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February 2, 2016 / Leo Hollis

The Fall of London pt.2: Privatization

This is the second part of a series of essays on the process of transformation in the city today. the first essay looked at: Enclosure: . Here we look at how – once enclosure has happened, it goes hand in hand with privatisation. In the future we will look at expulsion as the logical conclusion of the process.

Jane Jacobs wrote: “Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.”

The inequality of housing, a place to call home, is the most stark indicator of our divided lives. there is nothing in the nature of cities that dictates that there has to be this geography of difference. Inequality impacts on all parts of the urban landscape and it is the have-nots who do not have access to parks and green spaces, nor have the luxury of privacy and adequate housing.

In Mayor Johnson’s  Draft Housing Strategy [December 2013], it is noted that 80% of all housing stock in London is currently affordable solely to the top 20%. The same imbalance between supply and demand can be found everywhere. Johnson’s stewardship can be typified by the promise to rid the city of poverty and blight, but without understanding the causes of the problem. Throughout the administration the problem of poverty and inequality was depicted as one of neighbourhood decline, localised economic inefficiencies, rather than human desperation in the face of deplorable unfairness. In both cases the role of planning was seen as clearing out, up zoning and privatisating under producing neighbourhoods. The emphasis of ‘quality of life’ issues that hoped to attract investment, creativity and wealth, never attempted to address the actual facts of inequality. By packing the top end of the city, this did not raise up the rest but drove out and stamped down those that needed the most help.

For example, plans were announced last summer for the 74-story Hertsmere Tower in Docklands were announced offering 714 luxury apartments, the most expensive clocking in at over £10 million. While Mayor Johnson has given the green light to the £800 million project, there are 23,000 on the waiting list for affordable and social houses in the local Tower Hamlets council. Elsewhere in London the demand is at critical levels without any appearance of a solution.

‘Who is the city for?’ has become one of the most urgent questions in our current crisis.

 This shows that much of the current development of the city is not for living, but for capital accumulation. The house is no longer a home but an asset. For example, since 2000, of 2.9 million houses have been built in the UK, 2.5 million have been sold to landlords. This leads to the extraordinary statistic that, in a recent London Poverty Survey, 28% now live under the poverty line.

You can not open a newspaper without a story about the next calamity in the housing crisis, or how we are becoming more unequal, yet these are signals of a much deeper problem. London is living through a period of rapid enclosure: the spaces where we live our everyday lives are being measured, given a value, and sold to the highest bidder. This process of financialisation and privatisation turns a universal common wealth into a portfolio of assets, to be traded in a global market. This process has seeped into every corner of the city. It defines who is allowed to be part of the metropolis; it affects our relationships with each other, the places where we come together: home, work, public spaces and the corners that we hope to keep private.

That we are more unequal than ever before is now incontestable.Thomas Piketty’s deceptively brilliant equation that: R is greater than G (when R stands for capital investment, and G represents wages) shows that since records have been collected, those who own have had it better than those who work. The statistics tell us: since 1980 the super rich have paid themselves more than ever before, while real wages had declined for everyone else. As a result, in the aftermath of the great recession of 2008, 95% of all economic growth has gone into the hands of the 1%. 

Yet, these statistics do little to bring the reality of this imbalance into focus. It is difficult to appreciate such desperate differences at a distance. Even when it is stated that the top 10% in London are 280 times richer than the bottom 10%, it is difficult to perceive this balance. In New York, the top 5% earn 88 times more than the bottom 20%. In both cities the poverty level is between 20-25%, far above the national average. Yet it is difficult to see the human face behind such numbers. It becomes clearer when we give inequality a location.

For example: according to a recent study conducted by University College, London, it is possible to chart the rise and fall of life expectancy along the underground rail line, the Central Line, that runs through the middle of the city from west to east. The map showed that there is a 20 years difference in life expectations that comes from living either in the centre, Oxford Circus, or around certain tube stops in the East End of the city, Mile End. The distance between these two locations is a train journey that takes less than twenty minute, yet it can determine a dramatic gulf in longevity.

The city magnifies inequality and then gives it geography. It is where wealth is made and also the place that the poor come to; and often they have to live desperately close to each other. Yet income inequality within the city is more than just a register of varying levels of wealth amongst neighbours. The consequences of inequality goes to the heart of every aspect of the city: it defines the human landscape and determines the distribution of opportunities, turning the advantages of the city that should be available to everyone into a rigged lottery.

According to Globalisation and World Ranking Research Institute London, alongside New York, has been given the highest status of ‘Alpha Double Plus’, as central network points within the swirling global marketplace. It is a city where everyone wants to do business, and a destination for bodies, goods, money from across the planet. According to the 2014 Savils Wealth Report, the city is a major destination for the world’s Individuals of High Net Worth [IHNW]. For urban economist, Ed Glaeser, this makes it the best place to come to find business, culture and a husband.

At the same time, in other parts of the city, in the face of the fact that Britain no longer made anyway, the only commodity that could spread the economic good story was the ground beneath our feet. Owning a house, and buying shares of one of the recently privatised national utilities was presented as a badge of economic success; it was the smartest investment around: as escalating house prices outstripped wages, homes became lucrative assets. The right-to-buy initiative in the 1980s, that sold council properties at below market rates, also flooded the market with properties that could be turned into profit. Yet these properties were not replaced: the last time we had enough houses for everyone was 1971, forty-four years ago. Since then we have built too few houses, further pushing the demand skywards.
This process turned London’s very soil into one of the safest investment in the world. The result are the ghost houses of the super-rich, the privatisation of public spaces, the savage sorting of the city where ownership determines who belongs and who is no longer welcome. 
In the end, the damage of this rampant privatization is not to the fabric of the city but, more urgently, to us. Access to the metropolis has turned from a right to a privilege policed in ways that we cannot intuitively understand.  This not just affects the spaces of the city but also the way we are allowed to behave in them.



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