Joe Beswick HDV Presentation Notes – Wood Green Public Meeting on Development Vehicles

Joe Beswick

Joe Beswick 

University of Leeds
School of Geography
Co author of  
‘Speculating on London’s housing future’
 
“London’s housing crisis is rooted in a neo-liberal urban project to recommodify and financialise housing and land in a global city. But where exactly is the crisis heading? What future is being prepared for London’s urban dwellers? How can we learn from other country and city contexts to usefully speculate about London’s housing future? In this paper, we bring together recent evidence and insights from the rise of what we call ‘global corporate landlords’ (GCLs) in ‘post-crisis’ urban landscapes in North America and Europe to argue that London’s housing crisis—and the policies and processes impelling and intervening in it—could represent a key moment in shaping the city’s long-term housing future. …”

A recording of the public meeting held in wood green 13.2.17 on Haringey Development Vehicle

What they are?

Been around for a little while – third of councils in the country – but Haringey stands out – size, Joint Venture unusual

Why they are setting them up? – austerity and desire to use land profitably

Purpose: To deliver regeneration and housing, replace funding with profit – provide money for the council

How does it work?

Creates company – not the council – separate

And transfers land assets to that company – (estates, town centres)

Deliver homes via cross-subsidy or viability – private market homes – so often demolishing estates which are primarily social, with some leasehold, and rebuilding at higher densities, with a lot more private housing

Success of vehicles depends on increasing property prices and often gentrifying the local area

Many are wholly owned Cos – council owns 100% (takes 100% of the profits, carries 100% of the risk)

But HDV is different – shared control – Joint Ventured /Local Asset Based Vehicle

Haringey provide: land – Land Lease provide: capital – Both own half. Half profits. Half control.

Regeneration as profit making

4 things:

Transfer of land

  • Kober: “Whatever you want to call what we’re doing, it’s not privatisation.”
  • Privatisation: yes – ‘Lendlease’ don’t give for free hundreds of thousands of ££
  • Control/right to proceeds – council giving away half
  • Opposite to previous model on which council housing was historically built? Transfer of land from public sector
  • Away from the Housing Revenue Account – the fund which takes rents and pays for the upkeep of houses
  • Losing the freehold

Democratic deficit

  • Not council owned – 50/50 limited
  • Governance, control always complicated
  • Officers as directors – commercial company vs public service – conflict of interest – final liabilities to the Joint Venture
  • Not just one JV – numerous subsidiaries
  • especially complicate here with 50/50
  • Council versus private firm – delivered the notorious Heygate regeneration
  • Number of affordable homes – LendLease – most profitable tenure complexion allowed – Haringey Council – more affordable?
  • Highly complex proposal in the plan

Tenancy

  • Not council tenancies
  • Will not be protected in the same way
  • Pressure to raise rents
  • Landlord from democratically elected council to a property developer

Risk

  • Has to be in context of 20 year contract –
  • R2B, etc
  • Can be sold – changing administration budget crisis – sale to aggressive company

WARNINGS:

Exceptionally little detail – homes and communities to deliver – no figures!

The reality is – regeneration delivers less genuinely affordable housing than it says it will

Often promise of more homes at social rent – but reality often different – spoken off the record with councillors who confirm that they are disappointed with the number of affordable homes produced

So need: Commitments – there is a lot a lot of fluff – but the reality of these things won’t happen without cast iron guarantees from both partners

Unproven

Most comparable scheme – CCURV in Croydon just partially abandoned

This is the largest JV by far – as the name reminds us, the gross development value is 2bn! Biggest ever – and a gamble