Tuesday, May 1, 2018

Tidemill & Reginald Road update #2 – affordable rents and alternative plans

Following on from our previous post, we wanted to take a further look at that 'key decision' made by Mayor & Cabinet on March 15th 2018: "to change 43 homes from private sale to London Affordable Rent (social rent)" and Cllr Dromey's claim that there will be 117 "socially rented" homes on the new Tidemill development.

There seems to be some confusion. The minutes have "social rent" in brackets after "London Affordable Rent", but the two are not the same. For verification, we asked a friendly councillor in another ward to find out for us and he came back with the following from the Head of Housing Policy (our bold):

‘Social Rent’ and ‘London Affordable Rent’ are both considered types of affordable housing and have very similar rent levels, however they are not the same product.

Properties let at ‘Social Rent’ have long been the most affordable housing product available, typically known as council housing. These properties are allocated to applicants in priority need who apply and are accepted to Lewisham’s Housing Register. The formula for calculating the rents is set by Government and since 2016, rents have been subject to a 1% rent reduction, to last until 2020, when the intention is to return to CPI plus 1% rent rises. 
The Mayor of London introduced ‘London Affordable Rent’ in 2017. London Affordable Rent refers to rents for genuinely affordable homes aimed at low-income households. The benchmark rents have been set by the Mayor and are very similar to social rents. As with social rents, ‘London Affordable Rent’ will also be subject to rent setting guidance and the 1% rent reduction will apply until 2020. Allocations to these properties will be made in the same way as social rent properties mentioned above.

‘London Affordable Rent’ can be confused with ‘Affordable Rent’ which the Government introduced as a form of affordable housing in 2010. The ‘Affordable Rent’ product allows Registered Providers to charge rents of up to 80% of local market rents. Rents at this level are rarely affordable to residents on low incomes and the product is considered to be widely unaffordable in London; thus it is not supported by the Mayor of London. Allocations to ‘Affordable Rent’ properties are also made via the Housing Register, but there is a reliance on Housing Benefit to meet the high cost of the rent.

Finally, ‘London Living Rent’ is a rent which is affordable to households on median incomes, as the rent is set at one third of median local incomes. It is a form of intermediate housing and is aimed at low to median earning working households who are priced out of home ownership and yet have no realistic opportunity to qualify for social housing. A number of the properties at Besson Street will be let at ‘London Living Rent’ levels, offering a range of ways of meeting a genuine housing need in Lewisham. They will enable lower income workers to benefit from lower rents and greater security, and will be priced at a level that means the group of potential beneficiaries is very broad.

Going forwards, homes built using GLA funding in the Affordable Housing Programme 2016-21 are expected to include properties for ‘London Affordable Rent’ and properties for ‘London Living Rent’. 

A rent comparison table was included with the explanation (prices per week) as follows:

Click to enlarge

What is clear from the table is that "London Affordable Rent" is not at all similar to "social rent" (here described as 'Lewisham Stock – Average Rent'). In fact, London Affordable Rent is 37% more than Social Rent (based on a 2-bed flat), and would cost the tenant an extra £3,000 per year. 

Although the terms offered to Reginald Road residents may now be to keep them at the same rent levels (real Social Rent/Council rent) how are we supposed to believe Joe when he says all the Tidemill "affordable" rents will be "social rents" if the Council considers the two different rents as "similar" (when they quite clearly are not), and when the development is dependent on GLA funding which is offered only for London Affordable Rents?

We finally managed to get hold of the report for the 15th March Mayor & Cabinet meeting, but all figures are redacted. Nevertheless it refers to how in 2017, the GLA's "new London Affordable Rent model clarified the rent setting process and created rents that were effectively social rents" (p.6). Then in 2018 (p.7) para 5.5 states "...This new offer would increase the proportion of new homes on the development that are affordable – defined as either London Affordable Rent (i.e. social rent) or as Shared Ownership...".

Cllr Dromey is utterly convinced that the rents will be "social rent" and seems to truly believe they will be the same as Council Rents – which actually are genuinely affordable for people on low incomes. For those earning the London Living Wage (£10.20p/h) whose annual salary might be £19,890, they would take home around £326 p/w after tax and national insurance, so the "affordable rent" of £144.25 p/w for a one-bed flat is actually, at 44%, far more than a third of their wages.

Most people on the housing waiting list that Cllr Dromey says will get homes in this new development will be earning £20k or much less. But if he is using the Tory re-definition of social rent as London Affordable Rent (as the Council seem to) then he has either fooled himself or is fooling us.

Alternative plans

We hope Joe is right, because there is a lot of sacrifice involved in this scheme as it stands now with families being forced from their homes and loss of pollution-mitigating mature green space.

However, those sacrifices need not be made if this development was redesigned with the same amount of units without demolishing valuable green space and sixteen sound council homes. The campaigners have already demonstrated to the Council how this might be done, with an alternative plan that shows denser building on the northern side of the site, saving both 2-30A Reginald Road and the garden.

Click to enlarge

But there was a flat refusal from the Council and its partners to work with local stakeholders (aka the community) to reconsider the layout of the site (which was set in stone four years ago when the contractual agreement stipulated that any redesign would have to come out of the partners' pockets).

Architects for Social Housing got the same response from Lambeth Council after working with residents for a year at Central Hill Estate to show how new homes could be added (infill) and the older ones refurbished without demolishing them. Lambeth said the fully budgeted ASH plan was "unviable", despite it costing less. The decision was based on a feasibility study that was only made available to ASH with all the figures redacted; Lambeth refused to give the financial reasons for why they'd rejected the proposals. 

One of the reasons the ASH plans actually cost less was because it costs £50k per unit to demolish the buildings (and then the cost of rebuilding) whereas refurbishment cost £40k per unit (with no rebuilding costs)!

And that's without taking into account the environmental impact and carbon footprint of demolition and new construction, or the emotional and mental health impacts on those whose homes are demolished.


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