Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence


Memorandum by the Merseyside Civic Society (MCS) (AH 75)

  The material set out below is submitted on behalf of the Merseyside Civic Society (MCS).

  MCS is a charitable body with aims that include the protection and preservation of the architectural and built-form heritage and public amenity features of the Merseyside area, the promotion of high standards of town planning, architecture and design within the area and the safeguarding of areas and structures of historic and/or public interest.

  The submission includes an Executive Summary plus a total of 66 numbered paragraphs in that contain substantive evidence and expressions of judgement and opinion for consideration by the Committee, together with two short appendices.

EXECUTIVE SUMMARY

  It is our view that a number the government's policies are failing disastrously in Liverpool. We believe that the failing policies include those that are aimed at the promotion of access to affordable housing, the encouragement of stake-holding through owner occupation, the regeneration of housing markets via Housing Market Renewal and the creation of sustainable communities. We further contend that much of this failure can be ascribed to the wilful acts and omissions of publicly funded authorities and quangos.

  The results have been described by the Government Minister for Health, Jane Kennedy MP, in a statement in support of residents fighting a Compulsory Purchase Order at an Inquiry, as tantamount to "social cleansing".

SUBMISSION

  1.  Affordable Housing policy and funding in Liverpool is directed towards the eradication of conditions supposedly representing housing market failure, as allegedly evidenced by reports commissioned by the local authority and HMR Pathfinder, and accepted by the ODPM as the basis for providing major tranches of public funding.

  2.  These conditions include high void and vacancy levels, high stock turnover and large numbers of housing units for which it is alleged that there is low demand.

  3.  On the face of it, the latest ODPM figures, showing that Liverpool has the highest number of empty properties of any major city (7.6% of total stock or approximately 16,000 homes), appear to support claims that these conditions pertain and demonstrate a market failure to which a major public sector intervention is required in response.

  4.  This level of empty homes is, after all, grotesquely anomalous, being well over twice the national average proportion of empty stock.

  5.  Furthermore, these empty homes are spatially concentrated in the inner core of the city, hence the designation by the government of Pathfinder status and the in-principle allocation of hundreds of millions of pounds in public funding over a 15 year period. To date, the tens of millions of taxpayers' money already given have mainly been used for the acquisition and demolition of stock, often by agreement, but ultimately backed with the threat of resort to compulsory purchase.

  6.  However, the figures that show Liverpool to be blighted by high levels of empty housing only tell part of the story.

  7.  They mask what appears to be an orchestrated attempt by the local authority and registered social landlords (RSLs) to engineer, or exacerbate, signs of market failure, in order to assert eligibility for major government grant funding, and to justify the acquisition and demolition of people's homes against their will.

  8.  This is having many negative impacts that are not intended by government policy, including a failure to address rising problems of overcrowding and affordability.

  9.  The striking fact is that, of Liverpool's 15,964 empty homes, some 34% are owned by publicly funded bodies (ODPM/Halifax/Empty Homes Agency Audit 2005).

  10.  Precise figures show that 5,426 empty homes were in public ownership, either via the local authority, registered social landlords (RSLs) or other agencies (Pathfinder, etc).

  11.  As a comparator, Manchester, an equivalent sized northern metropolitan authority (2001 Census population: 439,476 in Liverpool, 392,819 in Manchester), has only 16% of its empty homes in public ownership, ie less than half the proportion recorded in Liverpool.

  12.  The above audit reveals that the number of voids in Liverpool City Council ownership is 80% higher than that owned by the local authority in Manchester, at 1,877 compared to 1,041.

  13.  The level of voids in RSL ownership, which are a mere 991 in Manchester, should be compared with the figure of 2,530 in Liverpool. This is over 250% higher.

  14.  We would also ask the Committee to note that, in Manchester, "Other Public Bodies" hold only 20 homes empty, whereas in Liverpool the number is 1,019. This is a baffling 5000% difference. The identities of these property-holding bodies are not specified in the data, but are thought to include the New Heartlands Housing Market Renewal Pathfinder.

  15.  We would suggest that market differences, though significant, are not enough to account for such vast disparities between the levels of empty publicly owned housing stock observed in the two cities. We contend that public policy differences at local level must be playing a part.

  16.  There is a clear spatial correlation between concentrations of empty property and high levels of RSL ownership. In the Liverpool 8 district, which is blighted by large numbers of substantial Victorian terraces and villas remaining in a derelict condition, over 70% of all homes are owned by RSLs.

  17.  The raw number of empty homes is used by the ODPM to assess the amount of stock deemed as being in "low demand". It is not clear that this assessment takes proper account of the power of public authorities to distort or manipulate this figure by withholding their own stock from the market.

  18.  This is important. In a Parliamentary Question, tabled by Louise Ellman MP, the Government was questioned as to how it would know when market failure had been reversed and the Pathfinder had succeeded. Its answer was simple—success will be achieved when void levels reduce by about one third relative to the regional averages. (See Appendix 1, Ministerial answer by Keith Hill, 21 March 2005)

  19.  With a third of voids already in public ownership, it is clearly within the power of the local authorities and RSLs to play a large role in influencing when, or if, this threshold is reached. As the Minister has set a target date of 2010 for achievement of this "success", there is no immediate pressure to reduce void levels until then. For as long as high void levels attract funding, and little scrutiny is made (or demanded) of the provenance of these voids, the incentive is not to release them.

  20.  In the past, the oversupply of empty stock has been explained as a simple function of low market demand in the city. Such conditions did, indeed, pertain in certain areas until around five years ago, when the research undertaken to justify calls for HMR took place.

  21.  However, as a result of many factors, the housing market has been radically transformed. The factors that have contributed to this transformation include steady economic growth, European structural funding, a shift in planning policy to favour brownfield development, the White Paper on Urban Renaissance, the expansion of universities and retention of students, the conferment of European Capital Culture status in 2008, the inscription as a UNESCO World Heritage City, and the resulting growth of confidence in the city's employment prospects.

  22.  The housing market now exhibits clear signs of strong demand and undersupply. However, public housing policy continues to be geared to low demand and oversupply.

  23.  This mis-match is now damaging the sustainable renewal of areas such as Liverpool 8, where healthy market demand and investment is being thwarted by the high level of RSL and city owned empty homes, which are being withheld from the market in the face of continued verbal and written requests by local people and refurbishment specialists for their sale.

  24.  It is also damaging the ability of people in need to access affordable accommodation.

  25.  The holding, by the public sector, of large numbers of empty houses in such a situation is, thus, increasingly unjustifiable. However, local and national policy has so far failed to respond to this new market paradigm.

  26.  It is unarguable that there is an explosion of acute housing need. Affordability and adequacy of supply is once again a major challenge in Liverpool.

  27.  According to a recent report by homelessness charity SHELTER, there are now 7,100 households living in unacceptably cramped conditions in the city, to the detriment of these people's health, education and life chances. SHELTER noted that racial minorities were twice as likely to be affected by problems associated with cramped conditions than the average for the population as a whole. The report found children sleeping in kitchens, teenage siblings of different sex sharing the same room, gross overcrowding and other manifestations of undersupply affecting most acutely the most vulnerable groups in society.

  28.  The housing authority accepts that there is an acute shortage of larger homes being offered for affordable rent or purchase. Only 1% of the available city council stock is of four or more bedrooms. There are few of five, six or more bedrooms.

  29.  Booming house prices (rising by 22.5% pa as opposed to a national rise of 12% pa in the last year, according to the Halifax), have put previously affordable homes far beyond the reach of people on average or low incomes. They have also encouraged landlords to evict tenants and sell their properties, or convert them to owner occupation, or refurbish them for offer to higher value rental market segments.

  30.  As a result, there are now over 18,000 households on the City Council and RSL joint waiting list, the consequence of a substantial increase in recent years.

  31.  Housing need is a major contributor to deprivation in the poorest neighbourhoods of the city. For instance, a recent report has shown the Princes Park district to have nationally high levels of child poverty. Venmore Street in Anfield is the most deprived "Super Output Area" in England, number one out of over 33,000 SOAs on the latest government Index of Multiple Deprivation.

  32.  Both these neighbourhoods are subject to very high levels of void properties owned by the local authority and registered social landlords. Both are subject to Pathfinder funded compulsory purchase and clearance proposals.

  33.  As revealed on 5 October, in comments made during a BBC TV interview by the Chief Executive of one of the largest RSLs in Liverpool, David Bebb of the Liverpool Housing Trust, the excessive level of empty housing held by the public sector has arisen in part due to a "deal" done between the local authority and housing associat-ions. The central feature of this "deal" was to leave property empty, un-maintained and boarded up, in anticipation of Neighbourhood Renewal Assessments, which tend to identify streets with high void levels as unsustainable and subject to market failure.

  34.  A transcript of the interview in which the RSL Chief Executive admits to making a deal with the local authority to leave viable homes empty and without maintenance is attached as an appendix to this submission. The link is very clear between this "deal" and the existence of ODPM funded HMR demolition plans and the "uncertainty" thereby imposed.

  35.  We share the response of the interviewer, Max Hutchison, former President of the Royal Institute of British Architects, that it is "a national disgrace" to leave five to six bedroom properties empty and decaying when public funds are putting homeless families up in cramped bed and breakfast accommodation.

  36.  A similar sentiment was echoed by respected cross-bench peer, the Noble Lord Alton of Liverpool, when he wrote to the Liverpool Daily Post to say "I visited the Lodge Lane Regeneration Group in Toxteth, and their representatives showed me, on the ground, publicly owned properties that have been allowed to stand empty and decay. This is an absolute disgrace."

  37.  The NRAs commissioned by the local authority appear to have taken no account of the ownership of these void properties, or when they became void, and also over-looked the level of investor interest from people making formal requests to public sector owners to buy, refurbish and re-occupy these houses.

  38.  These factors would have led to a different conclusion regarding the sustainability of the stock and the viability of the market than the NRA's reached. It is hard to avoid the conclusion that a blind eye has been turned to the some of the real influences that have been driving the decline of neighbourhoods.

  39.  The process through which public bodies attempt to suspend and, consequentially, undermine the housing market of an area, whose current tenure and type they seek to define as "unsustainable", has been termed "managed decline". Its main tools are eviction, dereliction and demolition.

  40.  Affecting the appearance of a failed market serves certain interests of the local authority if ODPM funding rewards failed markets. It is also in the interests of the RSLs to collude in this affectation, providing they negotiate a "deal" that is beneficial to them.

  41.  This is because an NRA that apparently reveals market failure provides the grounds for the local authority to activate additional compulsory purchase powers and funding eligibility by declaring areas with high levels of vacant housing "Renewal Areas", subject to, amongst other measures, comprehensive clearance.

  42.  Justified on the basis of an NRA, substantial ODPM funding via the local authority controlled Pathfinder is then available to carry out acquisition, relocation, demolition and site assembly, for redevelopment by Joint Venture delivery vehicles that consist of the acquiring authorities, favoured RSLs and selected national private developers.

  43.  The financial incentive is clear for the partners that are set to benefit from grant funding and receipts from new development on cleared sites close to the city centre.

  44.  What is less clear is the extent to which the public interest is served in rewarding tax subsidised housing providers to collude in leaving desirable, valuable public housing assets empty and blighting otherwise sustainable streets, while housing need grows ever more acute.

  45.  Furthermore, well tended, much loved family homes are being acquired, emptied and demolished against the will of their owners, at rapidly increasing public expense.

  46.  There a numerous grounds for concern over the level of clearance relative to refurbishment that is proposed on Merseyside and elsewhere. The Committee has already heard these in detail and made clear its view in the Report on Low Demand Housing earlier this year.

  47.  We will not rehearse them again here, except to say that we warmly welcomed the Committee's balanced and measured advice that the Pathfinders must be flexible and responsive to market conditions, community views, historic value and environmental resources, and must avoid the scheme becoming seen as a repeat of the mistakes of the mass clearance programmes of the 1960s.

  48.  But one headline that we would draw to the attention of the committee, in addition to the fact that Liverpool has more empty homes than any other city in England, and over twice as many more in public ownership, is that an extraordinary 67.1% of its previously developed area is classed as derelict land, according to the Audit Commission website, using ODPM figures. The national average is 22.3%.

  http://www.areaprofiles.audit-commission.gov.uk/IndicatorPages/AreaIndicatorDetail.aspx?indicator—id=10001267&authority—id=10000137&data—src—authority—id—list=10000137

  49.  It is worth reflecting on whether mass decanting and clearance of inhabited properties, and the holding of others empty for many years pending demolition, is a good use of land when so many already cleared sites exist and are in urgent need of re-use, and, meanwhile, so much demand now exists for affordable accommodation.

  50.  The acquisition of private property against the will of the owner is a serious invasion of individual rights in a democracy that places great store on the defence of such inalienable protections. It can only be justified by an utterly compelling public interest justification.

  51.  The Public Inquiry into a Merseyside Pathfinder funded intervention has just taken place (October 2005), into the clearance of 367 homes in the Holt and Edge Hill district in central Liverpool. As the Minister of Health, Jane Kennedy MP, contended in her evidence to the Inquiry on 14 October 2005, "there is no compelling case to demolish the area" selected.

  52.  She goes further and describes the policy as one of "social cleansing". "Unfortunately, someone has decided that the Holt area and the people who live there are a blot on the landscape and need to be removed. In my opinion the road realignment scheme has been widened into a scheme of social cleansing."

  53.  The abuse of legitimate powers for the illegitimate purpose of "social cleansing" will undermine rather than uphold the status of owner occupation, against the express intent of government policy. It brings well-intentioned initiatives into disrepute. It cannot be a good way of implementing government housing policy.

  54.  Finally, it is becoming clear that replacement homes being built under HMR are no longer within affordable reach of the local communities they have displaced. The cheapest homes in Clevedon Street, Liverpool 8, one of the first new build develop-ments to result from HMR intervention, will cost £75,000 to buy outright (for over 55s only). The next cheapest, for general sale, are priced at £120,000.

  55.  The equity from homes purchased for clearance will rarely cover this without incurring further debt, not always a viable or desirable option for elderly or low-income owners. There is no equivalent replacement for the large five bedroom and above townhouses proposed for demolition nearby, in spite of the acknowledged demand for, and lack of sufficient supply of, such big family housing.

  56.  The situation for tenants "decanted" or displaced is even more disturbing. Lacking equity to transfer, earning power to borrow or rights conferred by ownership, they are faced with a reduction in their housing choice and have little leverage with which to oppose the policies of those (often RSLs) upon whom they depend for housing. This throws them further upon the mercies of social landlords with an increasingly dubious record in upholding the interests of their tenants and neighbourhoods.

  57.  The ability of the local authority to deliver such projects on a large scale in Liverpool is also in grave doubt. An internal inquiry into to a failed demolition and rebuild project in an area known as the Boot Estate described the five year delay in re-housing residents displaced by demolition as a "disaster", caused by officers having "insufficient experience" in delivering major clearance and redevelopment schemes. The final number of homes available for affordable social rent in this development is a mere 70 out of 300-400, far below that required to fulfil pledges of re-housing displaced tenants back in their own neighbourhood.

  58.  There is understandable fear and uncertainty amongst residents in areas undergoing Pathfinder funded "decanting" and clearance that they, too, will be mistreated in a similar way. Generating fear and uncertainty in vulnerable individuals is not a desirable outcome of government policy.

  59.  Of course, the market cannot be suspended, only distorted. The presence of the Pathfinder has led to entirely foreseeable, but apparently unplanned for, increases in land prices on the basis of unscrupulous speculation. This has inflated further the genuine and desirable uplift caused by the city's wider economic regeneration.

  60.  The Pathfinder has, thus, been forced to radically reduce the number of acquisitions and demolitions that it can currently expect to fund over the 15 year period, from 18,000 to 11,000.

  61.  However, there has been no acceptance that the original clearance programme, and the land packages of which it hoped to acquire control was excessive and damaging. Thus, empty homes already acquired are not being sold off, but held in stasis in the desperate hope that funding will increase even further, or the market will again contract. Blight is reinforced and communities are left in Limbo.

  62.  The irrationality of a body set up to aid market renewal continuing to hold on to property in the hope that prices will fall will be clear to the Committee.

  63.  The fact is that homes in areas proposed for demolition are now regularly valued independently at between £60,000 and £180,000, even with the "scheme" hanging over them. In a "no scheme world", the situation required in law to be accounted for in CPO valuations, where the blighting effects of the "scheme" are discounted, the values can be expected to go up by around 30-40%.

  64.  Deliverability and value for money of the Pathfinder vision is in serious doubt, but its damaging unintended consequences are incontestable, and must be averted as a matter of urgency.

  65.  As it stands, government policy will inadvertently reward the agents of an artificially maintained market failure, and is now leading to acute market distortions that are making Liverpool's problems of homelessness, cramped housing conditions, dereliction and neighbourhood decay worse rather than better, at great cost to the public purse, and causing lasting damage to the communities that the government wished to help.

  66.  In order to avoid further contradiction of worthwhile government housing policy aims, we recommend that the operations of the Merseyside HMR Pathfinder should be suspended forthwith, pending a detailed review by nominees of the Committee, with a view to effecting a controlled refurbishment and release onto the market of thousands of publicly owned homes that are currently being withheld from productive use.





 
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