Architectural strategies for improving conditions at the bottom of London's housing market

FLASH CITY PADS AND

STRUGGLING SINGLE MUMS

Architectural strategies for improving conditions at the bottom of London’s housing market

BEN STREET W1284164 HISTORY+THEORY SHUMI BOSE

FLASH CITY PADS AND STRUGGLING SINGLE MUMS

London has seen many attempts to help people with low housing budgets. Most of these strategies have used financial methods such as redistributive taxation, charitable donations or endowments to subsidise the construction of buildings which are architecturally undifferentiated from conventional market housing, or are affordable only by nature of their funding rather than due to their design. This essay compares three contemporary methods architects are using to leverage design itself to improve the conditions of London’s poor.

By far the most common strategy architects have adopted has been some combination of modular design, mass production, the use of cheaper than average materials and smaller than average unit volumes.

This essay examines the Y:CUBE project by Roger’s Stirk Harbour and Partners which uses all of these approaches to produce one of the cheapest manufactured homes available today.

Broadly these techniques have had an impact in the middle of the market, but have been unsuccessful in assisting those at the very bottom. This is because land price is a more significant cost factor in housing than construction labour or materials, which has in turn lead to a generation of designs for mobile structures which can take advantage of land primarily intended for another use. An example of this is the PLACE/Ladywell housing scheme, also by Roger Stirk Harbour and Partners which is designed as a portable ‘meanwhile’ user of future development sites. This is considered in comparison to house boats, campervans and other vehicles which co-opt urban circulation infrastructure to provide accommodation even more cheaply.

Unsurprisingly neither of these methods have created significant results as neither yet achieve living standards either equivalent to, or as cheaply as, renting units in old inherited housing stock, which at any one time constitutes more than 99% of London’s residential accommodation.

At this point the essay considers the nature of ‘filtration’ (the process by which houses become more affordable over time) in London, it’s ability to provide mass affordable housing, and the design considerations that can best take advantage of this effect.

Where possible case study examples are taken from RSH+P’s body of work as studying the work of a single practice helps ensure differences between examples are due to the variable being studied, rather than simple differences between practice design styles.

Construction Quality vs Cost: Any ‘magic’ creation of a way to make high quality at low cost is copied at all cost levels, moving the entire line up and returning that project to it’s old relative position.

Part 1: Volumetric Prefabricated units Y:CUBE is a modular prefabricated unit which can be stacked to provide deck access, one bedroom flats as independent housing to be let at below market rates on behalf of the YMCA. A 36 unit prototype block was completed in Mitcham in South West London in 2015. The rectangular units are composed of an open living space with an adjoining ensuite bedroom, built as single, road transportable, timber frame boxes, clad inside and out with processed timber panels and are delivered ready to be craned into place and plugged into services. They have large windows and are highly insulated to minimise lifetime energy costs, and are produced for only £30,000 each (£1154/m²) for the unit, and another £14,400 each for their share of groundworks and common parts (total £1709/m² of internal area). As a comparison conventional residential mobile homes cost around £1400/m² new but cannot be stacked to share land costs.

The units are expected to last sixty years and will be rented out at £600/ month or a fixed percentage of local market rents. The quality of this housing is questionable, while it provides a large amount of space per resident, the economy of the fixtures and finishes is evident and despite excellent energy saving measures the design life is less than a tenth of a masonry building of equivalent per square metre construction cost. The rent is low, but not remarkably so for accommodation in the area, the difference being that the local market has few entirely independent housing options available, being mainly composed of shared houses at this price point.

Advantages of this method have been the ability to offer more individual privacy and self sufficiency than is found in the local stock and the visual distinctiveness of the development contributes towards the operating charity’s visibility. Short construction periods were another incidental side benefit. However this is not a mass market solution as its capital cost savings are completely undone by the short life expectancy of the structure, which brings the cost per month of housing utility far above those of any equivalent alternative. [1] A more successful use of this technology is Berkeley homes’ Urban House model. A prototype middle class three or four bedroom family home. Organized as a three story brick clad, terraced house of modern appearance. These units are manufactured offsite in modular sections, as at Y:CUBE but through the use of solid, permanent materials will have a useful life closer to five hundred years, with reasonable maintenance. A 22 unit block is to be assembled in London, at Kidbrooke Village in Greenwich and other developments are already complete elsewhere in the country. Construction costs have not been released, but their sale prices (which also include both the costs of land and Berkeley’s profit margin) work out at £4,263/m². Significantly more upfront than Y:CUBE cost, but even without factoring out the extra charges that figure includes, that Urban House will eventually produce far lower costs per month of useable accommodation.

Furthermore Y:CUBE has also only achieved a low rental rate by choosing a site so far out of from the centre of London that land costs drop low enough to make such low density, new build construction viable. Land prices are the limiting factor for this strategy, as once the plot itself becomes unaffordably expensive, even a completely free building won’t be cheap enough for minimum wage people to afford, especially one that makes the false economy of skimping on durability.

[1] The Y:CUBE development consultant at YMCA London south west has been approached for comment on this matter, his reply will be included in later versions of this essay.

Part 2: ‘Site-less’ Structures Site costs are the dominant factor in London house prices and a second experimental housing project by RSH+P plays on exactly this challenge. PLACE/Ladywell, built for Lewisham Council in 2016, uses all the same prefabrication techniques as Y:CUBE but it is also designed to be deconstructed, moved and reconstructed up to five times as it is hops between council owned sites which are waiting to be developed. This means the building can maintain a constant presence in (different) prime locations without paying for use of the land.

The units are this time larger, assembled from several component sections, and intended for entire low income families. The block is designed for higher densities than Y:CUBE as its first site stands directly on Lewisham high street. It also includes modular concrete lift cores and a podium of commercial and community spaces. This project was built for a slightly higher £1200/m² with the same 60 year life expectancy as Y:CUBE or a total of five relocations due to the wear and tear involved. Given that it’s current site is only available for a maximum of 4 years it is likely to complete those five moves long before the sixty year limit is up.

Furthermore the £1200 figure does not include the cost of relocation, which is not publicised, but is crucial to the viability of this as a model. The considerably simpler job of moving a conventional static caravan, (which involves no foundation work or separation of the units) costs about £3000 which is high enough to ensure that they are almost never relocated, though it is also technically possible. The high the cost of movement, and the short periods in each location, limits the viability of this model to only the highest value sites.

There are other schemes with dramatically lower costs of relocation. The best known examples are the London canal boats, which as long as they change mooring location every two weeks, can occupy central london space free of charge. The same is occurring in converted vans covertly using public parking bays, which require even more frequent movement as they must avoid detection. The owners of both types of vehicle fit out the interiors with compact, space saving furniture, electrical systems, often powered by solar panels or batteries, insulation, heating and tank based plumbing systems, though refilling and emptying waste water must be done manually which when combined with the frequent movement, significantly reduces the quality of service this housing type provides.

Despite these difficulties and because capital costs can be equivalent to six months or less of rent, [2] for used vehicles, and the potential for residual resale value, this is one of the most cost effective ways of living in central London, an attractive option for people concerned only with price and willing to sacrifice comfort to save on it. While this has proven a very effective strategy for a small number of people, both methods of accommodation are highly spatially inefficient, labour intensive and would rapidly create congestion and sanitation problems for the city should more than a tiny minority of people adopt them.

[2] An ebay.co.uk search for ‘campervans’ on 20/03/17 yielded a white 1999 mercedes sprinter, which externally appeared to be a tradesman’s van but was inside equipped with a log burning stove, a fold out sofa bed, electrical sockets and a basic food preparation area including a fridge for a buy it now price of £2000, or a white ford transit concealing a colourful double bedroom decorated with draped tie dye furnishings and a gas cooking stove for £2,200 and other similar vehicles. The UK minimum wage earner’s maximum rental budget is estimated to be £500/month.

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Part 3: Second Hand Homes The most common source of cheap living space in london today is old buildings, whose initial construction costs are long since paid off and whose amenities and styling have passed from popular taste.

This process (technically called filtering) occurs because newly completed buildings tend to be the most suitable for current needs, express the most up to date architectural fashions and require the least energy and maintenance. This means they tend to be moved into by the wealthiest part of the market, which over time reduces demand for the properties they used to live in, causing prices to fall and for those properties to gradually become available to more and more of the middle classes, who upgrade, in turn leaving their old houses available for the poorest to use. Due to this behavior the least desirable houses in a market are continually passing out of use[3] and housing conditions in general are gradually improving.[4] Filtering has been closely analysed in the United States market, using American Housing Survey data from transactions between 1985-2011 (Rosenthal, 2013). Changes were tracked in the incomes of households moving into properties over the years after construction. The study found that house rental rates fell on average 2.5% per year for the first forty years after completion, before stabilizing at a lower rate of rent decrease. This contributed to “the real income of a newly arrived occupant at a 50-year old rental unit [being] just 30 percent of [an] arriving [occupant’s] income in a newly built home”. This effect was partly created by the general pattern that “as houses age they tend to shift towards the rental sector” but came with the crucial caveat that “where house price inflation has been highest, housing stocks filter down . . . slower than for the rest of the country”. This lead Rosenthal to comment that locations which have high price appreciation may be unable to supply affordable housing at a sufficient rate for their population, and if appreciation is more extreme, there may even be negative filtration rates, or, as it is more commonly known: gentrification.

This effect is rife in 21st century Central London and pervasive in much of the rest of Inner London, (Darlow 1986) despite increasing incomes, wealthier and wealthier people are choosing to inhabit increasingly old, dilapidated and unsuitable buildings, which never the less, it does not make financial sense for their owners to demolish and replace.

A combination of a rapid increase in London’s population, combined with shrinking household sizes has created demand which far outstrips the low rate of annual house completions. A situation which is exacerbated by market incentives to buy and hold new units untenanted[5] which is particularly affecting new super prime units (Molior, 2017., Goodrich, 2017) which unfortunately are also those which have the greatest potential to create filtration impact (Rosenthal 2013).

The extent of this effect can be illustrated with another RSH+P case study, the Montevetro apartment building, built at a construction cost of £1520/m² (£2,500/m² in 2016 pounds) [6] on behalf of Taylor Woodrow as high end residences in Battersea, completed in the year

[3] The fact that so few Tudor buildings is because nearly no one wanted to live in them, those that have been preserved as historic artifacts demonstrate that with a normal level of maintenance, and crucially, no more valuable use competing for the land, the fabric itself is capable of surviving.

[4] The same is not true for land. Residential land value is generally set by proximity to valuable amenities, where land values are high, they set a lower limit on the level that rents can fall to. Which Is why the most dilapidated house on Oxford street will never drop to cheap rents (without a change in the level of amenity).

[5] New build premiums (the difference in value between a never lived in house and an identical but second hand unit) are now so high (20% of sale value according to the land registry) that unless the property is held for the long term, rental income will never compensate the drop in value that occurs when the first tenant moves in, similar to the loss in value when a car is driven out of the showroom.

Montevetro Flat D91 Sales History

2000. A typical two bedroom flat, number D91, was sold for £766,700.00 (£1,184,287.87 in 2016 pounds)[7] and the price has continued to increase ever since, growth was so rapid that the initial loss of the ‘new house premium’ only registered as slower growth rather than a drop in value proper. It’s inflation adjusted sale prices have almost doubled over the intervening sixteen years. Appreciation has prevented any opportunity for filtration.

Furthermore, while old filtered housing still provides the majority of cheap accommodation in London, the quality is becoming noticeably poorer than in cities which have not experienced as much high end development[8]. For as long as house building rates at the top lag behind total population growth, this effect will continue to intensify.

Filtering occurs when an external factor changes like an increase in income stimulates new construction. These changes reliably, but irregularly appear in housing markets over the long term. History has shown that the price of today’s new build units will eventually fall[9], as long as they survive that long, because the underlying factors driving the present appreciation rate continue to change over time (Muff, Goodman, 2001). The only opportunity the architect has to interact with this effect is by considering these potential end users and whether today’s new stock, could be more or less suitable for use by the future poor than our inherited Victorian buildings have been.

Take the recently completed NEO bankside for example, a 217 unit block of luxury flats costing £4,381/m² in 2012, with Native Land Ltd as the client, on the South Bank of the Thames. It is at the very top end of the market, but broadly typical of current housing architecture. The development is arranged as five hexagonal towers ranging from 12 to 24 stories tall, each a steel frame supporting poured concrete floors with panoramic floor to ceiling glass curtain walls, externally decorated with a dramatically expressed exoskeleton of cross bracing. The towers are small in plan, with a maimum of four units per floor and are accessed via bridges from freestanding lift shafts. The ground plane is a lushly planted public garden as well as a pair of retail units and some of the shared amenity spaces typical of contemporary high end development. The building is of very high quality, solid construction and could quite possibly survive long enough for underlying technological, economic and social factors to change sufficiently for space in this building to become affordable, just as so many other super premium buildings have in the past. If that situation were to come to pass, the first problem poor residents would have is the fundamental costs of living in tall skinny masses.

Towers require mechanical lifts, a factor which is not true in lower buildings, like for example, victorian walk up terraces. Similarly height demands mechanical ventilation as higher winds often prevent the opening of windows. Both of these facilities require constant maintenance to retain minimum habitability, an effect which currently manifests in cost price service charges of £75/m²[10],for residents. High for a building which has only a single concierge desk and no swimming pool. The ratio of internal corridor space to private residential space is extremely low, thanks to the multiplication of lift cores, which will minimise communal cleaning costs, though as stated before, in a very inefficient manner. The high glazing ratio would make subdivision simple, but the pointed wintergarden spaces at both ends of the plans would

[6] Inflation adjustments made with the Bank of England inflation calculator: (http://www.bankofengland.co.uk/education/ Pages/resources/inflationtools/calculator/default.aspx) [7] All sale values from the Land Registry : https://www.gov.uk/government/organisations/land-registry [8] A search on spareroom.co.uk on 15th March 2017 for rooms to let in London travel zones 1-2 gave 548 results, of which 30% are rooms to share with one or more other people, 60% where narrow single rooms, less than 2% were large enough to fit a double bed. A similar search in Nottingham or Birmingham’s City Centres revealed 80% and 90% double bedrooms respectively at this price point with a generally higher standard of interior finishes and furniture.

[9] In the very long term, for example Notting Hill’s ‘first rate’ terraced housing, fell from the super premium use in the nineteenth century down to the bottom of the market due to the impact of the war and London’s wealthy experimenting with suburban living up until the 60s before returning back to its original user base today.

[10] Information obtained from a phone call with a Knightfrank employee.

be difficult to occupy should unit sizes decrease. Overall this building will survive long enough to pay back its construction costs many times over, but if this geometry where to become as typical as for example the terraced house has, after its glamorous connotations have long since faded and leaving aside the social issues that can erupt in communally accessed tower blocks (Coleman, 1985) the city would, apart from for the huge energy reductions of super insulation and generous daylighting, perform less practically overall than it does today. Thought about in this light, it is easy to think of alternative designs which would ease the burden on future inhabitants by front loading as much lifetime cost as possible into the design and fabric of the building itself.

Conclusion Architects have no silver bullet for designing away London’s affordable housing problems, at some point, reducing the cost of construction materials and labour ends up in a quality tradeoff, land remains difficult to use cheaply or do without entirely and relying on building stock inheritance is only reliable during certain economic conditions.

However, if we compare the results of these methods to equivalent attempts in the same vein only 100 years ago we can see there has been great progress in both cost and quality of housing overall. Giving good grounds to be optimistic about design’s future ability to improve the lot of London’s poor, albeit, not singlehandedly.

Bibliography Architecture Cruickshank, D. and Wyld, P. (1975) London: The Art of Georgian Building, London: The Architectural Press Ltd. Muthesius, S (1982) The English Terraced House, London: Yale University Press Scoffham, E.R. (1984) The Shape of British Housing, Bath: The Pitman Press Ltd. Watkin, D. (2011) History of Western Architecture, 5th Ed. London: Laurence King

Money Muth R.F., Goodman, A.C. (2001) The Economics of Housing Markets, Oxford: Routledge Rosenthal S.S. (2013) Are Private Markets and Filtering a Viable source of Low-Income Housing? Estimates from a “Repeat Income” Model, American Economic Review, vol. 104, no. 2, pp. 687-706.

Darlow, C. (1986) The London Property Market in AD 2000, London: E & F.N. Spon Ltd. Cadman, D., Topping, R., (1998) Property Development, 4th ed. London: E & F.N. Spon Ltd. O’Sullivan, T., Gibb, K., (2003) Housing Economics and Public Policy, Oxford, Blackwell Science Ltd Canadian Mortgage and Housing Corporation (2004) Filtering in Housing, Ontario: Canadian Mortgage and Housing Corporation Griffith, M., Jefferys, P., (2013) Solutions for the housing shortage - How to build the 250,000 homes we need each year, London: Shelter England Ho, L. S., Haurin, D. R., Wong, G., (2003) Short Run Housing Market Dynamics: An Application to Hong Kong, Hong Kong: Department of Economics, Lingnan University, Ho, L. S., Wong, G., (2012) Policy-Driven Housing Cycle: The Hong Kong Case of Supply Intervention, Hong Kong: Department of Economics, Lingnan University, Murphy, C., Barton C. (2016) Foreign Investment in UK Residential Property, Briefing Paper Number 07723, London: House of Commons Library Goodrich, S., (2017) Faulty Towers: Understanding the Impact of Overseas Corruption on the London Property Market, London: Transparency International UK Molior, (2017) Who buys new homes in London and why? London: British Property Federation

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