there was a supply of affordable housing. This was in spite of the evidence of the very limited impact of affordable housing policies (Whitehead and Crook, 2000). A new Planning Policy Guidance Note 3 issued in 2000 further developed the Conservatives’ approach to using the planning System to promote affordable housing provision and the Housing Policy Green Paper (DETR, 2000) had continued the emphasis on local authorities’ housing strategies identifying the proportion of new housing in their own areas that should be affordable. In April 2003, Kate Barker was asked by the then Chancellor of the Exchequer and Deputy Prime Minister to conduct a review of issues affecting housing supply in the UK. The remit was to consider the weak responsiveness of the new build housing market in the face of rising house prices and concern that this adversely affected economic growth and hindered the achievement of major macroeconomic and European policy objectives.
10An interim report, produced in December 2003, indicated that housing supply affected economic and social well-being and the Final Report (published in March 2004) asserted that a substantial increase in house building would be required to achieve long-term stability in the housing market, with house price increases held to a low and pre-determined level. Existing levels of building were insufficient and an increase of between 70,000 to 120,000 units per annum in England was needed to improve affordability trends. The report acknowledged that this could have environmental consequences and contained several recommendations aimed at changing the planning and delivery processes for new house building. The Review also indicated that additional funds would be needed to deliver additional social housing to meet projected future needs.
11Following her earlier reports, Kate Barker was invited in 2005 to conduct a review of the land use planning System in England. The terms of reference were to consider how, building on recent reforms, the planning System could better deliver economic growth alongside other sustainable development goals. Kate Barker in her initial report, and more strongly in her review of the planning System, concluded that the key reason for the shortage of housing supply and the inflation of house prices was that the planning System was delaying and preventing the private sector from building what it wanted to. Her analysis came down on the side that the planners were to blame rather than the developers. An alternative view was that developers were sitting on large land banks and had planning permission to build housing which was not produced rapidly: this would suggest that the problem was the practices of the construction industry and of developers and the way in which they sought to ration supply in order to maximise profits. In the light of the collapse of new construction in 2008 following the credit crunch, a third possible explanation relates to the willingness of Financial institutions to lend whatever households wanted and thus facilitating an inflationary effect.
Sustainable Communities
12The Communities Plan was published in February 2003 ahead of the Barker review (ODPM, 2003). Housing now began to take on a much higher profile and, reminiscent of the rediscovery of poverty in the 1960s, there had been a rediscovery of housing problems. The Foreword to the Communities Plan referred to
[...] reversing the legacy of decades of neglect and under-investment [...] For more than 30 years this country lost its way. All governments failed to meet housing need. We built housing in a way that failed to put the needs of communities first. We did not invest for the long-term. We now have an opportunity to do things differently and to break from the past [...]
13The Communities Plan marked the revival of government interest in housing. It involved a regionalisation of housing policy with capital expenditures being determined regionally through a single housing pot combining the previously different channels from ODPM and the Housing Corporation. Appointed Regional Housing Boards were introduced to join up the separate capital allocation mechanisms existing within housing but also to begin to join housing up with other services (jobs, health services, schools, transport) and with regional strategies for planning, economic development and transport. All of this joining up is consistent both with the earlier preoccupations of the SRB and social exclusion agendas.
14The Communities Plan emphasised a sustainable approach to housing and planning-long term approaches which would stabilise communities and remove the need for periodic injections of funding to the same areas to address the same problems. It acknowledged the need to develop different policies in places with different markets with a focus on the problems associated with growth and affordability in London, the south and east of England and low demand problems in the Midlands and Northern regions. The disparity in the level of resources initially announced for these two agendas emphasised the extent to which housing and planning policy was now driven by the problems of the South East. The concern was to respond to the problems occasioned by the economic drivers in the South East while doing nothing to damage the competitiveness of that region internationally-whatever the consequences for regional imbalance within the UK.
15In the Midlands and the North this implied a small, targeted capital programme and a housing and neighbourhood management programme with Housing Market Renewal Areas (HMRAs) forming the flagship investment policy. HMRA money was strongly ring-fenced for housing alone. In the South and East of England, continuing housing shortages, difficulties in labour force recruitment and retention and heightened affordability problems meant that a more active housing policy continued. However, this was largely being promoted through the use of planning powers supplemented by a more generous public expenditure package, targeted upon growth areas and key workers.
Delivering Social Housing
16In the aftermath of the general election of 2005 and with housing higher up the political agenda a new Department for Communities and Local Government was tasked with delivering the overall housing targets set by Kate Barker and increasing the supply of social housing. In anticipation of new legislation to make sure that targets would be met (including those increased social housing) the Secretary of State commissioned new reviews related to social housing but continued to emphasise the economic importance of housing and the priority attached to home ownership (Kelly, 2006).
17John Hills was invited in 2006 by the Secretary of State for Communities and Local Government to review the future of social rented housing. The review reported in February 2007 and was welcomed by the Secretary of State. What emerged from the Hills review was a somewhat static and inward-looking account of the social rented sector. The report did not grasp the opportunity to examine whether there could be a renaissance of social housing in England. Rather, it was preoccupied with making the residual sector a better one to live in and with providing people with routes out of it. In that sense, the report could appear to be adopting an approach wholly compatible with the previous direction of policy and the preoccupation with home ownership.
18The second review of social housing, carried out by Martin Cave had a focus on regulation. In setting up the review the Secretary of State noted that it was some 30 years since the housing regulation System had been introduced. Although levels of satisfaction with social housing were relatively high compared with other public services, these levels were falling and public expectations were of a greater influence over services. The current regulatory System needed to be more flexible and transparent.
19The Cave Review (Cave, 2007) embraced what is conventionally regarded as the social rented sector (local authority housing, Arms Length Management Organisations (ALMOs) and Housing Associations) and unregistered bodies able to apply for Social Housing Grant. This definition brings together social housing providers which have previously been subject to separate regulatory regimes. The review includes important proposals to create a single, new, independent social housing regulator, a single ombudsman for the sector and for the provision of a national tenant voice. It set out a clear purpose for regulation to protect tenants, the wider quality of life and taxpayer interest. The review set out the requirements for a new System to ensure continued provision of high quality social housing, to empower and protect tenants and to expand the choice of provider. It aimed to establish a regulatory System focused on the needs of tenants rather than providers and proposes important changes as a result. It also separates out the roles of developer, owner and manager.
New Priority for Housing
20The elements identified above have combined to significantly alter the attention given to housing planning and policy. Housing was much higher up the political agenda, but the policy being pursued was essentially the same: it was still dominated by home ownership and would continue to reinforce the trend towards a more unequal home ownership sector and the maintenance of the status of social rented housing. By 2007, with a new government led by Gordon Brown, housing policy had risen to the top of the agenda. For the First time in many years, the Housing Minister, although still not a Cabinet member, would attend the Cabinet. The Barker Review, carried out for Gordon Brown when he was Chancellor of the Exchequer, remained the touchstone for policy.
21As the British government more and more enthusiastically embraced home ownership as the way forward for housing, so the inflation of house prices in the home ownership market was increasingly being the focus of comment. 2006 and 2007 saw a continuation of the stream of media and research reports highlighting the consequences of increasing prices for different sections of the community and emphasising an affordability crisis across much of the UK. Government itself repeatedly referred to affordability problems and the actions taken following the original Barker Review reflected both the government’s approach to the crisis and the need to increase housing supply.
22It is against this background that a new Housing Green Paper, Homes for the Future: More Affordable, More Sustainable (DCLG, 2007) and new legislation was prepared. The Green Paper highlighted government’s preoccupation with housing supply and affordability and reasserted the view that increasing supply would restrain house price growth. While more social housing was part of the agenda it remained a small part. The Housing and Regeneration Bill introduced into Parliament in 2008 had three principal objectives: to improve the supply and quality of housing in England, to secure the regeneration or development of land and infrastructure in England and to support in other ways the creation, regeneration or development of communities in England and their continuing wellbeing, with a view to meeting the needs of people living in England. As part of this, the Bill proposed the establishment of a new Homes and Communities Agency which would combine the responsibilities previously associated with English Partnerships, the Housing Corporation and parts of the DCLG. The new agency would have a budget of some £5 billion per year and would be the key agency in achieving Government’s objectives in relation to the increase in housing supply. It would not be just building agency but would be involved with regeneration and with enabling and acting as a catalyst for community regeneration.
23Part 2 of the Housing and Regeneration Bill proposed the establishment of a separate office for tenants and social landlords. This effectively would end the co-location of the investment and regulation activities previously combined within the Housing Corporation. While its investment functions would go to the Homes and Communities Agency, its registration functions would go to the new Tenant Services Authority.
Tensions and Exclusions
24The policy strands identified in this paper comprise an assembly of ideas and recommendations related to urban and regional development in Britain. They complement actions in other fïelds and reflect government s concern both with competitiveness and cohesion-but more with the former than the latter (Harding, 2005). The agenda was preoccupied with the performance of the economy-and London and the South East are critical for that. Issues of affordability and housing supply (especially in the South East) threaten the economy and actions to create a more flexible planning System and to enable the market to work (and build for sale) without increased demands for subsidy are critical. All of this potentially puts the countryside and the politics of regional balance at risk-unless development can be concentrated in major urban areas (but not so far restricted to these as to further distort the market). So the formula is one of balancing effective management and joining up of policies and different interests to achieve an uneasy mix: enabling building where prices are highest but also following the route approved by the architectural establishment by going for new high density niche markets in cities. Finally, to close the circle, there needs to be attention given to less prosperous markets, households and communities.
25The apparent consensus around regeneration and urban renaissance, however, obscures a number of real tensions. The tensions associated with the regeneration and urban renaissance agenda have become more apparent since the Urban Task Force, Urban Renaissance and Sustainable Communities plans were introduced and as their potential implications have become clearer. The discussion of tensions in this paper grows out of research work and a working relationship with the West Midlands Regional Assembly and the preparation of the Regional Housing Strategy as well as some limited involvement with discussions around the Regional Economic Strategy and the Regional Spatial Strategy.
Regional Tensions
26The driving force for both the Urban Task Force Report and the Sustainable Communities Plan was perceived problems in the South East of England associated with projected demographic growth. The Labour government elected in 1997 was not tempted to revert back to a Keynesian regional redistribution policy. The Chancellor of the Exchequer, Gordon Brown, had signed up (when in opposition) to endogenous growth theory and there was a preoccupation with the threats to the British economy from globalisation. There was a view that London, as a world city, was an enormous asset to the British economy and that strategies which would inhibit economic development in London would ultimately be damaging to the economy as a whole. They would not result in a redistribution of economic development within the UK but rather drive that economic development out of the UK to competitor regions in other parts of Europe. The Treasury is widely accepted as having increased its influence over housing and urban policy issues-evidenced by the commissioning of the Barker review and other interventions.
27Faced with this underlying economic orthodoxy, the booming South-East economy was drawing in international and national migration and adding to the effects of natural demographic increase and the reduction in household size. The projections of population growth suggested the greatest expansion would be in the South-east. Some dramatic images of this were that a new city of the size of Sheffield would be required to be built in the South-East by 2020. The newly elected London Mayor was bullish about the case for economic growth in London and actively pursued a strategy to grow the London economy. There was political support for an economic growth agenda for London and the South-East as being in the best interest of the UK economy as a whole. However there was also a concern about urban sprawl: households which had achieved the rural idyll or suburban idyll in the Southeast did not wish to see demographic growth dramatically alter their backyards. The politics of planning and housing in the South-East meant that the majority of local authorities did not want the growth to occur in their patch. The environmental lobby and the supporters of the greenbelt could also be seen as resisting some patterns of residential development.
28In this context the Urban Taskforce’s agenda was a convenient one. The support from the architectural establishment for modem, high density development within major urban areas and preventing urban sprawl matched the predilections outlined above. The urban renaissance agenda offered the prospect of meeting demographic growth and housing need without urban sprawl, damage to the greenbelt and the environment. The sustainable communities plan had a slightly different take on this but one that was consistent. It identified four growth centres which would see a concentration of residential development and this would protect the rest of the region, (the South-East and the Eastern region as well as Greater London) from the pressures of demographic and residential growth. A Growth Centre Strategy would also be more consistent with concentrating investment on improvements in the infrastructure-roads, schools, and so on. The Planning profession and private builders were not averse to this formula. It opened markets to developers and high density development would enable them to absorb the impact of the requirement to include affordable housing within developments (as required under planning law) without squeezing their margins. It has been argued elsewhere that this represented a new coalition of interest around a pattern of development (Murie and Rowlands, 2007). Rather than the pressures of demographic and economic growth leading to major conflicts between public and private sector interest or between major urban areas and rural areas, there was a formula which met everybody’s priorities to a very considerable extent.
29While HMRA gave some apparent priority to the Midlands and the North, the regional imbalance in the agenda remains. The bulk of spending and ministerial attention has gone to the South and attempts to decentralise government are limited and slow. HMRA is regarded as having an uncertain future and prestige projects (the Millennium Dome, the new Wembley stadium and developments for the 2012 Olympics) were focused on London. At the same time, not all regions think the high density development promoted by the Urban Task force is right for them and the countryside and environmental lobbies remain concerned about the scale of development proposed in the South-East in particular.
30If the Sustainable Communities Plan was successful in setting an agenda both for the Midlands and the North and the South, the consensus around this has become strained subsequently. As time has passed, the policy of growth centres in the South and Housing Market Renewal in the Midlands and the North has begun to seem less satisfactory. There was almost immediately a concern expressed in the West Midlands about the proximity of the growth centre in the South Midlands to parts of the West Midlands that were seeking to regenerate. While the presentation was that these were growth centres that would take the pressure off the South-East housing market, there was a question about whether, in practice, they would develop into something closer to the notion of growth magnets. Rather than draw demand from London, they would draw demand from Coventry! To what extent would the high investment infrastructure and the development of a modem housing stock matched with modem roads, schools and other facilities become a competitor that would attract people who otherwise would have looked to live 30 to 40 miles away within the West Midlands region? Would Greater Milton Keynes grow at the expense of parts of the West Midlands region that were already suffering from changes in the economy? Rather than the Sustainable Communities Plan setting a basis for regeneration in the West Midlands, would the impact of growth centres adjacent to the region deepen the crisis in the economy and the housing market in some parts of that region?
31In practice there was very little real evidence available to anticipate what the likely impact of the Sustainable Communities Plan would be overall. Some evidence was brought into play related to turnover and filtering and this suggested that the impact of growth centres was more likely to be on the adjacent areas rather than on, say, Inner London. There was also discussion of both migration and commuting patterns to calm fears of any impact by showing that there was little movement across regional boundaries. The data, however, referred to existing patterns and not everyone was convinced. Government and the regional bodies where growth centres were occurring simply denied the possibility of an adverse impact on adjacent regions but the concerns remained.
32These concerns can be linked to the growing debate within the Midlands and the Northern regions about why there were no growth strategies for them. In effect, there was a rejection of the view that what was needed in the Midlands and the North was a management of decline. One example was the proposal, in the Northern Way, for a development corridor linking the declining industrial cities of the North from Liverpool through Manchester across the Pennines and through to Hull and Newcastle. In the West Midlands, the arguments for growth centres in East Birmingham/North Solihull and through Wolverhampton and the Black Country to Telford were examples of the same kind of thinking. Why should growth only occur in the South, especially as the costs (environmental and development costs) were higher in the South?
Housing Market Renewal
33The counterpart of the growth centre debate is: why should housing market renewal only occur in the North? The assumption in the Communities Plan was that less attractive or successful housing markets in the South of England, in a buoyant economy, would be renewed through market processes. But, this is unproven. One of the greatest anomalies in the North/South divide is the extent to which there are dramatic concentrations of deprivation in parts of the South especially in Inner London. These are concentrations associated partly with immigration and the role of London as a gateway City (providing low quality and low priced housing for international migrants when they arrive in Britain before they move on). If this is an essential part of the structure of the City and the housing market and should not be interfered with or regenerated there are other parts of the London housing market which provide longer term permanent housing that is very unattractive. This particularly applies to larger Council estates in London-remembering that neither the Right to Buy nor stock transfer has had as much impact on some London Boroughs as is generally the case. So we have enclaves of housing within the booming South East economy that have exactly the same problems as the low demand estates that are subject to action in the Midlands and in the North under Housing Market Renewal and other agendas. They are socially and sometimes physically obsolete and do not meet the aspirations of households. Consequently residents often move on when and if they can.
34It would have been more logical to have both growth and renewal strategies in both the Midlands and North and the South of England. If the growth strategies are missing in the North because they did not fit the economic orthodoxy, the renewal strategies are probably missing in the south because they would raise other spectres. These relate to privatisation and redevelopment and issues about rebalancing the housing market m London and the South-East so that there was a less concentrated affordable housing provision in Inner London and more affordable housing in the secure suburbs and beyond London’s outskirts. The politics of these agendas within inner London, the Greater London area and the South-East more widely would deter the faint hearted.
High Density Development
35Following the Urban Task Force, high density development has become a feature of all cities and even of some small towns. Developers are content to participate in high density development as part of Section 106 agreements but the concerns emerging are about the nature of these developments. High density developments are predominantly of apartments and they are one and two bedroom apartments usually with very small kitchens perhaps opening off a single living-room. These are not traditional dwelling types for the British market and it is argued that their size will not make them attractive in the long term. They are not attractive to families with children and they have been disproportionately purchased by investors. The emerging communities then have high proportions of private rented housing and low proportions of families with children. Questions are raised about the kinds of communities that are created and about the extent to which they meet particular needs. If family sized accommodation is being replaced by small apartments unsuitable for families then there are issues about displacement. All of these issues have been increasingly voiced, there have been some alarmist references to these neighbourhoods becoming ghettoes for the homeless, but there is a more balanced critique of these areas and the extent to which they meet agendas about social mix, tenure mix and income mix (Murie and Rowlands, 2007).
36There is a further take on this issue. The Urban Renaissance Strategy has increasingly been associated with the development of City Living in major provincial cities as well as in parts of London. Parts of these cities that had very little residential accommodation have seen a dramatic growth-in Manchester, Birmingham, Leeds and elsewhere. The reality is that these developments were well under way before the Sustainable Communities Plan. For example, Birmingham’s initial steps to develop City Living were associated with the development of the National Indoor Arena and the International Conference Centre planned and developed in the late 1980s and early 1990s. Government has begun to take credit for Urban Renaissance that was happening anyway (or facilitated initially by European Union Funding in the case of Birmingham) and then adopted by a development industry which became convinced that new markets that they had said would never exist, did exist. These developments occurred largely without replacement of existing residential property. The conversion of warehouses and other industrial properties, the clearance of derelict industrial sites and building new housing all avoided concerns about displacement and gentrification. The fact that they are developed largely as housing areas for middle and higher income households is a different issue when these households are not displacing lower-income or working class households.
Displacement and Gentrification
37As the urban renaissance and sustainable communities agendas have developed, so the further regeneration of neighbourhoods has come up against issues about clearance, displacement and gentrification (e.g. Cameron, 2003; Smith, 2002). The Housing Market Renewal Programme in particular has come under increasing attack for being predicated on an unnecessary level of clearance of existing properties including older terraced housing in the private sector. Criticisms have come from the Homeless lobby, from conservation groups, from communities directly involved and from academic commentators. Part of the problem may be in the limitations of the original analysis and prescription informing the policy, but the problems also seem to be associated with the extent to which a new Housing Market Renewal agenda has been transformed back into the old Planning and Environmental Health agendas associated with clearing unfit properties rather than creating new markets. Perhaps a weakness here is the failure to establish new bodies to lead on Housing Market Renewal and the ability of Local Government to continue to influence or prevent the programme from developing as intended. So, for example, it is argued that in some cases the Local Planning Authority has not signed up to Housing Market Renewal and limits the development of inventive strategies.
38The problem in this is partly that the low demand areas in the private sector rarely have whole streets and blocks which are abandoned as in the USA. There are neighbourhoods in British Cities with very high levels of vacant property and areas where properties are difficult to sell or sell for very low prices. But these areas include residents with no intention of moving-especially long term and elderly residents who are attached to the neighbourhood and the property. Block clearance comes up against these groups and means that any lack of sensitivity to these issues will present problems. The tendency of Local Government professionals is still to see a process of mass clearance and renewal rather than gradual or selective renewal and refurbishment over a longer rime period.
***
39Arguably these problems are not evident in public sector estates. In these areas, there will still be residents who want to stay, but there is a higher proportion of residents who do not like the properties they live in and will see clearance as an opportunity to move on; and who are younger and with changing needs and aspirations. Even in these areas however, there has been a critique associated with gentrification and drawing on the imagery of Neil Smith’s revanchist city (Smith, 1996). This presents government policy as a faintly disguised attack on neighbourhoods and the people who live in them. It is further argued that approaches to anti-social behaviour and the management and policing of these neighbourhoods betrays a less than sympathetic approach. Rather than regeneration and renewal being seen as creating opportunities for people to improve their material living conditions or move from poverty neighbourhoods, they are seen as devices to penalise and punish lower income households.
40The reality of this is more difficult to establish and no doubt varies from place to place. However, the limited research that is available suggests that displacement effects are not as great as would be implied by the revanchist model and that the process of consultation and involvement of local communities is also incompatible with this model. It is undeniable however that the strategies being pursued for poverty neighbourhoods involve reducing the level of poverty. This one definition means that it is a strategy for gentrification. Government’s emphasis on tenure mix and social mix can be seen as an enthusiasm for gentrification and perhaps it should do more to emphasise improvements in living conditions and the quality of housing in the social rented sector as a demonstration of its intent to ensure that lower income households also see improved opportunities (see Rowlands et al., 2006).
41Issues about clearance displacement and improvement of housing all relate to a more fundamental issue about the involvement of residents and there is a tension which is unresolved in the debate in Britain. People are capable of espousing both sides of a debate which on the one hand emphasises the need for bottom up approaches (resident empowerment and resident control); and on the other hand asserts the need for strategies that relate to longer timescales and more ambitious competitiveness agendas, which involve other stakeholders which enable rapid decision making, reduce the delays associated with planning and which emphasise the inputs from professionals, especially the design professionals. There is a tension between these positions and the sceptical view is that government will choose whichever is most convenient. So in the case of New Deal for Communities the emphasis has been placed on bottom up approaches but these are involved in the regeneration of estates that are not critically important for the competitiveness of cities. The slow progress and dispute ridden history of some of the NDC’s is evidence that bottom up approaches have their limitations. At the same time, resident involvement in other regeneration schemes is likely to mean there is some resistance to any change (especially amongst older residents), a tendency to tailor regeneration to suit an existing community (rather than the next generation), and a tendency to resist modem design and high density. The professional community dislikes the public’s preference for pastiche and low density housing but empowering communities would mean providing more of this. There are examples of what might be called coproduction, where residents do make significant and important inputs by working closely with professionals but the weakening of the planning System under the influence of the Barker Review may mean that local communities have less say. The implication that the ability of the planning system to delay development should be reduced effectively means reducing the capacity of local communities to resist development which would, in their view, adversely impact on their living environments.
Finance and Organisation
42Government has repeatedly asserted that changing what has taken decades to create will take decades to resolve. But it is preoccupied with performance measures with quick wins and with delivery. There is a tension between quality, robust processes and rapid results. Discussion of emerging tensions around the regeneration and renaissance agenda, especially in relation to timescales, begins to open up more fundamental questions about the approach adopted. There has been a failure to address the conventions related to the public expenditure treatment of housing. The UK Treasury convention is out of step with other European countries and prior to 1997, there was a strong argument that moving to the European convention would transform the opportunity to achieve the level of investment needed in council housing without requiring stock transfer. There has similarly been a reluctance to rethink policies towards rents and subsidies. While council housing (before the 1970s) was marked by social mix, the argument that affluent and employed tenants should not receive the benefits of subsidy fuelled debates about higher rents and rent rebates or differential rents. By 1997, however, the residualisation of council housing had developed so far that a low rent policy would have involved a well targeted subsidy. The costs for example of substantially reducing rents for all elderly tenants would have been negligible and the savings in bureaucracy considerable. However new Labour has become the party of the means test and has introduced a market element into rents. It has consistently baulked at making any major changes to the housing benefit scheme and the weaknesses of this scheme (especially for households with members who move in and out of employment or have variable incomes) are profound but have not been addressed.
43The organisational arrangements for what was seen as a step change in policy have also seen very little change. The responsibility for delivering the step change in policy rests with those who were immersed in the old approaches. This applies at central government and local government level. Central departments remain departmental and the budget lines are often associated with single programmes - for example, the Housing Market Renewal programme was located within the Department of Communities and Local Government (previously the ODPM) and regarded as a housing programme. This limited the extent to which funds were used for non-housing purposes: and yet the essence of the argument about regeneration is to mobilise more than just property-led approaches. The early suggestions for housing market renewal emphasised the need for special purpose delivery agencies more along the lines of a new town development corporation to develop new towns within the old towns. This would have involved organisations with separate budgets and planning powers and a longer timescale for operation. It would have left them less at the whim of local political differences and the failings of local departments not convinced by the merits of market renewal. Government consciously chose not to be bolder in setting up housing market renewal and the same point could be made about the approach to regeneration and urban renaissance more generally. There is a constant threat that partner organisations’ agendas have switched: programmes that need continuity and consistency of support over 10, 15 or 20 years are constantly put at risk by changes in policy, politics and fashion amongst partner organisations and Central Government Departments.
44There also remains a question about the caution of the British Government System in embracing decentralisation. Central government continues to remain intimately involved and continues to fail to recognise the impact of other policies on the process and progress of urban renaissance and regeneration. It has still failed to join up policy and the framework for designing, funding and delivering different services and agendas is still not joined up. The agenda related to schools or transport is not well integrated within regeneration: key decisions related to these services and affecting a regenerating neighbourhood can still be taken with very little reference to the regeneration strategy. In relation to housing for example, government continued to operate the Right to Buy and controlled policies towards rents in the social rented sector that may not be in the best interests of renaissance and regeneration. More fundamentally, it is deeply committed to a style of regulation and investment control which may inhibit innovation. It seems to distrust the partners which are involved in regeneration and renaissance and to believe that value for money and the delivery of high quality services can only be achieved if there is an overbearing regulation and performance culture. The new public management System, the preoccupation with floor targets and measurable outcomes may work very effectively in some contexts but it has an impact in the way that organisations and policies work and, in relation to regeneration and urban renaissance, it is not clear that this encourages innovation. The new organisational arrangements included in legislation in 2008 (a new Homes and Communities Agency and Tenant Services Authority) seem unlikely to change the traditions embedded within government and its approach to practice.
45In this context, it is interesting to compare the different approach to the regulation of housing associations and investment by housing associations in the Netherlands and England. Both countries had very large public and social rented or not for profit housing Systems and both have responded to global and fiscal pressures with deregulation and privatisation. However the outcomes are dramatically different. In the Netherlands, Housing Associations were given a lump sum compensation in exchange for the cessation of subsidies. They effectively became financially independent and self regulating (although not free from pressure from government). There is an overall scrutiny of how they operate but with a very much lighter touch than in England. They have not been subject to a Right to Buy, although they have been able to dispose of properties if they wish. Housing Associations have become leading agencies in urban regeneration, operating within an asset management framework and in a much less centralised and more innovative manner than in England. In England, in contrast, the non for profit or social rented housing sector continues to be in receipt of subsidies in different forms and with a great deal of central scrutiny. They have been required to sell properties under the Right to Buy and are less in control in the management of their property stocks as a result. Local authorities have been pressed to transfer their stock and starved of funds if they do not. But after transfer, in common with all Registered Social Landlords, they are subject to a very burdensome regulatory load through the Audit Commission and the Housing Corporation. They are rarely able to lead regeneration and use the assets that they have to achieve innovative regeneration.
The Market Takes Over?
46The most significant challenge to the regeneration and renaissance agenda in Britain relates to market developments. Arguably the most important driver of the housing market since 1997 was not housing policy. Economic growth and a long period of high employment, stable and low interest rates and inflation and low direct taxation were more important and fuelled a long house price boom. In a period of low interest rates and low taxation, households on high incomes experienced a considerable growth in income and chose to spend a much greater proportion of their income on housing. This was especially so as housing was seen to be the best hedge against uncertainties, inflation and older age. The standard calculations in British affordability studies (that people spend 25% of their income or three times their annual income or some similar multiples) become meaningless once you move beyond a certain level of income. Once people have achieved generous levels of spending on food and clothing and other necessities, their residual income can be spent on almost anything; and in this situation they may choose to disproportionately invest it in housing. If this is the case, then the inflationary push associated with the decisions by high income earners becomes disproportionate. They can afford to pay more and to push prices up while those with lower incomes and lower residual incomes can only match the commitment by borrowing higher multiples of their income.
47After a downturn in the early 1990s rapid house price inflation and an “affordability crisis” was re-established and was sustained through to 2007 when relatively small increases in interest rates and, more importantly, the international credit crisis emanating from the USA, brought it to a halt. Up to this point, low interest rates, the experience of the appreciation of property values and the favourable record of investment in housing compared with investment in pensions or stocks and shares, fuelled over consumption. Households with more money were willing to invest more, and indeed willing to invest a greater proportion of their income in housing, and this contributed to house price inflation. Inelasticity of housing supply meant that the increased willingness to invest in housing largely generated a growth in prices and this growth in prices was uneven. It was highest in the more buoyant economic areas and in areas where dwellings were of better quality, or higher status, or could be relied upon to command higher rates of appreciation and to be good investments.
48Essentially, the consequence of government’s new housing policy (and its continuing emphasis on market provision), operating against the background of deregulation of financial institutions, much greater income inequality and differential ability to borrow and to spend was increased social and spatial inequality. A larger, more differentiated home ownership sector becomes a characteristic of the society: rather than an aberration, it is a predictable consequence of a succession of policies operating in an economy based on unequal reward Systems.
49It is important to note three other responses in this situation. Firstly, the development industry responded to the pressures from government to build more (and to the measures to secure affordable housing through the planning System) by shifting to build apartments and smaller properties. The new politics of urban housing involved central and local government, developers, planners and the architectural establishment in support for high density, brownfield and inner urban housing that took pressure off greenfield sites and avoided the political opposition to such development (Murie and Rowlands, 2007). There has been a considerable growth in apartments which have not been a significant part of the built environment in England except in London. The balance between houses and flats shifted from 79 to 21 in 1991/2 to 60 to 40 in 2004/5 (DCLG, 2007).
50A second effect linked to change in the development industry and the increased investment capacity of affluent households was the growth of the buy-to-let market. Deregulation of the private rented sector in the late 1980s was expected to lead to a revival of private renting. Because tenants had fewer rights and there was no control over the rents that were charged landlords were no longer deterred from investing in property to let. However, in the initial decade (up to 1997), following deregulation, there was little sign of significant growth or the development of a new private rented market. The new market that began to emerge in the second decade has been less explained by deregulation itself than by the decisions of developers, lenders and investors. There has been a considerable growth in the buy-to-let market especially through the purchase of apartments and the growth of second home ownership. The growth of the buy-to-let market could again be seen as a natural accompaniment of a buoyant home ownership market and the view that investment in land and property was the safest and the most likely to bring the best rate of return. The practice of developers in selling apartments off plan has also been identified as favourable to the investment purchaser (see Murie and Rowlands, 2007).
51Thirdly, it is important to recognise the different ways in which the individual consumer has reacted to the affordability crisis. There is some confusion in the housing research literature in England. There are contributions which emphasise the impossibility of ordinary households meeting the thresholds required to buy properties. And yet these thresholds only exist because people actually do buy the properties. How do we explain rising house prices if nobody can afford to pay them? Perhaps the research community is looking in the wrong direction? It is looking at first time buyers and people on average incomes and seeing them as unable to pay large prices when it should be looking at more affluent groups with higher incomes and dual incomes and with an ability to purchase more than one property. It is this group that is able to buy one or more properties at inflated prices and exacerbate the affordability crisis for others. In between these two groups, there are those who adopt all sorts of mechanisms which enable them to bridge the gap. They do borrow much more than the multiples of incomes that researchers suggest are appropriate. This may not always present a problem because they will use mortgage products that have lower interest repayments in the initial period or they will rely upon the fact that their incomes do rise rapidly in the occupations that they work in and the proportion of their income represented by mortgage payments declines rapidly as their income rises - down to a level that is much more acceptable to the researchers’ instincts. We also know that people borrow from friends and family, are helped by other family members, make use of savings and inheritances, purchase on a joint basis, make use of credit card and other borrowing to manage budgets that are stretched by mortgage payments and so on. Of course, this leaves a larger number of people at risk if interest rates rise or if they lose jobs or their relationships break down.
52The long boom in house price increases came to a sudden and unpredicted end in 2008 as the housing market entered an unprecedented crisis. For various reasons patterns of lending for house purchase in the USA had changed with a growth of sub prime lending to lower income groups using variable interest loans. While interest rates were low these loans were affordable and there was a boom in borrowing, some of which was financed by British and other international banks. When interest rates rose and sub prime borrowers were unable to meet mortgage repayments there was a crisis both in the American housing market and for the lenders exposed in that market - including British lenders. The “credit crunch” starting in the USA impacted severely on British banks which were faced with rising bad debts and a crisis in financing their existing mortgage portfolios-and were unable to take on significant new business. In the past, banks, if they needed to, would have borrowed internationally to meet the demand for borrowing but this option vanished as other banks were hit by the same crisis. In order to avoid the highest risk parts of the market, but also because they, in effect, had to revert to rationing mortgages, lenders in Britain largely withdrew from the buy to let market and sub prime lending and became much more conservative in lending generally. First time buyers who had previously been able to borrow more than the value of the property they wanted to buy would be offered less than the value (75% was often referred to) and would have to find the balance elsewhere. With first time buyers and buy to let purchases dramatically reduced, builders found they could not sell what they had already built and stopped building more; the numbers of transactions in the market overall halved and government’s targets shifted from increasing building to maintaining building activity at a lower level. It is not yet clear how these market patterns and the long term behaviour of builders, consumers or lenders in Britain will be affected by the credit crunch of 2008.
53In Britain, the credit crunch was brought dramatically to life with the collapse and subsequent nationalisation of the Northern Rock Bank. This collapse was directly attributable to its involvement in international (North American) borrowing. Hit by the collapse of the American market the Northern Rock Bank was faced with significant losses and a run on the bank drew the central bank (the Bank of England) and government in. Following this, it is evident that lenders generally have become more prudent, borrowing has become more expensive and so borrowers have become more circumspect. Some borrowers are caught with high loans relative to the value of their property and, perhaps with the end of a low start or protected interest rate package, are suddenly exposed to higher interest rates just when property values are stagnating and it is more difficult to sell. Lenders will no longer lend on demand or lend sums that represent such high proportions of property value. House price inflation has given way to decline, builders have found it more difficult to sell, especially where they were over-dependent on speculative and buy to let purchases. One consequence is that, against the intention of policy, new housing supply through new construction seems likely to decline. Rather than moving towards the Barker based targets of 240,000 completions a year by 2016 (a 30% increase from 2006) completions in 2008 will show a decline and are expected to be nearer 120,000 and may be even lower in 2009. The weakness of the Barker-based perspective on housing and the overselling of the market led, supply driven solution is evident from this.
54While affordability has been presented as a crisis, it is endemic when incomes are unequal and this inequality impacts on house prices. Prices that are driven by higher incomes, not surprisingly, move beyond the reach of those on lower incomes. In practice this was a manageable crisis for government and for many householders. It presented an opportunity for those who could buy and whose properties appreciated in value and it was certainly much less of a crisis than a lack of demand or a lack of house price inflation that begins to generate a reluctance to buy and sell, negative equity and the problems associated with the late 1980s. It is this prospect that faces some households following the credit crunch. The affordability crisis generated fewer concerns about repossession and mortgage arrears than the situation following the credit crunch.
55The housing, urban regeneration and renaissance agenda pursued in England since 2000 had a higher priority than in previous decades. While some of what is claimed for it is the product of other initiatives, there has been a more energetic engagement with regeneration and some real examples of progress. Behind this, however, there are a number of unresolved tensions and there may be fondamental flaws which will limit what is achieved and which connect with the recurring critique of the ineffectiveness of urban policy in England: they relate to the failure to understand the dynamics of cities and neighbourhoods, to develop holistic approaches and to have delivery vehicles which can adopt such approaches. Some of the issues may be more deep-seated in the dominant assumptions of key administrators and policy makers and the extent to which this means that new approaches inherit some of the weaknesses of their predecessors. There is a tendency to adopt the line of least resistance in addressing regional, financial and other issues rather than attempt to reshape the market more fundamentally.
56By 2008 the whole policy agenda was subject to a further test related to the credit crunch and the collapse of the housing market. It seems unlikely that this will prove a short-lived “blip” and that the market will revert back to its earlier pattern. It is more likely that there will be long-term caution over lending to support buy to let and the building of high density apartments and that lenders will generally revert to a more cautious approach. After decades of privatisation and withdrawal of the State from housing government has been drawn into a more interventionist role including the nationalisation of a bank and actions to enable the Housing Corporation to use State funds to encourage housing associations to buy unsold private housing in order to keep the market moving. A more market-based System has not enabled the State to leave housing to the market and the Barker agenda to further reduce the impact of the State by weakening planning regulation has given way to increased intervention by the State to keep the market working.
Bibliographie
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