“But there would be consequences.” Some thoughts on Jeremy Corbyn’s promises on housing

Jeremy Corbyn in Brighton today. Image: Getty.

Labour leader Jeremy Corbyn – the absolute boy, who inspired a generation, won the 2017 election and is even now literally the prime minister – just made his closing speech to the party conference in Brighton.

A large chunk of it was on housing. That’s not a huge surprise: it’s a huge issue for younger voters, from whom Labour draws much of its support, and a clear red line with the Tories who seem incapable of even admitting that they’re presiding over a problem. In that election, Labour’s unexpectedly strong performance came in part from the party’s strong performance among renters.

But what did Jez We Can actually say? And will his policies fix anything? You can read the full speech over at the Staggers, but here are some extracts, with my commentary.

We will insist that every home is fit for human habitation, a proposal this Tory government voted down.

This is not 100 per cent accurate, but it’s at least 96 per cent accurate, which is a lot more per cent than the Tories should really be comfortable with.

The government did vote down an amendment which would have required both private and social landlords to make homes fit for human habitation. It claimed that existing regulations were adequate, and that this amendment amounted to “unnecessary regulation and cost to landlords, which will deter further investment and push up rents for tenants”.

But it’s far from clear that existing regulation is strong enough – and anyway, if it is, surely this wouldn’t be imposing any extra burdens on landlords?

At any rate, this is a huge great open goal for Corbyn, and the Tories have nobody to blame but themselves if it costs them votes.

And we will control rents – when the younger generation’s housing costs are three times more than those of their grandparents, that is not sustainable.

Rent controls exist in many cities across the world and I want our cities to have those powers too and tenants to have those protections.

This is more complicated.

Rent controls are certainly popular – not surprising, when you consider the state of actual rents – but economists all hate it, including those on the left. They argue that it reduces the supply of rental property. Moreover, it splits tenants into insiders (who live forever in rent controlled homes) and outsiders (who can no longer find anywhere to live because nobody is moving out of those rent controlled homes). San Francisco has rent controls, yet is one of the few cities on the planet where housing is more of a problem than in London.

That said, it’s not entirely clear what these rent controls would look like – whether they’d cap prices or link them to inflation; whether they’d be temporary or permanent; even whether this is just misleading code for things like changing the length of tenancies. The devil is in the detail.

And once again, it’s very difficult to look at the actual British housing market and conclude that the status quo is just fine (at least, unless you’re a landlord). As more and more people are forced to live in rented homes for the long term – even bring up children in them – there is certainly a strong case for changing the balance of power between tenants and landlords.

So while there is likely to be much squawking from Tories about the dangers of rent controls, once again I’m forced to point out: your total complacency on this issue is a big reason Labour is now eating your lunch.

(More on rent controls here.)

We also need to tax undeveloped land held by developers and have the power to compulsorily purchase. As Ed Miliband said, “Use it or lose it”. Families need homes.

This is probably broadly a good thing: the big housebuilders do tend to sit on land with planning permission for a while, to help them maximise their profits, and during a time of enormous housing shortage this is pretty gross.

But (there’s always a but, isn’t there?) developers move at the pace they do for a reason. If they moved much faster, prices would fall, and they’d lose money. Builders are not going to build, if it puts them at risk of going bust.

So while this may help at the margin, and it’ll certainly change house builders’ behaviour, my suspicion is it’s not going to be enough to magically double their output and fix the housing crisis. Although I’d love to be wrong on this.

Now for the bit where I get really conflicted.

Regeneration is a much abused word.

Too often what it really means is forced gentrification and social cleansing, as private developers move in and tenants and leaseholders are moved out.

(…)

Regeneration under a Labour government will be for the benefit of the local people, not private developers, not property speculators.

First, people who live on an estate that’s redeveloped must get a home on the same site and the same terms as before.

No social cleansing, no jacking up rents, no exorbitant ground rents.

Okay. This looks great, obviously. Of course housing should be about people. Of course regeneration should benefit residents, rather than clear them out altogether. We can all get behind that.

But, in what is now becoming a theme, things happen the way they do at the moment – developers chipping away at their social housing commitment, tenants being offered a choice between replacement homes elsewhere and paying much higher rents – for a reason. And those reasons are a bit more complicated than “uncaring councils and parasitic developers”.

One is the squeeze on council funding, combined with their statutory responsibility to sweat their assets. In expensive bits of the country, that’s forced inner city councils – often Labour ones – to come up with creative ways of using the highly lucrative land their housing estates sit on. Because they’re not swimming in cash themselves, that’s often meant partnering with developers, who by definition care more about shareholders than tenants. So: tenants get screwed.

Could we stop this? Sure. But there would be consequences. It’d be less profitable, so it’s plausible fewer regeneration schemes would happen. You might be okay with that, but it would mean crumbling estates keep crumbling, fewer homes get built, and those inner city councils are forced into making even more cuts.

We could probably deal with the consequences of that, too – but only if we’re willing to chuck more money into the system. In other words, better regeneration would inevitably be more costly regeneration.

Oh, and if we’re not going to “regenerate” council estates any more, that’s yet another place we can’t build to meet demand for housing in London. Again, that’s a legitimate policy choice – but it will have consequences in terms of worsening the housing shortage, placing yet more pressure on other sources of land (hello, green belt).

Last but not least:

And second councils will have to win a ballot of existing tenants and leaseholders before any redevelopment scheme can take place.

Again, this seems like common sense. But if implemented literally, I fear it would result in no redevelopment ever taking place, because NIMBYism is a thing and anyway who in their right mind would vote yes on having their home demolished?

And yet. As with so much else in the world of housing, the status quo is very clearly awful. Of course tenants shouldn’t be forced out, promised homes that will never arrive, and end up living miles and miles from their homes. Of course we should do this better.


What’s more, it’s no longer clear that what Richard Florida has termed “superstar cities” like London are even capable of generating affordable housing any more. Since London isn’t going to stop needing nurses or teachers any time soon – not to mention carers or retail workers – that’s a very strong argument for defending the idea of state subsidised housing, in a way that no government has done in decades.

So. I’d like to believe this is going to work. And I’m certainly pleased that someone is trying to defend council housing once again. But I have worries.

And the biggest is what was not in the speech. Ending the housing crisis will mean building a lot more houses. Corbyn has said in the past that he’s in favour of that. But where or how a Corbyn government would do so is very far from clear.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and Facebook. Want more of this stuff? Follow CityMetric on Twitter or Facebook.   

 

 
 
 
 

Can you have capitalism without capital? Brighton, Ankara, Ghent and the intangible economy

The Fusebox, Brighton. Image: WiredSussex.

As you head north out of Brighton on the A23 things take a distinctly granular turn. The cool bars and trendy eateries give way to second-hand shops and nail bars.

Looming over the area, New England House, an eight-storey brutalist office block, is home to Wired Sussex, a collection of digital and media companies, as well as its offshoot The Fusebox. Here, a collection of entrepreneurs, tech visionaries and creative technologists are seeking to transform their ideas into successful businesses. This island of cutting-edge thinking, surrounded by the evidence of the glaring consequences of austerity, could stand as a synecdoche for the suddenly vogueish concept of the “intangible economy”.

Towards the end of last year, on Radio 4’s Start The Week, Jonathan Haskel, author of Capitalism Without Capital, laid out the features of this brave new economy. The ideas are scalable, have sunk costs, their benefits spill over, and they have synergies with other intangible assets. All of these things are, to a greater or lesser extent, attributes featured in the virtual reality games, apps for care home workers, and e-commerce ideas mapped out by the bright sparks in the Fusebox.

Its manager, Rosalie Hoskins, explains that it exists to support the work of small companies doing creative work. Within these clean white walls they can bounce their ideas off each other and reap the fruits of collaboration. “We’ll provide the doors,” she says. But “it’s up to them to open them.”

One innovative thinker hoping to make her entrance is Maf’j Alvarez. She tells me she studied for a masters in digital media arts at the University of Brighton, and describes herself as an ‘interactive artist’. “Right now I am playing with virtual reality,” she tells me. “There’s a lot of physics involved in the project which explores weight and light. It definitely has a practical application and commercial potential. VR can be used to help people with dementia and also as a learning tool for young people.”

The Fusebox, she says, is “about collaboration. The residents of the Fusebox are in all a similar situation.”

The willingness to work together, identified by Haskell as a key element of the intangible economy, is evident in the Fusebox’s partnership with like minded innovators in Ankara. Direnç Erşahin from İstasyon, a centre for “social incubation” based in the Turkish capital, visited the Fusebox toward the end of last year.

“It was a good opportunity to exchange knowledge about the practice of running a creative hub – managing the place, building a community and so on,” he says.

Erşahin and his colleagues have launched a fact-checking platform – teyit.org – which he believes will provide “access to true information”. The co-operation between the Fusebox in Brighton and İstasyon in Ankara  is “a good opportunity to reinforce a data-oriented approach and university and society interaction,” he argues.

But the interaction between wider society and the denizens of the intangible world is often marked by friction and, ironically, a failure of communication.

This point is underlined by Aral Balkan, who runs a company called indie.ie which aims to develop ethical technologies. “There’s a good reason we have a trust problem,” he says. “It’s because people in mainstream technology companies have acted in ways that have violated our trust. They have developed systems that prey upon individuals rather than empowering them.”

A former Brighton resident, Balkan is almost a walking definition of Theresa May’s “citizen of nowhere”. He is a regular speaker on the TED and digital circuits, and I crossed paths frequently with him when I covered the industry for Brighton’s local newspaper. He left the city last year, chiefly, he tells me, in protest over the UK government’s overweening “snooper’s charter” laws.


He has Turkish and French citizenship and is now based in Malmö, Sweden, while working with the city of Ghent on a radical redevelopment of the internet. “Ghent is a beautiful example of how location affects the work,” he tells me. “They don’t want to be a smart city, they want to encourage smart citizens. We are exploring alternatives.”

Karl-Filip Coenegrachts, chief strategy officer at the City of Ghent, is another believer in the synergies made possible by the intangible economy. “The historic perspective has impacted on the psychology and DNA of the city,” he says. “The medieval castle built to protect the nobility from the citizens not the other way around. People in Ghent want to have their say.”

Left out of this perspective, of course, are those who cannot make their voice heard or who feel they are being ignored. The fissures are easy to find if you look. The future of Belgium’s coalition government, for example, is threatened by Flemish nationalists in the wake of a scandal over the forced repatriation of 100 Sudanese migrants. In Ankara, President Recep Tayyip Erdogan has purged local government and continues to stamp on any dissent.

In the UK, the gig economy makes headlines for all the wrong reasons. Back in the area around the Fusebox, the sharp observer will notice, alongside the homeless people curled up in sleeping bags in charity shop doorways, a stream of gig-worker bikers zooming from one order to another.

The intangible economy throws up all-too tangible downsides, according to Maggie Dewhurst, vice chair at the Independent Workers Union of Great Britain. She gives short shrift to the idea of ‘capitalism without capital’.

“It does get a bit irritating when they muddy the waters and use pseudo academic definitions. They pretend tangible assets don’t exist or are free.”

In fact, she adds, “The workers are a human resource.”