Sunday, 1 March 2015

Can a 'means-tested progressive' rent model guarantee a future for long-standing New Era tenants?

New Era tenants celebrating in 2014 ahead of 2015 rent negotiations
© Courtesy: New Era Tenants' Association
Placard at March for Homes in January 2015
© Paul Coleman, London Intelligence 2015

Wealthier tenants could be charged more rent than less affluent ones on an east London housing estate.
Is this a progressive way to keep a tight-knit working class community together on their estate?
Or, a divisive measure that might cause resentment?
Can only subsidised ‘social rents’ ensure long-standing tenants can stay long-term?

These questions face the 93 residents of the New Era Estate who met on Thursday (26 February).
Some residents have lived on the estate all of their lives.
Dolphin Living, the charity now owning New Era, are considering plans to means test the pensioners, teaching assistants, PAs, NHS staff and construction workers who live on the estate in Hoxton.
Tenants earning around £21,000 a year might see their rent cut.
But rents might be doubled for tenants earning £66,000.

New Era tenants successfully fought an attempt in 2014 by an American property company – Westbrook - to triple rents and effectively evict them and make them homeless.
Westbrook had bought the New Era in 2012 and wanted to redevelop the estate for profit.
Instead, after the tenants’ vigorous and ultimately successful high-profile campaign, Westbrook relinquished direct control of New Era.
Dolphin Living bought the 93-flat estate and promised to negotiate new rents with the tenants.
New Era rents are about half of the local average rate for private rentals.
The estate is located on the trendy Hoxton-Shoreditch fringe of the City of London, the financial district with ‘astronomical’ property prices and market rents.
Private one-bedroom flats in Hoxton can fetch weekly rents of £650, according to the Rightmove property website.

New Era buildings also need repair and maintenance following a lack of investment over recent years.
Dolphin Living wants the ‘better off’ to pay a larger contribution.
John Gooding of Dolphin Living points to a chart in his office projecting how rent could increase for some tenants as their weekly incomes rise.
The chart displays ‘current rent’, ‘living costs’, ‘extra disposable income’, and ‘rent’ (new rent).
“We need to identify this zone of affordability – how much people can reasonably afford to pay,” says John Gooding of Dolphin Living.
“Clearly, if you’re earning a bigger salary, yes, you’re going to pay a bigger rent.”

New Era Estate tenants Lindsey Garrett (speaking) and Danielle Molinari (standing)
© Paul Coleman, London Intelligence 2015

Residents are said to be ‘broadly open’ to the idea, following their meeting.
“Of course, the problem with this is that it causes tension,” says Lindsey Garrett, chair of the New Era Tenants’ Association.
“The last thing we really want is the community to be really destroyed and to be taken to pieces because people will feel resentful at paying higher rents.”

“It may set a precedent if it works on this estate and everybody is happy with it,” says Danielle Molinari, vice-chair of the New Era Tenants’ Association.
“Why couldn’t it work for other estates?
“It’s only fair that people who are working class are able to stay in London.”
The charity and residents are said to be continuing to negotiate.

Dolphin Living is the housing arm of Dolphin Square Foundation, an ‘independent’ charity formed in 2005 after being endowed with more than £80 million from the Dolphin Square Trust.
The Trust’s endowment to the Foundation followed the sale of its leasehold interest in Dolphin Square, a residential estate in Pimlico in Westminster where rich and powerful people live.
Dolphin says it aims to achieve ‘good returns on capital’ invested in property so it can ‘deliver 1,000 new affordable rental homes by 2020’.

Dolphin says its ‘rents are set at 60-80% of the market value’ and aims ‘to provide homes that will cost our residents no more than 40% of their disposable income’.
Dolphin advertises 77 ‘intermediate studio to three bedroom apartments for rent’ in the King’s Cross regeneration area with weekly rents starting from £177.
Rents for Dolphin’s 39 one to three bedroom apartments in the One Church Square development in Westminster start from £190 per week.
All Dolphin’s fully managed Assured Shorthold Tenancies are for three years.

Rents on the New Era Estate, built in the 1930s by Middlesex property developer Arthur Barsht, were always kept below ‘market rates’.
The average weekly rent for a New Era flat is reportedly close to £143.
Two-bedroom flats cost £668 a month before rents rose under Westbrook’s ownership to £796.

Barsht’s two daughters had inherited the estate after their father died in 1933.
For over 70 years, New Era offered subsidised rents to people on average and lower incomes.
But the family sold the estate in 2012 to a Westbrook interest for a ‘substantial profit of £306,865.
The sale of these subsidised homes for working class Londoners reportedly enabled shareholders of the family company LBS Holdings Limited to receive a £300,000 dividend in 2013.
And, the shadow of that sale still hangs over 93 working class households.
They say they will not be able to afford to stay in London if rents rise and compel them to leave their New Era homes.

© Paul Coleman, London Intelligence 2015

© Paul Coleman, London Intelligence, March 2015

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