Category Archives: Wealth

Looking for Planet B – The super-rich, the environment and social injustice

The unchecked lifestyle choices of the globe’s super-rich, and its affluent more broadly, are a curse on our planet. As COP27 produces yet more anger and fatalism, Oxfam has reported that each billionaire emits a million times more carbon than the average person. What prospect for a combined response and recognition that we are all in this together?

In 1958 Shirley Jackson wrote about the retreat of an affluent family into their palatial home. Preparing for the end of the world she describes how the world outside ‘was to be plundered ruthlessly for objects of beauty to go in and around the house; infinite were the delights to be prepared for its inhabitants.’ (P. 8  Jackson, S. (1958) The Sundial, London: Penguin). Post-war North American affluence pales into insignificance beside the excesses and gross consumption of today’s consumer societies and the habits of its wealthiest. In 2010 Oxfam reported that 388 people owned as much as half of the planetary population. By 2014 the figure was 85, by 2016 it was 62 and, in the latest revision, the organization found that a mere 8 people commanded wealth unparalleled since pre-Biblical times.

There is rising concern not only at the level of power and influence that such riches command, and how such power is used in the pursuit of further wealth, the erosion of support for the poor and massive over-consumption of fossil and other resources. Worse still, opulent lifestyles, privileged social networks and secluded homes feed a mechanism described by a US sociologist as the ‘toilet assumption’: our damaging human effects and the increasingly denuded world outside are rendered invisible. What prospect for reform and healing if the harms we do remain unseen?

The expansion of the world’s super rich and the concentration of global wealth has come at a bad time for the planet. The popular political formations, themselves forged of these conditions, are offer images of continued economic growth, public denial of harm and denigration of the conscious. Those with achieve a disproportionate take on resources and lead profligate lifestyles – multiple residences, private jets, extensive cohorts of staff, gourmet delights alongside endless rounds of newly accumulated clothes, precious metals and jewels. The world’s rich are not cannot be sustained. This is not simply because of what they themselves do and own but because of their lead and influence within a culture fixed upon fashionable rounds of consumption, disposability and the signaling of success through monetary worth and acquisition of status goods. The revelation that SUV drivers globally form the equivalent of a seventh nation in terms of pollution in their own right is likely to lead to a morally inflected discussion among communities and calls to shame those making personal choices with public and planetary consequences. The hyperactive flightpaths of celebrities, the rich and also academics have come under scrutiny. Yet the rich are not only a problem because many would like what they have. What many now understand to be needed to face-down multiple climate crises and injustices, in social and environmental terms, will not be achieved unless excess is more firmly regulated, or their lives become more firmly embedded in the communities that increasingly censure them.

Rising inequality, as many now agree, is bad for us all. One reason for this is that the wealthy are able to outbid and out-consume others on merely mortal incomes. London’s skyline is now puffed-up with more than 500 skyscrapers at some stage of construction. Many of these apartments are bought purely for investment and lie empty for much of the year. The most recent estimate is that half of homes in London’s ‘prime’ property areas are under-used according to their extremely low use of utilities. Reality television shows regularly highlight the excessive consumption of the bunkers and fortress homes of the super-rich, but in my own research I have seen homes with ten bedrooms, personal cinemas, underground pools and even car lifts to sunken parking. In many cases beds and indeed houses lie empty for much of the year, visits timed to coincide with key cultural events and arts openings. More remarkable still is the creative destruction that accompanies more extreme cases – the demolition of extensive and often prized residences. The next step is often construction of a much larger home, capable of supporting grander parties and with expanded wall space for prized modern art canvases and sculptures bought more for investment than aesthetic reasons. Everything, including kitchen sinks, are regularly thrown out and reinstalled to maintain a look that is of the times. These lifestyles and homes offer standards now gawped at by many – considered the glittering potential prize of social escape and total luxury. Yet the cost is clearly huge. The excessive consumption habits of the rich show that luxury is untenable at a time of profound necessity and our increasing realization of ecological limits.

Two millenia ago Cicero suggested that to have a library and a garden is to have everything we need. For the global super-rich such ecological groundedness and erudition is twisted into the massive extensions of multiple homes and extensive lawns patrolled by private security guards. The costs of hyper-consumption are plain to see – unending air miles in private or chartered jets, diamond encrusted baubles, edible gold leaf cocktails designed to coax money from the wealthy. Consider that even a 70 metre super-yacht consumes around 130 gallons of fuel an hour simply with the engine idling.

What damaging mindset is generated by societies that have allowed or encouraged the growing ranks of the wealthy? Such attitudes matter because they infect our public life and damage our grossly unequal societies. Think tanks and complicit politicians defend excessive wealth and the inequality that goes alongside it. But in ecological terms we know that affluence is costing us the earth and those with less are affected worst and first. For the rich the dream is of escape, from taxes, from social obligation and even from nations. The latest news on the rich is their purchase of estates in New Zealand as bolt-holes come environmental or political apocalypse and attempts by billionaires to create cities in the sea free of tax and social burdens.

Working toward a celebration of connection to environments, to society and meaning are values that require emphasis in our public culture. Yet the expansion of the ranks of the wealthy militate against this. Indeed the actions of many millions among the affluent middle classes are also part of this story. Attempts at bringing harmony, happiness and an ethic of sustainability become rather like comedian Sean Lock’s suggestion that personal environmental efforts often feel like bringing a dustpan to clean up a volcano. Strenuous efforts at valuing that which is finite around us is increasingly common. Yet we know that rising living standards and private incomes unleash countless forms of waste and over-consumption on a fragmenting and damaged world. In this sense our consciousness must be aware of the need to engage and challenge excess as moral issues that bind us together, despite the rhetoric of personal wins and choice. The one percent are not with us on these issues.

Woody Allen once said ‘I don’t want to achieve immortality through my work. I want to achieve it by not dying’. For the rich an anxiety about death is met, in too many cases, not with a sense of common humanity and contribution, but with attempts at building wealth, ego excess (foundations and gifts for named wings of museums in some cases) or a strong interest in living forever through technological advances. One of the very real problems that we face as a global society is that those with money and power have a tendency to choose to give very little of what they have, rather than changing or improving the mechanisms by which such unnecessary wealth is generated in the first place. We must all have less if the world around us is to survive. The message for the super-rich is that they need a lot less.

Necrotecture: The Political Economy of London’s Super-Elite High Rise Landscape

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This is a much longer version of a piece published in the Le Monde Diplomatique which can be accessed here.

More than 400 high-rise developments are now in progress or have received planning permission in London (New London Architecture, 2016). Almost none of the dwellings these towers yield will be affordable. Close to zero are what we might loosely term public housing, reserved for those on no or low incomes. In the stories now told of London’s massive inequalities (Cunningham and Savage, 2017) and housing problems (Minton, 2017) the towers in place and those to come signal the city’s social extremes and the inability of state or market to resolve social need. Despite the intention that these high quality pads are for the globe’s elite the feeling on seeing these new spaces is rather of a somewhat disposable environment that fits their need, in many cases, to rest money. The community in mono imagined by ‘starchitects’ and estate agents on billboards and in brochures are sales pitches to a floating class of the rich and investors. Whatever drugs the architects of the gold apartment block at Battersea power station were smoking it seems their inspiration was pound signs rather than the giant floating pig pictured on Pink Floyd’s Animals album cover. As in many other parts of London construction here is undertaken solely in the pursuit of money rather than people (Watt, 2016). Much of the development along the Thames appears to offer a parody of place and a mirage-idea of communal life. These are essentially dead spaces and dwellings, their lifelessness important in maintaining clean conditions to allow the realization of maximum exchange value, rather than being valued for use as places to reside. The question of who benefits from such development is an ongoing irritant to the city’s managers and politicians that will not go away.

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London’s position as a shining beacon for the globe’s super wealthy has not been good news for the wider population of the city. When the good times were rolling they were marked by an aggressive expansion of gentrification, private tenant evictions, the demolition of dozens of public estates, welfare reforms and household displacement. Some have suggested that these forms of investment and destruction are related (Atkinson, Parker and Burrows 2017) but, with the advent of Brexit deliberations, the potentially negative role of international investment has been glossed over by the city’s elite who have had to recognise their addiction to international capital. Despite this the rich themselves appear more as a sign of the slow death of the city than one of vitality as in many cities around the world who now appear to be suffering under the vertical weight of the wealthy (Graham, 2017).

Dead vertical

One possible ghost guide to the new follies and ruins generated by investors and developers might be Erich Fromm who, in his later life had become exercised by the focus in our culture on things rather people. Having rather being. There remains something powerful in his idea that our desire for lifeless things suggested we inhabit a kind of necrophiliac culture, a society fixed on the denial of death and the pursuit of shiny objects. Can we not read the pursuit of apartments and empty homes as the peak expression of such desires and drives by the wealthy (Sudjic, 2006), the towers themselves as a form of necrotecture? Can we think of London’s inflated skyscape as the result of an urban political economy harnessed to the death-drive of capital and the unchecked global accumulation strategies of the wealthy?

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In The Anatomy of Human Destructiveness (1973) Fromm had identified necrophilia as a form of attraction to anything dead, a mechanical form of interest that evaded notions of the social or human connectivity. This love of dead things appears to offer an apposite framing of the love of dead things expressed by the world’s super wealthy. Properties are snapped-up as signs of personal progress and status while remaining wholly or partially uninhabited. Marketing materials for many of the new developments offer images of empty chrome and velvet interiors looking-out over the city. Prospective buyers are able to project their presence as the city’s triumphant captains without seeing signs of community life or troublesome social difference. The psyche of affluence is thus able to insulate itself from any sense of connection or social reciprocity while inhabiting myths of personal success driven by ambition and hard work. This might not matter if dead things and spaces were not so corrosive to the social life of the city more broadly. Massive injections of international capital have fed the logic of building for the needs of the wealthy and international buyers (Ho and Atkinson, 2017). Such investment also damages the apparent legitimacy and vital role of public housing (Marcuse and Madden, 2016) as it has come to be framed as a form of lavish public expenditure while higher bidders wait in the wings. Here the wider sociality of the city is afflicted by a creeping necrosis as other parts of the urban body are starved of a vital supply of people and social circulation generated by absent owners and their investment vehicles – overseen by a political system that has misunderstood city standing to be indexed by the presence of wealth, rather than its creation and wider distribution (Engelen et al, 2016).

The lifeless interiors of the architecture that has emerged from a confluence of capital investment and status-seeking by the wealthy seems to speak of the real endpoint of urbanism (Minton, 2012) and any ability to enable citizens assurances of livelihood and home by urban political economy (Aalbers and Christophers, 2014). The housing crisis is produced by a system in which money rather than people is the primary index of success. Political and economic forces have combined to produce lifeless spaces that are dynamically linked to global chaos, low intensity warfare and globalized criminality elsewhere (Transparency International, 2017) and upon which London’s economy now depends and of which few questions are asked.

If you want to see these processes of accumulation and emptiness in the flesh it is instructive to wander past One Hyde Park or the many empty mansions lining The Bishops Avenue and others in North London. One of the reasons that so many people are exercised about the cost and lack of housing in the city is that in it they witness their own and other’s competition for these resources juxtaposed with a landscape of empty shells that should be homes. While many and sometimes most blocks are almost never occupied many households on local authority waiting lists are exported outside their borough or to the regions (Greenwood, 2017) and a third of a million households languish on waiting lists for public housing in London alone (DCLG, 2016). While taking a walk along the Thames near Nine Elms one can see many new towers, apparently suspended by an invisible line along the river’s corridor. Rather like dead mackerels these luxury high-rise developments shine but they also stink, the odour generated by corrupt planning agreements and a housing system out of sync with the needs of ordinary folk in the city (Scanlon et al, 2017).

 A city for money or its citizens?

The sense of outright winners and vulnerable losers raises big questions about who the city is for (Minton, 2017). If we could buy the argument that the wider economy and population somehow benefit from such investment the new skyscape might have some grain of defensibility. Yet such arguments appear threadbare. Those with economic and political power nevertheless identify an economy of property and finance as the magical machine driving living standards and reputation. London’s new mayor has moved in a slightly different direction, launching an enquiry into the number of homes bought by offshore investors and which appear to be more or less unoccupied (Wallace, Rhodes and Webber, 2017). Some sense of the scale of these problems can be identified with even the discreet presence of the rich leaving traces. One recent study examined utility records to locate homes with abnormally low electricity use which generated the estimate that around 21,000 homes are long-term empty (Transparency International, 2017). In fact around five percent of homes in Central and Western London lie in such empty conditions according the to the government’s statistics agency (Gask and Williams, 2015).

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Non-partisan groups have highlighted significant flows of criminal and anonymous purchasing of thousands of homes that appear to be decidedly non-trivial. The head of the National Crime Agency has suggested that criminal money has driven-up property prices and that hundreds of millions of pounds of property purchases are the subject of criminal investigation as suspected proceeds of corruption, yet these figures only represent a fraction of the total amount. Transparency International (2015) has already revealed that around 10% of properties in Kensington and Chelsea were owned through a “secrecy jurisdiction” and tied to around £122bn of offshore money. The question of who cares is left hanging, with many cases not pursued by resource-starved tax agencies.

One of the most glaring injustices is that while essential workers and even those on respectable incomes struggle to access decent housing the city is producing thousands of apartments for people who may never use them. If you countenance that this is the sign of a functioning housing market you might like to reset your market principles – who does it benefit that housing lies unused by its buyers? How broken is a planning system that leaves unchallenged the construction of blocks of hundreds of flats sold north of £600,000 for a studio but in which the idea of a handful of affordable homes is seen as a threat to its market viability? Mounting evidence shows that developers and planning consultants work hard to circumvent their duty to offer either affordable housing or cash contributions to the local authority (here it is worth consulting the work published at http://www.ourcity.london). Criticism of this system has been growing for some years now but the rising intensity of anger is palpable, even if effective resistance remains elusive.

Urban growth and decline

In 1951 the population of Greater London, its 32 constituent boroughs and the square mile of the City, was 8,164,416. Like many other British cities the mid-century census recorded what was, for another 60 years, its peak. It now seems difficult to remember that Britain’s inner cities were places of economic stagnation, social decline and out-migration. The term inner city was used to invoke a social imaginary marked by these features as much as any sense of real geographical place. By 1981 the nascent Thatcher government occupied a London whose population had fallen to 6,608,513. The most recent survey of the city’s population now shows an all-time high of 8,173,900. This apparent demographic health belies massive shifts in the structure of the city’s economy and new rounds of casualties in housing markets. Alongside changes in the city economy that saw it move to become a nodal point in the world financial global economy massive changes have reworked many neighbourhoods thought untouchable as gentrification opportunities decades before (Jackson and Benson, 2014).

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Today the city again faces an uncertain future. Economic pre-eminence in a global system of urban command centres appears to be giving way to anxieties about London’s future and this includes the possibility that financial institutions may start to move away. Trying to keep the goose that lays the golden eggs, even if they did little for the city’s working class, is even more emphatically the name of the game under the Brexit threat. Such worries appear only to add vigour to the grab for land and sky by capital with projections for the numbers of the super-rich in the city set to grow significantly in coming years (Knight Frank, 2017). Meanwhile those criticising construction aimed solely at international investors are cast as out of touch with the realities of seeking custom in a global market[1]. Yet even the trade in premium real estate sales appears fragile in the context of Brexit and the possibility that key financial institutions may be lured away to competitor cities as the crisis talks continue with sales in the top ‘prime’ markets showing dramatic reductions in volume. Despite this questions of social inequality and exclusion have been pushed to the side by a government scrambling to attract buyers and institutions to keep the national books balanced.

London’s patrician class appear to have recognised which side their bread is buttered on some time ago. What was once our establishment might now be better characterised as ushers to capital and the discrete vendors of prized assets and products (Shaxson, 2011). The international rich come for the city’s financial services, generate construction and jobs for decorators and nannies and are prepared to pay fees and taxes on property sales (or work hard to avoid them). Property professionals and financial wizards continue to offer portentous and authoritative assessments of how tariffs, taxes or regulatory moves would kill flows of capital investment. This may be true now but it wasn’t even just two years ago when selling £10m flats before they were built was possible. What is true now is that the systemic threats being revealed today will injure the city’s poor and working-classes much more deeply than it will the wealthy. If in the last decade we had hung on to the coat tails or Masseratti exhaust pipes of the super-rich our grip must tighten if we are to catch any crumbs that might be dropped our way in the future (Koh, Wissink and Forrest, 2016).

The City’s own strength is simultaneously the wider city’s Achilles heel. While the economic role of the City is well understood, its asymmetrical dominance in the structure of the urban economy presents risks (Christensen, Shaxson and Wigan, 2016). For the price of a cup of coffee any economic geographer will tell you that a key danger for any single-industry town is that it is more likely to die or be filleted as changing fortunes become apparent over time due to competition from rivals. Where in the past such change wrought devastation on the likes of Glasgow, Middlesbrough, Birmingham and the rest of a long list, it may yet be that London’s fate is to see many of its core services lost to the Dublins, Paris’ or Frankfurts of this world. Analysts are now pondering the question of how many individual bankers or institutions will leave after an exit from the EU. The likely answers appear to be thousands and, well who knows! Even if banks are not as mobile as the currencies and services they deal in an orderly or partial evacuation over years remains a real possibility.

When the good times rolled prior to the Brexit vote (please bear with me here if you were on a waiting list, crammed two to a room or saving for that elusive deposit to get on the housing ladder) we were told not to touch the market, maintain a low tax environment to enable overseas monies to flow and benefit the wider city. With the risks to the city’s economy from Brexit this logic asserts itself more emphatically, leaving a city with an apparently very large neon ‘for sale’ sign above it. Many of its most prized assets are now the property of foreign wealth funds or individuals (Harrods, The Shard, Harvey Nicholls). Much of the commercial property on the street on which the Sloane Ranger of the 1980s was born is now owned by the Qatari sovereign wealth fund. These changes are emblematic of concurrent shifts in class and taste and reflect a move from gentry and landed wealth (Webber and Burrows, 2016) to the arrival of an expanding cadre of those who have benefited immeasurably from globalization, the lucky control of state assets or associations with international criminal activity. Their brashness and raw money power is perhaps only matched by the vitriol cast on them by the last vestiges of wealthy long-term residents in the city’s inner West who appear not to realise that it is others in their class that put up the ‘for sale’ sign in the first place.

It’s the money stupid…

The most obvious answer to any question we might wish to ask about London’s problems today is money. Money is why our political interests turn a blind eye to offshore and criminal purchasing of real estate, no matter how shady the source. Money is the reason that public housing is being demolished in the name of ‘affordable’ housing. Money is why gentrification is a good thing and poor residents might be better placed elsewhere. Money lies at the heart of keeping taxes low and regulations slack. Money is the reason for the new dead spaces along much of the Thames and beyond. The city shaped by this dominating rationality is like a negative doughnut, wealth and high-rise housing in its core that falls away to suburbs increasingly marked by slow physical decay and an enlarged presence of the city’s poor. Our claim to world standing is to play host to the most ultra-high net-worth individuals of any city globally – 4,750 living within its boundaries and around 80 billionaires (Knight Frank, 2017). Such boasts appear poor slogans for a city that has become a sorting machine for opportunity and fortune – the rich in one door, the poor out of others, necessary casualties of a city dominated by a prime real estate and finance economy.

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London’s dead homes are the offspring of demands for the unfettering of markets and ambitious urban remaking. Yet we also need to recognise that for many others the city’s new architecture indicates that we are moving in the right direction. Here the notorious assessment of the new director of Zaha Hadid architects, Patrick Schumacher, was a frank disclosure of the values circulating among some practices – pave over Hyde Park, remove public housing, let the market really rip and dictate who gets to live here. Surely, he suggested, everyone knows we benefit from dinner parties in the homes of the rich? Misjudging the views of the wider audience of these comments (the new mayor, for one, slammed his ideas) such ideas remain dominant among those whose bread is buttered by capital. Meanwhile protecting municipal housing, alleviating real poverty in a rich city, wider regional inequalities or caring for the elderly and disabled are seen as unfortunate by-products of a system damaged by the legacy of a previous government. The prospects for challenging the overall direction of the city and its politics appear miserable (Atkinson et al 2017).

Conclusion

Twenty years ago, before Meet the Russians Channel 4’s show, Big Train, offered a skit in which the jewel of London’s hotel establishment was sold to a wealthy oligarch. There would be few changes, the new owner briefed staff, but a small request – to change the name from the Ritz to the Titz. Such possibilities have become thinkable. The culture-shock and clash of capital against everyday life are features of a city that is barely working for its working population. Gross excess is now a mainstay of many reality TV programs on the super-rich, their tastes and demands gawped at by millions where the unnecessary is the very mark of success. More, bigger, shinier, emptier.

The ranks of towers on the banks of the Thames are born of a deep-seated market subjectivity which, in turn, moulds the thinking of those seeking to capture the desires of the hypermobile wealthy. If we build them, they might come, if we don’t, we are screwed. We can speculate on what will happen to a city that knows the price of everything and the value of nothing. The good times of high rollers and flagship buildings did little for the mere mortals of the city, yet the future holds the prospect that anxiety and economic insecurity will mean that the rich are welcomed with even more firmly open arms.

Authors note: This piece is dedicated to those that died in the Grenfell Tower disaster, a 24-storey public housing tower block in the London borough of Kensington and Chelsea.

 

References

Aalbers, M.B. and Christophers, B. (2014) Centring Housing in Political Economy, Housing, Theory and Society, 31, 4, pp. 373-394.

Atkinson, R., Parker, S., and Burrows, R. (2017, forthcoming) Elite Formation, Power and Space in Contemporary London, Theory, Culture and Society.

Atkinson, R., Burrows, R., Glucksberg, L., Ho, H.K., Knowles, C. and Rhodes, D. (2017) Minimum City? The Deeper Impacts of the ‘Super-Rich’ on Urban Life, Chapter in Cities and the Super-Rich, London: Palgrave, pp. 253-271.

Christensen, J., Shaxson, N. and Wigan, D. (2016) The finance curse: Britain and the world economy, The British Journal of Politics and International Relations, 18, 1, pp. 255-269.

Cunningham, N. and Savage, M. (2017) An intensifying and elite city: New geographies of social class and inequality in contemporary London, City, pp. 1-22. Online first available at: http://dx.doi.org/10.1080/13604813.2016.1263490

DCLG (2016) Households on Local Authority Waiting Lists, Live Table 600, London: Department of Communities and Local Government.

Engelen, E., Fround, J., Johal, S., Salento, A. and Williams, K. (2016) How Cities Work: A Policy Agenda for the Grounded City, CRESC Work Paper 141, Manchester: CRESC. Available at: hummedia.manchester.ac.uk/institutes/cresc/workingpapers/wp141.pdf

Fromm, E. (1973) The Anatomy of Human Destruction, New York: Holt, Rinehart and Winston.

Gask, K. and Williams, S. (2015) Analysing Low Electricity Consumption Using DECC Data, London: Office for National Statistics.

Graham, S.  (2017) Vertical: The City from satellites to Bunkers, London: Verso.

Greenwood, G. (2017) Homeless Families Rehoused out of London ‘up five-fold’, BBC News: http://www.bbc.co.uk/news/uk-england-london-39386587 Accessed 16 June 2017.

Ho, H. K. and Atkinson, R. (2017) Looking for Big ‘Fry’: The Motives and Methods of Middle-Class International Property Investors, Urban Studies, pp. 1-17. Online first at: http://journals.sagepub.com/doi/full/10.1177/0042098017702826

Jackson, E. and Benson, M. (2014) Neither ‘Deepest, Darkest Peckham’nor ‘Run‐of‐the‐Mill’ East Dulwich: The Middle Classes and their ‘Others’ in an Inner‐London Neighbourhood, International Journal of Urban and Regional Research, 38, 4, pp. 1195-1210.

Koh, S.Y., Wissink, B. and Forrest, R. (2016) Reconsidering the super-rich: variations, structural conditions and urban consequences, Chapter in: Hay, I. and Beaverstock, J. (Eds.), Handbook on Wealth and the Super-Rich, London: Edward Elgar, pp.18-40.

Knight Frank (2017) The Wealth Report: The Global Perspective on Prime Property and Investment, London: Knight Frank.

Marcuse, P. and Madden, D. (2016) In Defense of Housing: The Politics of Crisis, London: Verso Books.

Minton, A. (2012) Ground Control: Fear and happiness in the twenty-first-century city, London: Penguin.

Minton, A. (2017) Big Capital: Who is London For? London: Penguin.

New London Architecture (2016) Tall Buildings Survey, London: New London Architecture.

Scanlon, K., Whitehead, C., and Blanc, F. with Moreno-Tabarez, U. (2017) The Role of Overseas Investors in the London New-Build Residential Market, London: LSE/Homes for London.

Shaxson, N. (2011) Treasure Islands: Tax Havens and the Men Who Stole the World, London: Bodley Head.

Sudjic, D. (2006) The Edifice Complex: How the Rich and Powerful, and Their Architects, Shape the World, London, Penguin.

Transparency International (2017) Faulty Towers: Understanding the Impact of Overseas Corruption on the London Property Market, London: Transparency International.

Wallace, A., Rhodes, D. and Webber, R. (2017) Overseas Investors in London’s New-Build Housing Market, York: Centre for Housing Policy, University of York.

Watt, P. (2016) A nomadic war machine in the metropolis: En/countering London’s 21st-century housing crisis with Focus E15. City, 20 (2), pp.297-320.

Webber, R. and Burrows, R., (2016) Life in an Alpha Territory: Discontinuity and conflict in an elite London ‘village’. Urban studies, 53 (15), pp. 3139-3154.

[1] Even the London mayor’s response to the reports commissioned by him to look into overseas investment recognised “international investment plays a vital role in providing developers with the certainty and finance they need to increase the supply of homes and infrastructure for Londoners” https://www.theguardian.com/society/2017/jun/13/foreign-investors-snapping-up-london-homes-suitable-for-first-time-buyers

The Plan? Wealth, Housing Need and Austerity

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I have never been quite sure where it is from but I have a copy of a cartoon in my office called ‘The Plan’. In six frames it shows the ebb and flow, back and forth, of affluent and poor-black households in US cities, first changing places in the inner city and then in the suburbs. Yet research on gentrification suggests otherwise – with tens and sometimes hundreds of thousands of urban households displaced via the attention of higher-income households and investors to areas in which poorer households congregated (these are major currents of the urban politics of cities like San Francisco with debate moving from a concern with yuppies to Silicon Valley employees and rocketing house prices, or London with its influx of super-rich and international investment capital in the new-buiold apartment market). The lack of investment in such neighbourhoods, by landlords and owners, meant that properties in these locations offered a bonus dividend – invest here and prices might align themselves with higher prices elsewhere. The search for ‘gentrifiable’ properties and ‘up-and-coming’ neighbourhoods has been a key strand in the story of property wealth in the US and UK over the past twenty years. To understand gentrification is to provide a window on the otherwise closed workings of the economy and the politics of homeownership that permeates our culture today, in short – who are the winning and losing groups in society today?

the plan cartoon

The image of the affluent upping sticks and landing wherever suits them best in my cartoon may seem an unproblematic story, indeed one that is emblematic of what we have become as a flexible, location-maximising constituency of worker-homeowners. But who is this ‘we’? Some years ago I attended a policymaker forum in Melbourne convened at the onset of the global financial crisis. Here Australian Federal bank officials rationalised the story of low interest rates, arguing that they had benefited the macro-economy and the needs of ‘us’ homeowners. Well, even in Australia homeownership (like the US and UK) remains at just over two-thirds of households so it is not the embracing form of ‘we’ that we might want to refer to (data analysis on our project on London’s supe-rich shows that owner occupation has declined from 56% of households to 50%, the big gains going to owner-investor landlords benefitting from a rise in private renting from 17 to 26%). In all of this the self-identified role of many politicians and public bankers has been legitimated through reference to keeping things rolling nicely for ‘us’. Indeed those who would like to join ‘us’, aspirational owners seeking to get on that ladder of wealth creation and relative personal security, are also critical to understanding a large part of the banking/housing crisis – asset values rose because the architectures of the state and private finance were fundamentally aligned to fulfil the desire of existing and prospective homeowners, even as this project generated the basis for the current catastrophe as low income owners and their debt poisoned the new products built upon them.

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‘Cherish Public Housing’ – Poster on HK train.

As David Harvey (1) has eloquently argued, the crisis was underpinned by the ‘fix’ needed by capitalism to expand after ‘local’ supplies of labour and opportunity diminished. As labour and commodities came to be supplied more cheaply by countries like China and India a further stage of expansion could only be effectively generated by allowing consumers, many of them not at all well-off, to become indebted over increasing timeframes and using new products in ‘sub-prime’ deals, offered to millions of low-income households in the US. With the house of cards that this situation created now very much collapsed the costs, we were told, should not be borne by these financial institutions and, under an increasingly transparent ideological project, continue to be tackled through cutting the cost of public services. Critically, one of the many manifest outcomes of these cuts will be the way that the state provision and particular geography of public and private rental housing in major cities like London. Three key issues can be identified that need to be understood to make sense of what now appears to be happening to public housing and, by extension, to poorer households in our cities:

  1. The sense that public housing is a tarnished state project that is so stigmatised in the public eye and its households so economically marginal that reducing its costs is deemed politically desirable (by making conditions so bad that others are not inclined to want to use such services) and fiscally commonsense;
  2. Public housing, in its ‘estate’ form, represents an opportunity to contain the mad, bad and sad in spaces that can be policed and monitored by a punitive welfare regime that sees benefit uptake as a kind of deviance (literally not that which ‘normal’ or included society does) – demolition and the thinning-out of such pockets is seen as desirable and will make way for new rounds of capital investment and opportunities for international capital and high income households, and;
  3. The concentration of economic losers and social stress in public housing generates risks to included society (such as through criminality and anti-social behaviour) that higher-income groups seek to avoid by using housing and schooling systems as a means of insulating themselves from the risk of contact with poorer households (the ‘dinner party test’ is useful in establishing such practises – good schools are identified not through academic merit so much as by the ‘kind’ of children that go there, academic performance can then be used as a proxy measure for the social composition of schools).

This social, political and economic context has helped soften-up public housing for the onslaught of the current political regime. Housing benefit in the private rental sector has been capped and rents in public housing have moved closer to (up to 80%) of market rents where possible. These plans bring us back to the low status of public housing assistance in the UK. However, these new interventions should not only be attacked because they will not work and will displace poorer households, rather they should also be understood as the products of ideas and values shaped by affluent interests and lifestyles. These values are generated by the sheltered personal biographies and daily spatial pathways of policymakers who have little experience of such conditions or the impact of their proposals. Indeed our political elite are active in a process of insulating themselves; both from the risks generated by the social exclusion derived from the cuts themselves, and from paying for the current predicament. The callousness of political priorities is generated by the social pathways and deeper class interests of the wider spectrum of political elites who, for them and the constituencies they represent, refuse to allow the prospect that recent decades of massive wealth generation should be clawed-back, taxed or otherwise captured to tackle the crisis and re-build municipal and civic facilities.

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A front page from The Observer (2) brings fifty years of research on gentrification and its impact on the urban poor to the forefront of debates about the changes that will result from government commitments to erode the security of public and private tenants. Many will be displaced from high-cost neighbourhoods and, as Saskia Sassen (3) has recently argued, provide golden opportunities for accumulation by a locked-out aspirational class of prospective homeowners who so want homes at affordable prices in places that will be seen as the investment and gentrification hotspots of the future. While some commentators were aggrieved at earlier government ‘plans’ to engender local social mix as a form of gentrification in fact this plan appears to be something much more emphatically ambitious – deploying a crisis of capitalism as an opportunity to displace the poorer and middle classes and benefit investors (in much the same way that Naomi Klein (4) has described as endemic feature of our economic system). What is even more remarkable about the socially constructed parameters of current debate is that many of us have ingested the logic of cuts and requirements of corporate capital and attacking each other as the illegitimate beneficiaries of bloated state expenditure. This discursive race to the bottom of social insecurities and labour-market flexibilities will simultaneously provision a spatial switch as low-paid workers and benefit recipients make way for higher income tenants (in public and private rental accommodation) and owners (taking advantage of sales of repossessed housing). Cities like London will be for the rich, its hinterlands for a subsistence poor desperate to take work on almost any conditions in lieu of the assurances of the state (the argument that the private sector will not be capable of substituting for public employment is logical, yet we can see how highly indebted and insecure households may yet make abundant, cheap and flexible labourers for it).

There is something almost awe-inspiring in the scale of subterfuge on offer. Unashamed by their inability to predict or counter the excesses and collapse of the system many economists continue to debate and determine the direction of cuts, rather than their need. Instead of building common assurances and securities through a state that is seen as the product of a leviathan built of ‘us’ there remains massive cultural investment in a discourse of self-interest and wealth accumulation as the vehicle to personal welfare and insecurity from economic risks. This bind between property wealth and politics perhaps helps to explain the more muted response to cuts so far in the UK when compared with other countries, yet it is unlikely that so extensive a roadmap will not radicalise a much broader range of social groups and interests.

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Those spaces likely to be more resilient to a possible second economic downturn are inhabited by the lifeblood of political authority and planning today. For these groups their daily spatial circuits and friendships rarely cross with those who will see the social catastrophe and toxicity that will be sewn into many such localities for years to come (often on already lengthy histories of economic marginality and community decline). Political life has, whether it is of the left or right, largely failed to prevent the excesses of corporate-political agendas seeking the bottoming-out of wages and social benefits – for many people it is not at all clear how to respond or articulate an effective response that might challenge such alienating projects. It has also palpably failed to reduce inequalities in ways that might bring fairness and safety from the harms generated by economic secondaryness. The horrorshow of child neglect, para-criminal ambition as substitutes for legitimate careers, anti-social behaviour, incivility and the death of personal fulfilment via secure modes of work and community life will be the inter-generational gift of the ongoing plans of our political establishment.

This is an extended and updated version of a piece that first appeared as ‘Cities for the Rich’ in Le Monde Diplomatique.

Sources

  1. Harvey, D. (2010) The Enigma of Capital and the Crises of Capitalism, Profile Books.
  2. http://www.guardian.co.uk/politics/2010/oct/24/exodus-poor-families-from-london
  3. Sassen, S. (2010) A Savage Sorting of Winners and Losers: Contemporary Versions of Primitive Accumulation, Globalizations, 7, ½, pp. 23-50.
  4. Klein, N. (2008) The Shock Doctrine: The Rise of Disaster Capitalism, London: Penguin.

The barbarian manifestos

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All of the major political parties operate with barbarian manifestos, all appear to represent (either through ideological fervour or the game of second-guessing what ‘we’, the electorate, apparently want) the needs of capital, private interests via the selling-off of public assets (the NHS, public spaces, security, hospitals, schools, the post office). This politically mediated theft has been pursued in lieu of a more progressive agenda that might begin to target the staggering wealth of the very few globally and nationally, and the protection of that wealth by seeking cuts to publicly funded projects and programmes instead of personal or corporate wealth. All of this arguably makes this it an easy time to be a housing or urban policy analyst since there isn’t much going on except for persistent thinking about what to do with very little or no money.

The great triumph of Big Society thinking is that deep down there are indeed many people who believe communities, rather than these kinds of government, can do a better job. So there is a real need for urban, housing and social studies to be premised more firmly on equitable forms of taxation and resourcing, instead of austerity. Despite the massive popularity of thinkers like David Harvey and Thomas Piketty we appear to have not produced either a key thought leader or mainstream set of principles capable of advancing such goals. Attempting to face-down the prospect of being portrayed as radical for stepping outside the narrow boundaries of political thinking set by government and conventional news media is a hard prospect indeed. We need to adopt an unblinking fearlessness to such views however; based on the raft of data and analysis globally that points to the condensation of wealth, the social disaster of austerity and the pursuit of short-term gains by various elites. The very moderate arguments for municipal, public and shared forms of provision and infrastructure also need to be part of such arguments. If we want to discuss problems like housing provision, health and our welfare we will need to start with prescriptions that do not start by tinkering with less resource, contracting-out or other substitutes – we need to state up-front that there is a cost and, indeed, that we as a community can bare such costs given our combined wealth. Unfortunately this position has been eschewed by many on the political left, while the media has ignored or viewed as risible those asking for tax justice. In this sense those who work to such principles are seen to be asking for the world, or as fantasists not facing-down the reality of budget deficits – even while we know that even a handful of billionaires could wipe-out poverty world-wide. Positions of corporate and individual wealth, so carefully and constructively attacked by Piketty’s detailed empirical analysis, need to be challenged or they are increasingly likely to be shamed to action by a more vocal public no longer willing to tolerate their disproportionate take, all the while aided by a subconsciously compliant political class. I doubt it is only me that feels these points are so glaringly obvious, just as they appear to be so clearly off the map of current political leadership and action.