From Hodge to Hooverville

Could Margaret Hodge be our very own Sub-prime Minister?

There are more insane ramblings from UK architecture minister Margaret Hodge in this weeks Building Design (20,03.2008). Cleverly giving herself enough rope to hang herself, BD invites Margaret Hodge to show them around her consistuency of Barking, East London, and see what kind of architecture she likes - "Now that’s what Margaret Hodge calls architecture".

She starts off well enough, criticising a spec housing development by Bellway homes, (albeit for reasons that should be within the council and planning departments ability to enforce):

"It's horrible, cheap housing with no facilities: no schools, no transport infrastructure, no buses, no shops. This is just want you don't want."

Then she starts to show a little of her own design 'vision', for the Barking Riverside masterplan:

"I don't think it works," she says. "There are enormous pedestrianised areas. They haven't integrated the housing properly. New communities only work if people have their own gardens, fenced off."

Now it's possible that Margeret Hodge has been feverishly reading nutters like Oscar Newman and Alice Coleman et al, or channeling the spirit of Jane Jacobs through a kind of New Urbanist distortion field, since landing in the poisoned chair at the DCMS in June 200. However, it's more likely that she has made this gross, sweeping statement off the top of her head. Margaret Hodge has nailed her colours to the mast of environmental determinism.

But the killer comes when Hodges takes BD to Barking Learning Centre:

Among her high points is Barking Learning Centre, formerly the central library, designed by Alford Hall Monaghan Morris. This mixed-use building, which is the centrepiece of Barking Town Square’s redevelopment, is an example of the government’s vision for integrated public spaces, with council services, a lending library, educational facilities and residential apartments all on the same site. Hodge is very proud of it.

"Look, a buggy park!" she exclaims, as we view the children's library, a book club meeting in progress. Hodge points out the "welcoming entrance", which she sees as friendly and inclusive, and insists there ought to be a coffee shop here too. Her only disappointment is that the flats have been sold to a buy-to-let investor. "There’s nothing you can do about that." [My italics].

There's the money quote. With one throwaway comment the UK's architecture minister washes her hands of the parlous state of the UK's housing.

Buy-to-let, where investors buy properties as a business venture and enjoy tax breaks, has completely altered the UK housing landscape over the last 10 years. Fed a diet of 'you can do it' property investment programmes such as Relocation, Relocation, Property Ladder and How to be a Property Developer, the middle-classes of England have been steadily sinking themselves in debt taking out multiple mortages and riding the milktrain.

But now the chickens are coming home to roost.

Writing in the Guardian, Sympathy for the buy-to-let devil?, (22.03.2008), Patrick Collinson states:

Lenders keep telling us Britain doesn't have a "sub-prime" problem like the US. Yes we do - in the shape of a million buy-to-let mortgages.

Collinson then details some of the scams and sharp practices that have dominated the buy-to-let feeding frenzy:

"On paper, you couldn't obtain a 100% mortgage for a buy-to-let. But developers offered fake 15% "discounts"; credulous surveyors gave fanciful valuations; lenders skimmed over loan applications. Hey presto, wannabe landlords were able to obtain an "85%" loan which was really 100% of the purchase price, and start building a "portfolio" without spending a penny upfront. And they didn't even have to pay tax on the income.

It wasn't much of a worry to the lenders that the whole thing might later go wrong. They could "package" or "securitise" the buy-to-let loan, mark it down as a profit and take it off their books. Only in the coming few months will we see where in the financial system the losses turn up.

Compare this with first-time buyers. They have to stump up a deposit. They have to prove their income. They have to make monthly mortgage payments from a taxed salary. There could only be one winner in such a one-sided game. With access to easy finance, the buy-to-letter could outbid the first-timer and push prices up to ever more ludicrous levels."

Now the bubble has inevitably burst, not only are tens of thousands of get rich quick investors stuggling to make interest payments on mortgages, but overstretched owner-occupiers are faced with large mortgage hikes, while the banks and financial institutions who have been ridden by this loa of greed and exploitation get bailed out by the Bank of England. As a nation we are overextended on credit per capita to a much greater extent than the US.

Barking Learning Centre, held up by Hodge as the shining example of urban regeneration in Britain, is actually just the mirror to the failed state of housing in the UK. Who will maintain the properties at Barking Learning Centre? What can motivate investors, who are losing millions of pounds on the empty promise of buy-to-let, to look after their properties and ensure that they are good places to live?

To bring it back round to Robin Hood Gardens, and it's recent threat of demolition, Amanda Bailieu states in her recent BD editorial:

As one would expect from this government, Margaret Hodge believes the newly built Barking town centre in her constituency offers a more hopeful model for the future of British housing than the rugged, generous and light-filled flats at Robin Hood Gardens.

And yet Hodge cannot find any housing in Barking that actually works.

In the US, the credit crunch and the fallout from the subprime mortgage farrago is refiguring communities and the suburban landscape, creating new housing archetypes - subprime shanty towns and exurban slums. The death of the buy-to-let market in the UK could do the same in this country. Margaret Hodge could find herself with a Hooverville in the midst of her constituency.

What is needed, now more than ever, is a richer mix of housing types and typologies. This needs to encompass social housing, letted accommodation, housing associations and cooperative living, as well as owner occupied dwellings.

Instead of hanging round Barking, Hodge should try visiting Rotterdam.

Comments

[Martin Wisse]

Rotterdam? You're joking aren't you?