Notes for Haringey Council Scrutiny Meeting on the decision to set up the Haringey Development Vehicle

Notes for Scrutiny Meeting 17 07/ 17 on the decision to set up the HDV

The page references below are all from the Public Appendices, Items 9 &10., from the cabinet papers 03/07/17:
https://www.minutes.haringey.gov.uk/ieListDocuments.aspx?CId=118&MId=8288&Ver=4

Haringey Council’s Cabinet claims that it can deliver public objectives by the proposed Haringey Development Vehicle, as a joint venture with Lendlease, and that the HDV will comply with Council policies.

However, the Cabinet papers for the meeting of 03/07/17 demonstrate that this is not so, in four respects:

 

ONE: The Cabinet has agreed to exempt Lendlease from Council policy on rehousing those whose homes are demolished.

According to the Land Assembly Agreement (p107 onwards), although the Council’s revised Rehousing Policy promises tenants a right of return, including for housing association tenants, the Cabinet has agreed that the Lendlease HDV business plans ‘prioritise a single move for residents rather than Right of Return’; and ‘do not allow for rehousing of housing association tenants’. The Agreement says that the Council might have to pay Lendlease additional subsidy if any tenants return to Category 1 sites (primarily Northumberland Park) after demolition.
This affects more than 1,000 households; and there is an option for further discussions about what is to happen about the Right of Return and HA tenants at Category 2 and 3 sites, later. The HDV could continue to opt out of Council policies.
Here again, the claim that the HDV will adhere to Council policy is proved to be false. The truth is that tenants would be very strongly discouraged from returning.

 

TWO: Lendlease wants to move away from Affordable tenures

If we look at p 696, Lendlease state that
“A ‘one size fits all’ approach to housing delivery will not address the underlying issues and disparities between the sites, nor will it best respond to the underlying objectives of the HDV.

“Central to this approach is to move away from focusing on categorisation of ‘affordable’ and ‘private’ tenures and instead to focus on providing homes to ‘buy’ and ‘rent’ for a range of income levels.”

In other words, Lendlease wants to move away from Affordable housing tenures, towards a free market, with developers and landlords charging whatever the market will bear.

This contradicts Council policies, for example the Housing Strategy and the Tenancy Strategy.

These state that the council does agree with Affordable housing tenures: including council and housing association lets at Target rents, and council and housing association lets at higher so-called Affordable Rents (up to 80% of market).

Housing associations have increasingly become focused on market developments, and have lobbied government for rent freedom – the freedom to set whatever rents the market will bear. Therefore, council housing at Target Rent is the only remaining secure and really-affordable tenure, with publicly accountable landlords in the form of elected Local Authorities.

48% of Haringey households cannot afford deposits because they have no savings, or are in debt. There is no place for the poor in Lendlease’s vision for housing.

Following on from their statement of intent to move away from Affordable housing tenures, Lendlease do not provide any tenure breakdown for the 1,281 new homes they want to build in Wood Green (p1134), or the 5,003 new homes they want to build at Northumberland Park (p873).

It is usual for a tenure breakdown to be provided, especially where demolition is planned of 1,165 tenanted and leasehold council homes, at Northumberland Park.

The Cabinet has signed up to the Lendlease agenda by passing these papers through at their meeting on 3 July. Perhaps by mistake, and perhaps because they secretly admire Lendlease; but in either case the Cabinet papers make it clear that the Joint Venture would not deliver the Council’s policy on Affordable Housing tenures.

What the developer says in advance, in public and in writing, warns us what they would do later, in private, if they ever get the chance.

 

THREE: Higher house prices and social cleansing

Haringey’s Local Plan policy objective 3.2 states that:

The council seeks to ensure that everyone has the opportunity to live in a decent home, at a price they can afford, in a community they are proud of.

However the HDV offers no new housing to the poor. There is nothing here for the 9,000 households on the waiting list or the 3,000 homeless in temporary accommodation. These people need secure homes at Target Rent, but the HDV will not build those homes.

Lendlease use the Mosaic Consumer Classification system, which insultingly refers to individuals who are council tenants as Municipal Challenges [eg, pp 863-864].

It is clear that Lendlease are not interested in council tenants, because they just cannot make very much money out of us.

Worse, the whole HDV project is based on higher house prices. Looking at p949 of the Cabinet papers, in Northumberland Park, Lendlease want to see rents and house prices ‘leapfrog’, and expect a ‘marked and continued increase in the rental tone at Haringey’.

This could only price local people, on lower incomes and with lower savings, out of the area.

The HDV Plan cannot meet the Local Plan policy objective of decent homes for all.

 

FOUR: Viability funding gaps must be opened to public scrutiny

It is only occasionally mentioned in any council document that the estate demolitions have huge public sector viability gaps.

The public policy background is that government effectively cut all funding for new social target rent properties in George Osborne’s Comprehensive Public Spending Review on 20/10/2010. When a Conservative majority government was elected in 2015, it went even further, and abandoned all funding for any form of sub-market rent, leaving Starter Homes as the only form of new ‘affordable’ (i.e. not really-affordable) homes supported by government.

There is a National Estate Regeneration Strategy, under which estate demolitions are to be ‘market-facing’, with only seedcorn public funding. This leaves a problem of who will pay for demolition and rehousing, because the developers are not going to pay: they expect to be given vacant possession of a site without people or buildings.

So in December 2015, Haringey asked government for £166m upfront, to demolish Love Lane and Northumberland Park. Government said NO, so Haringey approached the GLA and got £62m to demolish Love Lane only.

In response the Council increased density and the numbers of proposed private dwellings at High Road West, increased the asking price per sq ft, reduced the ground space of the scheme by taking out two council blocks at Penshurst Road and Headcorn Road, and reduced the proposed community facilities.

The aim was to increase house prices in North Tottenham sufficiently to make the redevelopment of Northumberland Park viable. That must be quite a few years into the future, yet the Council wants to bring Northumberland Park forward in Category 1 of the HDV. With what funding?

The failed bid for the £166 million left a presumed funding gap of £100 million at Northumberland Park (Sep 2016). How has this been filled?

The Council promised 25% affordable housing at Northumberland Park, but now Lendlease promise 40%. Again, with what funding?

At Broadwater Farm which is an HDV Category 2 site, the Arup Strategic Masterplan of 2013 offered three redevelopment scenarios. All were to see total demolition of the 1,084 homes on the BWF Council estate, alongside partial demolition of the other 389 Council, Housing Association and private homes within the BWF Site Allocations area:

Scenario One: Funding requirement of £124.7 million

Scenario Two: Funding requirement of £136.8 million

Scenario Three: Funding requirement of £239.3 million

All of these scenarios include a 40-50% loss of social housing, and a permanent loss of affordable housing and affordable housing nomination rights.

Across all the demolition estates, these huge funding gaps risk outcomes that are negative for residents, because developers are reluctant to reprovide Target Rent, or any other kind of affordable housing, without subsidy.

The Council’s recent promises of Right of Return, new permanent tenancies, rights of return for HA tenants, and leaseholder guarantees, can only increase the funding gaps, which in turn mean that such promises will not be kept in the longer term.

The ways forward might be either huge government funding for social cleansing plans, or that we stop estate demolitions and change government policy to invest in communities, in council housing, and in other really-affordable housing. We prefer the latter option.

The HDV deal means that Lendlease will build for profit and for social exclusion, as they do at the Heygate.

Discussion about the funding gaps must take place properly and openly. This means full council ownership and full public scrutiny.

 

Recommendation:

Scrutiny should reject the HDV deal as one which can neither meet its stated purposes, nor comply with Council policies.

 

All comments and questions are welcome

Paul Burnham

Secretary
Haringey Defend Council Housing

07847 714 158