What happens when politicians and property developers meet behind closed doors? According to Vince Passfield, Unite’s deputy regional secretary for London, multi-national investors seek to “stitch up deals that would hit council tenants and leaseholders in the capital”. As a result Unite has called on Labour councillors in London to boycott MIPIM UK, supposedly “the 1st UK property trade show gathering all professionals looking to close deals in the UK property market” which opened yesterday (October 15) and runs until Friday at London Olympia.
Normally held in Cannes each March, the decision by MIPIM (Le marché international des professionnels de l’immobilier, to give its full name) to start a London show is a further sign that the capital’s property bubble isn’t bursting anytime soon. It’s right to have mixed feelings about this, and to be wary of developers whose first duty is always to make money, not provide affordable homes. Too many councils are unable to build new council housing, and housing association have been starved of funds with which to build genuinely affordable homes. Thanks to a supine Boris Johnson and his Orwellian definition of homes at 80% of market rent as “affordable”, too many new developments in London only deepen the capital’s housing problems.
But Labour councils don’t need Unite to remind them that developers are “directly profiting from the UK housing crisis” : I think they’ve worked that out by now. And Unite is spectacularly wrong to call for Labour councils to “withdraw from participation in MIPIM and the close relationships with private developers that the event seeks to foster”.
I’ve attended more meetings between politicians and property developers than I care to remember, both as a politician and, more recently, as a consultant working with developers. I can assure you that the vast majority of such meetings are formal, businesslike – even hostile. Far from caving in to developers, most politicians fall over themselves to be robust, tough, and sometimes downright rude to developers.
Hospitality of any kind – let alone yachts, cigars, or alcohol – is almost unheard of. I once went on a trip to Berlin with other Greenwich councillors and a few top people at Quintain and Lend Lease (then the developers of Greenwich Peninsula): the council paid our way and we were so anxious not to accept any hospitality that we even bought the developers drinks once or twice (inverted corruption, if you like).
And just as it would be ludicrous to expect all of a union’s negotiations with employers to take place in public, it’s ludicrous to demand the same of discussions between developers and councils. Unite is right to be suspicious of developers, and right to demand as much transparency as possible over their contacts with politicians. But how can politicians seek a better deal for their communities if they’re not permitted to meet developers face to face? As a Labour councillor in Greenwich, the thing that worried me most about the council’s relationship with local developer Berkeley Homes – the acceptance of a large donation to a charity chaired by the council’s Leader, just before a decision on homes they wanted to build in Kidbrooke – was not a secret deal behind closed doors: the photo opportunity was plastered all over the council’s own newspaper. The answer to these problems is better public and media scrutiny of politicians, not simplistic demands for them to “withdraw from relationships” with developers.
Meetings with developers can be a crucial opportunity for politicians to understand what’s on its way to the planning committee, and to lay down their expectations in terms of design, scale, affordable housing and other community benefits. Yes, they can also help developers and architects to explain what they want to build, and why. But assuming that all such discussions are selling out or stitching up is wide of the mark. Unite seems to forget that councils have planning powers over land they don’t own, as well as estates that they do.
Left to their own devices and unquestioned by Labour politicians, developers will only get away with it. With developers increasingly likely to appeal over Labour councils’ heads to Boris Johnson or to Eric Pickles, as at Mount Pleasant, it’s vital that Labour councils try and thrash out agreements on their terms.
Sometimes I’ve witnessed politicians using such meetings to ruthless effect. Last year I attended a briefing with James Murray, the Labour councillor in charge of regeneration in Islington, about bold plans to build a new HQ for the National Youth Theatre and 80 flats on the Holloway Road. As soon as Murray heard that none of the proposed flats would be affordable he cancelled the meeting and said it would only be reconvened one there were affordable homes on offer. Architect Patrick Lynch, developer Tom Shutes and a dozen hangers-on had huffed and puffed our way up the stairs in Islington Town Hall carrying models, plans and papers. We then had to huff and puff our way back down again, Grand old Duke of York style, without presenting the plans. The development has since been given planning consent, with 24 of the 80 flats at an affordable rent, and I’m not sure the developers would have changed their minds if that humiliating walk up and down the Town Hall stairs had never taken place. Stopping a meeting as soon as a derisory amount of affordable housing is mentioned is a much more effective negotiating tactic than refusing to meet at all.
Body language matters, as well as asking questions to which you already know the answer. In 2007, as chair of Greenwich’s Planning Board, I met with Wilson Bowden and their architects Chapman Taylor to discuss their dire plans for the redevelopment of the “Woolwich Triangle” (a site between Hare Street and Powis Street at the more run-down end of town). “How do you intend to sensitively restore the locally-listed Art Deco building?” I asked. “Er, it gets knocked down,” was the answer. I kicked up a fuss and thankfully the recession then intervened to kill the plans stone dead (the Art Deco building, a former Co-op department store, survived and is now being converted into flats). Again, such a meeting set a “red line” much more clearly than correspondence with a planning officer ever could.
Choosing a venue is also important: meeting developers on their own turf is always problematic. I once met with Berkeley Homes in their “marketing suite” – a glorified portacabin where the Woolwich Crossrail station is now being built – and was placed in a big white armchair to listen to their presentation (the work experience guy with me was seated in a smaller chair just behind, like an interpreter at a NATO summit). I always preferred to meet with developers on council premises, not in their plush offices or a glitzy trade fair like MIPIM. Prior to its demolition in 2010 bringing smart developers to Peggy Middleton House – the dingy 1970s office block that contained the council’s planning department, a bit like the set of Life on Mars – disarmed them no end.
And it pays to pick your fights wisely. In Greenwich, I twice witnessed the Council’s former Leader Chris Roberts suddenly storm out of meetings without letting fellow councillors know in advance. On one occasion he exited a meeting with AEG’s then chief executive David Campbell over an innocuous application for floodlighting on the roof of the Millennium Dome (or the O2 as he insisted we call it). Another, more justifiable, exit was from a meeting with Greenwich Peninsula developers who could not explain how high their buildings would be, or where the affordable housing would go. Walking out of meetings is a poor tactic when your own side doesn’t know in advance – on both occasions Deputy Leader Peter Brooks and I were left in the room, stammering apologies.
But this rudeness can serve a useful psychological purpose. Councillors in London have a constant tide of casework, meetings that fill every weekday evening, plus weekend door-knocking as well as family demands and, more often than not, a job outside the council to attend to – and it’s important that developers and architects realise that they aren’t the only show in town.
I once went to Tower Hamlets Town Hall to brief councillors about a new block of expensive flats at Canary Wharf (with the affordable homes placed a mile away at the other end of the Isle of Dogs, of course). Architect Michael Squires was hugely offended when Labour councillor Bill Turner arrived late, flung his bag down on the table noisily and proceeded to look at his phone rather than pay attention to his presentation. I couldn’t understand why: I had behaved exactly the same way at dozens of meetings in Greenwich (arrive late, leave early and try to show my face at as many meetings as possible). Developers often think they are busy, time-poor people, but in fact meetings in the private sector always go on for three times as long as council ones: councillors have got too much on their plate to hang around faffing unnecessarily.
Yes, I did attend meetings where politicians were so seduced by what developers were offering that common sense – and the ability to ask awkward questions – were left at the door. In 2006 Greenwich councillors were herded like schoolchildren into a meeting with billionaire Sol Kerzner‘s people to hear about their crazy plan for a Super-Casino in the Dome, which thankfully bit the dust shortly afterwards. A handful of us heckled quietly from the back row about problem gambling, only to later be chastised by other councillors for “disrespecting” our visitors (a convention that was rarely observed with other visitors).
But these love-ins don’t result from developers bribing or bullying politicians: councillors are sometimes so keen to welcome “regeneration” that they don’t need to be schmoozed. Despite the misgivings of community leaders, too many Greenwich councillors already thought that a giant 5,000 square metre casino – creating only poorly-paid, part-time jobs and gambling addicts – was the best way to regenerate the borough.
The most significant planning decision taken in Greenwich in the last ten years was allowing Berkeley Homes to build 3,700 homes rather than 2,500 in the final phase of the Royal Arsenal, in return for Berkeley helping to fund a Crossrail station in Woolwich – a huge increase in density in return for helping to deliver an important bit of transport infrastructure. Yet this plan did not originate from Berkeley Homes: rightly or wrongly, the council first proposed it. The real love-in was between the council and the idea of a new railway station, not between the council and the developer.
Calls from trade unions and left-wing commentators for councils to “withdraw from… close relationships with private developers” miss the point: it’s the type of dialogue that counts. And often it’s the politicians at fault, not the developers.
Let’s not have amnesia about council estates
It’s not just meetings with developers that Unite is wrong about. Unite’s also wrong to assert that “an overwhelming number of local authority estate ‘regenerations’ have had extremely negative effects on council tenants and leaseholders, as well as wider communities”.
Predictably, the Guardian’s Aditya Chakrabortty has highlighted the contrast between the glitz of MIPIM, and council tenants facing eviction because the estates they live on will be “regenerated”. He makes much of reports that Southwark’s Leader Peter John was reportedly flown to MIPIM in Cannes last year at developer Lend Lease’s expense, just as Lend Lease are redeveloping the Heygate Estate with a big reduction in affordable housing.
Unite’s right to cite “a reduction in the number of council properties available at socially affordable levels; forced removal of existing council tenants; and forced removal of leaseholders – often with compulsory purchase at significantly lower than market values” as common problems. But the answer is surely more dialogue with developers, not less. Whether we like it or not, for the foreseeable future mixed-tenure redevelopment is the only way that large housing estates will get rebuilt, and mixing up affordable and private homes is not a betrayal.
And there’s a growing amnesia about the housing estates that Unite is so keen to preserve. As Lynsey Hanley argued brilliantly in her 2007 book Estates: An Intimate History, most big council estates are not socialist utopias but ghettoes of crime and poverty which true socialists should be rebuilding, not defending: Indeed, many of London’s worse estates weren’t even built by Labour councils. In the late 1960s and early 1970s the Tory-controlled GLC built the Ferrier in Greenwich and a Tory-run Haringey Council built Broadwater Farm in Tottenham.
Hanley has stern words for middle-class do-gooders who sentimentalise estates like the one in Birmingham she grew up in: “You cannot know what that was like until you grew up inside it. Breaking out of it was like breaking out of prison. For all its careful planning and proximity to the city and the country, the estate was ringed by invincible, impenetrable force field: the wall in the head.”
As for leaseholders, Unite’s wrong again to assume they get a bad deal when “bought out” ahead of redevelopment. In practice, many homes on the worst council estates are unsellable on the open market. In the early 2000s I was closely involved in discussions about the redevelopment of the Ferrier estate in Greenwich, where several hundred leaseholders had to be bought out ahead of its redevelopment as “Kidbrooke Village” by Berkeley Homes. Most were offered the market value of their homes plus 10%, much less than the value of any other homes nearby: a Ferrier leaseholder would not be able to buy a new home anywhere near Kidbrooke with the money on offer. After painfully slow negotiations, most either moved out of London, reverted to a council tenancy or put the equity into a “shared ownership” home and went back to paying rent on the other half.
My sympathy for these residents began to subside when I realised that most had bought their three and four-bedroom houses from the council in the 1980s or 90s, under the Right to Buy, at huge discounts of up to 70% below market value: in some cases for £20,000 or less. Buybacks may be a bad deal for councils and developers, but it’s certainly not a bad deal for leaseholders who may be getting back ten times what they paid for their home.
The real scandal is not how quickly council estates in London are being redeveloped, but how slowly. Because of the acute pressure on council housing boroughs have to phase their demolition over many years – even decades – as there is only so much spare capacity that tenants can be rehoused into. In the borough of Greenwich three grim estates – Connaught, Morris Walk and Maryon Grove – are being redeveloped by “One Woolwich“, a consortium of Lovells and Asra housing association. Demolition of all three estates was originally scheduled to be underway by 2014, but thanks to council dithering, the credit crunch and Tory housing policies demolition of Morris Walk won’t start until 2019 and Maryon Grove 2023: in the meantime tenants won’t get new windows, kitchens, bathrooms or entryphones.
It is idiotic to blame these problems on the council “stitching up” a cosy deal with developers: given the constraints of Tory housing policies, the plans are impressive and the council has done well to get 500 affordable homes in the new development, half of them at social rent. Unite should spare a thought for tenants still living in estates like these. Halting their redevelopment would only pile on more misery. Tenants would be stuck indefinitely in decaying homes that the council cannot afford to modernise: a high price to pay for the ideological purity of “staying with the council” that some on the Left demand.
Armchair do-gooders who object to the redevelopment of council estates without ever having lived on one should think again. I once heard the environmental activist (and former deputy chair of the Lib Dems) Donnachadh McCarthy argue that system-built estates like the Ferrier should not be demolished because it would waste the “embodied carbon” they contain (in other words, the fossil fuels burnt fifty years ago to make their concrete and steel frames). I admire Donnachadh McCarthy’s work in showing how people can reduce energy consumption and waste to virtually zero. But there are times when other factors – the desire to have a front door facing a street, defensible space, architecture that humanises rather than brutalises – must override carbon footprints, and fixations with housing tenure.
Like many people, I’m concerned that Berkeley Homes is building too many high-rise flats for buy-to-let investors in Kidbrooke Village, is pushing affordable housing to the less attractive eastern side of the development, and is scrimping on infrastructure (Kidbrooke station is, incredibly, being rebuilt without a lift). But if Unite thinks that the Ferrier estate should have been kept as it is, then it’s crazy. Calling on Labour politicians to boycott MIPIM is gesture politics which won’t get a single more affordable home built. I’m no fan of rubbing shoulders with property developers, but Labour councillors have lots of good reasons why they might want to go to a property fair – not least to talk to developers about their schemes and how affordable housing can be maximised.
Earlier today the Labour party published the final report of the Lyons review into the future of housing, an ambitious plan to build 200,000 new homes a year by 2020. Labour needs to get real: while some will be council homes most of them will be built by the private sector or housing associations. They won’t get built without discussion, negotiation – and compromise – between councils and the developers who will build them. We need more robust dialogue between developers and politicians – at minuted meetings and without hospitality of course – not less.
I’ve never been to MIPIM in Cannes, and I’m not going to MIPIM UK this week – in fact I can think of a hundred things I’d rather do. But if I was still a frontline politician and I thought a face-to-face meeting with a developer there might help get my borough a better deal, I’d take a deep breath, cross Unite’s picket line and go inside.