Haringey Council’s decision to go into business with property giant Lendlease and redevelop numerous sites in Tottenham and Wood Green, including large housing estates, has attracted some strong opposition. On the other hand, a spokesperson for London Mayor Sadiq Khan provided the following statement when asked if City Hall supported Haringey’s approach:
The Mayor has been updated on Haringey Council’s ambitious plans that will contribute to meeting the housing challenges our city faces. He is clear that reductions in government funding, rising land values, and the need for more affordable housing mean that we have to look at solutions that are different to those that may have worked in the past.
Major studies published last year have concluded that redeveloping housing on at least some council-owned estates to higher densities is necessary if overall housing supply in London is to keep pace with demand. However, critics of what is called the Haringey development vehicle (HDV) argue that there are better ways to provide additional housing, especially for people on lower incomes. I put some of these points to Haringey’s leader, Claire Kober.
Question: You’ve said that your tenants who lose their homes through demolition have your “absolute guarantee” of a new home on the same tenure terms and at the same rents. How can give such a guarantee?
Answer: I feel very confident about that, particularly in relation to the Northumberland Park estate [which will be the first to be demolished], because it’s not a very dense estate. On a conservative estimate you can rebuild to triple the density there. I’m confident we can offer a right to return, the same rent and the same tenure type and a home of the right size. We’ve also learned from what people from the Love Lane estate [whose redevelopment process is already underway and falls outside the arrangement with Lendlease] have chosen to do. We offered everyone there a right of return. Quite a lot who were housed 300 yards up the road on a temporary basis quite quickly said: “Actually, we prefer it here and want to stay.”
Q: One of your critics is claiming that council documents show it is not Haringey policy to make such a guarantee. You know the relevant extract, which has been posted on Twitter.
A: That is from the estate renewal rehousing and payments policy approved by cabinet in July 2016. It sets out a minimum set of standards for any estate regeneration scheme anywhere in the borough. It doesn’t refer to the development vehicle. Our intention would always be to do more than the minimum. I am absolutely confident that we are able to deliver on that with the estates that will fall within the HDV, partly because of what we have seen on Love Lane [in the High Road West area] and also because there are relatively few properties on those estates that have gone to right-to-buy, which makes it easier financially.
Q: In the documents the cabinet considered the other week which definitely do relate to the HDV and Northumberland Park, a section from your member for housing, Alan Strickland, says the council “will do our utmost to rehouse tenants in the area where they currently live and on similar terms”. That falls short of a guarantee, doesn’t it?
A: That is because at this point in time our comments in council documents have to reflect current council policy. We had a long discussion with council officers about this. However, we are now in a period of discussion with the successful bidder and the Labour group bottom lines form the basis for that. We will find a way for that absolute guarantee to be expressed.
Q: It’s already been stated that the development vehicle will be bound by your policy that 40% of new housing must be affordable. Will it meet the London Mayor’s definition of “genuinely affordable”, which is a bit more stringent than the government’s?
A: Yes. We want to ensure that all types of rented products are at the lower ends of the rent range and that there is a mix of kinds of affordable homes on every estate, recognising that the cohort of people in really dire housing need is quite diverse. The different types of affordable will vary according to the economics of each individual estate.
Q: What guarantees can you give leaseholders on your estates?
A: For HDV schemes, we expect to offer every resident leaseholder a home ownership option in the new development, probably on an equity share arrangement – like shared ownership but where the resident doesn’t pay rent on the part they don’t own. Of course, some resident leaseholders may prefer to move away from the area and we will do all we can to support those people too. Non-resident leaseholders would simply get market value for their property plus a small additional compensation payment.
Q: You pointed out to Vanessa Feltz that Haringey has large numbers of people in temporary housing. Will the HDV produce more homes that homeless residents of Haringey can move into?
A: That would be the intention. But I have to be really clear here. This is where it will have to come down to some very complex financial negotiations. The first thing to nail down is that people who are already resident have a right of return on the same terms. Then you have to build beyond that. There is a sliding scale. If, for argument’s sake, you’re prepared to go for nine storey buildings rather than seven story ones, you can push up the affordable figure a bit more.
Q: It has been argued that there are better ways of financing new housing in Haringey. The public works loans board was suggested. It should be said that last November a decision was taken to scrap the board and its functions absorbed into the Treasury. But could it have been an option for Haringey?
A: It would still have come down to the council doing this alone and bearing 100% of the risk, which would mean the scale of what we could do being limited. Ultimately people need to think about what their priorities are and what their bottom line is. If your bottom line is that the public sector does this alone, you have to compromise on the scale you can work at and accept that you will bear a greater degree of risk. What I find incoherent is an argument that the private sector should not be involved because it’s too high risk. By definition, anything that involves partnering with another organisation means sharing and reducing that risk.
Q: What could you do within your own housing revenue account if you wanted to? Councils have limits imposed on what they can borrow, known as headroom, for building traditional council homes. But what could you do through that route?
A: Our headroom is about £55 million, but that account is required for the upkeep of all the housing stock we have. It was in a pretty bad state anyway, and the 1% cut in social housing rents brought in under George Osborne, has reduced the revenue going into it. That was the final nail in the coffin, really.
Q: What about a housing company owned entirely by the council, like some other boroughs have?
A: The scale and the risk points come into that, and you don’t get the expertise a private sector partner has. Also, a lot of boroughs that are doing it have already done quite a lot of estate and other regeneration. Haringey is starting from a lower base, in that we haven’t really done regeneration until now and we’ve got a huge amount of opportunity.
Q: What about community land trusts?
A: I was speaking to somebody at City Hall about them. There’s only one in London that’s actually operational and it’s only built just over 20 homes.
Q: It seems to me that you always come back to your view that you simply need to something bigger than any of the alternatives would allow and that the HDV is less financially risky for the council.
A: Yes. It’s worth looking back to when this conversation started, about four years ago. It was in the post-riots context and it became apparent that social regeneration is not enough. Without physical change to an area you are unable to create the level of change that will impact on people’s lives in a positive way – the whole package, looking at the local economy, public services and the quality of homes that people live in. Without physical change, you can’t effect social change in my view.
The other point about is that too often regeneration that’s happened elsewhere in London and elsewhere in the country, developers end up getting the most out of it. So unless you have a long-term financial interest as a council, all you do is parcel out a bit of land, set out your minimum criteria, the developer delivers those – or sometimes doesn’t – and then takes all the upside. If you want a social dividend from developing your land, you have to retain your longer-term interest. The thing I feel most impatient with is the idea that there’s an easy, ideologically pure way of doing this that doesn’t hurt anyone and can be done at scale.
Q: Any profits you make can go into improving the council’s services and so on, can they?
A: There’s two things here. The first is that from 2020 we move into a funding model that provides us with no government grant. It will all be based on our business rates and our council tax. The government is saying that over a five-year period you can retain some of the growth in taxes that you achieved during that time. So if you’re building more properties you improve your council tax base and your business rates base. That is going to be hugely important. The second thing is that by retaining your long term interest in housing delivery you ensure that revenue streams come out of this, which can either go into council services or be reinvested in the vehicle to drive up the level of housing. It gives you some choice.
Q & A ends here.
Further reading? Shelter’s Kate Webb has written a really clear and helpful explanation of what the Haringey development vehicle is and explored its possible advantages and problems.