Better Elephant has made a formal application to the Secretary of State under the new Community Right to Reclaim Land powers. The community-led regeneration group is requesting that the Heygate estate is released from its current contractual deadlock and put back into use.
The Secretary of State can order public authorities to dispose of empty property or land. The powers are part of wider developments under the new Localism Act, which aims to shift the balance of power away from the centre to local communities.
The Community Right to Reclaim Land allows anyone to request that a specific area of publicly-owned land is put up for sale on the open market.
This can be on grounds that there are no suitable development plans in place or likely to be put in place in an acceptable period of time.
The Better Elephant Group are arguing that the current development plans for the Heygate estate are not going to be implemented in an accetable period of time [completion not due until 2026].
The group claims that this is a ‘land banking’ exercise conducted by developers, which enables them to use the land as a long-term asset to shore-up their balance sheets. According to a recent IPPR report this is common practice among the big developers, and there are currently 170,000 homes in London with planning permission that are not under construction.
The Heygate’s neighbouring Oakmayne/Tribeca development is one such example where planning permission was granted for over 500 homes due to be completed by 2009. The site is still standing empty behind a wall of decaying wooden hoarding.
The ‘land banking’ practice also enables developers to drip-feed the market: it slowly releases its flats for sale - keeping prices high and avoiding flooding the market.
The effect on surrounding communities is devastating: 170 businesses are currently on the verge of bankruptcy according to business support network ‘Business Extra’ on Walworth rd. Such practices drive out retailers and lead to long term blight of an area.
The delay is also a waste of public funds in the loss of rent and council tax incurred by the council.
It also cuts into the council’s expected returns from the regeneration partnership: because the council’s return for its land interest is based entirely on overage (profit after the developer has sold the new homes and taken a priority share), delay to the housing development erodes the financial returns, since the present value of future income is lower when received later in time compared to income received earlier, because of the time value of money and the greater risks involved.
This was also the finding of a National Audit Office report, when an investigation was launched after questions were raised about the Lend Lease Greenwich Peninsula regeneration deal in 2008.
Better Elephant’s refurbishment plans will be facilitated by a Community Land Trust, which is not profit driven and will oversee the refurbishment of the buildings to ensure a more equitable revitalisation of the Elephant & Castle without waiting another 15 years.
We have also applied for a slice of the recently announced £300m Empty Homes Fund designed to ‘stop the rot’ and bring empty homes back into use.