Valuing Harvey

Old INURA friends Camilla Perrone and Giancarlo Paba started editing a book in which each contributor would write a chapter about a book which they had especially valued and how it had influenced them. During the gestation of the book Giancarlo died and now the project has become, in effect, a tribute to him – especially for those contributors who had been his students at the University of Florence. The book is called Critical Planning & Design: Roots, pathways, and frames.

I have contributed a chapter about David Harvey’s The Urbanization of Capital, 1985. The text I have submitted is here for those who would like to read it. This is in accordance with the publisher’s contract. I’ll post further details when the book nears publication.

Brexit, for a friend abroad

Friends in various parts of the world, busy with their local or global issues, sometimes end their messages by asking what on earth Brexit is about, how they can make sense of it, how something so bizarre could have happened. Feeling that they had not been paying enough attention perhaps, they ask for clarification. An email from a friend in Athens triggered this reply: an open letter.

In my daily life in England I rarely have to discuss Brexit or give an account of my views about it but I do feel a need to get something down in writing, if only for friends abroad. It’s tricky because I’m ambivalent on some dimensions of the issues, while others —especially around the Labour Party— have become toxic.

I don’t find it easy even to start. Perhaps I’ll begin with the EU as I experienced it in recent decades. I have always been ambivalent about the EU because it has so many attributes of the capitalist state, many of them built in by design from the outset but others added later as part of the rise of corporate capital and the neoliberal mental apparatus it sponsors. On the other hand the EU embodied from the first some features of historic compromise between capital and labour —some attachment to welfare systems, labour market regulation, the protection of reproduction and of environment. Like any other state apparatus it was the arena for struggles between social forces, for compromise and so on. I never really studied it so these are amateur comments. Increasingly, via the later treaties, the EU became more of an explicit instrument for capitalist liberalisation but it always retained positive support for education, research and exchanges —Erasmus, Socrates and so on— which I was most directly involved in. It enabled thousands of us to collaborate, to travel in doing so, to be students across the continent, to expand perspectives and build networks —even quite critical networks. Those wonderful EU functions still go on, of course, except for the British. In hindsight I realise how elite it all was/is. Bus drivers and cleaners and care workers don’t get to do international exchanges; school groups travel to some extent but I think it’s very limited in extent and depth: trips rather than living abroad. So the dissolved frontiers were essentially for elites, elites of left as well as right, but all part of the reproduction and consolidation of class.

[Fetches a glass of Rioja.] ***************

Where did the Brexit idea come from and how did it move from being a freak/fringe position to a contender for actual implementation? I’m no expert on this either. What seemed important to me was that some malign operators were shrewd enough to see a whole raft of disparate grievances, spread across social strata and geographies, which could be herded like a menagerie behind the Brexit campaign. Partly this drew on the internal contradictions of the Tory Party as representing (rather badly) big corporate business in productive sectors, PLUS (rather obediently) the banking and finance sectors (recently the geese with golden eggs) PLUS a lot of conservative people in various social strata, mainly nostalgic and/or xenophobic. Similarly the Labour Party had become very dysfunctional, less and less representative of (and composed of) working class people, estranged in large measure even from trades unions, often itself racist and never integrated with social movements in environment, housing, migrant rights or sexual politics. So both those political parties had a lot of potential voters who could be diverted by the blandishments and lies of the Brexit campaign.

A big issue in the UK (at least in England where I live) is how the referendum vote in 2016 should be interpreted.

Image from Billy Bragg

I’m very much persuaded by Lisa McKenzie’s studies in the Nottinghamshire coalfield from which she concluded that working class people’s votes for Brexit were primarily votes against a status quo which had abandoned them, trashed their economy and culture. In a more egghead vein I was also much impressed by my friend Jamie Gough’s argument back then that the Brexit votes of many working class people (in the popular sense) were substantially votes against the state, local, national and European, as useless at delivering for them. He also argued that blaming migrants for shortages of homes, jobs and services was a quite understandable response in the absence of any alternative political analysis and offer within formal politics.

Part of what went wrong in all this was a kind of guilt trap: it has been commonly held on the left that a lot of the working class Brexit vote was a wake-up call by abandoned, unrepresented, people for an alternative politics. OK so far: I’m sure that’s largely right. But those of us who consider that leaving the EU would be against the interests of most of those voters weren’t supposed to say so because that would disrespect the working class or disrespect democracy. Neither Corbyn nor anyone else picked up the challenge of developing a strategy for socialist approaches to Britain’s problems inside the EU, working alongside allies across Europe. A lot of us were politically homeless and the pressures on Corbyn and co led them to pull away from their clear Brexit position and hold out the prospect of a fresh referendum. This is widely credited with much the blame for Labour loosing the 2019 election. I don’t know, but certainly it was all disastrous.

The campaigns in opposition to Brexit, between the referendum and the implementation were, to me, deeply toxic: an impossible coalition of Liberal Democrats (the much hated junior members of the ‘coalition’ government), some Greens and miscellaneous dissenters form the main parties. I went nervously on one of their marches and found the patriotic waving of blue EU flags as offensive as patriotic waving of national flags. Who could be patriotic for the Berlaymont?

The strong support for Brexit among the supporters of the Tory party is a different kind of mystery. Clearly there were property-owning and business owning people in England who stood to loose a great deal from the Common Agricultural Policy or other aspects of Brexit but who made themselves visible leavers by erecting huge posters on their land beside highways or in their shops, echoing the Countryside Alliance against a threatened ban on fox hunting of a few years earlier. That was alongside the much more sinister presence within the Tory party of the kind of vulture capitalists, eager for chaos and ready to pick the bones of the welfare state if its death could be arranged.

The greatest practical problem for me was maintaining friendly relations with the few people whom I had always regarded as real political allies but who were pro-Brexit on the grounds that the EU was, or had evolved into, a hideously neoliberal enforcement machine (true) which we should quit so that, led by Jeremy Corbyn, John McDonnell and others, Britain could begin to develop in a socialist direction. This was in 2016/17 when the Corbyn project was going well and this optimism was plausible. Why didn’t I share that perspective, since I was (and am) very pro-Corbyn/McDonnell?

I think for two reasons. Firstly I do think that the modern nation state tends to be a horrible thing & the more it can be diluted and constrained by supra-national powers the better. I guess I keep hoping that the kind of humane consensus which has flourished in the ILO, WHO and some branches of EU activity can help keep nationalists & xenophobes in check. Added to that, most of my friends across Europe (and friends in London irrespective of national origins) were devoting their energies to anti-capitalist work. So a position like Varoufakis, seeking pan-European alliances to challenge and supersede the neoliberal elements in the EU was appealing. The satisfactions of transnational campaigning which I have experienced in INURA (the International Network for Urban Research and Action) and now see in the European Coalition for Rights to Housing and the City are great, and perhaps too beguiling.

So there we are. Out of the EU.

Undoubtedly this will bring, indeed was always intended to bring, serious further declines in living standards for working class people in the UK, occasioning further inequalities, collapse of investment in most sectors and attrition of protections on working conditions, environment and rights. This is all under way in the first month. Impacts in Ireland and in other places for which the UK was an important export destination (mainly German I think) will also be painful. There is a recent and again excellent analysis by Jamie Gough of why so many sections of ‘UK capital’ are supportive of Brexit or are keeping quiet while they construct ways around it.* All of this will of course combine with the long downward haul of UK austerity through much of the last 20 years and with the disastrous damage caused by the Johnson regime’s mismanagement of the Covid19 pandemic. Rival blame games are going to be very unproductive. I have no idea whether we (and who is the ‘we’, for god’s sake) can forge any progressive way through the mess. At a London level it does seem to offer some glimmers of hope for insubordination. But that’s another story and needs discussion among friends, discussions which are so elusive in this lockdown.

Meanwhile back to Brexit. Keith Flett’s blog today draws attention to 2 new articles by Perry Anderson in the London Review of Books which I must read because he is a real wise owl. (They appear to be outside the paywall.)

The text above is not a coherent story, much less an analysis. In writing, I’m imagining that I’m sitting with a drink talking to my friends in Athens. I hope that will happen again.

Do comment if you want.

  • We are getting many anecdotes and jokes about what is and isn’t “British” capital at the moment. But my favourite remains the episode when Margaret Thatcher was briefly in hospital for an eye operation and asked for mineral water. She was given Perrier but refused it as French, asking for British water. She was brought Highland Spring which she accepted. The Financial Times enjoyed this, explaining that the Perrier brand was owned by an English aristocrat while Highland Spring was owned by Saudi Arabian royalty – who had just recently annoyed the prime minister by booking seats for the state opening of parliament and then not turning up.

Property relations and London planning

Michael Edwards 17 November 2020

Expansion of speaking notes for seminar 13 November 2020 convened by Callum Ward, following 9 months of meetings of a reading group. The reading group has worked through all the chapters (except one remaining) of the 1985 book, now reprinted, Land Rent, Housing and Planning, a European Perspective, edited by Michael Ball, Vincenzo Bentivegna, Michael Edwards and Marino Folin. This was a compilation of Marxist work on rent and private land ownership. Contents and details at http://bit.ly/2M8z11P

Review of the re-issue by Callum Ward in Radical Housing Journal.

The reading group has been convened by Elena Besussi and grew out of a ‘teach-out’ at Tolmers Square on 2 December 2019 as part of a strike by university workers. Details and my notes here on my blog.

This text is provisional and I am still working on it. Further revisions will include a lot of referencing of other people’s work when I learn how to do footnotes in WordPress. Meanwhile bits in [brackets] are standing in for future notes. Please don’t quote this version thoughtlessly while this paragraph remains.

My working year has been dominated by inconclusive activism about a new London Plan and later – during the lockdown – by proposed neo-liberal changes to the planning system of England coming from the Boris Johnson regime. The London Plan had been produced in City Hall by an almost entirely new professional team following the retirement of those who had mostly joined the GLA from its precursor, LPAC. It was presented as the policy vehicle of a new Mayor of London, Sadiq Khan, following elaborate, managed, consultations on a non-statutory document A City for All Londoners. The draft Plan was issued for consultation in 2017 and for us in Just Space it showed terrible failings of procedure (weak consultation, trivial treatment of equality duties) and of substance: like its predecessors, substantially a developers’ charter, immediately spotted as such by property journalist Peter Bill. More detail on this plan below. The Johnson regime launched a number of consultations on changes to the planning system of England which led me into a number of responses, written with colleagues at UCL, comrades mainly from PNUK who came together thanks to Andy Inch in Sheffield and Bob Colenutt and Sue Brownill in Oxford, producing two composite pamphlets The Wrong Answers to the Wrong Questions and then The Right Answers to the Right Questions. I also played an editorial role in submissions from the members of the Just Space network who chose to report their brainstorming rather than dutifully respond to the government’s 39 articles of faith.

In this short paper I want to concentrate on what seem to me to be the compelling  local (London / UK) issues on which rent à la Marx can contribute: housing strategies and urban structure. Views are my own but I’m in great debt to friends in Just Space and the other networks referred to above, and in the reading group, for stimulus, ideas, criticism and energy.

These are not issues on which I am planning to start or undertake research myself. This is an ‘exit strategy’ in which I’d like to become more and more retired. So it is an attempt to interest others in picking up and developing, or challenging, this agenda. Feel free to use this stuff as you wish and invite your students and others to do so. Just make sure to keep us/me informed.

Method

What I have brought away from nearly a year of reading and discussion on rent has been a reinforced confidence that we have to analyse the property relations surrounding and powering today’s problems, viewing them as historical processes, using Marx’s work on rent and class as insights and tools. In other words we have to zoom out and in, look at these entire relations, not dwell on trying to match modern transaction-types to forms of exactions identified in 19th century agriculture. This is not an original or a fresh position: it was the position taken, more or less explicitly, by most of the contributors to the 1985 book. [In the light of these discussions I decided to re-frame my first lecture of the year to Elena’s course on European Planning Practices. It was my first pre-recorded talk (which I hated doing) but I’ll add a link here when I can get it out of the university’s walled garden.]

Housing – the big issue

It may not be helpful to talk too much of ‘The Housing Question’ since there are multiple questions and multiple localities and that phrase implies that there is a single diagnosis to be found. But I’ll take the risk to start with.

I’ve been arguing for years that the housing question is bedevilled by rival simplifications. Housing is a complicated question because of the way it penetrates almost every aspect of contemporary life. 

There is, howevera simple truth about contemporary housing in most countries: the system fails many people completely and probably a majority of people to some degree; it amplifies and reproduces inequality and becomes a core part of a financialised rentier economy for those who are ‘profiting without producing’. With growing inequality of income and wealth and most housing now distributed by markets, inequality of housing outcomes is inevitable. The results can be murderous.

Members of this seminar will probably be more-or-less content with this statement but the challenge is to re-phrase it in ways which are comprehensible and compelling for a fragmented society and to expand/unpack it to reveal what is going on. It could be a one-page essay or just a paragraph or just a tweet. Or it could be a movie or a cartoon. I’ve been wrestling with this problem this summer in responses to the English government’s proposed changes to the planning system, and the challenge crops up daily on twitter, where I choose to spend many hours. It’s not what one is supposed to do in academic seminars but I can’t think of anywhere better. [I’ll expand on this in the text version and now return to the talk —section or annex to come on versions so far that I wrote or know of.].

Any very concise account of the housing question needs, in my view, to invite expansion / elaboration to reveal the wider dynamics behind the simple truths. In particular:

The complete circuit of production in the housebuilding industry has to be examined: land assembly, labour processes (including professions, offsite component production), realisation of the surplus through sale/rent and innovations in circulation. 

The interplay of that new-building industry with the second-hand market in dwellings (and the armies of lawyers, valuers, agents involved). The interplay of market and non-market housing sectors is equally crucial.

The interplay with the endless process of refurbishment and upgrading of the old stock, both as capital accumulation and as the direct production of use values. Works to existing buildings used to be about half of all construction output and it must be a lot still (including some cash-in-hand & DIY activity outside the statistics).

Housing as an input and pre-requisite for the reproduction of labour power, where we have seen so much revealed by Covid19: the inadequacy of much housing (and many neighbourhood settings) for working at home, for home-schooling of children, for privacy, intimacy and recreation. The class, gender and ethnic dimensions in these inequalities are being examined now. I was really glad that Joon Park was in the seminar as it was he who suggested that perhaps we make a mistake in treating dwellings as the product of the land development sector when we should be treating labour power as the product. I’d love to know whether and  how he has progressed that insight, though it didn’t come up in the seminar.

That in turn links to the role of housing in the formation of social classes and strata – which for me came initially from the work of PhD students (Oguz Isik on Ankara, Dina Vaiou, George Beldecos and others on Athens) and now from Ozlem Celik on Istanbul, reflecting back to our UK (and especially London) experience to help us see how housing ownership / non-ownership concentrates wealth & hardens & fuels class distinctions in almost every department of life.

More could be added to this list: relations with pensions and elderly care, taxation and the funding of state activity, questions of urban structure and relations with global warming and ecological breakdown. 

London

I’ll develop this by focusing on some big issues in London planning. 

Firstly supply and demand. London planning is driven by the same doctrine that powers the neo-liberal ‘reforms’ of national planning: the belief that housing affordability problems are entirely or largely due to a shortage of supply relative to demand so the imperative is to achieve a target number of dwelling completions, computed or decided —believe it or not— at national level in the proposed national reforms.

For London, everything else is subordinated to this imperative, which suits the speculative private housebuilding industry and the financial institutions behind it very well. The imperative prizes open developers’ access to industrial land, sites of former collective spaces, council housing estates and land previously in municipal or utility ownership and used for public purposes. Our challenge has been partly to defend those most directly damaged by all that (those evicted or displaced to make room for densification) and partly to draw attention to the contradictions (displacement of production and service spaces, diversion of worker spending from consumption into rent payment, recruitment and retention problems for employers). But our opposition is not winning. Could we make a more compelling story and one which spans the proliferation of financialised forms which so fragments resistance between tenures and types of landlord/lender?

[Relevant here is the Just Space response to the Mayor’s housing strategy 2017 and the various Just Space responses to the housing provisions of the London Plan. There are also links there to submissions from the London Tenants Federation, a very important and well-organised network representing council and some housing association tenants. This aside needs expansion.]

Secondly: the London growth machine is superficially powered by reference to agglomeration – the positive side of agglomeration. Here the oppositional task has been to point to the downsides of air quality, journey times, and above all rents and housing costs. It’s tricky because of the enormous forces ranged against us and because rising  housing costs are also rising wealth for nearly half the population. London’s growth can partly be seen as massive state investment in infrastructure, valorising central London commercial property and suburban housing stocks, with land value increments harvested by owners. Covid19 seems to have shaken the assumptions about agglomeration – especially the need for 5-days-weekly commuting to central offices. That is producing some panic among investors/owners and there is work for us to do about the potentialities.

Thirdly: an established set of social relations of building provision is falling to bits, notably the leasehold system. This has been subject to criticism and half-hearted reform for decades but is crumbling now after being ruthlessly exploited by housebuilding firms to extract additional profit. The last straw has stemmed from the Grenfell Tower disaster, following which tens of thousands of apartment leaseholders now find themselves unable to sell and move without certificates of fire safety (which are obtainable only with long delays, if at all) and often confronting enormous costs for remediation and other fire protection works. Leaseholds are being further discredited by the exposure of the exploitative character of part-buy part-rent, a device used to provide what appears to be an entry to home-ownership but actually is misleading and unfair to those who take it up, valuable to the cash flow of housing providers who receive the initial payments sell while offloading their maintenance costs and risks . The state is no longer guaranteeing and overseeing the operation of market exchange.

Relations of building provision are changing elsewhere too: institutional owners of commercial properties, especially shops and restaurants, are able to collect only part of the rent due from their corporate tenants because Covid19 closures have enormously amplified the decline of physical retailing and catering. The landlords are having to put up with this but, unless tenants get much better organised, there is no equivalent shift for housing rentals and, like most places in the world, we expect surges of evictions. Meanwhile a completely new (for England) form of housing provision has invented itself: Build-to-Rent (BtR), effectively a new use class negotiated between interested parties and the state (and GLA) to construct entire blocks of middle-market flats to rent, with exemption from the normal requirement to provide “affordable” dwellings as part of their schemes.

These are not issues on which I am planning to start or undertake research myself. This is all an ‘exit strategy’ in which I’d like to become more and more retired. So it is an attempt to interest others in picking up and developing, or challenging, this agenda. Feel free to use this stuff as you wish. Just make sure to keep us/me informed.

Housing: not so simple

I was invited by Neal Hudson @resi_analyst to be an interviewee in his series of Housing Conversations on YouTube. It took place yesterday 26 August and, when I look at it now, I’m shocked by how much I managed to omit or could have phrased better. So I thought I would write it out, using my notes + hindsight. (Half done at 1515 on 27 August. Come back for the rest.)

Neal started by asking ‘In your 2015 report for the Foresight Future of Cities programme, you described the housing problem as  “bedevilled by rival simplifications”. Can you explain what you meant?’

So many people —citizens, academics, politicians, journalists— are happy to argue that the housing problem or crisis is caused by one single, or at least dominant, factor. That usually goes with proposing a simple solution:

Supply: the prevailing orthodoxy that there is a national shortage of homes and that a massive expansion of building is the answer to affordability and other problems.

Planning: the planning system, or the way it operates, has prevented a lot of new building and should therefore be ‘reformed’ in ways which would unleash increased output.

Technology: productivity in house building has failed to grow at the rate characteristic of other industries and more pre-fabrication & use of Modern Methods of Construction (MMC) would transform output and thus costs.

Foreigners: foreign investors are attracted to buy housing in the UK, either to rent out to tenants, or for use by visiting family members or students or just to hold in the expectation of capital gains. For some this is a means of money laundering.

Commodification: housing has become increasingly a traded commodity rather than a non-market public service and that has facilitated the pursuit of capital gains and a self-fulfilling upward spiral of prices.

Financialisation: the increased dominance of finance in the whole society and the growth of credit for house purchase (both to occupy and to rent out) has been a prime driver of price growth and should be curtailed or reversed.

Falling interest rates: house prices are understood as the discounted value of future rents; as interest rates have fallen, house prices have thus grown because rents get discounted at ever-lower rates.

Land ownership: private land ownership is what enables so much of the social product to be appropriated as rents or capital gains & is thus at the root of the housing crisis; land should be in collective ownership or subject to land value tax (LVT).

Boomers: the generation born in the 1940s & 50s (including me) are the problem; they have benefitted from benign public polices at key stages of life and disproportionately have become rich through owner-occupation, now posing an immense barrier to younger generations and further enriching themselves by collecting rents on homes they own.

Government: policies and practices galore take the blame. Dysfunctional taxes like capital gains tax exemptions, inheritance privileges, property tax (Council Tax so regressive at the low end, negligible at the high end); subsidies and support to owner-occupation which inflate prices & developer profits; Right to Buy, freeze on council house building; inadequate benefits & pensions.

All of these are wrong as simple stories. But all are also right as strands in an adequate account, either as contributory causes or symptoms or both.

Is there an acceptable simple story?

The best I can do is this, in 3 steps:

If housing is distributed through a market, it’s your income & wealth which determines how much you can have; 80-90% of housing in England is now distributed through market processes (up from about half since 1980s)

Income and wealth inequality (& insecurity of low incomes) have increased greatly since 1980s.

The combined effect is bound to create a crisis for middle & low-income people: what they can afford gets less, absolutely and relatively. People tend to buy a lot more housing as they get richer (larger, better located or second homes or homes to rent out, or as savings for old age).

This framing is helpful because it allows for the fact that it’s not the same for everyone; it depends on class position. For some there is a crisis; for others not. There are those who benefit from the current system:
• owner occupiers enjoy unearned growth of wealth
• landlords also, at the expense of tenants
• older generations of owners gain at the expense of younger
• land owners, many professionals, most developers and builders (though volatility can damage some).

And there are losers, some obviously so, including…
• those excluded from the market completely by poverty, income insecurity, mental or physical impediments not compensated by the welfare regime, those ineligible under racist migration rules; some of these groups would have gained social housing (outside the market) in earlier decades, others not. Many are thus on the street or in tents, sofa-surfing or badly housed by criminal landlords in substandard conditions or involuntary sharing.
• tenants whose rent enriches landlords and reduces their own capacity to save (notably for pensions or for later housing purchase), damages their power to subsist or to work shorter hours.
• tenants and some lower-income home owners displaced by market gentrification or state-sponsored demolition and replacement of social housing estates.

Some of the losers are less obvious…
• all of us (almost) who suffer the injuries of living in a rentier economy where the social surplus is so largely devoted to extraction of value from housing, from other land and buildings, from patents and other assets; thus little is invested in better technologies or training for dealing with climate change, improving working conditions or other useful purposes.

Rather than thinking of correct and incorrect elements in that list of explanations, I think it’s helpful to remember that the social forces bearing on housing differ in their geography and timing. Some processes are truly global like the financialisation of flows and falling interest rates. Some -precious few in the narrow housing sphere but more through competition policy- are regulated at a European level. Most tax and many benefit provisions are UK regimes while planning and housing policies and rules are mostly set for England, albeit by the UK government. Among the most important considerations are the structure of relationships of land ownership, notably between land owners and tenants, which remain drenched in feudal hangovers to an extent not known elsewhere, most visible just now in the paralysis of the leasehold system of housing tenure and the retreat of investment property funds in the face of non-payment of rents by corporate retail tenants.

This interplay of scales comes right down to the locality and explains the importance of careful analysis and understanding of property relations in each city, borough, district (which is why I so value the local work you are doing Neil in Built Place). In the words of my colleagues Jenny Robinson and Karen Attuyer which I quoted in commentary on the Government’s new white paper on planning::

The quest for simplicity and a one-size-fits-all policy runs up against what has been called the ‘slowly sedimented arrangement of “contradictory and complex system of dependencies, jurisdictions, and rules” which characterises British property, planning and governance relationships*. This phrase comes from a close study of the Old Oak Park Royal development in London where there were simply too many claims on the prospective property values to cover all the infrastructure costs, get even close to affordable housing targets and gratify the incumbent landowners. Each attempt to make a workable scheme led to further increments of density, way beyond what had initially been planned or consulted upon. The city is complex and thus resistant to simple nostrums.

73 Robinson, J. and K. Attuyer (2020 in press) “Extracting Value, London Style: Revisiting the role of the state in urban development” International Journal of Urban and Regional Research. The authors are quoting Christian Schmid here and the whole paragraph if from my section of The Wrong Answers to the Wrong Questions, August 2020.

The list of ‘causes’ at 1 above could be woven together.

The list of ’causes’ at 1 above have to be woven together to form an adequate analysis of the situation. That’s what I was trying to do briefly in that 2015 report for the Foresight Future of Cities Programme and I don’t see anyone doing quite that at the moment. Within the mainstream I’m quite impressed by the latest version of the analysis by Ian Mulheirn in his August 2020 CACHE paper. He’s added a lot of useful caveats and qualifications to what was previously a crude example of ‘everything is due to interest rates’. It’s good to have an ex-Treasury economist attacking the supply-is-everything ideological position which underpins the government’s irrational planning ‘reforms’ (and also provides the imperatives for the very damaging London Plan).

[stuck again: still not finished Friday 4 September]

Failure of the state to ensure that laws and standards enable markets to trade smoothly (leasehold breakdown + fire & safety breakdown) – let alone constitute new markets or learn intelligently from elsewhere in Europe how markets can be constituted to do a better job..Failure of the state to avoid policies which escalate prices

Failure of the state to respond to Covid on homeless, sharers etc

Weaknesses in the London Plan – density controls, RtB, S106 & CIL.

Experiments?

Learning from Europe on zoning, procurement, rent controls

Postcards from London: before and during Covid-19

Postcard 1 was written for a conference to celebrate the work of Frank Moulaert in 2017 and published as chapter 12 in Social Innovation as Political Transformation: thoughts for a better world , eds Pieter Van den Broeck, Abid Mehmood, Angeliki Paidakaki and Constanza Parra, ch 12, pp 66-69, Cheltenham, Edward Elgar. https://www.e-elgar.com/shop/social-innovation-as-political-transformation

Read aloud on the Architecture Foundation’s Instagram Live, 2100-2130h on Wednesday 27 May 2020 & thereafter on their YouTube (link to follow), part of their #BedtimeStories series, curated by Alicia Pivaro.

Postcard 1 

sent in 2017 to an international meeting to honour a great friend, Frank Moulaert

Forgive a short message from our offshore island, written in moments diverted from challenging the neo-liberal framing of our city’s narrative, watching the eviction of people from their homes and the expulsion of ‘foreign’ friends from their city of choice and now, suddenly, grappling with an intractable parliamentary election. All that is solid melts into air. 

The sub-text is a warm appreciation of what I have learned as a guest at the feast of Moulaert and its community over many years. 

London is a big city by European standards (10-15 million people) but that’s as precise as one can be. Its administrative area was already too small when it was defined in 1965 and becomes ever more so as its growth sucks commuters from much of England and migrants from everywhere, flinging out others. We know the importance of multi-scale relationships, though, and live with very distinct and localised economic, social and political experiences in the cities, towns and villages which make up our country: various capitalisms surviving under one Queen (the rentier par excellence) but a country increasingly financialised and divided. 

The dominant discourse about London is so familiar. City leaders, (almost all of) the political parties, policy communities, professions and mainstream media are proud of its rate of population and GDP growth, its prowess in fostering innovation and entrepreneurship, the ‘light touch regulation’ of its financial, housing and labour markets, its cultural richness, its universities and its youth. A wonderful place; the engine of the nation. 

Policy is crafted to sustain and extend this pre-eminence, with much reliance on the benefits of agglomeration as a convenient and reassuring rationalisation. The co-location in London of state and diplomatic functions, finance, business HQs, elite universities (including Oxford and Cambridge an hour from the centre) and leading cultural institutions has been a winning combination of course, all speaking English but with hundreds of other languages on hand. This magic might even, we are told, carry us through our separation from the European Union. It can also be presented as slightly green: public transport is elaborate, expanding and popular, we have reversed the growth of car use and cycling is booming. 

But London is a poverty machine as well as a wealth machine and has been for centuries, harvesting the value produced under slavery in the former empire and under capitalism in the post-imperial world, exploiting its resident working class in making the coffee, cleaning up, doing the caring, building, driving and security to support the growth. So it’s a city of mounting inequalities and it’s not so green either: its road space is increasingly filled with diesel vehicles delivering online orders and ferrying passengers who summon them by apps. The air is illegally toxic and we don’t even count our massive use of air travel and container shipping in computing our pollution load. 

Much of this could be said of other cities in the world but there are some distinctive London or British features in our experience. 

Above all Britain embodies the strong survival and periodic renewal of the privileges attaching to land ownership. Monarchy and aristocracy were never abolished and the early evolution of capitalism benefitted from the channelling of old landed wealth into capitalist enterprise – in the expansion of a slave-based empire, in the innovations of factory and mining production and in speculative urban development and infrastructure. Land owning interests have retained, though all this, powerful privileges in taxation, in their contractual relations with tenants, in inheritance law and tax and in political representation. 

The privatisation of common land in earlier centuries has a natural continuity with today’s enclosures of public space, commodification of collective assets and subordination of public planning to private profit. All of this has generated great contradictions along the way as private land ownership has blocked and distorted the evolution of infrastructure and cities, prevented the efficient housing of the population and starved local administrations of revenues. 

Modern London is substantially a product of successive waves of speculative investment, but also contains the products of important class struggles in the form of extensive social housing, mainly distributed through the inner neighbourhoods where left-wing local authorities built workers’ housing in the twentieth century. This had given inner parts of London a rather fine-grain mixing of social class and some inoculation against rapid transformation: a distinctive feature of the city and one which we had rather taken for granted until about the turn of the millennium.

The other important and distinctive inheritance is the planning system established after World War II as part of the social democratic settlement and the policies and practices which developed it in the subsequent decades. In particular London is surrounded by a green belt, now merging into other restrictive designations of open land which extend far into the surrounding regions, preventing lateral urban growth. And within the urban areas we have many restrictive designations protecting neighbourhood character, architectural interest, views and landscapes. The market in housing has become also a market in proximity to these amenities, to the best schools (in a highly unequal system) and best environments. A few of us argue about the relative importance of monopoly, absolute and differential rent but we all agree that rent is a massive allocator and redistributor of the social product —a major mechanism making London a poverty machine and a wealth machine. 

It is in these specific London conditions that housing market demand has surged. It has been a combination of population growth, income growth for the rich who then tend to acquire more housing, policy and subsidy support by governments for expanding ownership and for capital accumulation —and all that supercharged by three decades of credit expansion and pervasive financialisation. Overall this has been a financialised boom in house prices. Affordability falls and the proportion of households in owner-occupation which had risen since 1918, peaked in the 90s, has fallen as more dwellings are switched to private renting —a tenure form almost completely unregulated and highly insecure for tenants. More and more households are driven to rent privately at almost all income levels: better paid workers who can’t yet afford to buy and poorer workers who would, in former times, have entered social housing. The social housing sector has shrunk steadily through privatisation and is now rapidly eroding as many housing providers raise their rents closer to market levels. In real terms, after allowing for housing costs, London median incomes are among the lowest in the UK and have recovered more slowly than other regions since the credit crunch of 2007/8.


London workers are thus simply unable to compete in this bloated housing market. That contradiction had been partly bridged by Housing Benefit, a part of the social security regime which government capped in a desperate attempt to contain its escalating cost. Wages remain low and static for much of the population while rents continued to escalate. The outcomes are an accelerated displacement of poorer people to cheaper areas —often far from London— growing overcrowding, broken and dispersed communities, ill health and disruption of schooling. Another outcome is mounting household debt.

Mainstream economists point out how well our unregulated private rental sector meets the needs of a dynamic international economy: anyone arriving in London can find housing to suit their purse and their preferences within a day: a penthouse or a villa for the rich; a shared bed in a damp cellar for the poor. Perhaps this is what they mean by a perfect market.

Finally the housing crisis has become a crisis for the productive economy since land used for industry, workshops and other economic activity can be sold at prices between 3 times and 10 times higher if it can be switched to speculative housing use. Planners, under strong pressure from politicians —and all of them bewitched by supply-side economists— have permitted and encouraged this switch, ignoring the erasure of economic life and useful services which had existed on this land, often ignoring the disproportionate impact on ethnic minorities.

In this context there are the beginnings of resistance: untidy coalitions of housing tenants —always rather fragmented by the different kinds of landlords they confront— environmentalists, small and medium enterprises and neighbourhood associations. London has always had a tradition of micro-local activism and the challenge has been to knit local struggles with policy debates at city-wide scale. My own involvement has been with the Just Space network in which about 100 organisations support each other in this activity: building both organisational capacity and counter-narratives to the neo-liberal orthodoxy. This is the forging of new ‘communities of practice’, especially in the governance of landed commons: the streets, green space, water spaces and the social housing estates so hated and demonised by the elites, and also in challenging the London Plan itself.

In the present conjuncture we have the national state pumping billions into radial transport infrastructure so that the growth can continue, fuelling land and property markets where the value is harvested by owners, investors and their attendant professions. The local state fosters densification on multiple fronts (though not in the most privileged areas) and prizes open new investment opportunities on former social housing and industrial sites. The central bank is aware that the financial system is at risk of this bubble bursting. We shall see. Meanwhile the challenge is to grow the critiques and resistance from the bottom up, maintaining exchanges with other geographic scales and with movements in other regions and countries. 

Postcard 2 May 2020

Now we are in the midst of the Coronavirus pandemic.

The Covid experience is, to begin with, exposing & dramatising some of the less-visible pathologies of the city. Overcrowding of low and middle income people in the housing stock fosters infection; care homes and prisons could perhaps be made safe places if adequately resourced with staff and equipment but starved of both they are death traps. Middle and upper classes have second homes to retreat to, or at least gardens and balconies in London. Working at home is familiar or feasible for office workers but for most personal service and working class people you only get paid if you travel to your workplace and the transport network is itself a major spreading hazard for the infection. The class society becomes so visible.

The growth of household debt means that so many households have NO financial buffer and face destitution when work stops and government has refused to adopt a universal basic income. The patchwork of emergency supports is inadequate and full of gaps. Arrears are thus mounting up in all the rental housing sectors and a delayed wave of evictions threatens.

Especially terrible is the mounting evidence of the discriminatory impacts on black and ethnic minority people as deeply entrenched occupational and housing inequalities are sharpened by the management practices of health, care, transport and construction sectors. 

On the other hand, we discover how wonderfully air quality improves when traffic stops and that the city became as safe and quiet as Venice, suddenly. We discover our immediate neighbourhoods as pedestrians. We also discover that state power and money could be used to requisition unused hotel rooms for the street homeless to self-isolate (though not yet empty housing or Airbnb). Perhaps most important (so far) is the widespread realisation that the value of people’s work to society is almost inversely related to their rate of pay & their conditions. The valuation placed on the products of bankers, lawyers and accountants relative to nurses and bus drivers has given London its massive GDP but also its gross exploitation of ‘key workers’, now more transparent than ever.  

When we look back in a few years perhaps we’ll also focus on the fabulous proliferation of local self-help networks, rent strikes and other grass roots initiatives as citizens take their own actions in response to a failing state and incapacitated local governments.

So what does all this mean for the city? Fast-reaction pundits are already writing about the death of the city, the exodus of upper echelons to the provinces, or the accelerated expulsion of the working classes to the provinces, curtains for high density living or a golden age for high density living, back to the suburbs with electric cars. We just have to hope and insist that careful analysis and unpacking of class relations inform whatever happens next, otherwise the property and finance interests which rule us will simply latch on to the glib diagnoses which suit their needs and we’ll be back to the old normal, just with extra bike lanes.

It is deeply alarming but also has gleams of light for potential change. And remember that, hard on the heels of Covid-19 come the bigger tsunamis of Brexit and climate change and their attendant vultures.

END

A longer text with more emphasis on housing, and with references and links is Michael Edwards, (2016 April) The Housing Crisis and London, in Special Feature on London edited by Anna Minton and Paul Watt, City, 20, 2, 222-237, (paywall – or email m.edwards@ucl.ac.uk for a copy) http://www.tandfonline.com/doi/full/10.1080/13604813.2016.1145947

The web site http://justspace.org.uk has links to official and oppositional reports and academic work, together with campaign documents. The network is part of the European Consortium for Rights to Housing and the City http://www.housingnotprofit.org/en and has links with INURA.org

Teach-out on rent

Alongside the strike by university workers about employer attacks on the USS pensions scheme and disputes over the casualisation and discriminations of university jobs and pay, there will be a teach-out on Tuesday 3 December at 11:30 in the brick circle @ Tolmers Square NW1 2PE

How can land rent theory help us fight today’s battles? A #ucustrike teach-out, looking back & forward at land, rent, housing, planning with numerous contributors, including

Michael Edwards @michaellondonsf
Callum Ward  @Callumny
Daniel Fitzpatrick @danielmadav
Andrew Purves
Elena Besussi @ecudielle & perhaps others from UCL Bartlett
Louis Moreno, Goldsmiths, whose Review of Brett Christophers is here
(invited) Mary Robertson, Mr Corbyn’s office.
The event is triggered by the re-issue as a Routledge Classic of the 1985 book
Land Rent, Housing and Planning, a European Perspective, edited by Michael Ball, Vincenzo Bentivegna, Michael Edwards and Marino Folin. This was a compilation of Marxist work on rent and private land ownership. Contents and order details at http://bit.ly/2M8z11P
Review of the re-issue by Callum Ward in Radical Housing Journal
The 1985 book was itself one product of The Bartlett International Summer Schools (BISS) on the Production of the Built Environment. These international meetings were held annually from 1979 until 1997 and were the proving ground for a key strand in Marxist urban scholarship centred on the production and labour processes within the whole society. Thanks to the efforts of Jake Arnfield and MayDay Rooms,  the Proceedings of the BISS – out of print for many years – have now been digitised and are online at  http://bit.ly/AllBISS Further work at MayDay Rooms will shortly apply OCR to produce searchable versions.

Notes from Michael Edwards

What we discovered in 1970s and 80s from reading Marx on rent was (for me):
  • Rent as a feature of class relations in the division of the social product, rather than simply another kind of transaction among individuals in markets;
  • Rent and private property relations not only a mechanism for distributing part of the social surplus between capitalists and landowners (Topalov), but one which can profoundly affect the whole structure of the economy, at times fostering particular types of growth, at other times frustrating and extinguishing branches of production (examples of Ben Fine’s analysis of coal mining or, currently, the fortunes of retailing, the stalling of productivity growth);
  • A determining factor in the structure and evolution of construction, the choice of technologies (Michael Ball and Andy Cullen) and the labour process of architects and other built environment trades and professions;
Today’s London issues and rent theory:
  • Mainstream strategies for London dominated by a crude, Neo-classical, supply/demand analysis, an imperative justifying state violence in support of speculative housebuilding, not the meeting of needs;
  • Density controls on London housing which were largely circumvented in our notoriously ‘flexible’ planning system, followed now by the controls being scrapped in favour of ‘design considerations’, fostering developer over-bidding for sites;
  • The fetishisation of ‘agglomeration economies’ to sustain an imperative for London’s growth, underpinned by state investment in infrastructure, with value harvested by landowners including owner-occupiers; (HS2 is ripping up the Tolmers Square area right now.)
  • Endless increments of building height and density in a (?doomed) quest to finance infrastructure from developer profits, with social housing loosing out (Jenny Robinson).
Some current hazards
  • Calls for land nationalisation could simply make a more efficient capitalism (Singapore, new towns (a warning by Massey and Catalano 1978)
  • Calls for Land Value Taxation could simply hand extra power to a (fairer, more wholesome) market, instead of reversing commodification. (Analogous to the UBI dilemma.)

Tolmers Square…

…is part of a development by Camden Council for social housing, secured as a compromise after a long struggle by tenants, squatters, students and local businesses against a huge office development planned by the same developer who had transformed the NW sector of the Warren Street intersection into offices. There are a book and a movie by Nick Wates about it. The photo is from 1977 by Nick Wates and Caroline Lwin (c)

Tolmers 1977 Wates Lwin
A short link for this post is http://bit.ly/33y8AuI

Density: a walkover for developers?

[+ update at the bottom of this page as the Examination ends in May.]

Today in the London Plan Examination in Public (EiP) was the discussion on density policy.

Here I’m capturing my personal reactions – largely from memory – before they fade. I’ll later merge them with other people’s more balanced and complete notes and with Gabi Abadi’s notes on the morning session. They will then appear on the blog at JustSpace.org.uk

The GLA proposes to dispense with the ‘density matrix’, and thus with any upper or lower limits on housing density, replacing it with a site-by-site setting of densities to be conducted by Boroughs.

I appeared in my own right (not as Just Space); Caroline Shah from Kingston appeared for Just Space, Pat Turnbull on her own account (not at LTF), Peter Eversden and Michael Bach for London Forum of Civic and Amenity Societies, Kate Gordon for FoE and Neil Sinden for CPRE. Ian Gordon from LSE London, who had written 2 of the research papers commissioned by the GLA and had a big influence on the policy was there. The amazing James Stephens appeared for the Home Builders Federation but had to leave before the end. Duncan Bowie appeared for the Highbury Group on Housing Delivery. London First and some developer interests. London Councils and just one borough (Bromley!). Nicky Gavron for the London Assembly.

There was a great deal of criticism of the GLA new approach – an approach so new that it was still being re-written, with a lot of further proposed changes at the end of their statement for the day.

In essence there seem to have been the following issues:

What was wrong with the old system? Nobody thought it was perfect. Just Space had been criticising it for years for over-reliance on PTAL and ignoring social infrastructure capacity and social impact, especially in inner areas. Others had other criticisms but wanted to see an evolution through improvements designed to make a transparent quantified basis for policy.  Ian Gordon and the GLA wanted to scrap it. Ian’s position is that it has had no detectable impact on the actual densities of what has been built, is therefore a failed policy which existed for symbolic purposes only so it would be hypocritical to have it in the plan. He considers that “…we were also arguing that, since the negative effects of height/over development or whatever were essentially local in their incidence (unlike most of the expected benefits),  it was appropriate for individual boroughs to set and police upper limits in whatever terms/ways were most appropriate  [as the GLA could not be trusted to do this or need to be involved ]- which we thought unlikely to be via some mechanically derived number for a broad class of area.…” I had counter-argued that the need to slow down or reverse the escalation of residential land prices was a London-wide and strategic need which would & should justify a London-wide set of limits binding on Boroughs.

Would the boroughs have the capacity (skills, staff levels) to develop these site-by-site density settings? Widespread doubts about this, though GLA defended themselves stoutly, referring to Practice Public and other upskilling initiatives.

What if boroughs set densities which, in the out-turn, meant they would not attain their total output targets? I don’t recall an answer being offered on this.

How democratic is all this? Caroline Shah and Pat Turnbull both spoke strongly against the shifting of these crucial decisions out of the sphere of public debate (on London Plan and Borough Plan policies) and into the closed world of developer/council pre-application discussions in which deals are virtually done before “applications” reach committees. Caroline illustrated this concern from Kingston and Pat Turnbull from Hackney.

My argument that the enforcement of clear, upper limits on density would help discourage over-bidding by developers when they are buying sites and thus help damp land price escalation – to the benefit of social housing providers as well as private developers and ultimately households. (Many GLA statements favour discouraging such over-bidding in other contexts.) GLA mounted what I thought was a rather lame defence that recent changes in national and GLA Viability guidance make it harder for developers to argue that the price they have paid for land should be taken into account in ‘viability’ calculations and used to justify social housing reductions. They  brought in their new head of Viability, Robert Wacher, who argued that this can be really effective in ensuring that schemes are evaluated in the light of truly policy-compliant valuations, citing the Islington Parkhurst Road case. This was a brave effort but I countered by saying that, under the new GLA policy, there would be no policy on density, and thus no concept of policy compliance. Thus the reforms they were relying on would not work.  (If there was time I should have added that Islington was a council with strong and embedded policy requirements. But imagine trying to do that in Redbridge or Bromley.)

Is all this compatible with national policy?  James Stephens in the morning had argued that the GLA’s design policies did not accord with the NPPF requirement that applicants need clear enough guidance on what will be permitted to make compliant applications. He didn’t actually say this again on the density issue but it was in his written statement and is just the kind of issue the Inspectors have to look out for.

So what will happen? Many voices (including the London Assembly) were calling for the existing matrix or something like it, to be retained, or retained until better quantified arrangements were developed by the GLA or by each borough. I thought a map would be better than a (necessarily crude) matrix. The logic of the debate should persuade the panel to recommend something like this.  But will they have the nerve?

I’m getting tired now.  May add more to this tomorrow. Meanwhile here are the last 2 paragraphs of James Stephens’ written statement (HBF) which many of us have enjoyed:

“Once all this work has been completed for London several years from now, then we may eventually discover that the capacity for new housing within the developed area of London is much less than has been estimated by the Mayor through his SHLAA back in 2017. But by then it will be too late to stop the London Plan juggernaut continuing on its course of failure.

Of course, we appreciate why the Mayor would wish to dispense with the Density Matrix. This is because, if it had been retained, it would have had to be amended to indicate that much higher densities were to be tolerated in traditional suburban locations (characterised typically by low-density housing of about 20-30 dwellings per hectare). This would have attracted the ire of the residents of outer London. The London boroughs, however, know that this is what they will have to contend with.”

Later: 22 May 2019

  1. Today in the final session of the Examination, Robert Wacher (see above) said very firmly that, in their ‘viability’ testing they had estimated land costs for residential development per completed dwelling unit, e.g. £30,000 per dwelling, stressing that the value of sites depends on how much can be built there. This helps support our argument.
  2. Ian Gordon at the LSE has published his own blog post on this density issue, and I have been able to reply to his criticism on the comments section of his post. It is at http://lselondonhousing.org/2019/03/london-plan-eip-day16-m39

Later: 16 July 2020

Peter Bill article following the death of Tony Pidgley (boss of Berkeley Homes) on just hw he made decisions and, in particular, how adept he was at securing extra density after gaining an initial permission: what did I say? https://www.propertyweek.com/insight/learning-from-the-past-master/5109058.article

Mayoralty

[This morning I read, via Twitter, a short essay by Richard Brown of the Centre for London on 5 ways in which the Mayoralty (i.e. the three mayors we have had so far) have changed London. I responded with a tweet, he replied and I didn’t immediately respond because I thought it needed a careful response. This is it. I started with…

 

London Plan: thinking aloud

Warnings: this post (autumn 2018) is an informal attempt to collect my thoughts on the draft new London Plan. It is ‘thinking aloud’ in the sense that I’m tussling with the issues and shall continue to do so before I’m finished. It should not, therefore, be quoted or re-blogged please without cautions.  But if you have comments please do make them, either at the end of this post or on twitter (including @michaellondonsf) or by email m.edwards AT ucl.ac.uk

This post draws heavily on discussions and documents of the last few years, mainly those generated in the JustSpace.org.uk network of community and activist groups, but also with students and staff at UCL, LSE and elsewhere. As and when any of this crystallises as submissions to the forthcoming Examination in Public I’ll acknowledge sources as far as possible but I hope people will forgive me for not naming them all in this rough text. The views expressed here are, of course, my own and not those of Just Space, the Highbury Group or (of course) UCL or the Bartlett.

I started this in mid-September, locking it with a password until I had added a lot more. A month later I realise that I’m not going to do that any time soon. So here it is as a fragment. More may follow….

A major weakness: the housing targets

At the heart of the London Plan is a fantasy to which most planners and politicians subscribe, or at least appear to do so while in public. (I haven’t found the right cliche for this: emperor’s clothes? straw men? angels dancing on pinheads? deckchairs on the Titanic? ostrich?)

The fantasy is that the Plan should demonstrate that its targets will meet the projected housing needs and demands within the Greater London boundary and without using Green Belt. All 3 mayors have welcomed projected population and employment growth as an unchallengeable axiom.  The Johnson plan assumed that maximising housing output would solve problems and the draft Khan plan is pretty similar, albeit with a bit more attention to (the upper end of) “affordability”.  The previous London Plan (Johnson’s last one, 2016 version) was only approved by the Inspector very reluctantly as he considered that the targets were too low to “meet need” and insisted that a new one be immediately prepared. The current draft is the result, with vastly increased housing targets.

Very few people believe that these total output targets will be met, any more than previous ones were. Even the mayor complains that more powers and money will be needed from central government. London’s demand pressures will continue to be unmet and people will force their way out into surrounding counties and towns, adding to demands and needs being generated locally there and spreading the affordability crises. The national government, such as it is, won’t acknowledge that because they abolished regional planning in 2010/11 and are dependent on what they assume to be NIMBY votes in the home counties. Crossrail 1 gives the lie to this ostrich approach, as does the campaign for Crossrail 2: both will/would enable a lot of growth of long-haul commuting into Greater London. How people in City Hall can keep a straight face maintaining these contradictory positions is a puzzle.

The Just Space submission to the London Plan consultation in February 2018 (p40) sums this up and continues:

In one sense London’s failure to meet its entire needs within its 
boundary does not matter. The Mayor needs to pretend that this is 
possible to satisfy the requirements of the NPPF. But London’s 
housing pressures have been spilling out to regions near and far for decades and will undoubtedly continue to do so, further propelled by Crossrail 1 and (if it is built) Crossrail 2.

But it does matter for two reasons: (i) the cost and environmental 
impact of all that extra travel is bad growth by any standard, and 
borne by people in all income groups, and (ii) the massive pressure 
exerted by the targets are a grave threat to good growth in London inthe ways outlined...

[‘good growth’ is a central objective of the mayor’s plan]
good beans

These targets for total housing output become the central imperative which has led to most of the adverse features of the Plan: the push for estate “regeneration” which demonstrably reduces the social housing stock, leads to many losses of green space and school recreation space, land price escalation (which displaces jobs, businesses and public services, reduces value for money in market housing and inflates the cost of providing non-profit housing). The targets are to be met, essentially, by intensification / densification of housing and of all other uses of land. This will be a bonanza for land owners, shrewd developers and incumbent owner-occupiers. The journalist Peter Bill, writing in Property Week said “‘Densification’ is the Big Idea. A prescription that will promptly jack up values on the right land.” Was he thinking of the Marx concept differential rent type II which comes from applying additional capital to land?

One of the remarkable features of this Plan is how little attention it pays to the land and property markets. This is a city increasingly subordinated to property market forces and a Plan which relies heavily on market processes for the implementation of its building programme. But there is precious little informed analysis of how the land and development markets actually work, either in the Plan or the Economic Evidence Base.
Property consultants contribute specialist studies on the office market and retailing but nowhere can I find any analysis of how the land market works. Nor have I come across land market people in GLA teams. This may help to explain why the Plan is so cavalier, taking enormous risks of inflating land prices.  My own personal evidence submitted to the panel is on just one such issue: the proposed deletion of the density matrix.
There are a few glimpses of unrelated thought in the Plan: one is the statement that land price escalation through developers bidding too much should be limited by a clear, firm, rule on “affordable” housing requirements (but only in Opportunity Areas, and no mention of clear firm rules on density) §4.6.13. Another glimpse is in the discussion of why large sites take so long to complete. On this issue there has been lots of research and it is generally agreed that developers on large sites ‘build out’ only at the rather slow rates which they judge will avoid flooding the local sales market and undermining prices. This has led to policies favouring Build-to-Rent where build-out rates are thought not to undermine profitability so much.
On the housing targets I’m glad to say there are likely to be strong critiques coming from authoritative experts as well as from Just Space: Duncan Bowie and the Highbury Group; Iain Gordon I hope (see the LSE London submission); Vincent Goodstadt and others (I hope) on inter-regional issues. The critics of targets to maximise total housing output very in the strength of their counter-proposals.  Essentially the strong argument is that the plan should concentrate on meeting the overwhelmingly urgent needs for low rent housing (council housing):  focusing resources there, minimising losses of inherited social housing, mobilising and expanding public land holdings and the non-commodity sectors. All are tricky things to do under this present government but more doable after an election.
On the Land market issues I haven’t yet seen much evidence except from the great surveyor Stephen Hill and the historian Michael Hebbert. The RTPI is rather limp on this and the RICS seems not to have commented on it at all! Whether the panel of inspectors can be persuaded to send the plan back as unsound remains to be seen.
That’s all for now. More on Thursday, I hope.

Density limit is essential

This is evidence I am submitting as a personal response to the draft new London Plan. I am also sending it direct to officers in City Hall in the hope that they will do some work on it in time for the hearings of the Examination in Public in the autumn of 2018 [later: postponed to January 2019 & now expected on Tuesday 5 March in the afternoon, Matter 39 https://justspace.org.uk/hearings-eip-2019M39 ].

Summary

This submission argues that policy D6 Optimising housing density is a dangerous mistake. It would remove all numerical controls or advisory upper limits on the density of new housing schemes and would instead regulate density using a ‘design-led’ approach. Developers would be expected to negotiate with planners in each of the boroughs.

Developers decide how much to bid for a site by residual valuation: estimating the disposal value of whatever they will be permitted to build and deducting their expected costs to reach their sensible bidding limit. The 2 main factors a London housing developer needs to anticipate are the density of the scheme and the percentage of social / ‘affordable’ housing which will be required. If the development plan is clear about both factors and these policies are expected to be enforced then developers will make sensible bids for sites. If the development plan is imprecise or flexible or if the planning authorities are known not to enforce its provisions then developers will tend to bid too much for sites in the expectation that they can recoup their profitability by negotiating relaxations, often citing ‘viability’ constraints. This will encourage land price escalation.

Elsewhere (in the context of affordable housing requirements) the draft Plan accepts the importance of discouraging developers from over-bidding and creating land price rises “based on hope value” (§ 4.6.13) but the same logic is not applied to density controls. This is inconsistent and a great mistake. It will lead to land price escalation and thus to worsening affordability problems in the entire London housing market and for non-profit producers when they buy sites. Upper limits on density should be retained and enforced.

Background

Since the GLA was created in 2000, London Plans have used an innovative approach to controlling housing density for new housing across the city: density should be proportional to public transport accessibility. In this way most new residents are conveniently placed to use public transport and that, in turn, supports better and more frequent services. By contrast, in the areas which are a long walk from public transport or where services are infrequent, only very little new housing should be allowed. Developments in such places are more likely to generate car trips, so the fewer of them we have, the better. The combined effect of increased density (whether driven by policy or by market forces) with lots of other policies and investments, has been that London has managed the miracle of increasing the proportion of trips made by public transport, cycling and walking in this century. It is arguably London’s great achievement.

This very simple idea was embodied in an advisory matrix (a table) in which Public Transport Accessibility Level (PTAL) allows you to read off the range of recommended housing densities. Further refinements were added and the matrix was re-named “sustainable residential quality matrix”.

The market in housing land

With the high and rising prices and high rents of open-market housing in London, the speculative construction of housing has been extremely profitable for developers, whose quest for development sites has often been very competitive. This competition among land buyers tends to drive up the prices paid for land which is disastrous for councils and non-profit housing associations seeking to buy land cheaply to provide social housing, but also makes it harder to require private developers to provide a high proportion of social housing or other social benefits within their schemes (agreements under Section 106).  Securing social housing and other social benefits in private developments has become much harder since the financial crisis of 2007/8 when a downturn in disposal prices (a brief downturn, as it turned out) enabled developers to claim that they could no longer afford to make such provisions on the same scale, or at all. They became adept at using confidential ‘viability’ studies to minimise such commitments and the Coalition government of 2010 strengthened their position in new guidance and regulations. The use of ‘viability’ studies has been fully explored by journalists (Turner)  and by academic researchers (Colenutt and others 2015; Sayce and others 2016).

In calculating how much they can afford to bid for land, developers work backwards from what they can expect to realise from final sale or letting of the finished homes, deducting their estimated construction and other costs (plus a mark-up called ‘developer’s profit’) to arrive at a ‘residual valuation’ —the maximum it’s worth them paying. If maximum permitted density is specified in the city plan, then developers have clear limits on what they can build and that is therefore a main determinant of land prices. This is one of the key ways in which state action constitutes land markets —by defining precise development rights which can then be traded.

The London Plan density matrix has been very widely breached and ignored, however. That has been clear for years and in 2016 the GLA commissioned a study by an LSE team (Ian Gordon, Alan Mace and Christine Whitehead) which concluded that the matrix probably had very little effect: the densities of actual building projects could mostly —or better— be explained statistically by direct accessibility measures, neighbourhood density and other attributes.  [see their report and Chart 3.2 below] The researchers were interested in how to improve forecasts of future built densities and proposed that the matrix be discontinued. They considered that the London Plan should specify minimum permitted densities but that any setting and negotiation of maximum levels should be a matter for the 33 London boroughs whose professional officers and elected politicians would best be able to know what would be accepted in each place.

LSE 2016 density chart

The LSE study is notable, however, for having paid no attention to the effects of density regulation on land prices, so the consequences for the land market of their proposed de-regulation (or re-regulation) are not considered. On 30th October 2017 Prof Gordon confirmed:

"You’re clearly right that we did not actually assess the difference that specifying upper limits to local densities might have made in moderating land value inflation in London since 2004. And, though I understand little of land/housing economics, I too would assume that expectations that higher densities were likely to be permitted on particular types of site would increase expectations of its value."

If you, the GLA,  have a planning policy which is only advisory and is being widely disregarded or over-ridden in actual decisions, there are two ways to go. You could scrap the policy in favour of an explicit devolution of the issue to local policymakers and negotiators. Or you could improve and tighten-up the policy, making it mandatory. My view is that the GLA is wrong to scrap the matrix because it will further encourage speculative land buyers to over-bid for sites, pushing prices up, confident that they can negotiate high enough densities with the boroughs to get their money back.

Case-by-case negotiation between developers and boroughs has already been responsible for squeezing down the level of social housing provided under Section 106. If the regulation of maximum density becomes even more relaxed than it already is, then I’m expecting land prices to be further pushed upwards.

What the GLA should be doing is trying to get much more certainty into the land market by tightening up and enforcing (i) upper density limits (ii) minimum percentages of homes to be let at social rents. (The draft Plan uses the term “affordable”. I regard that term as now bereft of meaning, but that’s not part of this submission.)

Can I prove I’m right?  No. It’s based on my understanding of how markets work and is consistent with what practitioners (including many of my ex-students) tell me. It also fits with standard thinking in those countries which have zoning systems where it is a basic rule or axiom that any flexibility or relaxations in density must be strictly codified and only given at a high price —for example the incentive zoning debates in New York. I shall summarise international practice if called to the EiP.

It is significant that the Mayor implicitly accepts that greater certainty will be valuable in the operation of the land market in his new Threshold approach to affordable housing requirements (Policy H6) and explicitly in §4.6.13 where he accepts the importance of discouraging developers from over-bidding and creating land price rises “based on hope value”. However this logic is applied only to affordable housing percentages and only in Opportunity Areas. The same logic ought to apply to upper density limits and throughout London to minimise speculative land price escalation.

Proposal

Policy D6 should be replaced by a new policy

A revised version of the 2016 density matrix has been proposed by Duncan Bowie in his submission and valuable work was done by GLA and TFL last year to refine the PTAL accessibility measures and take account of bus and train service capacity. The Just Space Community-led Plan proposes that density controls take account of social infrastructure capacity. If a more sophisticated version of the matrix cannot be brought forward in time for for the EiP I would support retention of the 2016 matrix for use in boroughs which have not yet completed acceptable Design Codes  (policy H2B(2)) which in turn would have to include transparent density limits.

For the avoidance of doubt

1. Nothing in the density matrix prevents the good design which the draft Plan is so keen to encourage. Indeed it fosters the clustering of denser settlement in pedestrian-friendly configurations where accessibility is best. Architects and other designers can do brilliant work within density limits.

2. This submission is not an argument for any particular level of density.

3. Is this all I have to say about the draft Plan? No, but I am privileged to be able to contribute, along with colleagues and students, to other submissions on wider sets of topics, notably Just Space and the Highbury Group.

4. Biographical detail. Michael Edwards studied economics, then planning at UCL 1964-6. He worked in Nathaniel Lichfield’s practice, doing economic inputs to the Plan for Milton Keynes. He has enjoyed lecturing at the Bartlett School, UCL since 1969, founding and teaching on a Masters programme European Property Development and Planning which was centrally concerned with how planning constitutes and interacts with markets.  He has been been involved in all the EiPs on London Plans since 2000, working with the network of community groups JustSpace.org.uk  His publications are at michaeledwards.org.uk  and he tweets as @michaellondonsf . His 2015 paper on The prospects for housing, rent and land over the next 45 years, commissioned by the Government Office for Science Foresight project on the future of UK cities is at http://bit.ly/1NvjmV7  He is now a semi-retired Honorary Professor at UCL.

References and support

Toby Lloyd at Shelter in his February blog post  called for similar changes – not on density but on affordable housing proportions, space standards, viability tests, with good graphics. http://blog.shelter.org.uk/2017/02/time-to-look-again-at-viability

Colenutt, B, A Cochrane and M Field (2015) “The rise and rise of viability assessment” Town and Country Planning 64(10): 453-458

Gordon, I, A Mace and C Whitehead (2016) Defining, Measuring and Implementing Density Standards in London London Plan Density Research Project 1 London, LSE http://eprints.lse.ac.uk/68515

Just Space 2016 Towards a Community-led Plan for London, at Just Space A4 Community-Led London Plan

My correspondence with Ian Gordon is appended, with permission, to an earlier version of this document at https://michaeledwards.org.uk/2017/10/28/dont-dump-density-alarm/

Sayce, S, N Crosby, A Parsa, R Harris and P Garside (2016) Viability and the planning system: the relationship between economic viability testing, land values and affordable housing in London, University of Reading http://centaur.reading.ac.uk/68820/

Turner, George (2018), http://www.ourcity.london/financial-viability-in-planning/

Peter Bill (2018) in Property Week is spot on with a short article Khan’s heartless London Plan is good news for developers  “‘Densification’ is the Big Idea. A prescription that will promptly jack up values on the right land.”

Added September 2018, but not part of submitted evidence.

This is the matrix in its most recent form (in the 2016 consolidated version of the London Plan)

Screen Shot 2018-09-20 at 10.07.23

This, below, is an early version of the PTAL map for the whole of Greater London

sds 15 ptal

and this is an extract at a larger scale (covering the northern part of Kensington & Chelsea)

Screen Shot 2017-10-28 at 18.32.21