35% Campaign update – Social Rent or Affordable Rent?

Social Rent or Affordable Rent?

Jan 16, 2021 12:00 am

Five years on from Ombudsman’s report the question mark remains. -Five years ago today, Southwark Council rejected our complaint that affordable homes secured from private developments weren’t in fact being delivered, Southwark’s Director of Planning saying ‘Southwark Council has appropriate safeguards in place and has not failed in its duties .. therefore your compliant is not upheld”.

We made the complaint after discovering that Neo Bankside, a high-profile development next to the Tate Gallery, had only delivered 62 of the 94 social rented homes required by the planning approval. The story was taken up by the Guardian.

 Guardian article including our findings at the Neo-Bankside development

We were later contacted by a resident living at the Signal building, a new development at Elephant & Castle, who was confused about an affordable housing tenant pack put through his letterbox. He was concerned that a similar trick had been pulled by the developer of his building, as he was paying market rent for his flat. He asked if we knew how to find out if his flat was supposed to be one of the 11 affordable homes in the building and what implications that would have.

We told him that we had no way of knowing whether his home was one of the 11 affordable units and advised him to contact the Council.

 The Signal Building at Elephant & Castle where affordable homes were let at market rent and then sold on the open market

It later emerged that the housing association concerned had sold these and other affordable homes across the borough on the open market, resulting in a court case, brought by Southwark Council.

 https://www.insidehousing.co.uk/insight/insight/the-court-battles-over-section-106-delivery–56141

Given these examples of where there appeared to be no control over affordable housing delivery, we checked the Council’s choice-based letting system for social housing and found homes approved as social rent being let at more than twice social rent levels.

 Extract from the Council’s lettings system for households on its waiting list

We then cross-checked planning committee reports with section 106 agreements, Land Registry information, the GLA affordable housing outturn dataset and the government’s CORE lettings data. From this we compiled a long (but by no means exhaustive) list of 46 schemes which indicated that there had been a potential breach in provision, involving a total of 1,145 social rented homes. We submitted these to the Council as evidence that it was not getting the affordable housing it should be and asked them to investigate.

The Ombudsman

When Southwark rejected our complaint we referred the matter to the Local Government Ombudsman and in November 2016 he published a damning report stating that Southwark actually have no proper procedures for monitoring the delivery of affordable housing. In response Southwark undertook to introduce monitoring procedures and conduct an audit of all the section 106 affordable housing in the borough.

In late 2019, after three years of badgering, the Council finally published a spreadsheet, which it claimed to be an audit.

But the audit is in fact only a list of developments, detailing affordable housing required according to the s106 agreement. A necessary link to what was actually delivered is absent and any breaches cannot be identified from it. It is therefore impossible to tell from the audit if the affordable housing has been delivered according to the planning consent.

In addition, the audit shows that in over two thirds of the developments, the Council still doesn’t have confirmation of the affordable housing provided and nearly one thousand homes have ‘Not Known’ tenure, out of nearly 7,000 affordable homes listed.

In many cases where the housing association has responded confirming the tenure and number of homes provided, they clearly don’t match with the requirements of the planning consent.

For example, phase 1 of the Aylesbury estate (07/CO/0046) is listed as being let at affordable rent (i.e. up to 80% market rent) but the s106 agreement for this scheme requires social rent.

Similarly phase 1 of the Canada Water regeneration (09/AP/1870) required at least 123 homes at social rent. The audit shows these all at being provided at affordable rent.

Also, the 553-home Tabard Square scheme (02/AP/0168) was approved with a requirement for at least 79 social rented units. These are being listed as having been provided by Horizon Housing Association as affordable rent.

Show us the 5,462 social rented homes

The audit clearly hasn’t been conducted effectively. It remains impossible to know with certainty how much affordable housing has been delivered or whether it has been delivered under the tenure required by the section 106 agreement.

Southwark’s Housing Engagement and Scrutiny Commission considered affordable housing delivery at its last meeting at the beginning of December and we have sent the Commission a detailed account of the gaps and flaws in the audit. We have told the Commission that five years on, Southwark still has not properly fulfilled the requirements of the Ombudsman’s decision.

As we have pursued this issue, Southwark’s response has been that it is in the process of developing new software to deal with monitoring. But after 5 years of development this software is still not operational.

Southwark Council has lately been emphasising the number of affordable and the number of social rented homes that they have succeeded in securing from developers at the planning stage, but this is obviously a hollow claim if the homes are not built and or are then let at a higher rent tenure. Until a proper audit is conducted (plus an investigation of any apparent infractions) Southwark’s claim to have delivered 5,462 social rented homes, in particular, can only be met with scepticism.

Southwark Council is now under new leadership – solving this issue head-on, instead of just muddling along and sweeping it under the carpet will be a test of whether it will be any better than the old leadership.

 Southwark’s website claims it has delivered 5,462 social rented homes

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35% Campaign update – No room for social rent at Pocket Living on the Old Kent Road

No room for social rent at Pocket Living on the Old Kent Road Oct 06, 2020 12:00 am

100% affordable housing, zero social rent, zero family housing -Southwark Council is set to approve a mixed-used residential scheme in the Old Kent Rd Opportunity Area with no social rented housing or family housing, at its planning committee meeting this evening.The proposed development on Ossory Rd is for 105 units of housing, with light industrial space beneath this. All 105 units will be affordable housing, but of the most expensive type, sold at 80% market value. The applicant is Pocket Living, which specialises in maximising the amount of housing on small sites. All the homes will be one-bed, one person units, without family housing. This is the second such Pocket Living development in the area; the first, in Varcoe Rd had 57 units and a third, Credon House, also for 57 units is in the pipeline.Pocket Living make up their own rulesSouthwark Council requires 35% affordable housing, 70% of which should be social rented, on all developments of this size. This has been the case since 2007 and the requirement has been retained in a succession of local planning documents, up to the draft New Southwark Plan and the Old Kent Rd Area Action Plan. All major approved developments within the Old Kent Rd have pledged to deliver that amount.There should also be at least 20% family housing of 3, 4, 5-beds in major developments and 60% of should comprise 2-bed homes1.Pocket Living, however, want to make up their own rules. Their sites are small and it wishes to maximise the number of homes built, so they are all one -bed/one person units, though 10% of their occupants appear to be couples, with most units barely above the minimum size allowed (37 sq metres) 2.The amount of open and amenity space for occupants is also squeezed. In a development of this size there should be 1,050 sqm private amenity space, Pocket are providing a miniscule 42 sqm. Developers can compensate for a lack of private space with more communal space, but Pocket falls well short here, too, providing less than half the amount required (506 sqm instead of 1,058 sqm) 3 .Not that affordablePocket Living justify their radical departures from Southwark’s affordable housing requirements, by claiming they are serving the hard-pressed, young first-time buyer and supply their own statistics and census figures to back this up, dutifully reproduced by the officer’s report, which recommends approval of the scheme 4. The report also makes the confusing claim that the affordable housing offer is policy compliant:Buying a decent home in London is undoubtedly hard for the young professionals Pocket Living housing is squarely aimed at, but they are still relatively much better off than those excluded by the absence of social and family housing from Pocket Living developments. Pocket’s typical purchaser will have an average income of £44,000 (OR, Para 60), an income enjoyed by less than 4.5% of Southwark’s households. Pocket Living estimates that its homes will sell for approximately £300k each (with the 20% discount). Supplying homes at these prices to those who earn £44k per year, at the expense of those who earn barely half that is not what affordable housing should be about5.Density and un-exemplary designUnsurprisingly, given Pocket’s ambitions to maximise the number of units, they are proposing a scheme which is twice the density it should be, (at 2,333 habitable rooms per hectare against a maximum allowed of 1,100 hrph), justified on the basis of exemplary design. However, many of the measures for ‘exemplary’ design are not met – it does not have enough amenity space, there is no ‘predominance’ of dual aspect flats, it does not have any 2-bed or more flats, and the flats do not ‘significantly exceed minimum floor-space standards’ 6.Equality not a great considerationThe lack of social and family housing and the provision of all the homes as single bed units, targeted at middle income professionals, would also seem to have clear implications for the various social groups protected under equalities legislation. Southwark have a legal duty to consider this, but have not done so in any detail, content just to note of affordable housing, that there is ‘a high demand for such accommodation and a relatively high BAME population’ 7.Viability and the Bakerloo Line ExtensionThe officer’s report and recommendation for approval was written before press-reports that the Bakerloo Line extension has fallen down the list of priorities for Transport for London (TfL) and may not be built for many years. Pocket Living’s proposal is, according to themselves, technically non-viable and depends upon the delivery of the BLE to turn a profit (as do many other Old Kent Rd schemes) 8. There is no mention of a late stage review of the scheme’s viability, which removes the possibility of any improvement in the affordable housing offer, such as a greater discount in the selling price.The Mayor likes itWhile Pocket Living pretty much ignores Southwark’s own housing policy, so does the officer’s report to the planning committee, which notes the departures, but nonetheless recommends approval on other ‘material’ grounds. The report also cites the enthusiastic support of the Mayor (matching his enthusiasm for Build to Rent, another middle/upper income affordable housing tenure that sacrifices social rent)9.What we say…It is hard to see what this scheme brings to the Old Kent Rd, in housing terms. It has no social housing and no family housing. The affordable housing it does provide is of the most expensive kind. The scheme does not have the private and public space that it should have and it serves a very narrow demographic, while excluding broader sections of the community.Pocket Living would argue that the constraints of the site and the housing needs of a relatively well-off section of the community should outweigh these shortcomings, but Southwark’s local plan already addresses how much housing there should be for different income groups, with the overarching aim of building a mixed and cohesive community. Pocket Living simply ignores this, so the planning committee should reject this application.You can find the 35% Campaign objection to this development here. Footnotes:Southwark’s Core Strategy Strategic Policy 7 – Family homes, pg 86 Officer Report Table pg 42 Officer Report para 133,134,135 Officer Report para 112 New Southwark Plan Submission Version Jan 2020 Fig 2 Officer Report para 118, 119 Officer Report para 28 Officer Report para 64, 65 Officer Report para 229-237; 57 
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Shopping Centre closes, but campaign for traders continuesSep 28, 2020 12:00 am

Protesters mark the final day for Elephant shopping centre -The closure of the Elephant and Castle shopping centre last Thursday was marked by protest, impassioned speeches and widespread media coverage. The centre closed after 55 years’ service to the local community and is now set to be demolished, to make way for a new retail, leisure and residential complex. Shopping centre owner, Delancey, leads the development partnership behind the new scheme.While the centre’s major stores had gradually left over the previous months, many of the independent businesses were trading up to the final day. The closure also brought the end for the market which occupied the centre’s ‘moat’, which numbered around 60 stalls just under 2 years ago when Southwark’s planning committee first considered developer Delancey’s proposals for the centre’s redevelopment.Only 40 traders have been relocated to three sites – Castle Square, Perronet House and Elephant Park – ‘leaving about 40 traders who have been trading at least since January 2019 (as per the s106 agreement) without alternative premises’. A major aim now of the traders and their supporters is to secure space that could double the number of relocated traders, with a proposal to the Mayor for new market stalls at the Elephant.Up the Elephant solidarityA large protest organised by the Up the Elephant campaign (which includes the 35% Campaign) marked the centre’s closure and commemorated the people who had worked there, many from for black and ethnic minorities, and its role as a social hub for the Latin American community in particular. The campaign has long fought against the demolition and Delancey’s redevelopment plans and while the centre’s fate was lamented, speakers also noted the gains that the campaign had made – more social housing, affordable retail space as well as new premises for some displaced traders, along with transition and relocation funding.What the Papers say…There was extensive press and media coverage of the closure and protest, including articles on the SE1 websiteSouthwark NewsSouth London PressSouth West LondonerMorning StarThe Guardian (and here), the Justice GapVice and the Spanish language Express News UK (and here) and the BBC’s Drivetime with Eddie Nestor.Amongst the comments from protest speakers highlighted in SE1 website were those from Patria Roman of Latin Elephant, a mainstay of the campaign, and trader Emad Megahed.Patria expressed her sadness at the closure of the shopping centre but noted that campaigning efforts had yielded improvements in the support provided by developers and the council to local traders.‘I am incredibly proud of all we achieved,’ she said.‘If today we can say that some traders have been relocated, it is because the campaigners fought fiercely. Everything they have is because campaigners fought for it. Nothing came for free.’Emad said – ‘I am so proud of my community. I am proud that my community stuck together – whatever nationality … we all speak the same language, the language of love, and sticking together as one. That’s the lesson we want to teach our kids.’The Guardian noted ‘the shadow of decades of underinvestment’and commented-‘rarely has a managed decline been so obvious, or so long-winded’adding-‘you don’t need to love the shopping centre as it is right now (or at all), or worry about what happens after its demolition to the meeting places, public spaces and social bonds it offers, …. to raise questions about who must leave and who can stay, when the developers arrive in town’.Southwark News also covers the rebuttal of Southwark Council and Delancey claims that nearly all traders have been satisfactorily relocated. It quotes Latin Elephant, which has profiled those turned down for new premises or unable to find appropriate space, and who say-‘Our research has been widely documented, and it was carried out independently with an effort to enforce transparency and accountability. This has been discussed several times with Southwark Council and Delancey. It is unacceptable to see the closure of the Shopping Centre with many traders still without relocation, so we will continue our advocacy work in a constructive way to support the local community.’The Mayor responds to traders’ proposalA day before the centre’s closure Mayor Sadiq Khan responded to the traders’ proposal for new market stalls to accommodate traders who have not been allocated new premises.Southwark News and The South London Press highlighted the response. The Mayor, quoted in the SLP, says ‘It is disappointing that a number of small businesses still don’t have the certainty they need….in general I would welcome any workable solution that would provide these businesses with the space they need to trade’ while cautioning that the traders’ proposal ‘would be subject to various planning and licensing consents’ making it ‘not appropriate’ to comment on the specific plans being presented.The traders’ proposal is supported by Florence Eshalomi MP, London Assembly member for Lambeth and Southwark, local councillor Maria Linforth-Hall and London Assembly members Caroline Pidgeon and Sian Berry, the Green Party candidate for Mayor. The Camberwell and Peckham Labour Party Constituency Party also passed a motion in support of the traders’ Proposal at their meeting last week.The traders and their supporters will now be building on this support to get new market stalls and kiosks for those traders without new premises and repair some of the damage done to their businesses and livelihoods, by the centre closure.
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Recent Articles:The Elephant traders who face the end without new homes
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35% Campaign

35% Campaign update – The shopping centre traders expelled by regeneration

The shopping centre traders expelled by regeneration

Aug 24, 2020 12:00 am

University of the Arts ignores traders’ plight -In our last blog post we detailed how Up the Elephant and other campaigners had written to the University of the Arts, London (UAL), informing them that at least 28 traders had not been relocated new premises, as they face the closure of their businesses, to make way for the demolition and redevelopment of the shopping centre. Analysis by Latin Elephant puts the number of traders in peril at between fourty and fifty.

All the displaced traders (bar one) come from black and ethnic minority backgrounds and the campaigner’s letter demanded that UAL withdraw from the redevelopment, which includes a new UAL campus, in line with its Black Lives Matter statement “We aim to build our anti-racism commitments through collective engagement into actions that make a meaningful difference.”

No reply from UAL

Nearly a month after the letter was sent no reply has been received. We are printing below the stories of six of the displaced traders, in their own words, to prompt UAL into giving some thought to those who are losing their livelihoods so that they can benefit from shiny new premises. Southwark Council and developer Delancey might also want to take heed.

Nassim Cheraitain

My name is Nassim Cheraitian, I’ve been trading at Elephant and Castle market for over 20 years. The closing down of the Shopping Centre, for us, wasn’t good news, because they haven’t helped us. For the last three, four, five years business has been down, we’ve been losing, losing… they promised us they would help to find us to find a new unit but they didn’t. I applied, they asked us for all our details […] we provided them with everything. After that they said that there isn’t space for everyone. And it’s been left like this. We don’t have anywhere to go. They [the council] gave us £3000, but honestly it’s not really [been helpful]. £3000 is nothing — three years ago they told us they would help us, so all that time we’ve been waiting, the business has gone down, we’ve been losing money, losing customers every day, and we were waiting to get something back. Instead we got £3000. I don’t have any plans, as I’ve been waiting to get this promised help from the council […] we’ve been here for too long for them to leave us like this […] [my customers] are unhappy, they think it is unfair to us, we’ve been here too long to be left with nothing—no shop, no unit, nothing.

Shapoor Amini

My name is Shapoor Amini, I’ve worked at this market since 2001. These people promised us so many things, they said we’ll give you a space, we’ll look after you guys, but they’ve done nothing for us. Some people who were [trading] here for one year, two years, 6 months, they got a space. Me, I’ve been here 20 years, and they gave me nothing; they just said sorry, sorry, you still need to wait. And I don’t know what’s going on. I had someone who worked for me who got a space! But I’ve been here for twenty years and nothing. I applied so many times—I’ve made calls, been to the council, been to the office, done lots of paperwork […] been to countless meetings, and still nothing. I don’t know why not, they never talk to us face to face. They sent letters out […]some people got something, others didn’t […] everybody knows me here […] customers come to me as say ‘where is your new space?’, and I say I don’t know. My whole life has been spent in this market, in this area, and now I don’t know what to do. It’s very difficult for me. I have a kids, a wife… they said if you find yourself a shop we will help you. But at this late stage how can I find a shop? […] they promised us too much. Places are asking for a £30,000 deposit, it is very difficult.

Edmund Attoh

My name is Edmund, I’m working here [at the market] over 20 years. Things are very difficult, they gave a space to some people, who’d been here 5 years, 4 years, 2 years, people who have been here for a long time didn’t get nothing. That’s what we don’t understand, that’s why we are frustrated. We don’t know where we are going now. I applied for a space, and anything they asked, we give to them. They turned us down. But they didn’t say [why]. It has affected us […] someone who has been here for 20 years, and suddenly they say go. We don’t know where we are going. It is very hard for us. My customers always call me and ask where we are going. But we don’t know what to tell them […] that is a problem for us […] we’re looking to them (the council) […] we need help.

Mohammed Jamal

My name is Mohammed Jamal, I’m working in the market the last 8 years. I’m in a very bad situation, because I haven’t found a relocation […] I’ve got four children, and i’ve got no choice [but to work at the market] because I’m more than 55 now, and can’t find any other suitable job, and I’ve also got an illness I take medicine for […] customers ask ‘where are you going’ I said I still can’t find relocation […] because the council says there is no more relocation, it is all full. But I am still waiting for something to come up. One lady told me I’m not even on the waiting list […] she said your application is on file but not on the waiting list […] because there are so many people and the relocation spaces are limited […] I applied many times for a space […] and a small shop is alright for me […] I sent many emails, but no answer. The feeling of not having anything is very painful. If someone doesn’t speak English very well, or is softly spoken […] I am very soft, not talking a lot. That could be why no-one helped me.

Muhammad Raza

My name is Muhammad Raza, I’m working here since 2006. The market is dead now, before it was alright, but slowly, slowly they are closing down shops, big stores—Tesco, Poundland, Boots is going—it’s really dead now so it’s really hard to survive. And because we don’t have a space we don’t know what to do. Tree Shepherd and Delancey aren’t answering our emails, actually I emailed two days ago and didn’t get a response. This morning Tree Shepherd called me and said ‘if you find yourself any shop, we’ll help you’, I said which kind of help? Because I’m looking for a shop […] but if I look myself shops are £15,000, £20,000—I can’t afford that rent. And Tree Shepherd said they don’t have any affordable rents. If your looking for Castle Square or Elephant One, don’t even think about it […] they said ‘we’ll help you’, but which kind of help? I don’t know. This has affected my business, my life, my family, I don’t know what to do next.

Mohammed Al Waris

“My name is Mohammed Al Waris, I’ve been trading at the Elephant and Castle market for the past 15 plus years. Throughout these years I’ve been selling fashion accessories, and I’ve made friendships within the local community. Recently what happened was that they tried to demolish the shopping centre, and that affected most of the traders’ lives, I’m one of them. We haven’t been offered anything. We were asked to pick three different locations—Castle Square, Perronet House, Elephant One—they haven’t offered me none of them. They haven’t told me [why], they just said we haven’t got any affordable unit for you guys. At the beginning they promised us, and then we suffer for the past three years, they closed the subway (underground walkway) and the business going down by about 80%. Two years before they came with an application, saying that we going to definitely relocate you 100%. Now we have one and a half months left to leave the market, and we can’t get any help from Tree Shepherd, or from Delancey. Every time we talk to the they say ‘sorry we haven’t got anything for you guys’, so we can’t do nothing. I believe we are entitled to a place in this area, cos they are making millions from this project, why can’t they help these traders? These traders have families they are trying to look after. By kicking them out, they are destroying their family life […] I really hope they can think about these traders and help to move them to a place nearby the area, where they have their customers […] they say you can’t stay in the area because this area, like Central London, is going to be very expensive. So where should we go? We don’t know.”

Our campaign…

Our campaign is to get Nassim, Shapoor, Edmund, Mohammed, Mohummad, Mohammed and their fellow traders new premises or suitable compensation for the loss of their businesses. The power to do this lies with Southwark Council, Delancey and University of the Arts London (UAL), but time is running out fast – the centre is due to close on 24 September.

You can help us by sending a Twitter message to the Southwark Councillors responsible for this fiasco:

  • @peterjohn6 (Council Leader)
  • @rebeccalury (Deputy Leader, Ward Cllr and Cabinet member for Equalites and Communities)
  • @MerrilDarren (Ward Cllr and Chair of the traders panel that was supposed to support traders)
  • @cllrmseaton (Ward Cllr and Chair of the Planning Committee)
  • @JohnsonSitu (Cabinet member for Regeneration)
  • @Leo_Pollak (Cabinet member for Social Regeneration)
  • @steviecryan (Cabinet member for Jobs, Business and Innovation)
  • @coyleneil (Local MP and Elephant & Castle resident)

You can find more infomation about the displaced traders can be found here.
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New Housing Strategy – Consultation

Dear TRA Chair,

Over the past year the council has been consulting on a new housing strategy. This has included a stakeholder session back in June 2019, and a public consultation between January and May this year.

We were in the process of consulting on the housing strategy when the COVID-19 pandemic started to seriously impact on the United Kingdom in March 2020 therefore the consultation period was extended to May.

Many thanks for all the comments received so far.

The housing strategy is a long term document covering the next thirty years but the COVID-19 pandemic is likely to have a significant impact on the delivery of the strategy in the short term to medium term, and there may also be longer term consequences.

The pandemic has impacted on every principle of the housing strategy. We have have added new text throughout the strategy.

We have also made changes to the strategy in response to comments made so far during the earlier consultation, such as adding more text about tacking climate change.

All changes since the past consultation draft are included in purple text.

As there has been considerable change since the original consultation we have decided to do another quick final round of consultation.

We want to give partners and other key stakeholders an opportunity to comment on the proposed changes, and to highlight any other changes you think are required to respond to the new challenges with the pandemic.

Please email any comments you have to housingstrategy2@southwark.gov.uk by the end of August 2020.

We look forward to hearing your views.

Many thanks,

Rob

Robert Weallans, Housing Strategy Manager

Housing Strategy and Business Support, Resident Services Division, Housing & Modernisation Department

020 752 51217 |   : robert.weallans@southwark.gov.uk | Tooley Street, 5th floor, Hub 3

Copies of the housing strategy are available at www.southwark.gov.uk/housing/housing-strategy

Visiting address: Southwark Council, 160 Tooley Street, London, SE1 2QH

Postal address:   Southwark Council, P O Box 64529, London SE1P 5LX

www.southwark.gov.uk/mysouthwark For council services at your fingertips, register online.   You can also manage your rent or service charge account, pay your council tax as well as report and track your housing repairs.

Construction of 4 new flats at Balin House

Planning Application 20/AP/1159

EXISTING_PLAN__SECTION___ELEVATIONS-868963

20_AP_1159-APPLICATION_FORM_-_WITHOUT_PERSONAL_DATA-867293

20_AP_1159-DESIGN___ACCESS_STATEMENT-867289

20_AP_1159-SITE_LOCATION__EXISTING___PROPOSED_BIN___CYCLE_STORAGE-867287

20_AP_1159-EXISTING___PROPOSED_ROOF_PLAN-868970

PROPOSED_PLANS__SECTION___ELEVATIONS-868969

EXISTING_PLAN__SECTION___ELEVATIONS-868963

20_AP_1159-FLOOD_RISK_ASSESSMENT-876910

Stop demolitions and requisition empty homes!

Dear Friend

I hope you have been keeping well during these difficult times.

The Up the Elephant campaign has been working with Latin Elephant and Southwark Law Centre, to help shopping centre traders through the Coronavirus crisis and with their relocation plans. According to Southwark Council 45 traders have now been relocated, with 28 applications rejected. Traders can also draw on two funds – the relocation and transition funds – and Latin Elphant and SLC have been doing great work helping traders with this.

The campaign has also joined with eighteen other groups to send an open letter to Southwark demanding that it Stop demolitions and requisition empty homes to help solve the housing crisis.

There will also be a socially distanced protest to open up empty homes this Thurs 4 June 6pm, outside Pret a Manger
One the Elephant, 1 St Gabriel Walk, Elephant and Castle, London SE1 6SA
FB Event here

This is a socially distanced protest. Please bring a mask or face covering and stay 2 metres apart.

Regards
Jerry
PS We will be having an on-line meeting very shortly – notice and link to follow.

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35% Campaign update – Old Kent Rd scheme faces loss of affordable housing

Old Kent Rd scheme faces loss of affordable housing

May 01, 2020 12:00 am

Berkeley Homes threatens to reduce affordable housing at Malt St –Berkeley Homes is the first developer in Southwark to threaten to reduce the affordable housing in one of its schemes, since the onset of the Coronavirus crisis. Berkeley secured planning permission for the Malt St development, just off the Old Kent Rd, in June 2019, with a promise to build 40% affordable housing. Since then it has joined-up with Peabody, who had a smaller, neighbouring development on Nyes Wharf. Together the two sites will provide 1,569 new homes, with 40% affordable housing (359 at social rent and 222 shared-ownership), delivered by Peabody.

Now a planning committee briefing reveals that this affordable housing is at ‘risk’ because Berkeley intends to mount an appeal that will reopen the question of the viability of the scheme. To prevent this happening, the briefing recommends approval of an unprecedented clause in Southwark’s s106 planning agreement with Berkeley, that could see all the affordable housing lost, should development partner, [Peabody] hit financial trouble.

The Southwark Law Centre has written to the planning committee, objecting to the proposed clause and requesting a deferral, to allow the serious issues it raises to be properly addressed.

Why a Mortgagee in Possession (MIP) clause matters

The planning committee is being asked to approve a so-called Mortgagee in Possession (MIP) clause. Simply put, if a borrower cannot pay their mortgage, then the lender can take legal possession of the property and sell it – they become the ‘mortgagee in possession’ and up until now this has evidently been covered with a clause that keeps the affordable housing affordable ‘in perpetuity’ .

The MIP clause proposed for Malt St is different – it will not secure the affordable housing ‘in perpetuity’ , should Peabody fail. Instead, Southwark or another affordable housing provider would be given the option to take on the affordable housing, but if they do not, the affordable housing can then be sold onto the open market. If Southwark does buy the affordable housing, they would also have to pay anything outstanding ‘under the terms of the relevant security documents, including all accrued principal monies, interest and costs and expenses’ 1.

The MIP briefing is at pains to point out that such a situation is very unlikely to arise, because Peabody is in rude financial health; it has an annual turnover of £630m, an annual profit of £160m and assets of £7.6bn, so the possibility that it will fail is remote. The briefing reinforces the point by noting that no major housing association has ever gone into administration and quotes a GLA document that says ‘there is no known cases of a MIP clause being triggered…..’ 2.

Mayor of London opens the door…

This all begs an obvious question – why replace a MIP clause that protects affordable housing, in all circumstances, even unlikely ones, with a clause that does not?

Part of the answer is that this is what the Mayor of London wants. As Southwark’s briefing explains it, the Mayor wants ‘a consistent approach to MIP clauses across the London boroughs and to secure greater access to funding for RPs (registered providers) to increase the delivery of affordable housing’. The report continues; ‘In order to achieve this, the GLA MIP clause would allow, in certain limited and unlikely circumstances, affordable housing to no longer be “in perpetuity”’ . The briefing notes that Southwark’s own MIP clause is different from the Mayor’s, precisely on this point; Southwark does require affordable housing to remain such ‘in perpetuity’ , should a RP go into administration 3.

Peabody takes advantage

Peabody also wants the GLA MIP adopted, because it would allow them to borrow more money for other projects. To quote the briefing ‘Peabody have funds to deliver this scheme, but given the very large scale of the investment they are only willing to make such a commitment on the basis that they are able to secure additional funding in the future against the asset of the completed scheme’ . The report says that while the Malt St scheme is ‘entirely financed by Peabody from its own investment’ Peabody nonetheless wants more private bank finance and needs to make more of its ‘capital assets’ and the banks consider that the affordable housing ‘asset is not sufficiently liquid’. The briefing reiterates ‘Peabody has confirmed that they cannot proceed as the RP [registered provider] partner in this scheme without this clause’ 4.

Berkeley turns the screw

Berkeley backs Peabody, saying that it cannot, or will not, proceed without them. Berkeley goes on to threaten to reduce the affordable housing in the scheme, if the GLA MIP clause is not agreed, by way of an appeal to the government of ‘non-determination’. Berkeley would argue that Southwark had failed to conclude the s106 legal agreement in the required time, and also reopen the question of the viability of the scheme 5. Berkeley has a track record for such manouvers; this 2018 Guardian report shows that Berkeley has reduced its affordable housing obligations using viability reviews in almost all of its London schemes.

Southwark’s briefing tries to make the best of things; as well as emphasising the unlikelihood of any default, it claims that this decision will ‘not therefore set a precedent for other schemes.’ The Mayor has different ideas – he wants to see his MIP clauses used across London and says they will be used for anything he ‘calls-in’, (such as the Biscuit Factory) and that he ‘will promote their use for other schemes that are referable…and non-referable’ ie basically everything 6.

What we think

A Mortgagee in Possession (MIP) s106 clause that has evidently been perfectly adequate up to now is to be changed, compromising the ‘in perpetuity’ principle of affordable housing. The Mayor hopes that this will help meet his strategic 50% affordable housing target, but Peabody and Berkeley are not proposing 50% for the Malt St site. More generally, the Mayor has published no concrete commitment from developers and registered providers to increase affordable housing, in exchange for the Mayor’s more market-friendly MIP.

So, while it would be easy for Southwark’s planning committee to approve the clause in the almost sure knowledge that it will never be triggered and the affordable housing will remain as such, ‘in perpetuity’ , they should nonetheless reject the Mayor’s new MIP clause. It purports to facilitate a general increase in affordable housing, but there is no evidence before the committee that this will actually happen, either in Southwark or elsewhere. On the other hand, though, the Mayor’s MIP will definitely weaken the ‘in perpetuity’ status of affordable housing

This is the thin end of a very long wedge. These clauses have already been used in Islington, Tower Hamlets and Lambeth. They are being actively promoted by the GLA and the Mayor. Once they proliferate the whole principle of affordable housing being for ‘in perpetuity’ will start to be lost and developers and their registered provider partners will use the same kind of ingenuity that they have used with viability assessments to squeeze real affordable housing out of London 7.

The briefing and its recommendation, will be considered by the planning committee meeting on Monday 4 May, the first to be held online.

Footnotes:

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Support Shopping centre Traders not Delancey

Dear Friend

We are in the midst of a public health crisis which has impacted severely on people’s lives and livelihoods, forcing shops and businesses across the UK to close. The position for the Elephant shopping centre traders was already serious, with over half having nowhere to go, come the scheduled centre closure in July – now their situation is acute.

A survey conducted by SE1 website forum found that 72% of people wanted the centre to remain open beyond July. In response developer Delancey says that it still intends to go ahead with closure on the 31st July, but pledged that essential food and pharmacy facilities would remain available, if needed.

This is not good enough. All the remaining shopping centre traders need support now if they are to survive.

Southwark Council are due to assume Compulsory Purchase Order powers on behalf of Delancey, at their reconvened Cabinet meeting, this coming Tuesday. With these powers behind them Delancey’s hand in negotiations with remaining leaseholders and stakeholders will be strengthened. Southwark should not be helping Delancey to build a development that puts small traders out of business and does not give us the social housing we desperately need. 

Instead we call on Southwark Council to support the traders. We welcome its recent promise of £200,000 and now call upon them to release this money immediately as cash grants to traders.

We also maintain our demand that the centre is not closed until all the traders have been properly relocated or suitably compensated.

Please share these hash tags;
#supporttradersnotdelancey
#supportelephantnotdelancey

You can also find Up The Elephant on Twitter & Facebook.
You can read more on the 35% Campaign blog.

Regards
Jerry

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35% Campaign – Elephant Park – planning committee misled?

Elephant Park – planning committee misled?

Mar 01, 2020 12:00 am

Lendlease fails to declare public funding for affordable housing -Developer Lendlease failed to disclose at Last week’s planning committee meeting that it was in receipt of public funding, which could have increased the amount of affordable housing at Elephant Park (aka the Heygate estate regeneration).

The meeting was called because of the large number of objections to the final phase (H7 MP5) and the lack of additional affordable housing. We explained in our previous blog how Lendlease have met their 25% affordable housing requirement, while increasing the total number of homes, but without increasing the number of affordable homes or proportion of social rent (3%).

One of the objections, from the 35% Campaign, was that “There appears to have been no effort to take advantage of any public funding”. Southwark responded by saying: “There is no obligation on Lendlease to seek public funds.” (para 282, 283 of the officer’s report)

The planning committee followed this up in their cross examination of Lendlease, who were asked directly by Cllr King whether they had considered applying for grant funding:

 See video clip of committee meeting on youtube here.

In a lengthy reply, Lendlease did not disclose that the Mayor had in fact committed to fund Elephant Park, back in September 2018.

Elephant Park is the very first entry on a list of estate regeneration projects on the Mayor’s website, which have had funding approved since July 2018.

This gives rise to a number of questions:

  1. Why did Lendlease not say that they had received funding when the question was asked?
  2. Why were the committee members not told that Lendlease has received funding in the committee report?
  3. How much money has Lendlease received from the Mayor?
  4. Why has the affordable housing offer not been improved?

We suspect that the answer to this lies in the murky world of viability; Lendlease insisted in 2013 that only 9.4% of the new homes could be viably provided as affordable.

They repeated this at the planning committee meeting last week and would no doubt argue that any money they have received from the Mayor has gone to bridging the gap between what is viable and the 25% being delivered.

Whatever the merits of this argument (and we think it has none) it still leaves open the question of why Lendlease and the officers report did not disclose the grant funding to members.

There is a similarity here to the ongoing dispute about affordable housing in the shopping centre development. Developer Delancey claims that the £11.24m it is also receiving from the Mayor is being used to increase the amount of social rented housing. We showed previously how it was going to Delancey’s bottom line:

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