CommentPlus: pick of the papers

The ten must-read pieces from this morning’s papers.

1. We can survive a dip but we risk a fatal plunge (Times)

Anatole Kaletsky warns that if growth falters and the coalition doesn't moderate its macho cuts, a vicious downward spiral beckons, which could start a prolonged, potentially catastrophic recession.

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2. It's time to stand up to the Treasury (Independent)

Christina Patterson urges Iain Duncan Smith to hold his ground in his row with the Treasury over funding for his welfare reforms.

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3. A Lib Dem civil war? Surely we're forgetting something (Guardian)

John Harris looks ahead to potential tension at the Lib Dem conference. That the party has delivered power will probably be more than enough to keep a lid on any trouble.

4. Bush tax cuts for the rich must go (Financial Times)

By letting the tax cuts for the top 2 per cent of households expire on schedule, say John Podesta and Robert Greenstein, policymakers can continue to help middle-class families while harvesting low-hanging fruit on deficit reduction.

5. Parties must abandon the sordid dash for cash (Times)

MPs waste too much time sucking up to rich donors, says Alice Thomson. No one gives money to a political party unless they expect something in return -- which is exactly what they get.

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6. In the name of purity, public funds are wasted on the rich (Guardian)

From IVF to universities and museums, says Simon Jenkins, Britain's aversion to charging for services punishes women, students and the poor. Charging, paying and pricing must not be seen as morally corrupt.

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7. The myth of the forgotten middle class (Independent)

There is no danger that politicians will forget the concerns of the middle class, says the Labour leadership hopeful Diane Abbott. Only when the party leaves the "New Labour" era behind will voters of all classes trust it again.

8. There is an alternative to a shrivelled Britain (Times)

Another Labour leadership contender, David Miliband, argues that it's not denial to reject the coalition's plans on deficit reduction. It is Labour's duty to expose the risks of economic masochism and the "big society".

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9. We need states to be smarter, not bigger (Financial Times)

Ajay Chhibber, UN assistant secretary general, asks what the appropriate role of the state is after the financial crisis. It has reached its size-limit in the developed world, but could up its role in finance.

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10. Deluges after the deluge (Guardian)

Catastrophic floods in Pakistan are likely to recur, warns Julian Hunt, as global warming combines with El Niño, a climate pattern that occurs across the tropical Pacific Ocean every five years on average.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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