Elephant and Castle regeneration outrage: 2,535 new homes and just 79 social rented units

Elephant and Castle regeneration outrage: 2,535 new homes and just 79 social rented units

Thanks to some startling incompetence, Southwark Council accidentally exposed the contents of its deal with global property giant Lend Lease for the £1.5bn regeneration of the Elephant & Castle.

The document reveals that the proposed deal will see just 79 social rented units being built out of a total of 2,535 new homes around the site of the old Heygate Estate.

Elephant and Castle regeneration outrage: 2,535 new homes and just 79 social rented units

The information came to light after Southwark Council uploaded a redacted PDF version of its confidential regeneration agreement as part of its compulsory purchase proceedings against remaining residents on the Heygate Estate.

A council cock-up meant that it was possible to copy and paste the heavily blacked-out text straight into any word processing software to reveal the entire contents.

The startling information it contained was emailed out to interested parties as a press release (see below), with the SouthwarkNotes blog posting up more detail behind the story.

Elephant and Castle regeneration outrage: 2,535 new homes and just 79 social rented units

The People’s Republic of Southwark website covered a recent very lively Planning Application meeting, and pointed out some of the disgraceful facts behind this ‘regeneration’:

1. Instead of 1,100 new social housing units included only 71. So no right of return for over 1,000 families.

2. Instead of social housing, 2,400 private luxury apartments to be built instead.

3. Instead of building human scale housing, the supposed brutal ugly Heygate which had at maximum 12 storey blocks, is to be replaced with a plethora of massive tower-blocks up to 30 storeys tall.

4. The council has a policy of requiring 20% renewables in new buildings. The developer proposed ZERO and it was granted.

Read the full report of the meeting here and discuss this on the urban75 forums.

UPDATE 23rd April 2013: Southwark Council’s shame as Heygate flats are flogged off to overseas buyers

Background: 

PRESS RELEASE 31.1.2013

Badly redacted document exposes confidential figures behind Southwark’s £1.5bn secretive regeneration scheme.

Southwark Council has accidentally exposed the contents of its deal with global property giant Lend Lease for the £1.5bn regeneration of the Elephant & Castle. A redacted PDF version of its confidential regeneration agreement was uploaded to the Council’s website as part of its compulsory purchase proceedings against remaining residents on the Heygate Estate which is a key site for the regeneration scheme:

http://www.southwark.gov.uk/download/8148/core_document_28-ra

However the document has left it possible to copy and paste the heavily blacked-out text straight into any word processing software to reveal the entire contents. This comes as a welcome surprise for local campaigners who have been heavily critical of the lack of transparency around any real details of the Council and Lend Lease’s regeneration deal.

The unintentional breach of the Regeneration Agreement’s strict confidentiality clauses comes after lengthy proceedings to censure an opposition councillor[1], who claimed the agreement was poor value for money after it was signed in July 2010[2].

Southwark’s cabinet member for regeneration, Cllr Fiona Colley response to these claims was that land value payments had been reduced in favour of a guarantee of 25% affordable housing, itself a breach of Southwark’s policy of a minimum 35% for developments in the Elephant & Castle Opportunity Area.[3]

However the recently approved Heygate plans propose just 79 social rented units out of a total 2,535 new homes.

The document reveals that having spent £44m[4] on emptying the Heygate Estate, Southwark Council is set to receive just £50m[5] in return for the 22 acre site. The agreement does give the Council a share of overage (profit left after the developer has taken a 20% priority slice), but a report from the District Valuer[6] shows a viability gap such that there is actually unlikely to be any overage.

Comparisons with other development sites at the Elephant show that the Council is receiving well below market value for its land: the neighbouring Tribeca Square 1.5 acre development site exchanged hands on the open market in 2011 for £40m. This is £10m below the council’s deal for the 22 acre Heygate site (see attached Land Registry info).

The phased nature of the scheme, together with the cheap price of the land makes it more likely that the developer will engage in ‘land banking’[7] as they had previously done on the Greenwich peninsula Millennium site[8].

Local campaigning groups have long been critical of what they see as the ‘social cleansing’ of the area and the failure of the regeneration to bring local benefits to the existing community. They say that the Council’s administration has sold the Elephant short in order to gain political advantage by honouring its manifesto pledge to deliver the regeneration after years of stalled negotiations.

[1] http://www.london-se1.co.uk/news/view/5869
[2] http://www.london-se1.co.uk/news/view/4712
[3] http://www.london-se1.co.uk/news/view/4879
[4] Paragraphs 5.34 – 5.35: http://www.southwark.gov.uk/download/8171/proofs_of_evidence__jon_abbot__final_proof
[5] See pages 6 & 10 of the Regeneration Agreement – (Heygate Headlease Premium £46m + Rodney Rd. Headlease Premium £4m)
[6] See Officer Report 12/AP/1092 paragraphs 150-153: http://planningonline.southwark.gov.uk/DocsOnline/Documents/271840_1.pdf
[7] Land banking is the practice of buying land with the intention of selling it when it becomes more profitable. Typically, land is divided into smaller plots and sold on to developers once it rises in value.
[8] http://www.nao.org.uk/publications/0708/greenwich_peninsula.aspx

Update 6th November 2013: Look to the Heygate Estate for what’s wrong with London’s housing

[SouthwarkNotes blog]

6 Comments on “Elephant and Castle regeneration outrage: 2,535 new homes and just 79 social rented units”

  1. Where in the document does it say that there will be only 71 social rented houses on the redevelopment? Having searched for this, all I can find is the commitment to 25% ‘affordable’ housing.

  2. Once you break down 25% ‘affordable’ housing through the different ‘affordable’ tenures on offer (social rent, affordable rent, shared ownership etc), the socially rented units across the site will be less than 80.

  3. Having attended the public inquiry today. The definition of affordable housing has been calculated on 25% of the total habitable rooms on the entire scheme. So when the 25% of rooms is considered as units (actual homes) it makes 71.
    71 homes out of the 2500+ being proposed. Hope that helps .

  4. Hey Patrick – ‘affordable housing’ is a treacherous term. It includes intermediate housing, social housing (target rent) and so called ‘affordable rent’ which is a new term introduced by the current government in 2011. ‘ Affordable rent’ is pegged to market rent, and can be as high as 80%. In expensive areas, it can be very expensive. In the E&C you would need an annual gross income of over 30,000 to ‘afford’ such rent. So the 25% of the document has to be tested against Lend Lease Housing Statement, as presented for the Outline Planning Application, which gives the complete breakdown, and explains where the 71 units comes from. It’s a bit of a long and convoluted process (not helped by the fact that it’s not calculated by homes but by inhabitable rooms, so the actual number of flats and houses can be misleading. The rest of the 500-odd ‘affordable’ housing are intermediate and ‘affordable rent’. Hope this helps?

  5. This is what happens when you vote Tory. I hope you’ve all learnt from your mistake.

    In addition, this place is a disgusting hole. You can’t redevelop crap with more crap.

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