Controversies over high-profile estate regenerations will likely impact future arrangements for clients, developers and communities.
Recent regeneration wrangles have raised an important question: how can we ensure that housing estate revamps do not ostracise their existing communities?
Places are not static. There is no doubt that rising housing costs because of regeneration can cause problems for existing residents, who may feel they are being priced out of their community. This can result in opposition and challenges, the most high-profile and recent example of which has been the Haringey Council joint venture with Lendlease, which has been challenged in the High Court.
Despite this, investment in development is a sign of belief in a neighbourhood and can be an effective way of tackling the housing crisis. So how can we better involve local communities to ensure regeneration benefits all?
Managing investment and engagement
In the UK at least, regeneration tends to be accompanied – often through section 106 agreements – by investment in community infrastructure such as education, transport, leisure, health facilities, other public services and public realm.
The real question should not be whether investment from developers should be welcomed or rejected, but rather how it should be managed for the betterment of all and geared towards existing communities.
Early engagement with those most affected is crucial.
The call for a formal process of resident engagement in estate regenerations is gaining political momentum. The first suggestion came in December 2016 from the then Department for Communities and Local Government.
The Estate Regeneration National Strategy sets out government expectations for ensuring that residents are at the centre of re-shaping their estates, in partnership with authorities and developers.
“The legal arrangements between the authority and the developer, which normally take the form of a suite of sophisticated documents, are likely to become even more complex”
Along with general good practice surrounding early and ongoing engagement, the strategy goes on to stress the importance of demonstrating resident support.
It points out how testing support for the regeneration proposals at the start and throughout the process can build trust and support, and ensure viable developments.
Giving residents a say
The Mayor of London’s Good Practice Guide to Estate Regeneration, published in February, supports London boroughs that seek a resident ballot for any regeneration that requires demolition of existing affordable homes.
The mayor himself proposes encouraging ballots by linking GLA funding with a positive resident vote in favour of regeneration.
When consulting on the proposal, the mayor stated that his “objective in introducing a requirement for ballots is to ensure that […] resident leaseholders and freeholders, and residents on the estate in need of social housing, have a clear say over whether the plans should proceed”.
Support for the use of resident ballots for regeneration schemes now forms part of the mayor’s housing strategy, which was formally adopted this month – although little is yet known about the form that the ballots will take.
Labour’s housing green paper goes even further by consulting on the proposal for a resident ballot for any regeneration – not just those reliant on government funding. We should expect to see Labour-controlled local authorities using resident ballots when making decisions on estate regeneration schemes.
Balloting will put developers and authorities under very real pressure to engage with local residents, who will need their support before a final decision is taken. This will force authorities to re-think their approach to promoting estate regenerations, needing to first win the hearts and minds of those with the right to a vote.
To win their support, authorities will need to provide current residents with certainty as to how the scheme will affect them. Not only will people want to know what the new development will look like, they will also need to know if they will be offered the right to return to the site, what their replacement accommodation will be, on what tenure they will take an interest in the new property, and when it will all happen.
Is it a practical system?
But how will the authority convince a developer to spend time, money and resources on working up such detail with no certainty that the scheme will pass the resident vote?
The legal arrangements between the authority and the developer, which normally take the form of a suite of sophisticated documents negotiated within the constraints of public procurement regulations, are likely to become even more complex.
The parties will need to build in sufficient flex from the outset to allow projects to evolve as viable schemes, while simultaneously responding to and protecting the needs and views of the local community to ensure that what is ultimately created is for the benefit of all.
From a legal perspective, whatever the basis of the authority and developer relationship, whether a contractual development agreement or joint venture, there will always be a balancing act between the wishlists of the authority and the developer.
The key ingredients to making regeneration an all-round success is early communication, consultation and collaboration among the existing community and stakeholders.
Both authorities and developers need to first understand and listen to their community before taking a balanced and tailored approach – one size will not fit all.
Lucy Thomas is a partner in planning and environmental practice and Richard Vernon is partner and head of real estate for EMEA at Ashurst