Forest Gate Project | Issue #1 | Gentrification and affordability

Forest Gate Project

Issue #1

Gentrification and affordability

This zine is part of a set exploring the impacts of gentrification in Forest Gate. It takes quotes from people in the community who responded to the project and pairs them with local data and context. The aim is to enable a wider dialogue about change and its impact in our community. This first issue is about affordability.

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Forest Gate Project

Issue #1

Gentrification and affordability

Gentrification

Forest Gate Project

Affordability

While engaging with the local community in this project, many people used the word gentrification. For some it was a positive thing; something they actively wanted to see more of.

For others, it was a negative.

In both cases, the term was used often when talking about the changing affordability of the area.

An influx of middle class residents is one of the visible signs of gentrification. In the responses to this project there was a growing resentment towards the middle class in Forest Gate and towards newcomers in general.

There is an argument that the arrival of newcomers to an area signifies the start of local investment that eventually will improve outcomes for everyone.

Washington Post A neighbourhood’s poverty rate can drop from 30% to 12% in a decade with minimal displacement. That’s because gentrification leads to new construction or to investment in once-vacant properties.

“Increasing gentrification”

However, the story more often told about gentrification is the one being told here in Forest Gate.

It’s the story of increasing house prices, soaring rents, the decline of social housing and the fear of new luxury developments . More broadly, it’s about the fear of displacement.

While the gentrification debate is a large and complex one, it’s also convenient. As a community, we increasingly use the term gentrification to describe a broad range of local problems; blaming the middle class, ‘hipsters from Hackney’ and new people moving to the area. This creates divisions.

When this happens we fail to have important discussions about the larger factors playing a role in our changing community. We also miss the opportunities to engage with the wider issues in a practical or meaningful way.

Many times over the course of this project I encountered an ‘us’ and ‘them’ attitude in Forest Gate.

Those who are excited about the changes and positive about the future and those who are worried about the wider implications.

This zine takes quotes from members of the community and explores their wider context using data. It aims to take our shared concerns and enable a broader and more proactive dialogue about the challenges we face.

A dialogue we can all be a part of.

Pioneers

The three waves of gentrification

Professionals

Forest Gate Project

Affordability

Renovated housing is sold on to a new wave of gentrifiers.

The process of displacement begins as available housing falls and rents increase. As this happens, the struggle between gentrifiers the existing residents becomes more pronounced.

Word spreads.

Middle class households move in and renovate vacant properties.

This drives up the value. Little or no displacement of residents or businesses occurs at this stage as the properties are often vacant and new properties are built on unused land.

Developers

The area is now considered a good investment. Major developers and financial institutions begin to chase profits. High density blocks of flats start to appear.

The pioneer gentrifiers often find themselves displaced at this point as new wealthier people start to move into the area.

Forest Gate Project Affordability

Rising house prices

Forest Gate Project

Affordability

Neville Road, E7 Sold in 2007 for £250,000 [8x average incomes] Sold in 2016 for £520,000 [13x average incomes]

House prices in Forest Gate have been going up for years. Ten years ago a Newham resident would have expected to spend seven times their income on a property.↗ Last year, it was ten. Looking at what’s recently been sold in Forest Gate, it’s even higher.

Sold in 2006 for £250,000 [8x average incomes] Sold this year for £690,000 [17x average incomes]

↗ Affordability and types of home

“Locals are being priced out of Forest Gate”

Lorne Road, E7

Rising house prices

Forest Gate Project

Affordability

Neville Road, E7 Sold in 2007 for £250,000 [8x average incomes] Sold in 2016 for £520,000 [13x average incomes]

House prices in Forest Gate have been going up for years. Ten years ago a Newham resident would have expected to spend seven times their income on a property.↗ Last year,How it was many ten. Looking times your at salary can you what’s recently expectbeen to pay sold forin a property in Newham?

Forest Gate, it’s even higher.

10

7

7

4

2000

2005

2010

2015

Sold in 2006 for £250,000 [8x average incomes] Sold this year for £690,000 [17x average incomes]

What’s the split of housing in Newham?

17% Bought with a mortgage or loan 43% Rented privately

31% Socially rented 9% Owned outright

“Locals are being priced out of Forest Gate”

Lorne Road, E7

Rising house prices

Forest Gate Project

Affordability

Neville Road, E7 Sold in 2007 for £250,000 [8x average incomes] Sold in 2016 for £520,000 [13x average incomes]

House prices in Forest Gate have been going up for years. Ten years ago a Newham resident would have expected to spend seven times their income on a property.↗ Last year, it was ten. Looking at what’s recently been sold in Forest Gate, it’s even higher.

Sources Department for Communities and Local Government Office of National Statistics

Sold in 2006 for £250,000 [8x average incomes] Sold this year for £690,000 [17x average incomes]

“Locals are being priced out of Forest Gate”

Lorne Road, E7

Rising costs

Forest Gate Project

Affordability

The housing and homelessness charity Shelter believe that your rent or mortgage should never be more than 35% of your net household income (that’s your income after tax and benefits).

This is not the only way to think about it, but it gives us a way to consider what affordable means for people in our community.

Figures from the GLA estimate the average household income for London is £39,110. That’s the combined incomes of all people sharing a household. The average for Forest Gate is £34,410.

According to Zoopla, flats in Forest Gate currently cost an average of £251,000. At Shelter’s figure of 35%, you would need to earn over £51,000 to live there affordably. That’s £16,000 more than the Greater London Authority estimates of average household incomes in Forest Gate. It's also almost £12,000 more than the GLA averages for London.

Soaring rents

Few people are more vulnerable to the effects of gentrification than renters. 69% of Newham residents rent and 43% of them rent in the private sector ↗ that’s the largest proportion in the capital. The private rented sector is three times the size in Newham as it is in the UK. Demand for housing in Newham has lead to overcrowding, poor conditions and unsafe conversions.

About 25% of households in Newham are overcrowded and research has shown that this is more of an issue for those who rent from a property company.

In Forest Gate more people own their homes than the Newham average, but the proportion of private renters is still around 35%.

Figures from the council estimate that residents who rent their properties privately pay 42% of their net household income in rent. However, looking at property websites like Foxtons and Zoopla, average rents in Forest Gate are now closer to 76% of local household incomes and 66% of the average London household income. So it's not just locals who are finding themselves priced out of Forest Gate. The area is fast becoming too expensive for the average Londoner.

Demand for social housing in Newham is extremely high.

In 2015 there were 16,755 households on the local register and according to the council’s own website ‘the majority of people who apply will never be housed.’

This is not an issue specific to Newham or even London. The building of new social homes has collapsed nationally, locally the social housing stock is dwindling.↗ Figures from the GLA have shown that estate regeneration schemes are set to lead to the loss of 7,326 socially rented homes across London in the coming years. It is estimated that Newham alone will lose 286.

“They’re trying to push us out”

Social housing

Forest Gate Project

Affordability

Much social housing in London is being converted to Affordable Rent. Which as we have seen, is not very affordable. There is a real danger that this type of rent will replace traditional social housing completely. Local Authority rents in Newham are some of the cheapest at an average of £96 a week.

However, housing association rents - at an average of £135 a week are the highest in London.

↗ Social housing in Newham

This whittling away of social housing leaves vulnerable families with no option but to move into expensive homes they can’t afford.

“They’re trying to push us out”

Social housing

Forest Gate Project

Affordability

Demand for social housing in Newham is extremely high.

In 2015 there were 16,755 households on the local register and according to the council’s own website ‘the majority of people who apply will never be housed.’

This is not an issue specific to Newham or even London. The building of new social homes has collapsed nationally, locally the Much social housing in London social housing stock is dwindling.↗ is being converted to Affordable Figures How from has thethe GLA social havehousing stock Rent. Which as we have seen, is shown that in estate Newham regeneration changed since 2000? not very affordable. There is a real schemes are set to lead to the danger that this type of rent will loss of 7,326 socially rented replace traditional social housing homes across London in the completely. Local Authority rents in coming years. It is estimated that Newham are some of the cheapest 23,000 Newham alone will lose 286. at an average of £96 a week.

However, housing association rents 19,222 - at an average of £135 a week 17,697 are the highest in London. 16,360

2000

2005

2010

2015

Will estate regeneration schemes lead to more or less social housing in Newham?

Social rented Social rented

-286

Intermediate Intermediate This whittling away of social housing leaves vulnerable families Affordable rent with ‘Affordable’ rent no option but to move into expensive homes Market homes Market they can’t afford.

381 77 1337

“They’re trying to push us out”

Social housing

Forest Gate Project

Affordability

Demand for social housing in Newham is extremely high.

In 2015 there were 16,755 households on the local register and according to the council’s own website ‘the majority of people who apply will never be housed.’

This is not an issue specific to Newham or even London. The building of new social homes has collapsed nationally, locally the social housing stock is dwindling.↗ Figures from the GLA have shown that estate regeneration schemes are set to lead to the loss of 7,326 socially rented homes across London in the coming years. It is estimated that Newham alone will lose 286.

Much social housing in London is being converted to Affordable Rent. Which as we have seen, is not very affordable. There is a real danger that this type of rent will replace traditional social housing completely. Local Authority rents in Newham are some of the cheapest at an average of £96 a week.

However, housing association rents - at an average of £135 a week are the highest in London.

Sources Department for Communities and Local Government GLA London Development Database

This whittling away of social housing leaves vulnerable families with no option but to move into expensive homes they can’t afford.

Homelessness

Forest Gate Project

Affordability

Threatened with the loss of their accommodation, or financially unable to continue, many have no choice but to declare themselves statutorily homeless.

In 2015, the main reason given to local authorities in London for this type of homelessness was ‘end of assured short-hold tenancy.’↗ This is another way of saying that the landlord put their rent to an unaffordable level.

Newham has one of the highest rates of homelessness in London.

This year 1,345 household were accepted as being homeless and in priority need. In five years the figure has grown from 1.1 to 12 per 1,000 households.↗ Local authorities have a duty to provide assistance to people who become homeless but with the shortfall in social housing, there is no assurance that homes will be available for them. Many are placed outside the borough, away from families and connections.

Raquel Rolnik - United Nations The right to housing is not about a roof anywhere, at any cost, without any social ties. It is about enabling environments for people to maintain their family and community bonds, their local schools, work places and health services allowing them to exercise all other rights, like education, work, food or health.

↗ In Homelessness March 2016, 3,956 in Newham households were being housed in temporary accommodation by Newham Council. That’s the highest number of all the London boroughs. A great many of those households were having to live outside Newham due to lack of available housing.

Homelessness

Forest Gate Project

Affordability

Newham has one of the highest rates of homelessness in London.

This year 1,345 household were accepted as being homeless and in priority need. In five years the figure has grown from 1.1 to 12 per 1,000 households.↗ Local authorities have a duty to Threatened with the loss of their provide assistance to people who accommodation, How many or financially households have become homeless but with the unable to been continue, accepted many as have homeless no shortfall in1,320 social housing, there 1,345 choice butintoNewham declare themselves since 2010? is no assurance 12.2 that homes will 12 statutorily homeless. be available for them. Many are In 2015, the main reason given placed outside the borough, away 883 to local authorities in London from families and921 connections.

8.5 8.4 for this type of homelessness Actual numbers (top) Raquel Rolnik - United Nations was ‘end of assured short-hold and number per 1,000 The right to housing is not about a tenancy.’↗ households This is another way of roof anywhere, at any cost, without any social ties. It is about enabling saying that the landlord put their environments for people to maintain rent to an unaffordable level.

248 97

2.7

1.0 2010 2010

2011 2011

their family and community bonds, their local schools, work places and health services allowing them to exercise all other rights, like education, work, food or health.

2012 2013 2013 2012

2014 2014

2015 2015

What reasons did people give for being homeless in London in 2016?

3% Rent arrears

In14% March 2016, 3,956 households 40% Relatives longer in temporary End of assured were beingnohoused able to provide shorthold tenancy accommodation

by Newham accommodation Council. That’s the highest number of all the London boroughs. A great 16% of those households were many Friends no longer having to live outside Newham due able to provide toaccommodation lack of available housing.

7% 13% Loss of Other 7% rented Relationship Source: Department for Communities and Local Government housing breakdown

Homelessness

Forest Gate Project

Affordability

Threatened with the loss of their accommodation, or financially unable to continue, many have no choice but to declare themselves statutorily homeless.

In 2015, the main reason given to local authorities in London for this type of homelessness was ‘end of assured short-hold tenancy.’↗ This is another way of saying that the landlord put their rent to an unaffordable level.

Newham has one of the highest rates of homelessness in London.

This year 1,345 household were accepted as being homeless and in priority need. In five years the figure has grown from 1.1 to 12 per 1,000 households.↗ Local authorities have a duty to provide assistance to people who become homeless but with the shortfall in social housing, there is no assurance that homes will be available for them. Many are placed outside the borough, away from families and connections.

Raquel Rolnik - United Nations

The right to housing is not about a roof anywhere, at any cost, without any social ties. It is about enabling environments for people to maintain their family and community bonds, their local schools, work places and health services allowing them Sources to exercise all other rights, like Department for Communities and Local Government education, work, food or health.

Office of National Statistics

In March 2016, 3,956 households were being housed in temporary accommodation by Newham Council. That’s the highest number of all the London boroughs. A great many of those households were having to live outside Newham due to lack of available housing.

“The government has rendered the word affordable meaningless”

'Affordable' homes

Forest Gate Project

Affordability

When you hear developers talk about affordable homes they are referring to a category - a form of social housing. Increasingly the main form of government-funded housing in this country.

Traditionally, social housing rents were based on local incomes, allowing people to work without being dependent on benefits. The newer ‘Affordable’ rents are not, they are tied to the market and rents can be up to 80% of local market rates.

As we have seen, local market rates rarely have any relationship to people’s actual incomes, which is the reason that Shelter does not believe that Affordable Homes fit the definition of social rent.

People are left with no choice but to live in homes that they can’t afford. To bridge the gap in their finances, they rely on housing benefit. This just adds to the ever-growing national housing benefit bill.

The Guardian The consequence of this policy is the creation of thousands of new benefit-dependent tenants while the £24bn housing benefit bill will continue to soar.

Luxury developments

Forest Gate Project

Affordability

Luxury developments have become the ultimate symbol of gentrification. Travel just down the road to Stratford and you will see high-rise apartment buildings popping up everywhere. These developments are not likely to help meet the shortage of affordable family housing in the borough, many are not designed with the local community in mind at all.

Capital Towers, a development by Galliard Homes, is a fully private luxury development with no social or affordable housing provision.

The development was mostly marketed to overseas investors.

In return, Newham took a cash payment to fund affordable housing elsewhere in the borough. In stark contrast and less than half a mile down the road is the Carpenters Estate; social housing cleared for demolition before the Olympics and still empty. It is currently being advertised as a film set.

The Film Office Carpenters Estate offers a mixture of mid-rise and highrise tower block apartments with great views of East London. There are a variety of stairwell options - both fully concrete stairwells or a mix of concrete and metal handrails.

There is also the option of filming in the void flats in the high-rise apartment block some of which have balconies giving you brilliant views.

“This is what happens when property in your city becomes a global reserve currency�

Forest Gate Project Affordability

The future

Forest Gate Project

Affordability

Over the course of the research for this project so many people talked about their love for the diverse and mixed community in Forest Gate.

Many see increasing gentrification as a threat to that mix.

There is evidence that socially diverse areas tend to be more popular, and more satisfying to live in, but current policies and trends in the housing market are making mixed communities harder to sustain.

Zoe Williams The real issue beneath every question is: do people have a intrinsic value, or is everyone’s value quantifiable by what they give and what they get? Even more fundamentally: is policy driven by people? Or is it driven by profit?

Without new housing to meet real local demand, property prices will continue to go up and our neighbourhoods will become places where only the very rich can afford to live. We need more of every type of home, but to remain a diverse and mixed community we need the right mix of homes.

Market homes for people to buy and rent, so people who can buy don’t find house prices running away from them.

Social rented homes so that people on low incomes can pay the rent without struggling.

Shared ownership and intermediate rent for the people who don’t need the full support of social rented housing but can’t afford a market home.

Moving forward How can we, as a community, have better conversations about these challenges? How do we move beyond the rhetoric of the gentrification debate to something more meaningful?

Despite how it sometimes feels, gentrification is neither natural nor inevitable. It does not occur outside of the choices made by individuals and groups. As Forest Gate continues to change how can we all play our part in making it inclusive for everyone?

We can start by taking an active role in local planning. When consultations happen for new developments, take the time to ask about the mix of homes and get your opinion on record. If we leave these decisions to other people, we exclude ourselves from important conversations about the ideas that shape the community we live in.

It's clear that everbody is affected by issues eventually - we too could find ourselves excluded from the area altogether one day.