Ongoing problem

Tamar Wilner, Regeneration & Renewal, 22 August 2008

The boy tugging on her arm cannot be more than four. "It's the gospel truth," says the woman in long braids, as her son runs around her legs. "You rent and you pay the bill, then you find they come to repossess. I was paying my bill, and I ended up homeless for two months."

This young mother - who doesn't want to give her name - was a victim of a rogue landlord at Gallions Reach Urban Village, a development of 1,840 homes in south-east London. When her buy-to-let landlord failed to pay his mortgage, she and her boy were the ones out on the street. "There was nothing we could do," she says.

Fellow resident Dawn Smith was one of the first to move to Gallions Reach eight years ago. She doesn't know the woman with braids, but knows her story well. "The developers did sell large amounts of flats to absent landlords," she says. The result was disastrous. Not only were some tenants left high and dry, but many others made a nuisance of themselves, Smith says. "You'd get a lot of antisocial behaviour, parties going on all night as well as front doors of homes being vandalised. We've had brothels, drinking dens, cannabis factories, all kinds of rubbish in all kinds of places," she says. "If this was going on in your next door flat you wouldn't be happy."

Today, Smith says, the situation is much better. Gallions Housing Association has taken over the most troublesome buy-to-let flats. Police closed down the brothels, and a residents' association has worked hard to reduce the amount of litter. A walk around the estate shows pockets of premature damage - doors missing from garden sheds, bits of cladding chipped off walls - but the majority of homes in good condition.

Yet Smith's story and that of the young mother speak of a serious deficiency in regeneration practice. That a new housing development, far from curing social ills such as crime and homelessness, could actually introduce them should strike fear into the heart of any regeneration professional.

It was an issue brought to light last month by the charity Shelter, which published a report examining three new-build regeneration developments in the Thames Gateway growth area. Shelter found that the fact that no single organisation bore ultimate responsibility for the maintenance of the Gallions Reach development had led to a sense of neglect.

Some say management is one nut that regeneration practitioners have not managed to crack. Ken Dytor, managing director of consultancy Regeneration Investments and head of the British Property Federation's regeneration and development committee, says: "So often management is not dealt with particularly well. One sees examples where management downgrades the public realm. People lose confidence and crime becomes an issue."

And while mixed-tenure schemes have become de rigueur and are in many ways beneficial, they also cut new zigs and zags into the management jigsaw. Social housing, homes for private sale and private rented accommodation all tend to be managed by different agencies or companies. With so many managers, residents can be unsure of whom to approach, especially when it comes to public or semi-public spaces.

Different managing companies may also levy different service charges - though for social housing, this is normally included in the rent. They may provide different services and enforce different rules, which can all create friction between residents. Steve Wilbourne, a senior partner at law firm Batchelors, says: "You do have difficulties where houses that people purchased tend to be maintained in a better fashion. The tenancy agreements can also differ significantly between private and social landlords, he adds.

There is no easy ways to ensure good management, although following examples of best practice certainly helps (see box). Yet some in regeneration believe that fundamental change is required. They argue that what's needed is a shift away from the traditional "build it and sell it" model of housebuilding, something which current market conditions may help precipitate.

"The world has changed dramatically," Dytor says. "The credit crunch will have fundamental implications for how we structure (the industry)."

Dytor says mortgage firms have become far more careful about who they lend to and are examining management practices more closely. Those developing a site will have to take on greater responsibility for its long-term upkeep. That's not to say there aren't already developers who stay on as managers. But Dytor says the tough market requires a fresh approach. He backs an emerging model whereby institutional investors own and manage regeneration schemes.

Current market conditions have also slowed the buy-to-let craze. This could be good news for effective management, because buy-to-let landlords add another layer of management to an already crowded scene. Buy-to-let also makes it harder to control who ends up living in a development. National regeneration agency English Partnerships, for one, limits the amount of buy-to-let on many of its schemes (see box). But, says South-West region director David Warburton, there are exceptions. At a scheme in Gloucester, for example, the agency is encouraging its development partner to include buy-to-let properties, which the developer will then manage over the next ten years.

Dawn Smith is now happy with the state of Gallions Reach - mainly because of the action she has taken with other residents. They created an action group to pick up litter and clean graffiti, while a resident-founded forum conveys concerns to the police, as well as to management organisations Gallions Housing Association and Tilfen Land. Meanwhile, the Metropolitan Police is investigating a buy-to-let landlord for what it describes as "large-scale mortgage fraud" at the site, with an alleged benefit to the conspirators of £3 million to £4 million. Eleven people have been arrested.

Looking back at the neighbourhood's troubled past, Smith says: "I think the buy-to-let boom is what caused this." She blames some landlords for bringing in antisocial tenants as well as criminality. And she says the flats' managing agents failed to regularly collect service charges earmarked for improving the public realm. CPM, the former managing agent for the estate's troubled Hill House and Bridge House buildings, disputes this, however.

More controversially, Smith says the scheme's developers - Barratt, Persimmon Homes and Miller Homes - must shoulder some blame. A Barratt East London spokesman said his company acted "entirely properly" in its dealings at Gallions Reach, and chose to work with its management company, residents and the council to resolve problems. "But it must be recognised that our primary business is the building and selling of new homes in areas of need," he adds. "We are not a landlord or management company." Asked whether Persimmon was right to sell so many flats to an overseas landlord, Edward Owens, managing director of Persimmon Homes South-East, says: "It is not our policy to discriminate against any purchaser wishing to buy any of our homes. We only ensure that the purchaser has the ability to buy the property within an expected timescale." Miller Homes declined to comment.

The developers have a point: management failures on such large, complex schemes cannot rest entirely on their shoulders. Many hands played a part in building Gallions Reach, and it's doubtful whether anyone could determine a final point of responsibility. But that's just the problem. When it comes to regeneration management, it seems, the buck stops nowhere.

- Neighbourhood Watch is published by Shelter and is available via www.regen.net/doc

BETTER MAINTENANCE TIPS

1. Understand what needs to be managed - Is it housing - inside and out? Is it commercial property, communal spaces, public spaces, roads, car parking, drains? Who will manage resident behaviour?

2. Cut the number of bodies governing a scheme - Even if several management companies work on the same estate, they can help by providing a single point of contact for all residents, preferably via a 24-hour helpline. Harriet Baldwin, policy manager at English Partnerships, says: "If things are done by different people, make it clear why and who does what."

3. Get residents involved - and keep them so - Most management companies require residents to be involved in their management, in many cases with seats on the board. At EP's Devonport scheme near Plymouth, a £50 a year fee on all flats funds efforts to encourage resident participation.

4. Design with maintenance in mind - Dominic Church, senior policy adviser at design adviser the Commission for Architecture and the Built Environment, says that spaces which have no clearly defined purpose should be dispensed with. All public spaces should have a clear purpose, and their design should express that purpose, Church says. Those designing the scheme should engage early on with future managers to discuss how public spaces will be used and maintained.

5. Consider limiting buy-to-let - At EP's Devonport scheme, the management company has the power to limit buy-to-let to a maximum of a quarter of all properties. And on some other EP schemes, developers are prohibited from selling more than two or three homes to any one individual. They may, however, sell more to recognised companies.

- For EP and Chartered Institute of Housing guides to management companies, click here