Memorandum submitted by the Sustainable
Development Commission
BACKGROUND TO
THE CURRENT
URBAN AND
HOUSING SITUATION
1. England is a small, densely populated
island (level with Holland as most dense in Europe; among the
major countries of the world, we are the third most densely populated).
2. England industrialised and urbanised
first in the world, using heavy extraction and production methods
causing immense environmental harm (not yet compensated in Midlands,
North, Scotland, Wales and Thames Gateway).
3. Our rapid rise to wealth was predicated
on exploitation of the urban poor, leaving a strong class legacy,
particularly in industrial and mining areas, of male manual unemployment,
low skill, alienation from formal education etc. Colonial expansion
and domination gave us essential raw materials at great environmental
and social cost in exporting countries, eg Australia, South Africa,
Zimbabwe, Hong Kong. Today's migration patterns often follow the
patterns of colonial history (eg Indians in Birmingham; Somalis
in Sheffield; Jamaicans in Brixton, Bangladeshis in Tower Hamlets;
Pakistanis in Bradford etc).
4. Urban England became so wealthy early
on that it built in houses rather than flats, although for the
poor these were extremely crowded and dense with poor sanitation
etc.
HOW CURRENT
URBAN ISSUES
AROSE
1. Much of our current urban housing stock
was built to replace cleared slums (council housing, model dwellings,
Peabody blocks, terraces) in the late 19th and early 20th centuries.
These were built to high standards relative to their time because
of our industrial wealth. Higher class, earlier dwellings survived
if renovated, eg Georgian London; Victorian entrepreneurs' and
professionals' houses in Midlands and North. Overall the structural
condition of the surviving pre-WW1 stock is sound as only the
better built stock survived our long and extensive slum clearance
era (1930-80).
2. In spite of our high overall densities,
our urban areas are built at very low density compared with the
rest of Europe (or Scotland), reflecting our greater wealth and
innovative use of terraces. Cheaper, higher density "barracks"
and courtyard blocks, common throughout Europe (the Barcelona
model), are extremely rare here.
3. Suburban semis in suburbs grew rapidly
between the wars, thanks to government subsidies to private builders,
and owner occupation spread down the classes. Manual workers were
the dominant purchasers. Today we have about 3 million interwar
semis.
4. After WW2 there was a huge burst of house
building rising to over 300,000 per annum for a very short time
(1964-71) due to war time shortages, the legacy of WW1 and the
interwar loss of private renting due to tight rent controls. Above
all the giant slum clearance programme, displacing 4 million households
(demolishing 2 million homes) over 50 years, but mostly carried
out between 1955-80, required a massive building programme. Over
5 million council homes were built between 1945-2000 and around
7 million private homes.
5. In the 1970s there was a strong policy
shift away from clearance and council estate building, in favour
of renovation and area renewal. Several factors caused this shift:
— the high cost of new building and
unmanageable levels of long-term debt;
— the blighting effect and growing
unpopularity of slum clearance;
— poor design and decline in quality
of council housing (from 1968 onwards);
— increasing concentrations of needy
families in council housing due to targeting slum clearance families
(from 1930) and homeless families (from 1977);
— the failure of industrialised system
building and non-traditional building methods;
— the difficulties in managing large,
modern estates and the difficulty in letting big increases in
supply (government first saw signs of over-supply in 1974);
— mounting social problems caused by
loss of family supports and disrupted social networks;
— loss of many small scale enterprises,
workshops and services through blanket demolition in inner cities;
— the destruction of recognisable urban
street patterns;
— unpopularity of many of the 29 new
towns, resulting from poor planning and execution, low density
and "lack of atmosphere";
— racial polarisation in inner cities
through the concentration of minorities in "twilight areas",
ie areas adjacent to clearance areas blighted by lack of investment.
All these problems had extremely severe, long-run
effects which we see today. Many of these clearance impacts arise
today.
6. A positive drive for change came from
the desire of young urban professionals to recolonise the city,
buying up low value, often condemned property in "twilight
areas", and converting them for owner-occupation at relatively
low cost. Inner London led the way in this, partly due to uncommutable
distances.
7. The policy shift to rehabilitation of
existing properties and areas led to major renovation investment
across inner London; the scrapping of many outstanding demolition
plans (some in place since 1935); the introduction of improvement
grants; and general improvement areas. It increased the social
and ethnic integration in the capital (not always successfully
due to gentrification, the continuing polarisation of council
housing and the un-affordability of renovation (even with grants)
for low income owners. In other parts of the country, area improvements
also brought benefits, but these were undermined by severe depopulation,
extreme job losses and over-supply of housing through excess outer
building (eg NW regional figures, 1999).
8. The lower costs of renovation over new
build were apparent. The durability of older building structures
were demonstrated (eg sash windows, main timbers, slate and brick
etc.). The adaptability of terraces, mansion blocks, redundant
offices, warehouses, factories, mills etc. became a useful tool
in inner city recovery.
9. In the 1980s and 1990s, private house
building was prioritised, producing 150-170,000 new homes a year,
staying level with household formation rates, mostly producing
suburban semis or detached houses at even lower densities then
previously—dropping from 40 per hectare in post war new
towns to 23 per hectare up to 2000. A total of around 3 million
additional homes were produced between 1980-2000, creating around
15,000 new private housing estates on the edges of settlements
all over the country.
10. The government (in the late 1980s) imposed
VAT on all repair and maintenance and renovation at 17.5%, but
exempted all new build (and change of use). Effectively demolition
also went VAT free because the government was worried about the
low level of demolition—"houses will have to last as
long as Windsor Castle" and because developers/house builders
understood regeneration as mainly about replacement housing.
11. In 1995 John Gummer introduced a brown
field target of 50% to combat sprawl building. Out of town shopping
centres were compounding the problems of sprawl, traffic growth
and the decline of existing communities. The town centres of Dudley,
Dartford and Gateshead are three examples of the devastating impact
of out of town shopping (with cheap land, subsidised roads and
free car parking). So Gummer also introduced restrictions on out
of town shopping. By 2000 both these measures had tilted the balance
of planning, if not delivery, in favour of brown fields and town
centres. There was so much in the pipeline that the time lag was
significant.
12. In 1997 John Prescott, Secretary of
State for the Environment, raised the brown field target to 60%;
in 1999 the minimum building density was set at 30 homes per hectare;
Prescott also reinforced the out of town shopping ban. These gave
a strong signal to builders, but many loopholes were found. It
is an uphill battle to deliver these targets in a way that enhances
urban communities. Higher densities requires higher standards
and complex management arrangements.
13. The Urban Task Force in 1999 highlighted
the plight of British cities and argued for:
— compact urban form, prioritising
quality of public space and good design, using infill and remodelling
existing buildings where possible;
— higher, more sustainable urban densities—50
per hectare minimum (still very low by European standards);
— concentrating development at public
transport nodes to combat congestion;
— investing more in better public transport,
cycling and walking;
— encouraging integrated mixed use,
mixed income developments;
— equalising incentives for renovation,
repair and new build by scrapping or equalising VAT at 5%;
— imposing an environmental impact
fee to reduce sprawl (equivalent to the "betterment levy");
— developing a sequential approach
to building, starting from the centre outwards and concentrating
development in existing urban areas;
— supervising green spaces, creating
pocket parks within easy walking distance of all urban homes and
protecting green belts.
SUSTAINABLE COMMUNITIES
PLAN
Several pressing problems drove the development
of the plan:
1. From the late 1990s, economic growth
pressures in London and the South East were showing up in job
recruitment problems as a result of high house prices, serious
affordability gaps and congestion. Alongside this growth, there
were still very high concentrations of poverty in London.
2. In the North (and to a lesser extent
in the Midlands) inner urban neighbourhoods were declining rapidly
and actually lost value in some cases, from about 1995, affecting
about 1million homes. By 1997 the phenomenon of low demand began
to turn into actual abandonment in small pockets across the North.
3. Meanwhile, more homes were being built
across two-thirds of the countryside outside the South East and
East than were needed. Even exaggerated household projections
did not match the level of new homes being produced. Empty homes
were not factored in to housing projections, leading to acute
over-supply, particularly in the North West, North East, Yorkshire
and Humberside. This over-supply greatly accelerated abandonment
and falling values in many parts of the North up to about 2002.
People prefer more expensive, new homes in better areas than cheaper
old homes in poorer areas, pushing prices even higher in high
demand areas and down in low demand areas.
4. There was a general affordability problem.
Homes in the South East and in popular places all over the country
were overpriced for low paid workers and first time buyers. There
were many drivers including: a) a reduction in subsidised housing,
b) rapid household formation rates, c) low interest rates, d)
growth in wages and two earner households, e) easier and larger-scale
lending.
5. Council housing was increasingly unpopular,
except with very low income households. The larger the estate,
generally the less popular the homes. Council estates affect the
price of nearby homes. Many parts of the Thames Gateway are affected
by proximity to large council estates.
6. The government subsidises the infrastructure
costs (particularly roads, energy, utilities and services) of
new private estates, generally outside cities, thereby accelerating
the trend towards decline of poorer existing areas and high demand
for new housing, even in regions where there is surplus housing
eg Greater Manchester, Merseyside. The value of this subsidy is
around £35,000.
7. The planning system, which in theory
controls all land use in the country, is slow, clumsy and uneven
in its operation. It bestows or withholds huge uncosted benefits
(development gain) through building permissions. It allows (or
has) too much land into the planning development system (in the
North and Midlands); or sometimes too little (in parts of the
South East). The negotiated agreements between developers and
local planning authorities (Section 106 agreements) create widespread
suspicion of manipulation and sometimes corruption. They don't
deliver sustainability because that is low priority compared with
sheer numbers.
8. Meanwhile, the countryside lobby argues
for recognition of the need for a "rural renaissance",
combating exclusion and affordability problems there too. Others
argue fiercely against rural building, relaxed planning, more
roads etc. Rural areas show a big growth in population, jobs and
general prosperity. They are under increasing development pressure.
9. The government has cooled off on the
transfer of council housing to non-profit landlords, encouraging
arm's length management instead for cost reasons. This reduces
ongoing investment into former council stock. They are under increasing
development pressure. It has also restricted the right to buy
in high demand areas because of affordability problems. Most significantly,
the government has set a standard of Decent Homes for all social
housing providers and has provided significant incentives for
major repair of council housing. However there are no clear energy,
waste or water targets and estate environments are not affected;
and the repair standards are minimal.
ACTIONS BASED
ON THE
SUSTAINABLE COMMUNITIES
PLAN THAT
ARE UNSUSTAINABLE
IN THEIR
CURRENT FORM
1. The Government has significantly raised
house building targets in the South East and East of England,
to be delivered mainly outside existing cities and towns, mainly
through private developers. There are weak enforcements on design,
density, energy efficiency etc. They do not address the needs
of existing communities.
2. There are large ambitious clearance plans
for the North and Midlands in nine Housing Market Renewal areas
(covering over one million homes) eg Liverpool proposes 17,000;
Stoke 14,000. Other areas of the North are also affected eg Middlesbrough.
10,000 demolitions by March 2006 means around 40 quickly declared
clearance areas, sending alarm bells ringing through many communities
across the country. These will not be easy to calm. Over the Pathfinder
life, it implies up to 200,000 demolitions or 700 blighted urban
neighbourhoods. This is not good for market renewal.
3. Estate regeneration, involving mainly
demolition and rebuilding, has become a common remedy for serious
repair deficits in council housing. Only rarely are social units
indistinguishable from the "top-end" private units necessary
to fund the rebuilding of demolished units. High density, high
value private housing sits uneasily on the same site as renovated
or rebuilt social housing of much lower quality. Yet this combination
is the main funding mechanism for regeneration, all privately
driven.
4. The 70% of the stock that is in existing
areas and in a process on constant, gradual decline receives very
little attention.
5. Key worker schemes are catching on. They
seem popular, but are expensive for government and limited in
scope.
SUSTAINABILITY PROBLEMS
1. Ambitious plans within the growth areas
and Thames Gateway are not adequately backed with infrastructure
funds, particularly for public transport. This will lead to sprawl
and string development rather than densification and upgrading
of essential existing communities.
2. Energy efficiency and environmental standards
are referred to in statements but without enforcement tools or
incentives, or clear targets based on the essential 60% cut in
energy by 2050.
3. Nothing is proposed for the existing
stock or existing communities. There is an assumption that they
will take care of themselves or be improved under Decent Homes.
This is totally unrealistic given the 17.5% tax on virtually all
repair and improvement, a major deterrent to home owners, builders
and local authority policy makers. Conserving the existing stock
and improving it is the sweet way to protect supply, prevent polarisation
and ensure long-term sustainability.
4. Demolition proposals are often ill-judged,
clumsy and poorly consulted so community opposition is inevitable,
and widespread. At least 50 community-based opposition groups
have formed with backing from architects, engineers, surveyors,
builders etc.
5. Building lots of extra homes (Bedford,
Corby, Milton Keynes, Cambridge, Peterborough, Southampton, Ashford,
Barking etc) wins plaudits in Government offices, ODPM and the
Housing Corporation. So does demonstrating a tough new set of
CPOs and ambitious demolition plans (Liverpool, Hull, Newcastle,
Oldham). Government wants quick results and Government officials
are reported to be pushing hard on numbers (both for demolitions
and new build).
CHANGING MARKET
CONDITION
1. House price rises have levelled off in
the South East and London, putting many developments, sales etc
on hold. Prices are likely to continue falling. Many developers
are looking to the affordable housing market.
2. House prices in low demand areas have
risen fast over the last three years and many demolition plans
are being called into question. Relatively prices are still low
but they are attracting buyers at much higher values—people
in work are responding to the market.
3. Conservatives control a majority of local
authorities, stalling many growth areas plans. The political problems
of many local authorities are caused directly by the Plan eg Liverpool,
East Lancashire authorities, Kent, East Anglia.
4. Environmental pressures have become a
much more urgent issue given the housing expansion of the last
decades and the awareness of the problems of existing homes. Existing
homes generally have poor thermal efficiency and are "very
leaky". The Government is now very interested in tackling
this. Equalising VAT would make a big difference.
5. The incentives to build new are still
strong and the barriers to repair and renovate are still weak.
New build leads many of the negative environmental consequences
we face—not just sprawl but social isolation and polarisation;
growing ethnic separation; rapid increases in traffic and congestion;
waste of embodied energy and materials; landfill and flooding
impacts; decline of existing areas etc. In a heavily built up
country, this is a serious (possibly the most serious) barrier
to sustainability. The tax barriers to renovation are huge, for
high income as well as low income households, leading to decisions
to move out. This undermines the conditions of whole neighbourhoods
and negates the very idea of sustainable communities.
6. The existing stock and existing built
up areas offer our best prospect of sustainability. The rapid
expansion of small infill developments in inner and central London
underlines the untapped capacity of existing areas. Current capacity
studies are highlighting this potential.
ISSUES TO
BE RESOLVED
1. There is a conflict between house building
targets and environmental pressures—water supply, water
and waste disposal, transport overload, land take, real costs
and incentives to government of current policies.
2. The continuous decline of older property
and need for continual repair and upgrading faces the big barriers
of VAT; plus the fact that older property is often occupied by
poorer people.
3. The relative costs of upgrading existing
homes to eco-excellent standards compared to new build must be
clarified. Evidence from BRE and three other studies show upgrading
to be cheaper, with shorter payback times, to be longer lasting,
with lower maintenance costs; and to achieve the highest environmental
performance relatively easily.
4. The perverse incentives to demolish must
be tackled:
— low income owner occupiers can't
afford major repair with 17.5% VAT;
— better-off buyers see VAT as a big
deterrent;
— builders report that it's easier
to build new because of planning, building regulations, site access
and VAT;
— the embodied energy in existing buildings
is not costed, nor is the landfill or pollution impact;
— some improvement schemes lose viability
through VAT, eg Langworthy, Salford, Parkhill, Sheffield, central
tower blocks in Birmingham;
— the social consequences of growth
areas and demolition areas are already powerful. Neither approach
addresses the problem of cities in the round. Nor do they begin
to address environmental problems;
— estate regeneration under current
private funding only stacks up with large scale demolition and
new private high cost building to cross subsidise replacement
social renting.
CONCLUSION AND
POLICY RECOMMENDATIONS
Isn't current policy just a return to predict
and provide and the heavy hammer of government intervention on
too large a scale? A modest shift of incentives and a more even
playing field between existing and new communities would transform
regeneration methods.
RECOMMENDATIONS:
WE SHOULD
DO THE
FOLLOWING:
(a) Equalise VAT between new build, repair
and renovation. Impose VAT on all demolition, to be paid by the
organisation producing the replacement housing, for example, the
private developer in the case of Council estates where a developer
wants the land. Councils should no longer fund demolition directly
and it should not escape VAT.
(b) Charge the real infrastructure cost of
new build property to the developer/builder, thus creating greater
incentives for renovation.
(c) Require the recycling of at least 80%
of demolition building materials into reuse as building materials,
targeting timber, brick, slate and stone particularly—this
would push up the value of existing properties and reduce landfill
waste as well as greatly helping climate change targets. New build
waste material should be reduced to 5% in line with other industrial
waste targets, compared with current performance of around 30%
waste.
(d) Require eco-excellent standards of all
new build and renovation. This would favour renovation on a cost
basis and disallow get-out clauses for small performance improvements
in new build.
(e) Count renovation and reuse of existing
buildings as additional units, thereby contributing to the output
targets and increasing the incentives to repair and improve property
for councils and housing associations.
(f) Adopt a strict sequential approach to
land use, starting from the centre and working outwards, incorporating
into the brown field agenda the reuse of existing buildings, as
was originally conceived but is in practice not applied. This
should enable us to push up the brown field target beyond 70%.
(g) Require a minimum average density of
50 homes per hectare to support a regular local bus etc (SDC,
2004).
(h) Reuse the existing Council stock as far
as possible as it is often capable of thorough renewal at a far
lower cost than demolition and rebuilding. This would greatly
assist the affordable housing supply. To achieve higher standards
of repair and management, it will often be necessary to transfer
the stock to alternative landlords (including ALMOs and housing
associations).
(i) Support neighbourhood management across
the board in built up areas, focusing first on older, more run
down and more precarious areas.
(j) Create fiscal incentives for the recycling
and remodelling of buildings, as well as for infill, leading to
reinvestment in existing communities. This would hugely increase
capacity in the inner Thames Gateway (London), close to transport
links, eg there are approximately 750,000 existing homes and massive
infill capacity around existing transport networks and other services
in need of regeneration in the Thames Gateway London boroughs.
(k) Impose revised building regulations on
the existing stock and create incentives through council tax remissions,
VAT exemptions etc to fund it.
REFERENCES
Power, A and Mumford, K (1999) The Slow Death
of Great Cities? Urban abandonment or urban renaissance, Joseph
Rowntree Foundation.
Power, A (2004) Sustainable Communities and
Sustainable Development: a review of the Sustainable Communities
Plan, SDC/CASE report 23, LSE, January.
Rogers, R and Power, A (2000) Cities for a Small
Country, Faber.
Urban Task Force (1999b) Towards an Urban Renaissance.
Final Report of the Urban Task Force. London: Stationery Office.
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