TAP affordable housing campaign BLOG 1 Affordable housing a test of surveyors willingness to act in public interest.
January 2017 Powerful support for concern that viability appraisals inflate land values, enrich landowners and reduce the amount of affordable housing.
Stephen HIlls concerns have been now been powerfully endorsed by a report called: "Viability and the Planning System: The Relationship between Economic Viability Testing, Land Values and Affordable Housing in London" by Professor Sarah Sayce BSc, PhD, FRICS, IRRV and Professor Neil Crosby PhD, ARICS. The report was Prepared for the London Boroughs of Barking and Dagenham, Brent, Camden, Croydon, Enfield, Greenwich, Islington, Lambeth, Merton, Newham, Southwark, Tower Hamlets and Waltham Forest January 2017
TAP Affordable housing campaign BLOG 1. Affordable housing a litmus test for Chartered Surveyors willingness to act in public interest.
TAP has invited three authoritative thinkers and doers to challenge what we experience as being a profoundly unjust, unfair and socially and economically divisive system of land ownership in this country, and the housing policies of successive governments that have sustained it and so reinforced its damaging effects on the national interest and wellbeing of the nation.
Our writers are Professor Danny Dorling from Oxford University, Fred Harrison, author and founder director of the Land Research Trust, and to open our series of nine blogs, Stephen Hill. Member of the Royal Institution of Chartered Surveyors (MRICS), a Churchill Fellow and land economist.
In the first of Stephen’s series (Blog 1), he will draw on his Churchill Fellowship research in the USA, Canada and England to explore the roles and responsibilities of politicians and the professions, especially his own RICS, in housing and land policy. In his second (Blog 4), he will show how ‘the people’…citizens…have increasingly taken the initiative to plan and deliver the housing and land ownership solutions that genuinely meet the needs of their communities, when public policy and the market fail to do what is needed. In his final contribution (Blog 7), he will suggest that the phenomenon of citizen or community housing is itself an important sign of the changing power relationship between the citizen, the market and the state that might have important lessons about democratic renewal for all politicians grappling with post-truth or post-Brexit politics, and the collapse of public trust in political elites and professional experts.
Affordable housing a litmus test for Chartered Surveyors willingness to act in public interest.
Stephen Hill MA MRICS, Churchill Fellow, C2O futureplanners
Overheard recently in London
Surveyor 1: “Busy?”
Surveyor 2: “BUSY??? Soooo busy! Just rushed off my feet with viability appraisals for developers to avoid providing any affordable housing.”
In one of the richest cities in the world, it does seem counter-intuitive, unbelievable really, that central London residential developments become ‘unviable’ in the face of established public policy requirements to provide affordable housing. Ed Glaeser, Harvard’s Professor of Economics, would not be surprised. He sees this problem everywhere: “Affordability (of housing) is the key to success(ful cities), and challenging under-employment and education. But with supply and demand for housing, we have a madness and mania situation: in the most popular places, we build least.”
The long-term success of cities, with their capacity to support rich, diverse and resilient ecosystems of economic, cultural and social life, is core business for surveyors. Affordable housing is therefore a litmus test for my own profession’s willingness and ability to act in the public interest.
How is the surveying profession measuring up?
At the end of his year as President of the Royal Institution of Chartered Surveyors (RICS), Martin Brühl described one of the profession’s primary responsibilities as helping to “foster public and market confidence in real estate investment.” It needs to be. The World Bank estimates that 70% of the world’s wealth is linked to real estate. He identified risk, especially climate change and market volatility, as the principal enemies of that confidence. For RICS’ 150th anniversary in 2018, he challenged the members to define the public interest of the profession.
Why wait to 2018 when the profession’s reputation is suffering now from the actions of people like our ‘so busy’ surveyor? In the opinion of some commentators, his actions and those of other unqualified people who also do viability appraisals are little better than fraud.
What should we think of those property people involved in the valuation and compulsory purchase of council homes for the regeneration of the Aylesbury Estate in Southwark? In the opinion of the Secretary of State, the “interference with the residents’ human rights (was) not proportionate in all the circumstances”, agreeing with his Inspector “that a compelling case in the public interest for confirming the order has not been made.”
I teach mid-career development professionals in London about ethics and public interest issues, so it’s a brutal jolt to hear someone say, “I’m not applying to be a member of RICS, as I think it’s an unethical organisation”, but it is no longer a surprise.
Whether that criticism is justified or not, the conspicuous absence of thought leadership from the professional body and its members about the crisis of affordability in London appears to confirm the worst imaginings of other professionals and the public at large; surveyors have a vested interest in high land prices as their fees depend on it.
Overheard not quite so recently in London
A senior partner in a City surveying firm:
“I think you misunderstand what is going on here. Our job is to get a planning permission for our client, promise as little as possible at planning, and sell the client’s land for as much as we can.”
What that senior partner misunderstood was that his firm was not only failing to act in the public interest, but that its institutional landowner client was, in fact, passionate about promoting a truly sustainable urban extension to justify the use of green belt land, and to de-risk a 30 year investment from future climate change and energy shortage factors.
Accountability for the public interest
Recently, community organisers London Citizens, founders of the London Living Wage campaign, challenged the RICS whether they felt that people like Surveyor 2 were acting in the public interest. It’s a difficult question, one that written professional and ethical standards struggle to answer in black and white terms. Many surveyors would feel the answer lies with politicians not with professionals: ‘we shouldn’t get involved in politics’.
But the difficulties in answering the question do not absolve the profession or its individual members from becoming properly accountable to the public in their interest: putting public debate and deliberation with our clients and peers about the environmental, social and economic purpose of our work at the heart of everyday ethical practice and their Royal Charter requirement “to secure the optimal use of land…to meet social and economic need”. That must include speaking uncomfortable truths to power.
What does every housing and land economist know?
An appropriate level of affordable housing is necessary in every market and at all times to act as a buffer against and damper on the factors that lead to housing market volatility. Since the 1980s, the start of Right to Buy and the global deregulation of finance, the UK has suffered from more housing market volatility in every tenure than any comparable economy. There are over 1m less affordable homes than there were in 1980. The population has grown by nearly 9m people. Incomes at the median level are flat, and secure employment is increasingly scarce. (Fred Harrison and Danny Dorling will be writing more about this in their forthcoming blogs in this series.)
Nick Clegg’s recollections of a conversation with Cameron and Osborne revealed that one or both of them was mystified by the idea that they should build more affordable housing. “I don’t understand why you keep going on about the need for more social housing – it just creates Labour voters”: demonstrating an alarming degree of ignorance about how housing markets work. If their sole political priority was to increase home ownership, they also needed to create the conditions in which, by definition, marginal homeowners are not then at risk from volatile fluctuations in both their housing costs and their ability to pay. Without those conditions, home ownership becomes a potential liability with damaging personal and national consequences. Are memories of what happened here and in the USA in the early 2000s really so short?
So between them, the politicians don’t know what is needed to create a coherent housing policy, even to achieve their limited political objective, and the professionals help to undermine the effectiveness of what policies do exist to achieve that necessary market stabilising effect of affordable housing. So much for Martin Brühl’s fostering “public and market confidence in real estate investment.” And with 70% of the world’s wealth linked to real estate, the most extensive and valuable component of which is housing, the wellbeing of the nation and the public interest is ill served by its ‘political elites’ and ‘professional experts’.
Whilst not subscribing at all to that Brexit narrative on elites and experts and other meaningless slogans, my next blog will be about ‘taking back control’ and ‘better together’…showing why and how citizens are already prefiguring the revolution that is needed in the way that land must be priced, owned and used “to meet social and economic need” for the future benefit of all.
Affordable Housing Seminar co-hosted by TAP and the APPG on Poverty
Wednesday 16th November 2016, 18.00-20.00, Boothroyd Room, Houses of Parliament, Portcullis House, Westminster. SW1A 2TT
This event is part of a new affordable housing campaign led by Taxpayers Against Poverty (TAP). Starting on 7th October TAP will publish nine blogs over nine weeks exploring alternative policy solutions to resolve the UK’s housing crisis.
The seminar on 16th November, co-hosted by TAP and the APPG on Poverty, will be an opportunity to discuss the ideas arising from the affordable housing blog series and to consider how best to transform housing policy.
Chair: Kate Green MP
Speakers are four powerful writers on housing matters:
Progress with funding TAP
It is essential for the long term future of TAP that we begin to employ staff to support the volunteers who currently run this not for profit company.
It is now possible to sign up as members of TAP for our email list using the join panel, and to help fund TAP on the TAP website, or to join TAP without contributing funds. Membership is free.Some people prefer to follow on twitter and Facebook but not on email.
Those of us who can afford to fund TAP are supporting those who cannot. .
or you can send a cheque or cash to; Taxpayers Against Poverty Ltd, 93 Campbell Road, Tottenham, London N17 0BF or pay into Taxpayers Against Poverty Ltd a/c at Branch sort code;40-06-20; Account Number; 71664603
Since we posted this information in June 2016 monthly contributions by 65 people have reached the equivalent of £7104 a year. We need to employ full time member of staff. It should be possble to raise and annual income of at least £50,000 from 17,500 supporters on Facebook.
Very many thanks for the monthly contributions so far which are are;
1 x 2 = 2
18 x 5 = 90
31 x 10 = 310
7 x 20 = 140
1 x 50 = 50
Total = £592 month = £7104 a year
Very many thanks also to those who have sent cheques or made their own arrangement for monthly payments. All this income goes to financing TAP; none of it goes towards the cost of my personal council tax battle with Haringey Council.
Reverend Paul Nicolson