West End Partnership

Westminster’s new vision for the West End is quiet on the commercial and housing pressures facing Soho and Chinatown

The West End Partnership, a Westminster Council-led project, has launched a major new report setting out its ‘Vision for 2030’. Described by the council as a 15 year project that could deliver £500 million in proposed improvements, the report includes a number of welcome schemes to improve the public realm and promote both Westminster and London as a whole.

However Westminster Labour Councillors believe that the proposed Vision for 2030 fails to fully address some of the challenges facing Soho and Chinatown, two of the West End’s most iconic areas.

Rising rents and commercial pressures are threatening the diversity of premises that make these important sections of the West End unique international attractions and vital parts of our city. As the ‘Save Soho’ campaign has articulated so well over recent months, Soho faces growing encroachment from high street firms that risk changing the character of the area for good, with local small businesses being priced or pushed out.

London’s Chinese Community have previously raised their concerns about the impact of rent rises and gentrification on the future viability of Chinatown, yet the challenges facing Chinatown are not mentioned in the documents.

At the same, the housing crisis is making it ever more difficult for those on modest incomes to live in the West End. The West End has never before been considered to be a place just for those with money. The Victorian philanthropists did not say to the poor that they only place they could be housed was miles away in ‘cheaper’ areas. George Peabody built homes for people on low incomes in Mayfair. In the first half of the 20th century Westminster and Marylebone Councils built homes for those on low incomes in the West End. More recently, from the 1970’s onwards, the Soho Housing Association and others have continued this enlightened policy of providing new homes for those of modest means all over the West End, many of whose residents work in local business and keep public services like schools, hospitals and the fire brigade working smoothly.

Add to this the imminent Government requirement for both Westminster and Camden Councils to sell off their most expensive Council flats as they become vacant in order to pay for the cost of allowing housing association tenants to buy their flats at a discount, and the future for the West End’s existing residents looks even more bleak.

Labour welcomes plans to build on the commercial potential of the West End and ensure business thrives in order to benefit local communities and the wider economy. But broad aspirations to increase the supply of commercial space across the wider West End do not fully address the challenges faced by Soho and Chinatown, where a market-led approach as set out in the report may not lead to results that are in the public interest. Westminster has a clear role to play as an influencer, landowner, planning and licensing authority to help protect the future of these areas.

Westminster Labour Group Leader Councillor Adam Hug said;

“A future vision of the West End that doesn’t fully address the challenges faced by small shops, restaurants, pubs and venues in Soho and Chinatown is a huge missed opportunity. These unique places are the beating heart of London and admired across the world. With rent rises and gentrification threatening to drive long standing businesses out of the area, Westminster needs to work with landowners and small business people to develop a long-term sustainable future for Chinatown and Soho.”

Labour’s Built Environment Spokesperson Councillor Paul Dimoldenberg said;

Not only is the West End under threat from this proposed ‘forced sale’ of Council and Housing Association homes, but also from Westminster City Council’s continued policy of allowing new residential developments to ‘buy out’ of their obligation to provide on-site affordable housing. Over recent years the Council has been seduced by the one-way argument that by taking cash in lieu of on-site affordable housing in the West End it can provide extra housing elsewhere. This policy has reduced the supply of West End homes for those on low incomes from a trickle to a drought and reinforced the exclusivity of the West End residential market, pushing prices ever higher and slowly, but surely, destroying the West End as a living, breathing community open to all.”

Notes to editors

While the word ‘diversity’ is used in the report a number of times but the only time rents are mentioned is in the context of a general desire to increase the supply of commercial space across the West End as set out in P12 of the report. Page 15 of the delivery plan notes a scheme to promote diverse business space but without any detail or projected programme cost (unlike other plans).

The only mention of housing is in the context of providing homes for West End workers. No mention is made of providing homes for the families of existing West End residents.


A Submission from Westminster City Council Labour Group to the West End Commission

The West End is a series of villages – Soho, Marylebone, Fitzrovia, Mayfair, Covent Garden – all of which are genuine, real communities where generations of people from all income levels, the rich and poor, the young and old, and people of every race, colour and creed have lived together cheek-by-jowl.

The West End has a successful, dynamic economy where global companies, world-class theatres and music venues, multi-national retailers sit side-by-side with independent corner shops run by family businesses and an array of public services, all working every day, seven days a week, 365 days a year. As Soho resident and Man Booker prize winner, Howard Jacobson, celebrates;

“even if I’m locked away writing, it’s all out there, if I want it. At 11pm on a Thursday I can be in Dean Street in five minutes. I walk out into this thrilling inferno – it roars with noise.”(1)

However, the West End and its villages are under threat as the recent campaign to save Gaby’s Deli on Charing Cross Road from the Marquess of Salisbury’s plans, via Gascoyne Holdings, to replace it with a chain restaurant demonstrates http://www.facebook.com/save.gabys.deli.

Housing

The biggest threat to the continued success of the West End are recent proposals to compel Westminster and other central London Council and local housing associations to sell their housing stock because the area is considered to be “too expensive” for Council and housing association tenants. Proponents of this policy, including The Policy Exchange, are urging the present Government to require the sale of Council and housing association property on the open market with the proceeds used to build new accommodation for poor people in “cheap” areas. Although still in their infancy, these policy ideas have powerful backers within Government.

The effect of this policy would be devastating, as Ed Hammond, the Financial Times’ Property Correspondent, explains;

“In asking the few remaining permanent residents of the country’s top addresses to politely leave, the government would create the promised land of high-end property ownership: a completely unoccupied neighbourhood. Already, huge tracts of London’s most coveted postcodes are virtual ghost towns. From Belgravia to Knightsbridge and South Kensington, the pattern is well established: buy a house, leave it empty for 50 weeks of the year, swan in for a fortnight and wear it like a haute couture accessory.

It’s not just a London phenomenon, either. In New York, Paris, Hong Kong and Mumbai, the best neighbourhoods are no longer really neighbourhoods at all. Instead, they have become bespoke airport lounges for the transitory super-rich as they hopscotch their way from one soft-touch tax regime to another.” (2)

Over the past 30 years, Westminster City Council has already sold 9,000 of its 22,000 stock of Council homes, with 40% of these homes now in the hands of buy-to-let landlords. The gradual but steady sale of the rest of the Council’s and housing associations’ stock in the West End would turn the centre of London into little more than a ‘playground for the rich’, with poorer residents exiled to the edge of London on sink estates reserved for those in low paid jobs or without jobs.

The West End has never before been considered to be a place just for those with money. The Victorian philanthropists did not say to the poor that they only place they could be housed was miles away in ‘cheap’ areas. George Peabody built homes for people on low incomes in Mayfair. The Duke of Westminster built homes for poorer people in Belgravia. In the 1930’s, 40’s, 50’s and 60’s Westminster and Marylebone Councils built homes for the poor in the West End. More recently, from the 1970’s onwards, the Soho Housing Association and others have continued this enlightened policy of providing new homes for those of modest means all over the West End, many of whose residents work in local business and keep public services like schools, hospitals and the fire brigade working smoothly.

Not only is the West End under threat from this proposed ‘forced sale’ of Council and Housing Association homes, but also from Westminster City Council’s continued policy of allowing new residential developments to ‘buy out’ of their obligation to provide on-site affordable housing. Over recent years the Council has been seduced by the one-way argument that by taking cash in lieu of on-site affordable housing in the expensive West End it can provide extra housing in cheaper Paddington. This policy has reduced the supply of West End homes for those on low incomes from a trickle to a drought and reinforced the exclusivity of the West End residential market, pushing prices ever higher.

Gradually, but inexorably, the West End’s villages are changing – and not for the better. We now have the situation where more and more property is being bought and sold as an investment, and not as a place to live. Expensive apartments are being sold ‘off-plan’ with no intention of the purchasers to live there. The celebrated example of the Candy & Candy development at One Hyde Park – “the most expensive ghost town in the world” (3), where few of the 86 flats are occupied by permanent residents, is just the most celebrated example.

A similar, if less extreme story, can be told about new residential developments throughout the West End. The irony of this situation is that, had developments like One Hyde Park included 30 or 40% affordable housing on site, this new apartment block would have not only provided permanent homes for local residents, but it would have contributed to the local economy providing customers for local shops and employees for local business and public services. The Council’s planning policy needs to change so that the cash-led approach changes to one which is community-led.

Jobs

The West End is a real economic success-story with world-leading companies in the retail, fashion, advertising, design and the cultural industries. In addition, the West End is home to numerous head offices for global companies employing people with a wide array of skills. While one million people a day arrive in Westminster from all over the south east (and beyond), the tragedy of the current situation is that in Paddington, Pimlico and other parts of Westminster, barely a mile or so away, there are too many young local people with good academic qualifications without a job.

A key task must be to link up the jobless with the job opportunities. We challenge every business in the West End, large and small, to offer a one-year apprenticeship to one Westminster young person at the London Living Wage. The advantages of this would be enormous; young people would learn work-skills, gather work experience and gain confidence; businesses would get an extra pair of hands to provide additional capacity; extra spending capacity would be generated in the local economy and spent locally in shops, cafes and elsewhere.

For those West End businesses which cannot afford to a one-year apprenticeship we suggest that they offer short term work experience placements at the London Living Wage.

We further suggest that Westminster City Council should lead the way by offering 100 one-year apprenticeships to local young people.

In addition, the West End provides the engine for the UK’s world class leisure and entertainment industry which is dependent on musicians, actors, croupiers, back room staff, waiters, bar staff living across the south east. Many of these key workers work unsocial hours which necessitates the use of cars to get to work and back because for many of them public transport is an option that simply does not exist. With 24-hour operations becoming a growing feature of the West End economy, it is vital that the needs of the increasing number of people who work unsocial hours is acknowledge and factored into West End parking policies.

Quality Public Services

Never before have quality public services been more important. Whether it be health and welfare, schools, transport, policing or libraries, quality public services underpin a successful urban economy. If nothing else, the lesson of the successful Olympic and Paralympic Games are that investment in public services is a very good investment in which we all share the benefits.

Yet, Westminster’s public services are under threat through year-on-year cuts in expenditure. Cuts to services for children and older people are already affecting the quality of life of the most vulnerable. Cuts to the successful Safer Neighbourhood Teams threaten to increase crime and the fear of crime, as reduced police capacity makes it more difficult for basic anti-social behaviour to be dealt with quickly and effectively.

The impact of changes to the local government financial framework

Changes to local government financial framework will have a significant impact on the West End. From 1st April 2013 the NNDR retention arrangements will come into place. This will create a strong financial incentive to prioritise commercial developments over those for housing (of any sort) and skew development towards those with higher Rateable Value, such as hotels, bringing with it a risk that the West End will become a tourist village rather than a residential one (be those residents rich or poor). Since this will be the only way of funding service improvements for a growing population (within any ten year period) this will be a further incentive for the Council to rule out affordable residential development anywhere in the West End. The Commission therefore needs to think through how the perversity of the new local government financial framework is to be addressed.

In addition, from 1st April 2014 s106 arrangements will change. Non-site-specific contributions will be banned and will be replaced by the Community Infrastructure Levy (CIL). Therefore having an Affordable Housing Fund for off-site housing linked to negotiations around individual developments will cease and be replaced by the CIL fund. This itself will be linked to an economic viability assessment and a costed Community Infrastructure Plan. Necessarily, the Community Infrastructure Plan will encapsulate what it is the Council expects the West End community to be like in 20 years’ time. Therefore, the Commission needs to think through the needs of the West End over this sort of time period and how developers can be signed up to a vision which will in part determine the level of the CIL to fund this.

Westminster has been one of the largest recipients of New Home Bonus funds (over £5.5 million in 2011/12 and similar amounts expected over the coming years). The New Homes Bonus will continue in place but does not fully fund average service demands for new residents, thereby providing an incentive to the Council to encourage high-end, luxury residential development that will rarely be occupied and therefore do not make demands on local services.

The Challenge

We call on the West End Commission to take on board these fundamental issues into its deliberations. The Commission needs to be looking at the West End’s long term future and the resources needed to maintain a vibrant mixed community.

(1) http://www.standard.co.uk/arts/book/howard-jacobson-i-used-to-think-this-citys-orgy-of-excess-must-soon-be-over-but-still-it-goes-on-6436946.html

(2) http://www.ft.com/cms/s/2/60b4e160-f8db-11e1-b4ba-00144feabdc0.html#axzz27NTKSLwM

(3) http://www.telegraph.co.uk/property/propertydevelopment/8604113/One-Hyde-Park-The-most-expensive-ghost-town-in-the-world.html

WEST END COMMISSION

Further evidence from Westminster Labour Group

From homes to hotel rooms – The growing threat to the West End’s residential communities

Over a recent years a new threat to the West End’s residential communities has emerged – the increasing number of illegal changes of use from residential accommodation to short-stay hotel accommodation. Not only does the this unauthorised change of use have a negative impact on the amenity of long-term residents, but it reduces the amount of permanent residential accommodation in the West End and pushes up the price of the diminishing housing supply that remains.

This growing threat was set out clearly in a report to the Housing, Property and Community Services Policy and Scrutiny Committee on 17th January 2011. The key points from this report were;

  • Short-term letting reduces the stock of permanent housing, in a climate of housing shortages and stress within the City
  • Short-term letting harms the amenity of other permanent residents within established blocks. The use of short-term lettings as holiday accommodation in particular leads to activities incompatible with permanent residents, including reduced security, people making noise at unsociable hours and coming and going throughout the day. The high turnover of occupancy can be threatening towards longer-term residents who constantly encounter new faces, leading to increased insecurity and a fear of crime. It can lead to a feeling of transience and can undermine permanent residential communities / neighbourhoods
  • Short-term lettings have very high rental values relative to longer term lettings, which displaces potential longer lets. The City Council has historic evidence demonstrating that rentals achieved from short-lets are 300 – 500 per cent more than the average rents obtained from lawful longer property lets.
  • There was a report commissioned for Westminster’s Overview and Scrutiny function in 2003, which was conducted by the University of Westminster and documented that consistently higher rents were being charged for short lets. It was found from a survey that 2 bed flats in W1 were being advertised for £850 per week on a long let and £1,200 for a short let (a 41% increase).
  • Interviews in 2003 with estate agents advertising short let properties found that….overwhelmingly, agents felt that owners chose to let on a short-term basis for financial reasons – it was significantly more profitable than longer-term letting.
  • Despite the fact that all the agents interviewed were advertising short letting as one of their services, a third of those interviewed stated that they were not doing so and made reference to Westminster‟s policies and the ‘90 day rule’. As a result of the latter, none of the agents interviewed were willing to be identified in the 2003 report. In conversation after the interviews, some agents stated that it was possible to avoid breaching the 90 day rule by issuing a contract for a longer period, in the knowledge that the tenant would leave before the end of the contract. The limitation on short letting was felt to reduce business opportunities and was another factor for them to confront at a time when the general political and economic situation was leading to a decline in travel and tourism.
  • In 2004, a limited survey undertaken by the University of Westminster showing properties being advertised on the internet and by local agents as short-lets found in excess of 3,000 properties for such use. It is a view (although there is no empirical evidence) that the number of properties for short-term let remain at these levels if not higher and it is clear that many agents / internet companies are continuing to advertise properties for let on a short term let basis.
  • The Planning Enforcement Team currently has four Planning Officers employed on 12 month contracts (money secured from external funding) which will expire on the 4 December 2012.

http://transact.westminster.gov.uk/CSU/Policy_and_Scrutiny_Committees/Archived_Scrutiny_Committees/Housing_Property_and_Community_Services/17%20January%202012/Item06_Short%20Term%20Lettings.pdf

The snapshot below of examples reported to Westminster City Council by Labour Councillors illustrates the extent of the problem;

Dufours Place, Soho

A resident from a Council block in Soho says:

“I live in a Westminster Council block, and a huge number of the flats have been sold off to lessees. I and my co-residents’ representative have repeatedly raised the worry of the suspicious numbers of people arriving and leaving with quantities of cases after a matter of a few days’ stay, and I actually witnessed an incident which confirmed that a lessee was operating a hotel-type system of letting. We have been nagging our Village Manager about this for over a year, and at a meeting at CityWest’s Head Office I raised this problem again. We keep being told that lessees cannot be approached or their sub-tenants checked on unless there is cast iron proof of some breach of the regulations, and that therefore a real root and branch check on sub-tenants and the duration of their stays is impossible. The cast iron proof which I reported has only resulted in the lessee concerned being somehow alerted – he was actually operating a hotel-type letting business but this operation appears to be currently suspended. I suspect it will be resumed, since it has been going on for a very long time. But the attitude of CityWest Homes seems to be worryingly “hands off”, in very many respects.”

Dolphin Square

A resident of Dolphin Square tells us;

“About six months ago, I noticed that Dolphin House was being run as an apartment hotel with open advertising on internet sites like last-minute.com and bookings.com. The rates range from £180 to £400 a night and vary throughout the day since the management use an algorithmic booking programme to maximise the occupation rate. If one goes to the TripAdvisor website one can see reviews, good and bad, for short stays answered by the resident hotel manager;

“We stayed at this property for approximately two weeks while visiting Europe. The apartments are located near the Pimlico tube stop but if you take the tube from Heathrow you will still need to walk a few blocks to get to the apartments, the foot paths are a bit uneven so rolling a suitcase is harder than expected.”

“Had a thoroughly enjoyable time at Dolphin House – stayed for 6 nights. Wonderful location – close enough to walk to everything – 20 mins to Westminster Abbey or a tube station just a 3 min walk away. The area is very quiet and feels very safe even at night after returning from a show.”

 My sister and I travelled to London for 6 days. This was a convenient, safe place for two women “of a certain age”. We enjoyed the location and the convenience. It helped that the weather in London was glorious…it is a short walk to the tube but very, very convenient to the bus line.”

“We stayed three nights in Dolphin House. As part of the vast Dolphin Square complex, the place is a bit of a rabbit warren, but one benefit is that you have access to the gym and pool. Our room was on the ground floor overlooking a car park. As it was the weekend, it was fairly quiet though.”

“We have just enjoyed a very good weekend at Dolphin Square. We stayed here a few years ago and always enjoyed the spacious comfortable rooms with lounge and small kitchen. Since we last stayed there has been an overall improvement of the apartments and service. There is now a bar-grill where you can enjoy your breakfast, which was freshly cooked”

During the last month the hotel use has spread to the other buildings, where it is not unusual to see people coming and going with suit-cases morning and evening assisted by the Dolphin House porters. The main reception in Dolphin Square principal entrance is manned during the day by general letting staff who direct hotel visitors to the Dolphin House reception in the building to the side where there is a hotel style lobby and bar, and three receptionists who receive hotel guests. They are careful not to take bookings themselves but refer visitors to a telephone booking service or the internet sites that I have mentioned.

Forset Court and Dudley Court, Edgware Road

We have been given the following information about the experience of the sons of a local resident:

 “They both stayed at different addresses in the Edgware Road where I visited them and was appalled to see the conditions which I am informed are widespread. The two blocks in question were Forset Court, 140 Edgware Road, and Dudley Court which is at the junction of Upper Berkeley Street with the Edgware Road (entrance 38 Upper Berkeley Street). My youngest son occupied a bunk in Dudley Court while he was gaining work experience after graduating from Stockholm    University. The flat was occupied by 11 young Swedes of both sexes. My other son stayed in at Forset Court and he confirms that “bunking” is widespread in the building which is why the Soho-style bouncer is employed on the reception to maintain control.

Typically four bunk-beds are fitted into small bedrooms and the occupiers receive a bunk, and shared use of the living room, bathroom and kitchen. They pay one week’s rent as deposit and one week’s rent in advance and can leave at a week’s notice. If they do not have the money for a week’s rent in advance they are evicted immediately. The rents are between £85 and £120 a week.”

In response to enquiries from Labour Councillors, Westminster Council’s Planning Department has told us;

“You will be pleased to know that we are actively investigating both Dudley Court and Forset Court in an attempt to ascertain which flats are currently being used unlawfully for short-term let purposes. We are investigating 73 flats in Dudley Court out of a total of 110 and the Short-term Let Officers in the Team are currently drafting reports recommending issue of enforcement notices for three of the flats, where prima facie evidence has been obtained that they are being used unlawfully.

The Team is also currently investigating 17 flats at Forset Court, many of which are already the subject of extant enforcement notices. Should we obtain the necessary evidence that the owners of the flats the subject of the notices are breaching the terms of the enforcement notices, then prosecution action will be commenced.

I understand too that our Environmental Health Team will also now be investigating the overcrowding element to which your email refers and the possibility that some of these flats may now constitute unlicensed flats in multiple occupation under the provisions of the Housing Act 2004.”

St John’s Wood

We have alerted the Council to possible illegal use of residential property as hotel rooms after receiving the following information;

“I notice some people in council owned property, advertise their flats for nightly, weekly, or monthly rental stays, from £100 a night, to overseas visitors on airbnb.com. Surely this is not allowed and breaks tenancy agreements?”

These former Council flats in Frampton Street, Church Street, NW8 are examples;

https://www.airbnb.co.uk/s/nw8-9rx
Minimum Stay: 2 nights

Weekly Price: £700 /week

Monthly Price: £1700 /month

  • Extra people: £16 / night after the first guest
  • Minimum Stay: 4 nights

16 Dec 2012 – 6 Jan will be £49 for the first guest + £21 per extra guest per night. Book as normal and I will send a ‘special offer’ to reflect this.

The Way Forward

We urge the West End Commission to investigate this growing and illegal erosion of the West End’s residential base. One way forward may be to following the example of New York City, as described below;

New York to crack down on ‘no-tels’

By Vicki Baker, The Guardian, Friday 23rd July 2010,

If you like the idea of renting an apartment during a short break in New York, you could be facing some problems if new legislation is pushed through. The controversial proposal could make it illegal to rent an apartment in the city for any period under 30 days.

The “subletting” bill – which has been passed by senators and is currently awaiting final approval from the state governor – has been designed to crack down on illegal hotels that cause problems for permanent residents by depleting the local housing pool and creating noise and security issues. However, it is feared the ban will affect growing online networks, such as AirBnB, Craigslist, Crashpadder and Homeaway, which allow travellers to find short-term accommodation in privately owned properties

Although the bill is said to contain “appropriate exceptions for roommates and boarders who live or rent in the unit with the permanent occupants”, if you are looking to step in while the owner is away, you may only be able to do so if no money changes hands. This means home swapping is permitted, but paying to rent an apartment for private, short-term usage could become illegal.

The bill blames the internet for the rise of illegal hotels, stating that “it is easier than ever to advertise illegal hotel rooms” and “most tourists have no idea they have not made reservations at legitimate hotels until they arrive at their destination”. Sites such as AirBnB – which has more than 3,000 properties listed in New York City – maintain they make it very clear that these are residential properties.

Councillor Paul Dimoldenberg

Leader of the Labour Group

Westminster City Council

November 2012

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