Here’s a little article I wrote while I was at university. It touches on inequality in urban areas and how it effects homelessness.
Inequality, Buy to Leave and Homelessness
An ongoing issue in the urban landscape which is being ever more highlighted by the growing seriousness of the current housing crisis. Do ‘buy to leave’ investors have a direct impact on the current issues surrounding affordable housing and the rise in homelessness? The knock-on effect of not only thousands of homes standing empty but the reality of these multi-million-pound homes and investors competing against each other, monopolising our city centres, are pushing up house prices for the poor and our next generation. The poor and working class cannot afford these inflated prices pushing them to the boundaries of a city, even if their employment is in the city centre, adding extra expenses such as travel costs to their already inflamed outgoings.
In this essay I will talk about the effects ‘buy to leave’ investments potentially have on our poorer societies, drawing on examples from different perspectives, both socially and economically, for and against investment. Is there a way to turn things around? Many projects/schemes have been introduced over the last decade to try to counteract the economic and social inequality, however are these projects/schemes enough, or do we need a complete shift in thinking, a new mind set, where everyone would benefit from social and economic growth, not just the rich. A question which seems almost impossible to answer as there are so many complexities surrounding the issue of our housing crisis with many theories of causes but can there be a simple solution? In a country where our seasons are becoming ever more varied as climate change worsens, summers are hotter and winter is colder, recently recording record lows in temperatures. This makes our homeless society ever more vulnerable and as homelessness is on the rise, this is becoming an emergency.
An article from the Guardian explains; ‘While UK house prices rose by an average of 20% over the last decade, according to the Office for National Statistics, prices in Kensington and 1 Chelsea rose by 65% over the same period’. These increases only benefit those who are already home owners, ultimately benefitting the richest the most. The demand for investors to buy multi-million-pound properties in our city centres is at its highest, seeing the best returns on their investments in only a couple of years by leaving these homes empty and essentially doing nothing with them.
The report from the Guardian ‘Buy to leave: profits dwarf ‘meaningless’ fines for London investors’ by David Pegg focusses on the pitiful fines these multi-million-pound homeowners endure for leaving their homes unoccupied. Polly Neate, the chief executive officer of the housing charity Shelter said “It’s much easier for owners to just incur the penalty” , Neate 2 then said, “That’s actually the easiest option for them; it should be the hardest option. It should be harder for them to keep the home empty than to do something with it” In most 3 cases it is easier and cheaper for these investors to pay the fines than it would be to pay rental costs and fees from management companies. The article goes onto explain; ‘One flat, worth £99,000 in 2001, is now worth an estimated £1.5m. Yet the owner of the property, an apartment in the attractive ward of Courtfield, was charged just £1,077 last year for leaving it 4 empty.’ It raises the questions; can anyone blame them? and should these investors have a moral responsibility to contribute back into society by various means?
In the text ‘Becoming a Super-Rich Foreign Real Estate Investor: Globalising Real Estate Data, Publications and Events.’ Dallas Rogers explains that a lot of ‘super rich’ investors use property as ‘a place to park excess capital, a way to obtain educational security for children studying at foreign institutions, and as a way to ‘purchase citizenship’ through a new suite of 5 foreign investment visa regimes.’ In other words, property can be seen as a security for the super-rich, as property trends previously have shown (in the UK) a steady, sometimes extreme increase in value, securing the best investment returns as oppose to other investment revenues such as stock markets and shares. From this perspective, generally, property investment could be seen as the best investment, not only for the super-rich but for the working class alike. As the rich use property to secure excess capital, working class wouldstruggle to get onto the property ladder. Whether property is a good investment or not it is certainly more difficult for the working class to purchase properties. Often a deposit is required to even apply for a mortgage and invasive checks into personal finance history can seem to be an ordeal, something that many of the super rich won’t have to endure.
Since Guardian ‘Buy to leave: profits dwarf ‘meaningless’ fines for London investors’ by David Pegg was first published on 25 Oct 2017, average property prices in the Royal Borough of Kensington and Chelsea have reduced by approximately 7% while the national average for England and Wales have reduced by approximately 4.1%, where the average property value is just under 250,000 in comparison to the average property value in Kensington and Chelsea which is just over 1.3 million. relatively, who does stand to lose the most?
During these times of austerity, house prices to buy or to rent have remained high, whilst Government benefits either have remained the same or have been cut. Even the National Living wage has only risen 71p from £7.50 to £8.21 in two years. There is a clear shortfall between income and outgoings, especially when household expenditures are taken into consideration. There is no surprise that homelessness is rising year on year. 6 (image) According to another article published by the Guardian and statistics supplied by the housing charity Shelter, there are at least 320,000 homeless people in Britain, on average, a rise of 4% every year. ‘This amounts to a year-on-year increase of 13,000, a 4% rise, despite government pledges to tackle the crisis. The estimate suggests that nationally one in 200 people are homeless.’
In the capital there are estimated to be 17,000 homeless people, equivalent to one in 52 which is considerably higher than the national average, which is even considered to be an under exaggeration as homeless people that ‘sofa surf’ and/or live in cars or sheds are rarely counted. This shocking statistic could be considered to be a direct link between the cost of living and average housing prices to homelessness. In London’s richest borough, Kensington and Chelsea this statistic rises again to one in 29 people, the very area which is most targeted by ‘buy to leave’ investors. Alternatively, could the richest boroughs of London such as Kensington and Chelsea be somewhat of a honey pot to the homeless? According to the article ‘At least 320,000 homeless people in Britain, says Shelter’, the worst effected areas 8 of homelessness in the capital seem to be the richest. With no fixed abode, homeless people are free to move from borough to borough, possibly in search of the most affluent areas where they would receive, on average, better donations for street beggars or pan handlers.
Whilst being a major contributing factor to our housing crisis, the ‘buy to leave’ problem is not the only one. Very recently, a social housing project has gained popularity, being awarded the prestigious RIBA Sterling Prize for 2019. Goldsmith Street, designed by Architects Mikhail Riches and Cathy Hawley, is comprised of almost 100 ultra-low-energy dwellings for Norwich City Council. This is the first of its kind to be awarded the prize since it began in 2006. This highlights the seriousness of our housing problem being that such a project, especially one for social housing, can now be considered for the award. Perhaps, previously 8 there hasn’t been a project like this to be considered for the RIBA award, or certainly a lack there of.
Mikhail Riches and Cathy Hawley’s 9 Goldsmith Street have an assortment of dwellings including two storey houses and three storey flats, a stark contrast from the high-rise blocks within the local vicinity. The complex has been designed to resemble the Victorian streets of the nearby ‘Golden Triangle’ district by adding details such as window recesses to give the impression of a larger, Victorian style window and the materials used for construction like the black roof pantiles nod to Norwich’s Dutch trading links. As a social housing project, the Architects have considered the working class in their design, how the space will be used by including large porches and secure, communal spaces where children can play safely. All these factors make this estate a very worthy, if not surprising winner of the RIBA Sterling Prize.
Whilst being considered a ‘one of a kind’ development, Goldsmith Street is a step forward in innovative design to provide cheaper living for the working class. Being ultra-low-energy homes, the cost of running one of these households would be dramatically reduced and the designers claim that the annual energy costs for one of these dwellings would be 70% cheaper than the national average. This scheme and future ones like it would directly benefit the most financially venerable among our society and many would say it would be a step in the right direction towards solving our housing crisis. Whilst unmistakably being a positive within the whole housing crisis argument, “It is not often we are appointed to work on a project so closely aligned with what we believe matters; buildings people love which are low 10 impact” . Is this the solution, or simply a band aid, bringing a short-term solution to a long term, still ongoing problem? Is simply building affordable social housing enough to counter affect an already spiralling out of control situation? And would it be even possible to build enough homes to house the tens of thousands of people living in overcrowded houses and flats or having no home at all?
The topic of the housing crisis is constantly at the forefront of our minds, should you listen to news programs or read newspapers, there is almost always an article relating to the housing crisis in some way. It seems like the crisis is worse than ever and to those affected, it most certainly can be considered to be. In fact, our generation isn’t the first to be affected by such a crisis. The Housing Question,1872-2016 by Architects for Social Housing (Simon Elder and Geraldine Denning) comments on how this common occurrence has affected the oppressed classes in all historical periods. ‘This general shortage in housing is not something particular to the present moment; it is not even one of the sufferings particular to the modern city worker as distinct from all earlier oppressed classes. On the contrary, all oppressed classes in all historical periods have 11 suffered fairly uniformly from this shortage.’ Elder and Denning compare the housing crises from the past to our very own modern crisis. They hint on the key differences being related to the sudden increase in population in large cities and the 12 substandard housing the (image) ‘oppressed classes’ are forced to live in. These factors certainly contribute to the crisis; however, these are only two factors in a massive ‘mind set’ problem. Elder and Denning also reflect on who is affected by the most recent crisis, stating that it is not only the working class who are affected, but also the middle classes. Could this be why the current crisis is getting so much media coverage?
The text ‘Spotlight on… The Spirit Level’ by Lyndsay Grant and Glen O’Hara is a study of the original text ‘The Spirit Level’ written by Richard Wilkinson and Kate Pickett. Grant and O’Hara talk about inequality between our richest and poorest societies and the ever-growing divide and whether it matters or not if the rich get richer. Grant and O’Hara draw on data trends collected for the original text, comparing reduced life expectancy, low educational qualifications, high crime, high proportions of teenage pregnancies, high incidences of mental health problems from different countries. The countries where these ‘negatives’ are higher clearly correlate to those countries with a larger economic/social divide between the rich and poor, including the United Kingdom and the USA. ‘With a higher degree of disparity between the highest 20% and lowest 20% incomes fare worse on measure after measure than more socially equal countries such as Japan, Sweden and Norway.’ Based on this research, 13 if the rich get richer, the inequality becomes greater meaning the people on the opposite side of the scale will suffer more greatly from austerity as a result. The gap between the richest and poorest has increased in most developed countries over the last 30 years, and the UK has 14 been no exception. Surely this great inequality can be contributed towards the rise in homelessness as based on this theory, as the rich get richer the poor get poorer.
The political climate could also be considered to be a factor in ‘great inequality’ within the United Kingdom. Over the past decade, a fairly far right government have taken the reigns. Certain policies put in place by the current conservative government have certainly handicapped the poorer amongst our society, introducing universal credit, a blanket payment as a benefit rather than being assessed on individual needs and many long-term sick have had their benefits cut or even stopped completely. There seems to be an unconscious fear that things can and will get worse over the coming years for the poor, making ‘great inequality’ even greater.
It is clear that not one resolution alone can be an ultimate resolution for our housing crisis problem, but a mind set shift. Whether in be a social one or political, a revolution of sort. Over the past five years, ultimately since the Brexit referendum, there has been a spike in young voters and indeed first-time voters. Suddenly politics has become something for everyone to have an opinion on and realising that one vote does count in the fight for change. As homelessness and inequality rise, a social stance grows, a ‘rage against the machine’ as it were. We have seen many justice groups emerge over the last few years such as the British political organisation, Momentum, a group that supports Jeremy Corbyn and his labour party and of course the Extinction Rebellion, the international group dedicated to fighting climate change and global warming. These once small movements are ever growing and becoming more powerful year on year. British people are resilient and the larger the divide between the rich and the poor the more powerful these groups become.
The need for change has been recognised and the ‘shift in mindset’ has already begun.
‘A nation’s greatness is measured by how it treats its weakest members’ Mahatma Ghandi.