Examination of Witnesses(Questions 20-39)|
TUESDAY 15 OCTOBER 2002
20. Can I ask you about the effects of the gentrification
of parts of Tower Hamlets. Has that been a doubled-edged sword?
What has it done to local land values over the last few years?
(Councillor Keith) Clearly the average price of a
house is well over £200,000 in Tower Hamlets, and the median
income, as opposed to the average income, is extremely low. The
average income is in some ways higher because of the gentrification.
There are problems of escalation of the property values. I think
it has moved on slightly, but in two or three of the years at
the turn of the century the highest price rises in the UK were
seen in Tower Hamlets itself. That makes the progression from
the early stages of your life, to buying a house, to settling
in the Borough incredibly difficult because it means aspirations
tend to be out of the Borough, regardless of the policies taken
by the local authority. At the same time, it has to be said that
some of that gentrification, both in terms of old houses being
done up and also speculative investment in river front properties,
creates disposable income that has had beneficial impacts in some
of the employ ment sectors.
21. If the arithmetic does add up and you can
find a site that is affordable to housing associations to build
on, is there then an issue of finding the skilled labour to actually
build the new homes? We have been given evidence that finding
skilled construction workers in the East End is a problem. Is
that your experience?
(Councillor Keith) Yes.
22. Finally, could I ask you what your views
are on prefabricated homesthe return of the prefab?
(Ms McEleney) We have got very limited experience
of it so far; but our own experience is that it can be a very
useful tool, especially on small in-fill sites, in tight urban
sites, maybe small bomb sites. It can be a very useful tool, in
that it does reduce construction time; it does bring advantages
in terms of noise and construction; and we think there is a potential
future for that.
23. What about quality and design?
(Ms McEleney) It can be very high quality, and it
is capable of being quality-checked before it arrives on site,
which is great.
24. You may not have enough homes by 2010, but
will they all be Decent Homes? Will you meet the Government's
Decent Homes Target by 2010?
(Councillor Keith) I think that very much depends
on the success of our stock transfer programme, and that depends,
brutally, on us achieving a dowry that goes with that stock transfer.
25. How big a dowry do you need?
(Councillor Keith) About £230 million.
26. Could you just repeat that, so we get it
(Councillor Keith) About £230 million. Price
Waterhouse Coopers, as well as many other experts in other equivalent
parts of London, have valued the stock at a negative value of
27. Suppose that happens, and you get the Decent
Homes Standard, is that a job done or is the Standard in itself
not a proper indicator of success? It does not deal with things
like overcrowding, does it?
(Councillor Keith) No, there are social dimensions
which are absent from the Decent Homes Standard. I think the principle,
the floor target of basic quality housing is extremely sound,
but there are aspects and the nature of any kind of capitalisation
is that certain things are missed out so that, for example, 60s
and 70s new-build, which was concrete walls which are, in engineering
terms, problematic, are excluded from the Decent Homes Standard
until they are 80 years old, so no measure is going to be perfect
and clearly there are social dimensions particularly around overcrowding
which are also not measured, so certainly there are problems.
28. Are you confused or helped by the variety
(Councillor Keith) I think the notion of setting goals
for steady improvement is one that is laudable as long as we can
find the resources objectively, not in terms of some hypothetically
infallible local authority, but objectively create realistic aspirations
for a local landlord, whether it be the local council or whether
it be other registered social landlords.
29. You have spoken already about the abuses
of the Right to Buy. Now, if you had your way, what new powers
would you, as a council, want in order to prevent these abuses?
(Councillor Keith) Well, the most simple process,
I think, would be a suspension of Right to Buy in areas of regeneration
so that the sorts of abuses around communities and the sorts of
abuses around other areas where there is likely to be investment
in housing stock are prevented. There are also other measures
that we would welcome at their most straightforward, such that
also the level of discount on Right to Buy could either be abolished
entirely or, at the very least, made directly equivalent to other
registered social landlords, so that Right to Buy, Right to Acquire
effectively had the same discount. In total, there are financial
effects that I think were not intended by anybody in the Right
to Buy process to have such a major detrimental impact on our
housing revenue account.
30. I am playing devil's advocate here. Does
this not slightly conflict with the sort of desire that everybody
has got to make people feel that they are stakeholders in their
own community, and the Right to Buy ought to do that in an area
of deprivation where people may feel quite alienated in a way?
(Councillor Keith) I think the goal of making people
stakeholders in their own areas is laudable, but the fact that
one section of the community had MIRAS for many decades which
is effectively a subsidy in ownership and some of the poorest
folk in Britain did not is also a very strong case for Right to
Buy. I think it was never intended by anybody in the Right to
Buy process that what would happen is that the benefits of the
discount were effectively taken by second players who do not have
an interest in the area, but as the properties move on to other
landlords, they take over some of the worst housing stock in Britain
and rent it out in a very bullish London rental market.
Sir Paul Beresford
31. Should they be targeted rather than the
Right to Buy applicants?
(Councillor Keith) I think that is an interesting
question and it partly raises questions about primary legislation,
parliamentary time, regulation of landlords and those sorts of
32. So what you are saying is that the Right
to Buy can be dealt with by regulation, whereas controlling those
landlords needs primary legislation, so we take the easy option?
(Councillor Keith) I think what we as a local authority
in Tower Hamlets would say is that we would be pragmatic and work
with whatever was available.
33. If I can move on to planning agreements,
what successes have you had in Tower Hamlets in getting affordable
housing via the planning agreement route?
(Councillor Keith) I think we were one of the local
authorities that pioneered the process by which 25 per cent of
all new developments over 15 homes were handed over to social
housing on the 80/20 per cent mix that we touched on earlier,
but I think that was again in line with pre-1997 or post-1997
broad national objectives. That has been challenged by one or
two private developers in the courts and that has been sustained
in the courts. I think we are interested in exploring aspirations
above 25 per cent and how plausible those are is something that
34. How much social housing have you got in
Tower Hamlets as a result of this?
(Ms McEleney) Last year around 150 units were produced
as a direct result of the planning process. The rate of applications
in the borough at the minute does mean that section 106 agreements
that have been signed are increasing, although obviously
35. But it is very small compared to the scale
(Ms McEleney) Yes.
(Councillor Keith) And the scale of demand.
36. Have you even attempted to try and persuade
developers, other than housing developers, to make a contribution
towards affordable housing?
(Councillor Keith) Absolutely. If you take the case
of Spitalfields Market right on the edge of the City of London,
part of the planning gain practice which came out of the Spitalfields
Market proposals was a contribution of social housing.
37. How many?
(Councillor Keith) I think it was about 120 units,
off the top of my head.
(Ms McEleney) Yes, it is around that number.
38. So if you were being challenged now in the
courts, how would it be helpful and what changes would you like
to see in order to strengthen your case when you are negotiating
with developers? Would you like to see it enshrined in the law,
a figure like 25 per cent, or would you like that left to individual
local authorities to determine?
(Councillor Keith) I think your own Committee has
received evidence from Professor Evans about the balance between
economists and planners in addressing issues of affordability
and my personal line would be that I think that the planning laws
that are there are about as far as you can go. I think what is
needed, however, though, and the Green Paper does offer potential
for this, is to think through the regional possibilities of East
London as a whole in the context of the growing economy of London
as a whole and think through a solution, a housing solution, which
is about affordability and social housing across a larger patch
39. So you would be happy to transfer to other
London boroughs if you could get an agreement? In Tower Hamlets
you would be happy to see those affordable units actually built
in other boroughs?
(Ms McEleney) As long as that matched what the need
was and the aspirations of residents and we got the right to nominate
people to those dwellings.
(Councillor Keith) One very important point is that
we are not about moving people out of the borough, but if their
aspirations are in line with that and there are sites available
that are in line with that, then that is fine.
Sir Paul Beresford: What is your unemployment
and how does that compare with your neighbours?