How Birmingham is using property development to re-tool its economy

The new New Street. Image: Getty.

Something I’ve noticed when visiting Birmingham over the past couple of years: parts of the city have started to feel rich.

The new glass-fronted offices of the central business district, Colmore Row, blend in better with the grand Victorian architecture that surrounds them than you have any right to expect in a city whose architectural history is as chequered as Birmingham’s. The names of the shops point to a certain prosperity, too. Nespresso. Harvey Nichols.

Colmore Row is not the whole of Birmingham – as so often in England’s regional cities, you can turn a corner and find the city centre just stops, to be replaced by crumbling housing estates or derelict industrial land. And subjective impressions are, well, subjective. But there’s a core of prosperity in Birmingham that many cities would kill for.

Part of the explanation lies in the city’s proximity to London: a number of major financial or professional service firms, refugees from the capital’s property prices, have moved chunks of their operations to the Midlands. At a Centre for Cities event in late 2014, the American urban theorist Edward Glaeser suggested that Birmingham could have a bright future providing back office services to London. The following August, HSBC announced it was moving 1,000 jobs there.

But another part of the explanation is that the city has been, literally, planning for this. In 2010, the council published the Big City Plan, a “20 year vision... supporting transformational change to create a world class city centre, delivering sustainable growth”. Cut through the thickets of jargon, and that basically means building a load of nice new shops and offices, and making sure people can get to the bloody things.

The big plan

The recent extension of the Midlands Metro tram into the city centre fits into this plan. So does the New Street station development, in which the dark and cramped concourse has been replaced by an airy light canopy, and the grim brutalist Palisades shopping mall cleaned up and rebranded Grand Central. (The tram now terminates at the confusingly named Grand Central New Street; one day it’ll extend through the nightlife district into Edgbaston.) The shopping centre’s largest retailer, John Lewis, was “lured in by the Big City Plan,” says director of planning and regeneration Waheed Nazir, one of its authors.

The extending city centre. Click to expand. Image: Birmingham City Council.

The biggest idea in the plan, though, is to extend the footprint of the city centre by 25 per cent, by transforming under-developed land on the edge of the city centre – “book ends”, Nazir calls them – into posh new retail and commercial space. The city was prevented from doing any such thing for many years by the inner ringroad (the “concrete collar”), which made it impossible to leave the city centre on foot without using a dingy subway. Burying sections of that, and re-directing traffic where possible, made it possible for the city to expand.

The Big City Plan has already seen new developments around Colmore Row, and on the West Side (the “Paradise” redevelopment, currently separating the city centre from the ICC conference hall at Centenary Square). It’s also seen the city relocate the old fashioned Bull Ring Markets from the Smithfield area around the back of the shopping centre, on the grounds that it was occupying what Nazir calls “prime real estate”.

Much of this work will come from private developers, but the city is investing too. “The game changer was keeping business rates,” says Nazir. “Suddenly TIF [tax increment funding] was viable.” TIF is, basically, a mechanism for funding developments by capturing the uplift in property values those projects will create. Doing this will give the council at least £700m of investment capital to play with, and possibly up to £1.2bn.

The city’s biggest investment priority, though, is one which it can’t control: High Speed 2, the rail link which will shave a few minutes off the journey to London. During the recent Conservative conference the city’s enthusiasm for the new rail link was literally visible on seemingly every available surface, with posters plastered all over the place. (That said when I visited the city to speak to its leaders back in the spring, whenever I asked what the city’s priorities were, everyone gave me the same identical answer: protecting vulnerable children. I got the distinct impression a memo had gone around.)

Nazir denies that talk of HS2 has been the key to the city’s regeneration – Deutsche Bank moved there in 2008, before it was even a gleam in Lord Adonis’ eye, he points out. “But it brings confidence and changes perception of the city.”

The new economy

It’d be misleading to suggest that Birmingham sees its future entirely as a sort of commuter suburb of London. Besides the central business district, the Big City Plan also proposes a number of other economic zones where it hopes employment to grow: a food hub, an advanced manufacturing hub, and so on. Council leader John Clancy vision for the city is as a “nimble, tech driven manufacturing” economy. To that end, it’s investing in facilities like the BioHub life sciences centre on the edge of the university campus.

I meet Clancy at the Innovation Birmingham Campus, a sort of tech hub in the Aston area. He was in ebullient mood: the government’s independent improvement panel, which had been monitoring the city’s children’s services department, had just left the city (the cause of that memo, one assumes), and he’d just been talking to some American visitors. “They like big things,” he said. “Well this is the largest local authority in Europe. We’ve got a £3.1bn budget and own 40 per cent of the city.”

HS2 is an “absolute game changer” he tells me. Curzon Street, the currently derelict area on the Eastside where the new terminal will be built, is “absolutely an investment hotspot that the world is interested in”.

The Metro extension, because we love a map. Click to expand. Image: Birmingham City Council.

But the opportunity is as much about skills and jobs, he adds. “We’ve been known as a motor city. Now we may very well become known as a train city.”

The city has other investment plans, too. It wants to build a Bus Rapid Transit network called Sprint. It also wants to “upgrade its housing to make it a better asset”, says Clancy.

To fund this, it’s been talking to the Treasury about increasing its borrowing powers through by launching “brumme bonds”. (This one’s gone a bit quiet since Brexit.) It’s also trying to encourage local capital to remain in the city: “It’s about re-writing things so that the pension fund is feeding back into the local economy.”


From next year, of course, despite being the leader of Britain’s largest local authority, Clancy will have a bigger figure above him: the new West Midlands metro mayor, elected by the residents of Birmingham and six other boroughs. The leaders of all seven will make up his cabinet, however. “We’re not ceding power upwards, except possibly in transport. If anything, the power of local leaders will be enhanced.” The Big City plan is likely to continue.

In terms of selling the Midlands to the world, Clancy points to an unexpected ambassador. “People in the UK don’t associate Shakespeare with Birmingham – further afield they do.” Stratford-upon-Avon isn’t technically covered by the West Midlands metro mayor, but Warwickshire is a non-constituent (that is, non-voting) member.

Birmingham doesn’t have the strongest brands among British cities, and the West Midlands has often seemed to get forgotten in the race to build a Northern Powerhouse. But when I ask him if he feels that the city is overshadowed by Manchester, Clancy – a native of Stockport, albeit one who’s been in Birmingham for 27 years – professes to be relaxed. “This is about re-balancing the economy, and I’ve no problem with the economy being rebalanced to Manchester and Birmingham.” (I’d only asked about Manchester. The reappearance of Birmingham in that list is his own.)

“Good luck to Manchester,” he adds. “I wouldn’t say I think we will match [the Greater Manchester deal], because we were late to the game politically.” Yet he is certainly ambitious for his adopted city. “We might even see parliament move here,” he adds. “They’ve got to move it anyway – and I’m sure we could accommodate the United Kingdom parliament.”

This is part three of a series on the West Midlands. You can read part one here, and part two here. Next time: onwards to Coventry.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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Is Britain’s housing crisis a myth?

Council housing in Lambeth, south London. Image: Getty.

I’ve been banging on about the need for Britain to build more houses for so long that I can no longer remember how or when it started. But at some point over the last few years, the need to build more homes has become My Thing. People ask me to speak at housing events, or @ me into arguments they’re having on Twitter on a Sunday morning in the hope I’ll help them out. You can even buy a me-inspired “Build More Bloody Houses” t-shirt.

It’s thus with trepidation about the damage I’m about to do to my #personal #brand that I ask:

Does Britain actually have enough houses? Is it possible I’ve been wrong all this time?

This question has been niggling away at me for some time. As far back as 2015, certain right-wing economists were publishing blogs claiming that the housing crisis was actually a myth. Generally the people who wrote those have taken similarly reality-resistant positions on all sorts of other things, so I wasn’t too worried.

But then, similar arguments started to appear from more credible sources. And today, the Financial Times published an excellent essay on the subject under the headline: “Hammond’s housebuilding budget fix will not repair market”.

All these articles draw on the data to make similar arguments: that the number of new homes built has consistently been larger than the number of new households; that focusing on new home numbers alone is misleading, and we should look at net supply; and that the real villain of the piece is the financialisation of housing, in which the old and rich have poured capital into housing for investment reasons, thus bidding up prices.

In other words, the data seems to suggest we don’t need to build vast numbers of houses at all. Have I been living a lie?

Well, the people who’ve been making this argument are by and large very clever economists trawling through the data, whereas I, by contrast, am a jumped-up internet troll with a blog. And I’m not dismissing the argument that the housing crisis is not entirely about supply of homes, but also about supply of money: it feels pretty clear to me that financialisation is a big factor in getting us into this mess.

Nonetheless, for three reasons, I stand by my belief that there is housing crisis, that it is in large part one of supply, and consequently that building more houses is still a big part of the solution.

Firstly I’m not sold on some of the data – or rather, on the interpretation of it. “There is no housing crisis!” takes tend to go big on household formation figures, and the fact they’ve consistently run behind dwelling numbers. Well, they would, wouldn’t they? By definition you can’t form a household if you don’t have a house.

So “a household” is not a useful measure. It doesn’t tell you if everyone can afford their own space, or whether they are being forced to bunk up with friends or family. In the latter situation, there is still a housing crisis, whatever the household formation figures say. And there is plenty of anecdotal evidence to suggest that’s the one we’re living in.

In the same way I’m not quite convinced that average rents is a useful number. Sure, it’s reassuring – and surprising – to know they have grown slower than general prices (although not in London). But all that figure tells you is the price being paid: it doesn’t tell you what is being purchased for that payment. A world in which renters each have their own property may have higher rents than one in which everyone gets one room in an over-crowded shared flat. It’s still the latter which better fits the label “housing crisis”.

Secondly, I’m entirely prepared to believe we’ve been building enough homes in this country to meet housing demand in the aggregate: there are parts of the country where housing is still strikingly affordable.

But that’s no use, because we don’t live in an aggregate UK: we live and work in specific places. Housing demand from one city can be met by building in another, because commuting is a thing – but that’s not always great for quality of life, and more to the point there are limits on how far we can realistically take it. It’s little comfort that Barnsley is building more than enough homes, when the shortage is most acute in Oxford.

So: perhaps there is no national housing crisis. That doesn’t mean there is not a housing crisis, in the sense that large numbers of people cannot access affordable housing in a place convenient for their place of work. National targets are not always helpful.


Thirdly, at risk of going all “anecdote trumps data”, the argument that there is no housing crisis – that, even if young people are priced out of buying by low interest rates, we have enough homes, and rents are reasonable – just doesn’t seem to fit with the lived experience reported by basically every millennial I’ve ever met. Witness the gentrification of previously unfashionable areas, or the gradual takeover of council estates by private renters in their 20s. 

A growing share of the population aren’t just whining about being priced out of ownership: they actively feel that housing costs are crushing them. Perhaps that’s because rents have risen relative to wages; perhaps it’s because there’s something that the data isn’t capturing. But either way, that, to me, sounds like a housing crisis.

To come back to our original question – will building more houses make this better?

Well, it depends where. National targets met by building vast numbers of homes in cities that don’t need them probably won’t make a dent in the places where the crisis is felt. But I still struggle to see how building more homes in, say, Oxford wouldn’t improve the lot of those at the sharp end there: either bringing rents down, or meaning you get more for your money.

There is a housing crisis. It is not a myth. Building more houses may not be sufficient to solve it – but that doesn’t meant it isn’t necessary.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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