Here’s why Britain should move its capital

The future ex-capital, London. Image: Getty.

Three months ago, two different bits of Britain’s much-loved privatised rail network fell over. Passengers on Thameslink and Northern rail were victims of a timetable overhaul, which was intended to increase the frequency and reliability of train services but instead led to delays and cancellations.

There were, however, some important differences between the two cases. For one thing, Northern’s problems weren’t new – the timetable changes made things worse, but passengers in the north had already been putting up with a disrupted service for months.

For another, most Thameslink stations now get several new trains per hour, often formed of 12 cars. Whereas for much of the north, a good service still means only two trains an hour –  comprised of two or three carriages made of modified buses on rails.

And then, as if that weren’t enough of a symbol of the social and economic chasm that runs down the middle of this country, a moor outside Manchester spent three weeks on fire. The London media initially ignored that, too.

The economic divide between the affluent south-east and the rest of England has become such an accepted part of our national life that we’ve stopped being shocked by it – but we shouldn’t have. A 2014 report from Eurostat found that England accounted for seven of the ten poorest regions in northern Europe; two more were elsewhere in the UK. Most post-industrial English cities now have productivity levels comparable to those of eastern Germany, which spent half a century under communist rule.

Another crucial and related fact is that England remains one of the most centralised countries in the developed world. In Germany, Italy, Australia and the US, political, financial and cultural power is dispersed among several cities. In England, London dominates all three. Other cities are not even allowed to raise their own money: in a bid to build a tram network, Leeds had to go cap in hand to Whitehall. Whitehall said no in 2016.

There is, however, a policy that would unambiguously break London’s stranglehold on the country: moving the capital city.

The banks are unlikely to move en masse to the north (Frankfurt or Amsterdam are stronger contenders, sadly). The BBC’s partial relocation to Salford Quays has been a success, but a limited one: most commissioning power in the media industry has stayed stubbornly in the capital. But moving out of London is something the government could decide to do, and the industries that cluster close to political power would follow.

Such is its status as a major world city that London’s economy would barely skip a beat. It might even benefit: spreading jobs and power to another city would take some steam out of the capital’s overheated housing market, making it easier for those industries that remain to recruit and retain staff.

There’d be other benefits. A new capital would allow parliament to move to a new site that isn’t falling down. (The Palace of Westminster would make excellent yuppie flats.) Increasing the distance between financial and political elites would break the 40-year habit of running the entire British economy for the benefit of the City of London. And dispersing power would soon disperse investment: upgrading Northern’s modified buses might seem as important as Crossrail 2.

As to where the new capital should be, there is an obvious candidate, whose central location would spread benefits to other nearby cities: Manchester could be Washington to London’s New York. But I’m agnostic: perhaps we should hold an auction.

It would take time to move parliament and the civil service without incurring a catastrophic loss of expertise. But in Brexit, the political class is already committed to one expensive project that will take decades to complete. At least this one might actually benefit the country – spreading jobs, rebalancing the housing market and ending the internal brain drain in which graduates of northern universities head immediately for the south. At the very least, it would finally force ministers to sort out those trains.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

This article first appeared in our parent publication, the New Statesman.


A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.

Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.