Thursday, 27 November 2014

Playing the end game

In two years’ time London will host the greatest sporting event on earth. Nick Duxbury investigates whether the housing legacy the Olympic Games will leave behind is on track or yet to get out of the starting blocks

Olympics logo

Much of what you have read about the 2012 Olympic and Paralympic Games to date has probably included more than a couple of puns - perhaps ‘a race against the clock’, ‘over-coming hurdles’ or ‘crossing the finish line’. If you haven’t noticed these sporting quips before, then you certainly will soon. Next week marks the two year countdown to the moment 4 billion people around the world will be watching London as the Olympic torch is ignited to mark the beginning of the 2012 games.

Since London beat Paris in its 2005 bid to host the event, organisers’ chief concern has been meeting the deadline for transforming the 500-acre site in Stratford, east London, into a series of world class Olympic venues. No mean feat - especially given the global recession.

After the event

What will happen when the games have been and gone, however, is still unclear. Chair of the bid Lord Sebastian Coe and his team based their pitch for the Olympics on the promise of the lasting regeneration legacy the event would leave east London. But half a decade later, the five London boroughs surrounding the Olympic park - Newham, Hackney, Tower Hamlets, Waltham Forrest and Greenwich - still don’t know how exactly they will benefit.

‘Everyone is focused on the games, but the five boroughs have been very focused on the legacy,’ says Sir Robin Wales, mayor of Newham.
‘That is all we want to talk about - that’s what we are there for. We are interested in what the Olympics will do for our people.’

Looking out from the 22nd floor of Newham Council’s Olympic viewing tower - a glass balcony built on the roof of its Holden Point sheltered housing scheme in Stratford - the progress made on the Olympic site is staggering.

Just four years ago, the park resembled little more than a sprawling gravel pit. Today, the white roof of the 80,000-seat athletics stadium already appears long-established against the horizon, crowning both the giant Westfield shopping centre and the Olympic aquatics centre. The high-speed train line from Stratford International carves out the divide between these and the athletes’ village, where 11 blocks containing 2,818 homes are being clad against the curving backdrop of the velodrome.

Hidden costs

This remarkable achievement is a distraction, however, from an apparent lack of progress made on the games’ long-term legacy. On this front it seems London is yet to ‘leave the starting blocks’. Five years after the bid was won, there is still no coherent masterplan detailing what this park legacy will be, and there is also no money secured to pay for it.

The London Development Agency produced an initial masterplan in February 2009 which proposed 10,000 homes on the Olympic Park, but this has been returned to the drawing board by the Olympic Park Legacy Company, set up a year ago to oversee delivery of the legacy over the next 25 years. Without a masterplan framework, the development costs for the park legacy are unknown. As a result, the government has not committed any funding, and nor have any private sector development partners. Furthermore, local authorities, housing associations, and other owners of land surrounding the Olympic Park have been in limbo, unable to join-up their local plans to those of the OPLC.

Despite all this, the first signs that the legacy is starting to progress are appearing. Two weeks ago, following four months of uncertainty, the OPLC secured its financial future. A make or break £438 million deal brokered by Mayor of London Boris Johnson with the previous government to transfer the land on the Olympic Park from the LDA to the OPLC was finally signed off by the Treasury. Crucially, the OPLC did not take on the
£600 million debt which previously accompanied the land. The deal and has left the OPLC able to move forward with its legacy plans. And it looks like it is doing just that.

The masterplan

Next month the OPLC is expected to reveal its long-awaited vision in a legacy masterplan framework. The plans have been kept closely under raps and no developers or local authority bosses have seen them. As one housing association chief executive put it, ‘we are completely in the dark’. However, Inside Housing understands that this framework will see the provision of homes drop significantly from the LDA’s allotted 10,000. This is chiefly because of a planned increase in the number of larger homes and low-rise buildings in order to improve the social mix - a process which is already taking place in the athletes’ village.

OPLC chair Baroness Margaret Ford has repeatedly expressed her intention to make the bulk of legacy homes attractive to families. This aim is backed by Newham Council, which is determined to introduce a sense of aspiration to the borough - the sixth most deprived region in England - without excluding local people.

‘We want housing - we don’t just want flats,’ explains Sir Robin. ‘You have to mix your communities. I want communities with social housing, intermediate housing, private housing - the full package - and I want to create job opportunities for these communities.’

To create jobs for these communities, the OPLC’s framework will include plans for new offices and shops as well as housing on the remaining 99 acres of undeveloped plots on the park. The majority of land in the park falls in Newham, but Clive Dutton, executive director of regeneration, planning and property at Newham Council, says that it has yet to be consulted about the legacy framework. Despite this, he’s pushing ahead with the borough’s ‘core strategy’, due to be published in September, which transcends the boundaries of the Olympic Park. His regeneration proposals cover an area ‘the length of Manhattan Island’, stretching from Stratford down to Canningtown towards the Royal Docks. Hopefully, he says, the OPLC’s plans will create a wave of momentum for wider regeneration.

To have real clout, the proposals for the Olympic site need political backup - and this could come in the form of the London mayor. Last month Mr Johnson announced his intention to turn the OPLC into a Mayoral Development Corporation. This would mean the legacy company would report directly to him and, he argues, enable him to cut red tape and drive forward regeneration in east London. It is understood these powers are likely to be included in the coalition government’s Decentralisation and Localism Bill which goes before parliament next year.

Reactions to this proposal seem mostly positive. Geoff Pearce, executive director at athletes’ village developer Triathlon, for instance, says: ‘if the development corporation is given planning powers it will have real teeth - which would be a good thing.’

The mayor has yet to confirm whether he will stand for reelection but given the long-term nature of these plans, Mr Johnson’s drive alone will not be enough to safeguard the legacy. One man who could pick up from him after the 2012 mayoral election is former London mayor Ken Livingston. He is making a bid to return to office after being ousted by Mr Johnson in 2008. The Labourite is typically critical of his Conservative successor’s handling of the legacy plans to date. But equally, he reveals that delivering the housing element of the legacy will be one of his big sells to Londoners in his re-election campaign.

‘This [the legacy] is going to be the central issue of my mayoral campaign,’ he says. ‘It is going to be about infrastructure - both transport infrastructure and housing construction. Certainly I will be arguing very hard that we are heading towards a real crisis here in London. The government has to accept that the last 30 years of Thatcher, Blair and Brown not having provided housing for rent has been a disaster. The private sector can’t do it without a degree of public subsidy.’

Getting cash from the government could prove the biggest problem facing the legacy plans given the context of spending cuts. While it has no debt, and now owns much of the park, the OPLC also has no money to invest in development. Furthermore, it has not yet entered discussions with its shareholders, ministers and the mayor’s office, about how much cash it will take to make its framework a reality.

However, Inside Housing understands that the first stage of the OPLC’s plans will cost around £400 million. Where this could come from is unclear. The Communities and Local Government department will struggle to scrape together funds via the Homes and Communities Agency, which has already stumped up £120 million for the athlete’s village and is now implementing £450 million cuts.

Private investment

While public sector cash is going to be a problem, there are the first signs that the Olympic Park is at last attracting private investment. Last week, LandProp, a development company owned by Inter Ikea, the wealthy investment arm of the Swedish furniture giant, bought a key 13-acre site on the edge of the park from receivers for an undisclosed sum. The developer plans to build a mixed use scheme with 1,500 homes on the Sugar House Lane site in Bromley-by-Bow. As reported by Inside Housing (9 July) housing associations Southern Housing and East Thames Group, which have plans to develop homes on land neighbouring the site, will be carrying out the masterplanning.

The two associations have also contacted the ODA about buying the remaining plots of land around the athletes’ village, which the development agency bought from London Continental Railways last month for an undisclosed sum.

High expectations

Ultimately, though - according to a senior government official close to the OPLC - the legacy will rely heavily on public sector investment. The problem with this he says is that the legacy was sold to the taxpayer as part and parcel of the Olympic package at the bid stage. He warns that the public will be disappointed when it realises that the Olympic bill does not cover the cash needed for the long-term legacy. This, he claims, was a result of the credit crunch, and a ‘naïve’ expectation that the games infrastructure, including the sporting venues, would produce income after the games.

But the same source also defends the work of the OPLC to date. Indeed, Andrew Altman, chief executive of the OPLC, argues that by setting up the legacy company and publishing plans two years ahead of the games, the government is well ahead of efforts made by past hosts including Beijing, Athens and Atlanta. ‘We are able to plan early for the best use of the stadia, the parks and facilities,’ he says. ‘One of the great achievements has been the historic assembly of land to create the Olympic Park which we [Londoners] will inherit.’

Of course, the real test is what the people who will inherit the legacy think. At the top of the Olympic viewing tower, our guide, Jean Jeffrey, a Newham Council commercial officer who has lived in the borough for 44 years, is convinced that the benefits are worth waiting for. ‘If you have a few bob, then buy property around here,’ she offers by way of jovial advice. ‘I have told my kids not to sell the house after I die. House prices are cheap now, but they won’t be for long.’

For many local people, though, this is a likely cause for fear. Unaffordable homes were the legacy of the last development on this scale in the east end - Canary Wharf. But Ms Jeffrey rejects the idea that the Olympic Park could become another ‘island of prosperity’. She points south to the gleaming high rise office towers of the dockland financial district - ‘no one wants that to happen here,’ she says.

As we take in the distant view of office blocks, trendy apartments, bars and restaurants, no pithy athletics puns come to mind.

The athletes’ village

The athletes’ village is the first evidence to date of the Olympic housing legacy. As a result, it is being used as a test-bed for a social experiment being carried out by the developer, Triathlon, which is a special purpose vehicle owned by First Base, East Thames Group and Southern Housing Group, alongside Newham and the Homes and Communities Agency. Triathlon, which has purchased 1,379 of the homes is considering introducing a local lettings plan for the 679 of social homes.

Working with Newham and the HCA, this would select a proportion of tenants to improve the social mix of the area rather than taking people from the top of the housing lists in order to improve the community mix and increase a sense of aspiration.

‘We have been thinking about how we can make the lettings process more sustainable so we can avoid some of the problems you get by taking people from the top of the housing lists,’ explains Geoff Pearce, group director of development and asset management at East Thames and executive director at Triathlon.

‘We are trying to find a way that will give us a balanced community from the outset. We are looking at employment and how we could help people and ensure people are on the pathway to employment, reducing dependency on benefit. Also, age range: we wouldn’t want a high proportion of families with children of a similar age as they would fill the school up disproportionately.

We are keen that there is scope for families to grow.’

Mr Pearce stresses that details have not yet been confirmed, and that there are legal hurdles, but says that Triathlon is working closely with Westfield to ensure that residents get access to job opportunities created by the giant shopping centre.

Readers' comments (1)

  • The same why they said local jobs for local people!! What a load of nonsense. I doubt whether you can made any inroads into the housing waiting lists by offering 600 one bed box flats! For families??? Overcrowding is a major issue in these boroughs. These flats will be suitable only for single people.

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