Beware: American property developers are coming to Croydon

By - Monday 20th November, 2017

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

Photo public domain.

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.

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.”

Sean Creighton

Sean Creighton

A former employee of and freelance project worker with community and voluntary organisations, Sean is active with Croydon Assembly, and Love Norbury Residents Associations Joint Planning Committee. He is Governor of Norbury Manor Primary School and Chair of the Norbury Community Land Trust. He is a historian of Croydon and South-West London, and of British black, , social action and labour movement history. He co-ordinates the Samuel Coleridge-Taylor and Croydon Radical History Networks. He runs blog sites covering Croydon, Norbury and history events, issues and and news. He runs a small scale publishing imprint - History & Social Action Publications. He gives talks on a range of history topics and leads history walks.

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  • Glyn Robbins

    Thanks for such a thorough review/overview Sean. Looks like I could have subtitled the book ‘The American housing crisis and what it means for Croydon’! These are worrying times. Housing is at a crossroads, as clearly illustrated by what’s happening in your neck of the woods. But there is a growing campaign of resistance demanding an alternative for decent, secure, truly affordable and safe homes for all. We’ll be protesting outside parliament tomorrow with our alternative budget for homes and this Saturday is the national housing summit, 11am at NUT head office, Hamilton House, Mabledon Place (opposite the British Library).

    • Ian Marvin

      Embarrassingly your book is still by my bed waiting to be read! I’ll probably write something once I’ve read it with regard to the Croydon context, although of course Sean has provided some excellent insight here. It would be great to get your comments once I’ve produced something.

  • Andrew Kennedy

    There’s no doubt that American style housing is coming to Britain. Sadiq Kahn has been advocating modular buildings as a way to quickly construct new housing. 101 George Street, former Essex House, opposite East Croydon Station will be built by the American company Tide Construction and their UK company Vision Modular System , in two prefabricated towers 38 and 44 storeys high. The main point here is that it is a modular construction like stacking containers on top of one another. This is fairly new to Britain and has been used mostly to date, for hotels (Travelodge) and for student accommodation. Benefits are that all services are plumbed in in the factory and all that has to be done is to connect them to a central service core. For 44 stories I imagine (and I am imaging here because I have not studied the detail yet) they will build a skeletan steel framework into which they will slot the modules. See the photographs which can be accessed via their Design and Access Statement on the Council’s website. Search for ref 17/04201/FUL on the Councils Planning App page
    All the flats will be “build to rent”, 63% will be one bedroom and 30% two bedroom flats. Once more a ludicrous figure of 748 bicycle spaces will be provided. (Someone should tell them that Croydon is not that good for cycling and I say that as an advocate of cycling where it is possible). Car parking only for disabled. We wait to see how long the leases are for. Other questions might be, for how long will the building last? Are these buildings any safer than traditionally built ones? How easy are they to maintain? What standard of accommodation do they offer. Many of these questions are addressed in the D&A Statement referenced above. Being built to rent, the landlords can charge whatever rent the market will stand and for whatever period they deem most profitable. Why would they do anything else.

    • Ian Marvin

      So far as far as I’m aware the tallest off-site constructed building in Croydon is 11 stories; Alexandra House in Dingwall Road. It was primarily built that way for speed, as it used Mayor of London funds which had a deadline attached.

  • Robert Ward

    Thanks Sean. I see here a good deal of ideology rather than looking at solutions for the housing market. Two stand-out problems for me are security of tenure given that an increasing number of families with children are in private rented accommodation which is typically let on a one year tenancy, and the lack of professionalism of some private landlords, more than 90% of whom have only one or two properties.

    Bringing more professional landlords into the private rented sector is part of the solution and one that I welcome. Not only does that improve the quality of the offering to prospective tenants of a better service including longer tenancies, it also removes the threat of owners wanting their property back.

    In the UK owner-occupiers are a key part of the market and one that has declined in recent years. Doing something about that is also important and edging towards a professional private rented sector with the smaller private landlords slowly selling out to owner-occupiers will help in this too.

    • Ian Marvin

      I think we can all agree that longer term private rented accommodation leases would be a big positive for the community. Large developments of one bedroom flats are also needed, but we have little provision for natural progression to larger family properties within the area, this will definitely have long term adverse consequences as we try to maintain a balanced society.