So, by way of a thought experiment: what if London is about to peak? The reason would be the way housing provision and housing regulation had destroyed the economic balance of the city, and there are some serious warning signs. Recently, there’s also been a wave of commentary on this. But first, let’s just roll back to the ’70s.

When I moved to London in the late ’70s the city was regarded as being on the way down. Population was declining. People were moving out. The tax base was declining. And one of the consequences of that was that there was empty housing right across the city. (There was a similar story in New York).

Roll forwards to 2013. For a moment, let me leave to one side the social cleansing represented by the housing benefit cuts. the bedroom tax, and the unwillingness of the GLA to enforce its own affordable housing policy, and the long-term consequences that has for the lower-wage service workers on whom a city depends.

Parking the money of the rich 

I started writing this post a couple of months ago, and recently there’s been several articles on London’s housing crisis. In the New York Times, Michael Goldfarb wrote about his middle-class London neighbours, moving out to to cities such as Bristol and Cambridge:

This is what happens when property in your city becomes a global reserve currency. For that is what property in London has become, first and foremost. The property market is no longer about people making a long-term investment in owning their shelter, but a place for the world’s richest people to park their money at an annualized rate of return of around 10 percent. It has made my adopted hometown a no-go area for increasing numbers of the middle class.

Or Ian Jack, on the way that housing prices are squeezing the middle class out of the inner city:

A report into Islington’s future published this month by Cripplegate Foundation concludes that its middle class will slowly disappear, leaving the population polarised between the very wealthy and the poor, with “a youthful transient and childless sector” somewhere in between.

And although it’s hard to find pity for high waged bankers who are still living very well off the taxpayers’ largesse, the recent reports that some would be looking for help under the government’s Help to Buy scheme because they couldn’t afford to live in the nicer parts of town was another symptom of the same trend.

Ghost towns

The absurdly ostentatious development represented by One Hyde Park encapsulates the problem, as Vanity Fair observed (interesting that there’s more coverage of this from New York than from London.)

“Those people who do buy these houses, particularly the bigger ones, in many cases don’t buy them to live in permanently: they are part of a portfolio,” said [the Chelsea Society’s Terence] Bendixson. “That doesn’t add much jollity to your street: houses with the shutters down and nobody there.” Edward Davies-Gilbert, of the Knightsbridge Association, sees the area gaining the flavor of “a ghost town, peopled by ghost blocks.”

Or another version in the same article, by the social commentator Peter York:

It’s absentee money: the kind of money that has bodyguards. … These people have no substantive relationship with anything British at all. It’s everywhere: I can’t emphasize enough how everywhere-ish it is.”

‘Distinctive new developments’

In passing, it’s also unclear to me why the reputation of Lord Rogers, whose company designed One Hyde Park, hasn’t been more tarnished by it, given his pretensions to being a public intellectual in the realm of urban development. And, oh look: here it is on Rogers Stirk Harbour’s website described as “a distinctive new residential development.”

The data underline the gaps symbolised by One Hyde Park. The richest 10% in London are 270 times wealthier than the poorest 10%.

And in practice, there are similar, if less expensive, blocks of upmarket new property strung out across the centre of London, along with houses that are lived in for only a few weeks of the year. My twitter feed today mentioned a new development in still-not-that-fashionable Hammersmith offering a £5m penthouse, and with no affordable housing, neither built onsite nor elsewhere in the borough, because of the number of ways in which developers are allowed to weasel out of such commitments to the social needs of the city, while remaining behind the veil of “commercial confidence”. No wonder that the government felt the need to criminalise squatting, to protect absentee owners from any inconvenience.

Spaces for experimentation’

Several things are being squeezed out of the life of the city by this economic dominance. The first is urban innovation. An intriguing blog post by Alistair Livingston, reviewing a seventies book by Astrid Proll – exiled in London during the middle of the ’70s while on the run from the German authorities – quotes her as arguing that the 100,000 empty properties in London in the middle of the decade were “open spaces for experimentations of all kinds towards a life lived without economic  constraint.”

In other words, and maybe it is worth spelling this out, they created spaces for public and social innovation which reinvigorated a city in decline. As I’ve written before, how this works is spelt out in Joe Boyd’s memoir White Bicycles, where he writes of the innovation in Notting Hill generated by those “open spaces” in the late 60s, from free schools to the Notting Hill Carnival.

Hollowing out the future

The second is the kind of governance that comes from people who believe that they are going to stay around an area for a while. A few years ago I did some work with an inner city London borough – not one of the poorest – and one of the concerns of the politicians in the council cabinet was that house prices had hollowed out the next generation of people like themselves who had a long-term commitment to the borough.

While such narratives can be driven by an over-developed sense of one’s own civic indispensability they seemed to be right; it was hard to see the next generation of aspirational professionals who would be able to afford to move into the borough in their 20s and stick there. Rosabeth Moss Kanter explained in her book World Class that one of the ingredients for urban and economic development is leaders who live and work in the location who are in it for the long haul.

Forty year cycles

I have a heuristic about public change which suggests it works on cycles of forty years and eighty years – crisis to crisis in four generations. The theory isn’t really there yet, though readers of the Fourth Turning will recognise the generational learning patterns that sit behind it. If so, London is halfway through that cycle at the moment, forty years on since the crisis of the mid-’70s.

Another rule of thumb is that there’s nothing so dangerous for a policy maker as a mental model that describes the world wrongly, certainly in the longer term. In Whitehall and City Hall, I suspect that there are policy makes who believe that London’s growth, and its attractiveness as a place to live and work, has been driven by the deregulation of the financial sector in the mid-80s. They’re looking in the wrong place. Loose housing, not loose money, is the ‘secret sauce’. And right now all of the housing trends are heading in the wrong direction.

The image of One Hyde Park is from the website of the project managers, Laing O’Rourke, and it is used with thanks.