Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence


Memorandum by Birmingham City Council (EMP 64)

EMPTY HOMES

  Birmingham City Council welcomes the opportunity to submit evidence to the Empty Homes Inquiry. This is a timely opportunity as Birmingham embarks on a process of housing market restructuring, which includes proposals for the transfer of the entire council housing stock to enable restructuring of social housing provision. Increasingly, action will also need to focus on inner-city, multi-tenure areas. The market restructuring that these processes address will form the biggest urban renewal challenge for the next two decades.

  This memorandum suggests that a new and radical approach is required to respond to the underlying structural causes of empty homes that relate to housing market failure. The recommendation contained in this submission is that housing market renewal areas be created, with associated funding, to establish a framework in which market restructuring can take place.

  Birmingham has an established empty properties strategy that has sought to tackle the issue of empty properties through mechanisms, such as:

    —  Giving advice and guidance to owners.

    —  Working with Registered Social Landlords (RSLs) to target Approved Development Programme (ADP) resources at properties empty for more than six months.

    —  Single Regeneration Budget (SRB) projects focusing on bringing properties back into use in key wards.

    —  Using Grant aid where relevant to assist owners bring them back into use.

    —  Using Compulsory Purchase Order powers as a last resort.

    —  Using enforced sale procedures where relevant.

    —  Using other enforcement powers to mitigate nuisance to neighbourhoods.

    —  Consulting Private Development Agencies to see how new models of intervention can be created.

  A focus on empty property on an individual basis has its place, as do approaches that concentrate on the improved management of social housing to achieve lower levels of empty property, or regeneration on an estate or locality basis. These type of responses do not, however, address the fundamental issue of the health of the housing market, which will continue to undermine, at a district level, more localised intervention. Analysis of Birmingham's housing markets suggests that these type of measures will not be sufficient in areas where the housing market does not meet current aspirations and is affected by changing demography and socio-economic processes undermining activity that falls short of fundamental restructuring. Rather than continuing to treat the symptoms, there is a need to address the underlying issues, deriving from social, economic and demographic influences, which alter the pattern of demand. This memorandum argues that a new framework for intervention based on market renewal areas is required, which are not necessarily coterminous with local authority boundaries, to produce sustainable districts.

  The remainder of this evidence highlights the improvements that Birmingham City Council has made to address increasing polarisation in the City's housing and employment markets, the current approach being taken and policy changes sought. Since the 1970s, a two-pronged approach has been adopted, that has sought to improve housing conditions in the inner-city within the existing infrastructure, and to undertake limited restructuring focused on the most problematic social housing estates. Until recently, this activity has sustained the City's housing market areas. Birmingham City Council has been one of the first authorities to recognise that this approach is no longer sufficient to halt the decline of housing markets in some areas. The City Council is now attempting to integrate proposals for stock transfer with a new approach to urban regeneration that will need to be co-ordinated over the next 20 years. This new approach is outlined below, along with some changes to the current public policy framework that could assist in fully achieving the need for restructuring of the City's housing markets.


THE REGIONAL SIGNIFICANCE OF BIRMINGHAM'S HOUSING MARKETS

  This is far from being solely a housing related issue, but rather is central to the urban renaissance agenda. Birmingham plays a key role within the regional housing and employment markets of the West Midlands and, by virtue of its size, the socio-economic trajectory of the City is vital to the region's future prosperity. A continuation of current trends would see further social and economic polarisation, which threatens to undermine the economic base of the City. Birmingham is an international City that seeks to consolidate and build on its position in the global economy. The vision for the City is one of quality, a place where people choose to live. Birmingham's success in achieving this goal has implications for the whole of the West Midlands region. In order for the City's position to be strengthened, or indeed maintained, the City needs to retain affluent, economically active households. It also needs to improve the educational standards and skills base in the City. This will require more stable communities, so that regeneration activities have a lasting effect rather than providing a means for households, who benefit from them, to move elsewhere. To retain and attract households who have choice, the City needs to provide an attractive living environment, including appropriate and desirable housing.

  Housing choices are not made wholly, or even primarily, on the nature of the housing itself. There are a much wider range of considerations relating to the neighbourhood, including the standards of services on offer, litter, crime and anti-social behaviour, educational facilities, leisure facilities, environmental issues and the transport infrastructure.

RESTRUCTURING SINCE THE 1970S

  In Birmingham, there are both flourishing and declining markets, areas of both deprivation and affluence, often sitting side by side. There are unpopular high and low rise flats and maisonettes in the social sector, alongside private sector provision in high demand. There are City Centre apartments regularly selling for hundreds of thousands of pounds, within two to three miles of areas of pre 1919 terraced housing, in some of the most deprived wards in the country.

  Birmingham has achieved considerable success in restructuring its housing markets. City Centre living continues to prove popular, and current efforts focus on spreading City Centre housing across a wider area, and developing products to attract families as well as the more traditional young professional market.

  Birmingham already has a history of intervening in areas of the City, which are experiencing decline, low demand and empty, abandoned and derelict dwellings. Many of these intervention programmes have been area based, and include the following:

    —  Private sector action through General Improvement Areas, and Housing Action Areas, forming the largest programme of private sector intervention activity in the country

    —  Tenure diversification through extensive Estate Action programmes followed by other joint venture initiatives, such as the Pype Hayes mixed tenure development of 1,650 homes

    —  The Castle Vale HAT

    —  Optima Community Association—the successful transfer of 3,000 council properties under the Estates Renewal Challenge Fund

    —  Large scale programmes to remodel areas of system built dwellings.

  These housing led programmes are complemented by a range of corporate activities designed to improve the image, economic competitiveness, environment, and quality of life in the City. This includes the National Indoor Arena and International Convention Centre, and major works to improve the surrounding environment, as well as current work ongoing in the Bull Ring area of the City and Eastside.

  Although Birmingham's proactive response has achieved much, the underlying factors involved in changing demand mean that a larger scale response is required, if housing markets are to be transformed to the extent necessary. There is a need for recognition of the scale of the challenge, so that policies can be developed that are likely to prove sustainable in the long term.

HOUSING MARKETS IN BIRMINGHAM AND THE WEST MIDLANDS

  Housing markets in the West Midlands display characteristics of both the North and South of the country, with increasing polarisation between the two. They are characterised by differential migration from the major urban areas, increasing travel to work areas, and social polarisation both within towns and cities, and between urban and suburban/rural locations. The negative impacts of housing market change are extremely spatially focused in some local authorities, including Birmingham, where some neighbourhoods are experiencing low demand.

  The following map of house prices[1] clearly displays a regional picture that includes a high price corridor to the south of the City's border along the M42 and down the M40 towards London. In contrast, there is a central band of low prices across the City, which continues across the Black Country areas of Sandwell, Wolverhampton and Dudley.

  Patterns of market failure in the City have much in common with this map. The areas with the most significant numbers of vacant dwellings are inner city mixed tenure areas, where there are significant vacant dwellings across the social and private sectors. The numbers of vacancies occurring and the length of time vacant need careful analysis to understand the processes taking place. The patterns displayed in the social housing sector are different to the private sector because vacancies are closely managed. It is therefore also necessary to look at the turnover rate and transfer requests as indicators of instability in the market. Research[2] has also shown a relationship between stability and particular types of property, such as flats and pre 1919 terraced housing, and areas with over provision of similar dwelling types.

  The dynamics currently affecting Birmingham's housing markets include:

    —  Differential migration. Future net outward migration is expected to be small. However, this masks high inflows of migrants to the City and high outflows. The outflows consist disproportionately of more affluent households. Inflows show the City to be a reception centre for several groups including homeless households, international migrants, a large student population and those moving to the City for employment.

    —  Declining demand for social housing on some peripheral estates, particularly on the southern and eastern periphery of the City. These estates have already been, and will continue to be, affected by economic and demographic change. These estates tend to be a local authority ownership and many are in areas where the employment structure has changed, with employment opportunities being lost locally and new work being created in other areas. Much of the original rationale for the location of the estates no longer exists. The housed population is ageing, without any significant new demand being generated.

    —  Significant problems in relation to stock condition, in both the public and private sector, and by large numbers of unpopular property types. This includes high levels of flatted accommodation, both high and low rise accounting for around 45 per cent of the local authority stock, and an array of non traditional build types. Much of this provision is contained in large, unpopular estates.

    —  An issue relating to obsolescence rather than stock condition for back of pavement and smaller terraced housing in the inner city, where the majority of housing is private sector, pre 1919 terraced housing. In many cases the housing does not match up to modern day requirements. In some, but not all, instances this obsolete housing is in areas of high household growth amongst Black and Minority Ethnic communities. The issue is not therefore a lack of demand in the area, but a lack of demand for that type of dwelling.

    —  The North West area of the City in particular is suffering from a high turnover rate in the housing market. This area contains local authority stock, a large number of properties belonging to Registered Social Landlords (RSLs), a high proportion of the City's private rented stock and low value owner occupied housing. Much of the housing is unpopular, and demand is weakened by social and environmental issues, such as crime, anti-social behaviour, educational facilities, litter etc. this results in a situation where households, many of them young single people, move in and out of the area, and also move frequently from property to property. Almost 9 per cent of properties within the area are vacant.

  It is in the North West of the City where the housing market renewal area proposals are most fully developed at present. The North West contains an area targeted for SRB funding and also forms part of an Advantage West Midlands Regeneration Zone. The area has been the subject of a research project[3], involving extensive consultation, primarily through focus groups, with residents in different neighbourhoods, communities in the area, and a wide range of other stakeholders. This has lead to the production of an action plan that is described in more detail below. This approach is now to be replicated in the Eastern part of the City, which also forms part of an Advantage West Midlands Regeneration Zone. The zone covers a significant area of Birmingham and part of North Solihull. It contains largely older private sector housing in the inner city wards with predominantly Asian communities and, moving further east, monolithic provision of social housing that continues across the border to Chelmsley Wood in Solihull. Birmingham City Council is working with colleagues in Solihull on the approach for the zone, including a requirement for detailed housing market research. Similar work is to take place for the South of Birmingham, which, although not part of a regeneration zone, also requires fundamental restructuring.

B Nevin, L Goodson, P Lee, J Phillimore, Centre for Urban and Regional Studies, University of Birmingham, 2001.

THE VARIETY OF HOUSING AGENCIES INVOLVED

  Addressing housing market concerns in Birmingham and its surrounding areas is very much a cross tenure issue. The map below[4] shows the tenure balance between the social and private sectors in Birmingham. As can be seen, there are many areas of the City with a mix of tenures, including the area to the North West, where housing market problems are perhaps the most pronounced. There are currently 53 social housing providers in addition to the local authority operating in the City. Should Birmingham's proposed stock transfer go ahead, there will be a further 10 RSLs and a citywide trust. The co-ordination of the activities of these agencies along with the activities of the range of other stakeholders, planning, business etc, is a vital component of successful market restructuring.

HOUSING MARKET RENEWAL AREAS

  Restructuring of the housing market requires the co-operation of a number of different agencies working towards a shared vision. It requires a plan to be developed for the area, in consultation with existing residents, housing providers, both social and private, planning and economic development colleagues and business communities. In some instances, more than one local authority would need to be involved. Birmingham is presently working jointly with Sandwell and with Solihull.

A Birmingham/Sandwell Pilot

  In collaboration with Sandwell MBC proposals are being developed for a market renewal area. The main objective is to reduce residential instability, thus helping to create sustainable communities, through an appropriate mix of public and private sector investment in the area.

  A wide variety of physical and socio-environmental issues need to be addressed if North West Birmingham is to become sustainable in the long term. These issues are being considered in the context of the South Black Country and West Birmingham Regeneration Zone, and particularly through the SRB6 programme.

  As part of this corporate approach, there are a number of specific housing related issues which need to be addressed through a 20 year plan.

    —  The removal of unpopular and inappropriate housing, derelict buildings and non-conforming uses in residential areas.

    —  The provision of suitable housing in terms of quality, design, tenure, affordability and location through new development, refurbishment and repair.

    —  The provision of appropriate support for more vulnerable groups, such as the elderly and young homeless people.

    —  A reduction in opportunity for crime by improving security, designing out crime in new developments, improving levels of lighting in residential areas, and managing areas undergoing extensive remodelling, to maintain the quality of life for remaining residents.

    —  Involving the community in planning processes, community initiatives, etc to enable them, for example, to take ownership of safety initiatives.

    —  Improving the image and appearance of the area.

OPPORTUNITIES PROVIDED BY STOCK TRANSFER

  The proposed transfer of the City Council's housing stock would provide an opportunity to undertake work on a scale that could alter the fundamental nature of the housing markets in the City. The business plans for the stock transfer areas will take account of private sector housing, although clearly the focus for investment will be on the social housing stock. The plans across the City include the demolition of around 20,000 units of social housing. Re-provision of social housing will be in the region of 25 per cent. This again presents an opportunity to restructure markets through tenure diversification. An example is in the South West of the City, where there is weakening demand on peripheral estates that adjoin high priced housing areas to the South of the City's boundary. The economic strategy for the West Midlands region includes a high technology corridor with growth nodes running from the City Centre, to the South West corner and beyond the City's boundary, stretching down to Worcester. Selective demolition and partial replacement with aspirational private sector housing would provide housing pathways for more affluent households to satisfy their housing requirements without having to leave the City.

  Although stock transfer would increase the opportunities available for market restructuring, there is, at present, no existing framework in place for this to happen. In areas with poor quality or obsolete housing across tenures, including council estates with large numbers of properties purchased under "Right to Buy", additional resources will need to be made available to complement improvements to social housing. This could take the form of dowry support from Government. There are around 50,000 properties in Birmingham purchased under the "Right to Buy". The replacement and refurbishment of social housing may also put further pressure on the demand for the less popular sections of the private housing market. As an improvement in the social housing stock takes place, offering additional choice, there may be an associated decline in demand for some less popular private sector housing.

A HOUSING RENEWAL FUND

  To make a fundamental difference to the housing market, change will necessarily be on a large scale, both in terms of the extent of interventions required, and in the geographical area covered. Sites need to be identified that are 20 acres or more to make the impact required. A long-term commitment is necessary to fully engage communities without falsely raising expectations. In areas such as North West Birmingham, where there have been a succession of shorter term, piecemeal projects, there is a degree of cynicism to be overcome before communities are likely to positively engage. For the necessary commitment to be made, there is a need for resources outside of the Single Capital Pot to provide a degree of certainty that will enable partners to contribute fully to proposals for the area.

  The current regional framework has some overlap with the Housing Market Renewal Area approach, but the primary focus of the Regional Development Agency relates to economic activity and, inevitably, an economic approach is taken. Housing Market Renewal Areas would be complimentary to this, but there is a need for a focused approach with focused resources. Current capital resources are tenure based. Private sector housing resources form part of the Single Capital Pot and are based on a series of indicators included in the Generalised Needs Index (GNI). These existing resources do not recognise the issues around the need for market restructuring to the extent needed. Resources are currently targeted in the main at improving the quality of dwellings to provide decent housing. This is markedly different to an approach that seeks to create sustainable housing markets based on an understanding of the dynamics that drive housing market change. This includes addressing obsolescence, as well as stock condition and housing management.

  The lead agencies could vary depending on the individual circumstances of the area. In this instance, the core of the SRB area has a need for clearance and redesignation of land uses. In these areas, the Council and AWM will need to be lead agencies because of the predominance of economic development, planning and compulsory purchase issues.

  In other areas, however, it will be possible to utilise the skills and resources of the RSL movement to create new housing regeneration companies, whose strategic framework would be set out in a prospectus for the cross border Housing Market Renewal Area.

RECOMMENDATIONS FOR CHANGES TO THE PUBLIC POLICY FRAMEWORK

  1.  A move away from the formulaic distribution of resources to recognise resource requirements resulting from market failure.

  2.  The creation of a hypothecated Housing Renewal Fund. This would need to be related to genuinely failing areas, be long term, and be catalytic to pull together the different agencies.

  3.  A move towards the production of large sites for new build.

  4.  Revenue funding for new regeneration vehicles in multi-tenure areas.

  5.  Provision within the ADP specifically to support stock transfer.

  6.  Dowry payments to support urban renewal in stock transfer areas.


1   Not printed. Back

2   Birmingham Housing Study: Citywide Report; Centre for Urban and Regional Studies, University of Birmingham with Bob Blackaby Associates, CRESR Sheffield Hallam University, FPD Savills. 2001. Back

3   Housing Market Change and Urban Regeneration: Achieving Sustainable Neighbourhoods in North West Birmingham. Back

4   Not printed. Back


 
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