Steve Clarke looks at the issues raised by David Cameron’s estate regeneration programme in England and the potential implications for Wales.
Two terms have become increasingly important to tenants recently, regeneration and gentrification.
Regeneration is a term that means different things to different people, and I guess organisations. The term spans large-scale activities that promote economic growth, through to neighbourhood interventions that improve quality of life for a community. Because quite often, a key focus within regeneration plans is the supply of additional housing, or improved existing housing, regeneration often accompanies infrastructure developments that provide job opportunities. Few would deny the need for regeneration, particularly where there has been persistent poverty and disadvantage in what is otherwise may be a thriving urban setting.
Gentrification on the other hand, is a general term for the arrival of wealthier people in an existing urban environment with accompanied increases in rents and or property values, the consequences of which are often changes in the district’s character and culture. Gentrification is often used negatively, suggesting the displacement of poorer communities in favour of more wealthier inhabitants. Gentrification when accompanied by regeneration produces greater spending and additional wealth to the community. However, in recent years we have also associated gentrification with welfare reforms. For example, in London with the introduction of housing benefit caps, people are being forced out of high value property areas to make way for the new money and new investor developers, that fails to provide local benefit to the community.
When earlier this year when prime minister David Cameron called for the regeneration of run down council estates to halt ghettoising and the residualisation effect of council estates (the concentration of poor in one area) he was being advised where the cheapest options were to regenerate and gentrify communities and maximise profits for developers. That is, existing council estates. These ‘development hot spots’ are potential manna for developers.
These hot spots occur where investors see potential for big financial gains on sales of properties or increased rents. Developers are not confined to vacant land or underdeveloped sites, but have moved into existing areas inhabited by social renters as development land becomes difficult or too expensive to acquire.
We are told that the tags for ‘hot spots are several and critical in attracting the right investment’. Rather than in the past being reactive, or even in recent times being more proactive with development programmes, the investor is now becoming more ‘predictive’, utilising intelligence to target areas ripe for regeneration and gentrification. Could this be our council estates?
With some social landlords looking to improve revenues with more commercially minded approaches to regeneration, the consequential gains in such national programmes for Wales could be hard to resist as one of the most cost effective options in areas that are property ‘hot spots’ is to see often unprofitable and problematic social housing estates as prime for regeneration.
Among hot spot tags are the listing of sites that have: improved transport links; good broadband connectivity; areas of stagnant growth where there are low stamp duty surcharges on property values; areas where there are improved social outcomes, such as health and crime, or where councils are offering incentives, meaning higher tenant demand and stronger yields; and proximity to jobs and existing infrastructure. These are all ‘predictive markers’ for investor regeneration. Another favourite is to improve the value and attractiveness by developers, is improving schools, where developers or indeed councils can negotiate inclusion in the catchment area of improved schools.
The dilemma is that, as hot spots improve, as on some existing social housing estates, they are becoming potentially ‘predictive’ for prime development. Now that wouldn’t be so bad, as most would wish to see their estates ‘regenerated’, both physically and socially. But when you have the prime minister advocating and indeed incentivising the knocking down of council estates, what often occurs is less social housing not the same or more, and fundamentally altered communities and changed cultures.
With a programme of 20,000 affordable homes to be provided in Wales over the next five years, and the possibility of consequential for investment, and mergers being more common in recent times, the temptation is that we utilise existing council and social housing estates for corporate gentrification (as Cameron seems to be suggesting).
Although some of the regeneration initiatives have been inspirational in Wales, and while Welsh Tenants supports the Homes for Wales campaign, we need to also ensure that regeneration opportunities provide more, not less genuinely affordable housing and we have to be watchful of how land use is provided as we try and keep up with housing demand. One thing is certain: communities need to be ready for that challenge – should it arise.
Steve Clarke is managing director of Welsh Tenants. If you want to support the Welsh Tenants irrespective of your tenancy status then join the growing collective voice. Help shape the sector by visiting Welsh Tenants and subscribe as supporters www.welshtenants.org.uk