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Beware: American property developers are coming to Croydon

Beware: American property developers are coming to Croydon
Nov 21, 2017 Shaking Hands 0 comments
This post was first published by The Croydon Citizen on 20/11/2017.

Beware: American property developers are coming to Croydon

US property firms are targeting Croydon in their next bid to break into the UK housing market.

The largest US private rented housing provider, Greystar, is moving in on Britain. It is currently negotiating to provide over £150 million to build Tide Construction’s proposed 44-storey, 546-flat tower on George Street. Tide submitted an application in August. Greystar is already building 2,000 homes in Greenford.

The recent publication by of Glyn Robbins’ book There’s No Place: The American Housing Crisis And What It Means For The UK (Red Roof) is therefore timely. Robbins is a housing worker and campaigner, who recently spoke at the Croydon Assembly’s public meeting on housing and planning on 18th October 2017.

He tells us that Greystar, which has 425,000 homes in the US, “opened its UK portfolio by acquiring 22,700 student apartments and has entered a partnership with Fizzy Living… a subsidiary of Thames Valley Housing, a so-called non-profit housing association”.

Croydon Council’s participation has been much criticised over the years

Greystar was one of 16 US property developers to attend the three-day 2015 London MIPIM UK, which discussed – among other subjects – ‘The American Way’. Croydon Council’s participation in MIPIM events has been much criticised over the last three years.

The US firm Essential Living is also active in London. It was lined up to be the provider of the rented accommodation in the former council/J Laing CCURV partnership redevelopment of the Taberner House site. Fortunately, the change of control in May 2014 resulted in the end of the deal.

Robbins points out that Essential Living “is building a 44-storey block of flats for private rent on public land gifted to them by the former Mayor of London Boris Johnson”, and is “backed to the tune of $200 million by M3 Capital Partners, a US-based firm with $3.4 billion of international real-estate investment and offices in London”.

Blackstone wants to invest in UK housing, targeting subprime mortgages

Another US firm discussed by Robbins is the Blackstone Group, which owns the Hilton Hotel group, and has a subsidiary in the States with 48,000 rental properties. It has “stated its intention to invest in UK housing, targeting reincarnated subprime mortgages and buy to lets”. Blackstone is involved in financing First Base, which is active in redeveloping the Olympic Stratford East Village scheme.

US corporate landlord Westbrook’s private equity partners took over the ownership of New Era Estate in Hoxton in winter 2014, and the tenants there managed to defeat their plans to triple rents. Both Blackstone and Greystar “are particularly active” in the development of purpose-built student accommodation.

The US approach turns housing into a commodity, not a home

Robbins argues that UK housing policy is being influenced by the American approach, turning housing into a commodity and not a home. He explores what is happening with public housing and so-called regeneration in Boston, New York, Chicago, Seattle, San Francisco, New Orleans, Atlanta and Washington DC.

He identifies five broad features of the commodification of housing in both countries:

  1. Relentless government attacks on municipally owned rented housing as part of a wider assault on public services.
  2. The unchecked rise of private landlordism as part of a broader advancement of the private sector and profit-seeking interests.
  3. Growing corporate links between US and UK housing in the context of global speculative property investment.
  4. Socially divided cities characterised by displacement and denigration of poor and working-class people and communities.
  5. Housing as a commodity, not a home, is being ideologically promoted.

The demonisation of people living on council estates and how those with so-called unacceptable behaviour traits are treated was the subject of the message from Vince Lane of the Chicago Housing Authority while he was touring the UK in 1995. Former Tory leader Iain Duncan Smith’s Centre for Social Justice took up the message. Lane was convicted of fraud in 2001.

The number of council tenants has declined substantially

In discussing the situation in the UK, Robbins reminds us that as a result of the Right to Buy policy, brought in by the Thatcher government, the number of council tenants has declined from 30% of households in 1979 to 8% in 2015. He believes that the Housing and Planning Act 2016 is “the culmination of policies driving the convergence of trans-Atlantic housing policy and remains a significant threat until or unless it’s repealed”. He goes on to say, “the Chartered Institute of Housing has predicted a loss of 350,000 social rented homes by 2020”.

The commodification of housing continued under the Blair government through its New Deal and Decent Homes policies, often involved so-called regeneration, demolition and new building with existing tenants being moved elsewhere, and the transfer of control to arms’ length management organisations away from councils.

The coalition government’s 2011 Localism Act introduced important revisions to the founding principles of council housing, an intention made clear by the sentence: “Previously almost anyone could apply to live in social housing, whether they need it or not”. The act gives local authorities and housing associations far greater powers to restrict access to homes. It dismantles the rights of the homeless and introduced affordable rents enabling social housing landlords to charge up to 80% of market rents. The 2016 Housing and Planning Act will accelerate these forces.

It’s impossible for many to turn the ‘drama of home ownership’ into a reality

Robbins shows that there is a fundamental contradiction in both US and UK housing policies: the decline in home ownership. Both governments are “now faced with a gap between their attempts to re-establish the economic and ideological supremacy of owner-occupation, and the impossibility for many of their electorate of turning the ‘dramas of home ownership’ into reality”.

Robbins warns that universities, now run as corporate businesses acting as agents of debt, displacement and gentrification, are into urban land grabbing (for example, UCL and Carpenters Estate, Stratford; Imperial College’s 25-acre scheme for the former BBC White City site).

Finally Robbins argues that: “The scarcity of non-market housing alternatives and the introduction of new types of tenancy that are time limited, means tested and in some cases, conditional on certain types of behaviour are all contributing to the erosion of the social fabric of working-class communities”.

“In both the US and UK the clock is turning back to an earlier housing age of marginal existence at the whim of private landlordism.”