Monthly Archives: February 2014

Will economists and social scientists ever speak the same language about housing?

I ask myself this question when I write about housing as a ‘commodity’. It does seem at times that economists and social scientists, allegedly sharing the same academic faculty of the Humanities, are destined to speak at cross purposes. Which, for clever people, seems a bit odd.

A social scientists reads ‘commodity’ as a bad thing – it is a public good which has become privatised, such as having to pay a toll or fee to go across what was previously common land.

But an economist talks about commodities as products which used to be an expensive and famous brand but are now being made very cheaply, which for most people is a good thing. Current examples would be DVD and MP3 players. It also covers goods such as milk, potatoes, eggs, where there is virtually no brand power.

An alternative phrase to commodity would be talk about housing as a ‘utility’, but we run into the same terminology problems as above because of the current culture of privatisation, at least in the UK.

OK, slightly interesting, but does this really matter?

Yes – just consider the difference between the cost of housing and the price of housing. The average UK purchase price for a family house is now around £250,000. But the cost of building that family house is much less. Most building firms keep this figure a commercial secret, but with economies of scale and using more modular offsite manufacturing of the complicated rooms such as bathrooms and kitchens, a house build cost of under £60,000 is perfectly feasible. The big difference between price and cost is made up from sales, tax, land and profit.

Up to 2008 when house prices were rising rapidly, central and local government benefitted from extra tax income, and the private sector benefitted from growing land receipts and from profits through sales, but mostly based on private credit. Of course, the housing market is different now, especially outside of London and the south east of England. And linking affordable housing to employment is now a significant challenge across the UK, where it is often a stark choice of one or the other but not both.

But, if by housing as a utility or a commodity we mean that it should be cheap and affordable, then now is the time to look at new models of delivery. This could probably start in the social housing sector because prices and costs can be more readily controlled. It would involve a long-term switch of funding from revenue to capital, from Housing Benefit towards house building. It would also impact on the housing market generally, reducing upward pressures on private rents and purchase prices. It would look at economies of scale, possibly by consolidating social housing building micro programmes at a city or regional level, using a client-managed consortium of suppliers to balance the risk of non-delivery.

Alongside house building, the significant amounts of empty property could be incentivised back into use by a market shift whereby empty property would have reduced income as an unused asset but significant income growth via rent. Higher taxes on empty property would help push this trend, as would lower taxes on rent.

So finally, perhaps economists and social scientists could agree that: yes, housing is already being used as a commodity, and the next phase is to make it an affordable commodity.

Disclaimer: private views, as ever. Tony previously worked at the Centre for Construction Innovation based in Manchester.

Britain now has fewer than 1,000 independent bookshops

Worryingly, the number of independent bookshops in the UK has dipped below one thousand. Those that manage to continue thriving are said to have diversified, working with schools and community hubs. The article below makes the economic case for sustaining High Street shopping, but I also think a good bookshop is a cultural and health necessity for any decent size town. Reading is good for people’s wellbeing. And in some places, the best range of books locally now is at the Oxfam shop.

Manchester plans to keep on reducing its carbon emissions – some thoughts

The February update from Manchester A Certain Future (MACF) has arrived this week with news on efforts by all partners towards reducing the carbon footprint of Manchester, which I fully support.

MACF is a broad based organisation of many partners and philosophies, from some neoliberal globalisation in economic policy to grass roots local cooperatives and campaigns. Any progressive city is necessarily a mixture of movements, beliefs, organisations, authorities and trends. So, for example, it would be unrealistic to look for a uniform ‘party line’ and it is better that different interests find a way to ‘rub along’ for the greater good.

There are some encouraging signs. For example, Manchester City Council plans to replace 56,000 street lights with low-energy LED lamps, saving up to 60% on carbon emissions. Probably many Manchester partners first saw an LED street lamp at CCI and CUBE on Portland Street. It was the early production prototype Philips 82watt lamp, part of an exhibition on new indoor and outdoor low-energy lights.

But some signs are less encouraging.

Many of us had assumed that higher energy prices were a natural ratchet which would lead to less energy demand and consumption. Better insulation and high-efficiency boilers would become cheaper – and more attractive each year – when compared with rising energy bills. Well, we learnt the hard way in 2013 that this model has limits, especially when there is a context of austerity and reducing living standards. People pushed back on prices, rather than spending more now to save later.

Yet in MACF there is (still) a stated desire to maximise the “multi-million pound Green Deal” programme in 2014. Really? Even after the abysmal national take-up figures in 2013 and then the shift of ECO cost collection away from using consumer fuel bills and on to general taxation? It feels very unlikely, unless Green Deal now is only about the ECO payments to social landlords, in which case the Treasury would probably give it to HCA to manage as grant aid.

So, it feels there is a bit of catching up to do. I know that is a challenge currently, especially when many organisations have shrinking resources and are being hollowed out. But we must show the resilience we look for in others, and find ways to be optimistic as well as determined.

The recent storms and flooding in the UK have brought climate change into sharp focus, and early 2014 might be a moment when the popular mood changes. But we should be careful not to rely on it too much. It would be lovely to think that, when the prime minister said “money is no object” that all our wishes will now come true. But what he said was just to rephrase something well known in the public sector, which states that any public service is allowed to break the rules when it is a matter of saving life and limb – “money is no object in a relief effort”. Unfortunately for the climate change agenda, the increased spending on flood defences in the UK will probably come from the two usual suspects of savings and contingencies. For some time now, it has been ever thus.

The storms and flooding may lead to a new emphasis on adaptation, but possibly with even less effort on prevention. After all, it is possible to fully support adaptation without admitting that carbon emissions are the problem. Adaptation alone does not ask questions about the causes of climate change, so it could be caused by … sunspots, natural cycles, or even changes in the price of Marmite.

In my opinion, and supported by science, climate change prevention (or reduction, given it has already started) is essential. But if there is no major national shift towards prevention and therefore stronger reductions in carbon emissions, even though I and many others wish it would happen, what are Manchester and other cities to do?

Transport and the heating of buildings remain the high impact sectors for reducing carbon emissions. The MACF ambition for more people in buildings to show their visitors a Display Energy Certificate (DEC) is one that I hope takes a strong hold. I have said before that every shop window on Market Street or in the Northern Quarter should have a DEC in the corner. Keep it simple, uncluttered, A5 size is enough, showing their A to G rating and maybe a QR barcode for anyone who wants more details. Surely a great student project.

Another practicality. For carbon literacy and buildings I would suggest that in the built environment professions we start to examine the use of U values. For example, windows. A double glazed or triple glazed window makes a building warmer because it is better insulated, and the measurement of the amount of insulation is its U value. The lower it is, the better. But when new windows are advertised on TV, there is no mention of U values. TV ads instead talk about windows being “Triple A Rated” or similar. In terms of insulation, many people now will know about duvets and togs. The higher the tog number, the warmer it is, because the higher the amount of insulation. Some good engineers will wince here, because togs are for textiles and U values are for building materials. But … carbon literacy, folks … I would ask: if your choice between two new windows is U values of 0.67 and 1.1, what do you think? Now, if I tell you the two windows have values of tog 9 and tog 15, is that any clearer now which one will give you a warmer room? I think so.

So, the take-home message for the built environment and housing professions is, show a DEC and talk tog.

Disclaimer: My personal views only. So far I have worked for national, regional and local government, the private sector, the voluntary sector, and universities. That only leaves the church and the military still to do, though I did once have a boss who was an ex-army chaplain. Nothing in these blog postings is a statement of the policies or practices of any current or former clients or employers.

Are we entering a new era in politics?

The sad death recently of Stuart Hall and the thoughtful obituaries that have been published, along with recent public debates about extreme weather and climate change, perhaps help us first take stock of our past and then point to the possibility of a new era in politics being about to start. Of course, nothing is certain because politics is not mechanical, but let’s consider the last 60 years, as outlined in the obituaries of his working life, and how the time divides roughly into two political periods.

First, in 1956 we had Suez and Hungary. The Suez crisis caused a disenchantment with the UK, France and Israel acting as imperial powers, basically invading Egypt on a pretext. The Hungarian uprising and the Soviet crackdown showed the Eastern Bloc countries in a similar light. The resulting New Left was non-aligned, not fixed to nation states, but instead fixed to ideas of human rights and freedoms. It was the New Left that created a climate for cultural change and the ‘sixties revolution’ of supporting campaigns rather than political parties. This was CND, women’s liberation, the civil rights movement in America, Cathy Come Home and Shelter, and a nascent environmental movement.

Then, in the late 1970s we find a counter-movement politically. The oil crisis around 1973 created an economic shock in the West which took years to work through. Politics slowly moved to the right, a new era of neo-liberalism followed, summarised as Thatcherism in the UK and Reaganism in the USA, but best known now as globalisation. The solution here was to be business-led, to dismantle the structures which were said to hold back progress, including trade unions and local authorities. In the UK the New Labour movement continued in that direction in some aspects, for example requiring students to pay tuition fees, but took a more inclusive approach in other aspects, such as the network of Sure Start centres, rebuilding schools and hospitals, and in-work tax credits to address child poverty. There was a view in Russia that the two world wars in the twentieth century were essentially a conflict between democracy and capitalism, and the post-war settlement in the West was about how those two forces might rub along. Globalisation put capitalism first again, not least because democratic countries became powerless to stop flows of money leaving. The New Labour movement argued that this was a price worth paying for a new, more peaceful world order. To roughly quote a line from the TV drama, The West Wing, “Global trade stops wars. The rest we sort out afterwards.” Iraq and Afghanistan ended that hope.

However, even if wars continued, globalisation in the West contained two seeds of decline: debt and climate change. The lack of global political structures that were as strong as the forces of business meant that any international responses to debt or to climate change were essentially voluntary, by treaty, and could be ignored or avoided without penalty. Thus we see the World Bank and the International Monetary Fund making requirements on elected governments for limited amounts of borrowing while the business sector was very lightly regulated, being able to shop around the world for the best deal. The new round of Basle banking rules have been an attempt to better regulate banks internationally after the 2008 crash, but other aspects of globalisation continued as before, alongside growing levels of income inequality.

So, following the 2008 crash (from which the UK has yet to recover economically in terms of GDP, productivity or employment), and the 2014 extreme weather events (which maybe will bring climate change into political focus in the UK), this could be a moment politically when the furniture is moved for another 30-year or generational period. Crucially, any such change will hinge on how younger people respond politically to their generally declining conditions of employment, housing and debt. The national lack of trust in UK institutions as well as in the press and in political parties has, I believe, inhibited a coherent political response so far.

And when this political response does show itself, there are no guarantees it will be a good outcome. Politics is not a playground game where ‘left’ and ‘right’ take it in turns to be in charge. The move could be further to the right. The 2008 crash has produced some strong right-wing trends in some European countries, especially in blaming immigrants, most recently in Switzerland.

The pessimistic scenario is of a right-wing retrenchment across Europe, with increasing xenophobia, more intolerance of minorities, and an increasing meanness in sharing the fewer public resources available. The driver for these trends would be the continued economic decline of the West as the South (China, India, Brazil, and maybe Africa) rises. Such tensions are also evident within the South, for example the street protests and disorder in Brazil over rising costs in public transport, and the increase in street violence linked to racism.

An alternative scenario is of a new understanding of how the world’s resources are finite, and what a fair and equitable sharing of these resources would look like. Ideally, centred around maximising people’s happiness and wellbeing rather than maximising a figure of wealth. Money is only a means to an end, not the end itself.

Clearly this is an ideal, and globally there will always be countries which drag their feet, looking to squeeze an advantage over the rest. But, for me, I’d much rather face that as a problem to be dealt with, rather than have to deal with retrenchment and xenophobia with all its echoes of 1930s Europe and the conditions which supported the growth of fascism.

Disclaimer: As are all my posts here, this is a personal view.

The 12 success factors for urban regeneration

Following the 2007-8 economic crash in which high property values played a significant part, the world of urban regeneration has, in part, struggled to find its feet again. Yet it was often said that the truly effective regeneration and renewal of some of the most deprived areas in the UK was always a 25-year change process— working to a rhythm of generations, not quarterly reports.

I want to suggest that it was the years leading up to the economic crash, let’s say 2002 to 2008 roughly, which were the aberration and that we are now poised to return – either to normality, or to repeat the earlier mistakes. And perhaps the biggest of those mistakes was to assume that ever-rising property values was the same as urban regeneration. It was clear to many at the time, and to many others with hindsight, that a world where property prices were rising faster than earnings year on year was not sustainable.

Instead, let’s go back to the drawing board. We need to remind ourselves of the underlying factors which are crucial for urban regeneration, and apply these timeless traits in modern times.

So, in no particular order we have:

1. A Masterplan
OK, these days even the youngest newbie in the team knows that you have to have a masterplan or you just cannot join the regeneration club. But, sadly, how often have we asked people for a masterplan, only to be handed a document. Yes, it has lots of colourful diagrams and maps. Especially the overlay maps that show the synergy between transport corridors (bus routes) and primary employment areas (bus stops). It might even touch on some of the headings below. It will have a vision statement. But, crucially, the writers of the document will have assumed that the document is the masterplan. It isn’t. The document is useful for various engineers who will need to know where to dig their holes. The masterplan is what people tell you when you ask them the question, why do they bother? If you get a coherent answer from a range of partners, brilliant! If you get unconnected answers or even no answers at all, then there is no masterplan, only maps.

2. An Economic Base
Bang in the centre of your urban community is an externally-funded non-transferable major employer with a commitment to, and proven results in local employment, and an order book that is full for the next 50 years. Lucky you. The rest of us have to work with less, and with what is real. Not everywhere will be a high-tech innovation hot spot. There just are not enough Googles to go round. So a me-too economic strategy will not work. Maybe for your area the niche, the economic USP, is something like world-class soft cheese making. Don’t knock it. Better to be real and succeed than to be pretentious and fail.

3. Partnership Working
Anyone who says that partnership working is easy clearly hasn’t tried it recently. Like childbirth, some say we only do it again because the brain can’t fully recall the pain from previous times. Partnership working is going back to your office and thumping the wall with frustration. It is putting down the phone and tearing your hair out. It is not about who sits on what committee. Nor is it who is on speed-dial with who else. It is hours and days of patiently going over the same simple point with the plonker from X until a glimmer of independent thinking is spotted. Every regeneration programme has at least one X. For me, I’m waiting for the day predicted in science fiction when arms-length agency ABC becomes self-aware. I’d fill in the gaps, but I need the work.

4. Community Engagement
So, this is (a) the minimum necessary number of community meetings to be endured in a church hall to satisfy the council so that planning permission will be granted, or … ah, there is no (b).

5. Jobs, Skills, Education
When asked, the majority of car drivers say they have above-average driving skills. Similarly, the majority of regeneration programmes have above-average expectations. Which sometimes is valid because there is a need to re-balance an area that has become mono-cultural. After all, blacksmiths did have to re-train as car mechanics. But too often the high-skills jobs focus says nothing for the many people who have lower formal skill levels but still want and need to play their full part in the local community, including the local economy. My first job was as a schools crossing officer, that is, I did a lollipop patrol. Long may they be.

6. Leadership
Similarly to partnership working, this is not only about who runs which committee. Nor is it about management, a necessary but different task. Leadership is bestowed, not taken. You will know the classic definition, that the people around a good leader say, ‘this is what we have done’. But also, leadership is not about any one person, but instead it is a function in which many different people all have a part to play at different times. The teacher who stands up against the bully is a leader.

7. Inclusiveness, Fairness, Diversity, Tolerance, Equality
Unfortunately, there is a cheap and very nasty way to build community spirit, and that is to produce a scapegoat. The blame game. Sometimes it is blatant— let’s blame Travellers for crime, let’s blame immigrants for unemployment, or young people for litter. But there is also an insidious blame game— let’s blame political correctness. “Everything was going just fine until we had to be nice to…” A tell-tale sign of this approach is an exclusive focus on traditional communities, as in a bread commercial, which conveniently leaves out the minority voices that can be found if you search with an open mind.

8. Mixed Communities
What are the factors which influence the mix of any community, any area? The housing type? Access to transport? Skill levels? These are textbook answers, but in truth it comes down to two factors: secondary schools catchments and estate agents. All the rest is puff. If you want to regenerate towards a more balanced, mixed community, then start with teacher recruitment.

9. Sustainable Practices
It is a fact universally acknowledged that every urban regeneration programme with a sustainability strategy is in need of more eco-bling. (Sorry Jane, but you know others have mangled it far worse. I have names if you need them.) So, when the flood defence teams arrive with their wagons of concrete in the hundreds, and you ask them to fund the planting of some trees, and get *that look*, you need to realise that actually more eco-bling is needed instead. Think bigger. Artificial trees made from recycled plastic bottles, that kind of thing.

10. Transport
Most people walk. Some run. A few skip. Many cycle. Some use wheelchairs, some scooters. Doctors encourage us to take exercise. And walks with greenery around us are good for our mental wellbeing. So isn’t it marvellous how professors of transport planning have come up with concrete walled dual carriageways. Who would have the M602 in their CV, no-one I guess. And, as every economist knows, the required solution for any economic improvement is another motorway.

11. A Sense of Place
There are stacks of picture books for architects to colour in (sorry, palette) which show you how to make a distinctive and unique sense of place. Oh, wait a minute, …

12. Can-Do Attitude
This is perhaps one of the hardest aspects of urban regeneration to make happen. It is where “everything here would be just dandy if only the government / council / supermarket / whoever would give us X.” Maybe it would. It very probably would be an improvement. But urban regeneration is not a box of magic wands to be rationed out. “If only we had the power to do such-and-such.” Of course, funding helps massively and for some tasks it is indispensable. But it is all for nothing if there is no spark, no passion, no love, no animation, no attitude. And we all know places which have had the money and then some, but where there is nothing left to show for it.

You may disagree with some, or even much, of this blog. Great. Because that’s the attitude we like to see.