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| Volume 47 Number 12, July 1, 2017 | ARCHIVE | HOME | JBCENTRE | SUBSCRIBE |
Rowland Atkinson, Le Monde diplomatique - English edition [extracts]
Caption text here
The fire that destroyed Grenfell Tower and killed so many who lived there made clear what many have felt for years: London has become a city for capital not people. It builds for financial transactions, not for homes.
Government ministers seen as responsible for unceasing cuts to public services gave uncomfortable street interviews after a massive fire rapidly engulfed Grenfell Tower, a public housing block in one of London's most affluent districts. The disaster made clear the terrible results of ideological commitments to cut corners and costs in building safety regulations, including the installation of what may have been fire-conducting cladding. Besides the anger and trauma at the loss of life (some 80 dead), people are questioning the political and economic choices that forced low-cost safety choices. There is a strong sense that poor people matter less in a city run for the rich.
Cutting funds to local authorities and public services, and red tape around health and safety regulations, combined with deep social inequalities to produce a catastrophe with major political repercussions. The tower was in the Royal Borough of Kensington and Chelsea, a parliamentary constituency that changed in the general election, by just 20 votes, from Conservative to Labour for the first time, mostly due to concerns over housing. The borough ran budget surpluses and offered council tax rebates, while choosing to do public housing maintenance and safety on the cheap. London's inequalities are most evident in the social geography of its inner western zones, where public estates offer vital affordable housing to those on no and low incomes among multi-million pound homes whose prices are inflated by offshore investment capital and wealthy buyers.
The slow-motion social disaster of austerity created a burnt-out landmark as a visible symbol of the callous political choices of the past decade. People sensed that the poor mattered less and got a raw deal in social and physical protection; some began to feel that the disaster might even be part of a plan to rid the area of unsightly low-income housing and poor people. The disaster seemed the defining moment of a precarious government struggling to build an alliance to govern, as promises to posture aggressively at Brexit negotiations were being broken.
The mood of London and its populace is changing. There is a sense of possibility that may generate more emphatic changes at future elections, with a now engaged youth vote and new respect for Labour's Jeremy Corbyn. People are asking who London is for, and the answer isn't capital. The Grenfell disaster has led to calls to invest in and reconstruct high-quality and affordable housing, and to recognise that declining public investment and the callous treatment of the urban poor are the problem, not public housing.
Most of London's current and future high-rises aren't public housing (1). More than 400 high-rise developments are now in progress or have received planning permission. Almost none of their homes will be affordable, and very few are public housing. In the stories now told of London's massive inequalities and housing problems, the private towers signal the city's social extremes and the inability of state or market to resolve social needs. These pads are intended for the global elite and look like a disposable environment that fits the need, in many cases, to rest money. The 'community' imagined by starchitects and estate agents on billboards and in brochures is a sales pitch to a floating class of the rich and investors. Whatever drugs the architects of the gold apartment block at Battersea Power Station were on, their inspiration was a pound sign, not the floating pig on Pink Floyd's Animals album cover. Much of the development along the Thames is a parody of place and a mirage of communal life. These are dead spaces and dwellings, their lifelessness important for the realisation of maximum exchange value, rather than being valued for their residential use. The question of who benefits from such development is an ongoing irritant to managers and politicians.
London's position as a beacon for the global super-rich has not been good news for its wider population. When the good times rolled, they were marked by an aggressive expansion of gentrification, private tenant evictions, the demolition of dozens of public estates, welfare reforms and household displacement. The investment and destruction may be related; with Brexit deliberations, the potentially negative role of international investment has been glossed over by London's elite.
[…]
If you want to see this process of accumulation and emptiness, wander past One Hyde Park or the many empty mansions lining The Bishops Avenue north of Hampstead Heath. People are exercised about the cost and lack of housing in London because they witness competition for these resources juxtaposed with a landscape of empty shells that should be homes. A surprising percentage of private housing is rarely or never occupied, while many households on local authority waiting lists are exported outside their borough or outside the city; and a third of a million households remain on waiting lists for public housing in London. Walking along the Thames's south side near Nine Elms, you can see many new towers, apparently suspended along the river's corridor. Like dead mackerel, these developments shine, but also stink of corrupt planning agreements and a housing system out of sync with the needs of ordinary folk.
The sense that there are outright winners and vulnerable losers raises big questions. If we bought the argument that the wider economy and population benefit from such investment, the new skyscape might be defended. Yet such arguments are threadbare. Those with economic and political power identify property and finance as the machine driving living standards and reputation. London's mayor, Sadiq Khan, has moved in a slightly different direction, launching an enquiry into the number of unoccupied homes bought by offshore investors. A recent study examined utility records to locate homes with abnormally low electricity use, concluding that around 21,000 homes are empty long-term. Around 5% of homes in central and western London lie empty according to the government's statistics agency (2).
Non-partisan groups have also highlighted the criminal and anonymous purchase of thousands of homes. The head of the National Crime Agency has suggested that criminal money has driven up London property prices, and hundreds of millions of pounds of purchases are under criminal investigation as suspected proceeds of corruption, yet these figures only represent a fraction of the total (3). Transparency International has revealed that around 10% of properties in Kensington and Chelsea, the borough in which the Grenfell tragedy occurred, are owned through a 'secrecy jurisdiction', tied to £122bn of offshore money. Many cases are not pursued by resource-starved tax authorities.
One of the worst injustices is that while essential workers and even those on respectable incomes struggle to access decent housing, London is building thousands of apartments for people who may never use them. How broken is a planning system that does not challenge the construction of blocks of hundreds of flats in which a studio costs over £600,000, while including a few affordable homes is said to threaten market viability? Evidence shows that developers and planning consultants work hard to circumvent their duty to offer affordable housing or cash contributions to the local authority. Criticism has been growing for years, but now there is intense and rising anger, even if effective resistance remains elusive.
In 1951 the population of Greater London - its 32 constituent boroughs and the square mile of the City - was 8,164,416, making it a peak year for London (and many British cities). But by 1981 and the nascent Thatcher government, the population had fallen to 6,608,513 due to a changing economy and outward migration from most of Britain's major cities to suburban areas. It is now hard to remember the time when Britain's inner cities were places of economic stagnation, social decline and out-migration, and 'inner city' evoked a social imaginary marked by these features as much as any geographical place.
The most recent census, of 2011, shows London's population at an all-time high of 8,173,900. Yet this apparent demographic health belies massive shifts in the structure of London's economy and new casualties in housing markets. With changes in London's economy as it moved towards becoming a node in the world financial economy came changes to many neighbourhoods previously thought untouchable by gentrification.
Today London again faces an uncertain future. Economic pre-eminence in a global system of urban command centres is giving way to anxieties about the city's future, including the possibility that financial institutions may move away. Trying to keep the goose that lays the golden eggs, even if it does little for London's working class, is ever more the name of the game under Brexit.
Such worries add vigour to capital's grab for land and sky, with projections for the numbers of the super-rich in London set to grow significantly. Those criticising construction aimed solely at international investors are called out of touch with the realities of selling in a global market (4). Yet even the trade in premium real estate appears fragile in the context of Brexit and the possibility that key financial institutions may be lured to competitor cities as crisis talks continue, with sales at the top of the market dramatically reducing in volume. Despite this, concerns about social inequality and exclusion have been pushed aside by a government that is scrambling to attract buyers and institutions to keep the national books balanced.
London's patrician class recognised where the money is some time ago. What was once the establishment might now be better called ushers to capital and vendors of prized assets and products. The international rich come for financial services, generate construction and jobs for decorators and nannies, and are prepared to pay fees and taxes on property sales (or work hard to avoid them). Property professionals and financial wizards offer portentous assessments of how tariffs, taxes or regulatory moves would kill the flow of capital investment. This may be true now but it wasn't just two years ago when selling £10m flats before they were built was possible. The systemic threats being revealed today will injure London's poor and working classes even more given the inability of governments to extract more from the presence of the wealthy when times were good. If in the last decade we hung on to the Maserati exhaust pipes of the super-rich, our grip must tighten in the future. There will be less going spare.
The City's strength is London's Achilles heel. While the economic role of the City is well understood, its asymmetrical dominance in the structure of the urban economy presents risks. Any economic geographer will tell you that a key danger for any single-industry town is that it is more likely to die as its fortunes change because of competition from rivals. Where such change once devastated Glasgow, Sheffield, Birmingham and many others, London's fate may be to lose core services to Dublin, Paris or Frankfurt. Analysts are now pondering how many bankers or institutions will leave after Brexit. The likely answer is thousands. Even if banks are not as mobile as the currencies and services they deal in, an orderly or partial evacuation over years remains a real possibility.
In the good times before the Brexit vote (bear with me if you were on a waiting list, crammed two to a rented room or saving for a deposit to get on the housing ladder), we were told not to touch the market, in order to maintain a low-tax environment to enable overseas monies to benefit London. With the risks to London's economy from Brexit, this is more emphatic, and London now has a large neon 'for sale' sign. Many prized assets are the property of foreign wealth funds or individuals (Harrods, The Shard, Harvey Nichols). Much of the commercial property on Sloane Street is owned by the Qatari sovereign wealth fund. These changes symbolise shifts in class and taste and reflect a move from gentry and landed wealth to an expanding cadre of those who have benefited from globalisation, the lucky control of state assets, or associations with international criminal activity. Their brashness and raw money power is only matched by the hatred felt by the last wealthy long-term residents of inner west London who didn't realise that others in their class put up the first 'for sale' signs.
[…]
Rowland Atkinson is chair in Inclusive Societies at the University of Sheffield and the author (with Sarah Blandy) of Domestic Fortress: Fear and the New Home Front (Manchester University Press, 2016) and co-editor of Building Better Societies: Promoting Social Justice in a World Falling Apart (Policy Press, 2017).
LMD English edition exclusive
(1) Rowland Atkinson, 'Cities for the rich', Le Monde diplomatique, English edition, December 2010.
(2) Karen Gask and Susan Williams, 'Analysing low electricity consumption using DECC data', Office for National Statistics methodology working paper series, no 6, 2015, https://www.ons.gov.uk/file?uri=/aboutus/whatwedo/programmesandprojects/theonsbigdataproject/analysinglowelectricityconsumptionusingdeccdata_tcm77-418326.pdf
(3) Ben Moshinsky, Business Insider UK, 6 April 2017.
(4) Even Khan's response to the reports commissioned by him to look into overseas investment recognised that 'international investment plays a vital role in providing developers with the certainty and finance they need to increase the supply of homes and infrastructure for Londoners',