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Behind the Sky Pool

Images of Nine Elms' sky pool provoked controversy last week, but behind the glass lies a story of Britain's political elite conspiring with super-rich developers – and the communities that suffer as a result.

Images of the sky pool in Nine Elms during that hot bank holiday sparked fascination and fury alike. For me, as one of the local councillors for the area, it offers an opportunity to discuss the huge transformation taking place along this part of the river, and the role Wandsworth Tory Council and the then mayor, Boris Johnson, played in shaping it.

There are two questions that have been somewhat intertwined during the subsequent debates sparked by the images. The first is about access. The sky pool is unsurprisingly a private amenity, accessible only to the residents of the buildings it is perched between. However, not everyone who lives in those building can use it.

The development is divided between market properties and shared ownership – an affordable (in the statutory sense) housing product for those looking to become homeowners by part-buying a quarter of the property and stair-casing upwards through combined mortgage and rent payments. Because it is an affordable product, their service charge, for maintenance, facilities, and so on must be kept at a rate that guarantees their outgoing costs remain affordable. This means they don’t get access to things like gyms, conference rooms, or indeed the sky pool.

Throughout Nine Elms this issue of access has raised a complex set of problems. Some residents have campaigned for opt-in payment services, but Housing Associations (the landlord for the affordable housing) and developers have argued that the legal implications on the leases people have signed (both market and affordable) makes this impossible as they would have to change everybody’s leases to avoid being challenged.

On the other hand, some residents will raise with me the opposite problem: they are charged increasingly high service charges for things they say they don’t have access to, and they can’t get any transparency on what money is going where from the developer. I have a live case at the moment of a developer legally threatening shared-ownership residents to force a change in their lease so they can be charged for facilities costs they have been secretly paying for all along without knowing. Many residents definitely don’t want access, as they think service charges are high enough already.

There is also a third problem for people who have now bought their property outright through shared ownership, and want to sell and move. If someone from the market flats is selling at the same time, there will likely be two identical flats – one from existing market stock with access to facilities and one ex-shared ownership and now market but without access to the facilities. Someone buying into a scheme at market rate may not want a shared-ownership style access.

The physical division between buildings and entrances has also for a while caused anger across schemes in London: this is the problem of ‘poor doors’. Housing Associations (put in charge by a developer to run the blocks that house ‘affordable units’ like shared ownership, intermediate rent, and social rent) also argue that the separateness or segregation of developments between the different types of tenure is a way to keep the affordable housing service charges down. For instance, having two separate blocks makes working out who is paying for what in regards to maintenance and upkeep much easier.

Of course the social implications for this are clearly damaging, and I regularly hear from many residents that they feel it divides the community and creates a permeating feeling of inequality. And some schemes are less subtle than others. People are often shocked when I tell them the affordable housing being provided by the Battersea Power Station development (currently only 9%) is not actually on the site, but a kilometre away squeezed between an existing estate and the railway tracks on an old industrial site and former kids’ playground. That leads us to the second bigger question: how did Nine Elms end up like this?

Private Interests, Not Public Good

The starting point is the Battersea Power Station, which for years stood empty, slowly falling apart. A symbol of Battersea’s working-class roots, and a beloved icon of South London, it had changed hands a number of times (nearly becoming a theme park in the ’80s), but the work required to maintain and revive it always proved too much for developers to handle.

In 2006, Irish property development company Treasury Holdings bought it for £448 million. Under an existing planning application passed by the Council, the site was to host an exhibition centre, theatre, hotels, and housing. However, by the time Treasury Holdings brought their own planning application to the Council in 2010, the 2008 financial crisis and subsequent credit crunch had seen the value of the building and land drop to around £67 million, well under the £448 million they had paid.

Wandsworth Council had significant political capital involved in making sure the Battersea Power Station regeneration was a success. David Cameron launched his 2010 leadership campaign outside it, and the then council leader Edward Lister had promised to revive the site. An FOI by journalist George Turner shows that in order to try and keep Treasury Holdings afloat, Wandsworth Conservative Council ignored their own viability assessment document, an independent evaluation used by councils to negotiate affordable housing and infrastructure taxes off developers.

Rather than insisting on 50% affordable housing, as was GLA policy, the Council cut a deal to try and keep Treasury Holding afloat. Instead of assessing the viability of the scheme through the current land value, they used the previous pre-crash land value, which was nearly five times higher. This meant Treasury Holdings could argue that for the scheme to be viable (e.g. they made their ring fenced statutory profit of 20%) they would only have to build 15% affordable housing. The council signed it off.

Treasury Holdings went bankrupt anyway in 2012. The collapse of the Irish property bubble and the recession had seen it spiral into debt and it was taken over by the banks and Irish government who sold the Battersea Power Station to a Malaysian consortium, the current developers of the site. The original planning application that had been designed to keep them afloat remained tied to the site, and with it, the distorted land value.

As Turner puts it, ‘had the Tory councillors on Wandsworth Council, or the then Conservative Mayor (Boris Johnson), refused to bail out Treasury Holdings… the land could have been sold to a developer at a lower price, allowing them to come forward with a scheme that delivered more affordable homes. … Ordinary Londoners seeking a home… have paid the price for Treasury Holdings’s gamble on the London property market.’ In 2017 Wandsworth Council let the Power Station developers further reduce their required affordable housing percentage from 15% to 9%, stating viability challenges with the site. The developer is projected to make £1.8 billion.

A City-Wide Problem

That’s just one site. From 2009 onwards, the new Johnson administration in City Hall in partnership with the Wandsworth Conservatives had began further plans for the industrial brownfield land that curved through Nine Elms to Vauxhall and was up for grabs (later known as the Vauxhall, Nine Elms, Battersea Opportunity Area, or VNEB for short). Both the Power Station investors and those being enticed by the VNEB had a primary concern around transport, as the closest Tube Station was Vauxhall, a fifteen minute walk away. In order to fund a new tube line, developers would be allowed to renege on the normal affordable housing conditions with the money instead going the tube.

On top of this, the entire ‘opportunity area’ in Tory Wandsworth was given a special planning rule allowance that meant the usually required 33-44% affordable housing was reduced to 15% in a bid to attract developers. This means even after the money for the tube has been raised, developers were essentially buying into a regeneration curated to minimise their affordable housing contributions.

In effect, just as Wandsworth Council had decided keeping Treasury Holdings afloat was more important than affordable housing, they also decided that the tube line was more important than affordable housing. Wandsworth taxpayers essentially subsidised it to the tune of £226 million, for an asset that, unlike council housing they, have no direct public ownership over, and which will not generate revenue for the council. Of course, the tragedy is that this was happening precisely at the time George Osborne was planning to cut his way out of the recession and the politics of austerity.

A public works infrastructure scheme when interest rates were at almost 0% was the ideal kind of Keynesian stimulus that would have helped us build out of the recession, while providing 1000s of new social homes. Instead, a historic opportunity to use a huge chunk of precious central London brownfield land for the public good will instead produce record historic low numbers of affordable housing. And of course, to top it all off, David Cameron changed the meaning of affordable in 2012 from 50% market rate to 80% market rate – so the number of genuinely affordable homes in Nine Elms is well below the pitiful 15% required by planning.

Class Cosiness

In 2011 the leader of Wandsworth Council, Edward Lister, stepped down and went to work for Boris Johnson in City Hall as Chief of Staff and Deputy Mayor for Policy and Planning. His would be an administration that systematically gave property developers priority in getting their schemes through planning, regardless of how measly their affordable housing offers were. This included actively intervening when boroughs objected to try and get better social housing negotiated. Following the Wandsworth model, the priority was giving developers quick sign-off to build as many properties as possible, regardless of whether these were actually the homes people who needed them could afford to live in. By his final year, only 13% of homes signed off by his office were affordable.

The affordable homes definition change also saw a shift to prioritising intermediate rent and shared ownership. Boris Johnson built less social homes than any previous Mayor. When you factor in the programmes set up by a Labour government and the previous Labour Mayor, 2016/17 was the only year when almost all housing delivery came through Johnson’s own programmes, and during that period the number of social rent homes started in the whole of London was three.

After City Hall, Edward Lister went on to become Chairman of Homes England, a public body tasked with funding affordable homes. During his time there it was discovered he had accepted donations totalling nearly half a million pounds from a Malaysian property development firm, which he had failed to declare.

In May this year, the Times revealed that he had also negotiated a huge £187 million taxpayer loan to the property company Delancy, the largest amount of money ever awarded by Homes England, while failing to declare he was being paid by Delancy at the time as an adviser. In 2014, while in City Hall, Lister had signed off the sale of the Olympic Village to Delancy, for £275 million less than it had cost the taxpayer to build.

In 2019 Edward Lister joined Boris Johnson in Number 10 as his chief strategic adviser. The Conservative Party continues to receive millions in donations from developers; in 2020 alone they gave £11 million (that we know of). A number of the developers that have donated had specific planning applications granted by Johnson during his tenure as Mayor, some with no affordable housing at all. Just like Nine Elms, the housing crisis is not an accident – it’s the product of a political elite working at the behest of private interests, and London and the country are poorer for it.