Jon Rouse The question hanging over much of northern England is: how bad does a neighbourhood have to be before the only thing that can improve it is a bulldozer?

Keep or clear? This is the key housing question ricocheting around large areas of the North and the Midlands. In one corner are the likes of English Heritage and the Sustainable Development Commission. In the other, a mix of development agencies and interested economists.

This matters. We are talking about the possible demolition of more than 100,000 homes, along with the displacement of whole communities. If you want to know what happens when you get this particular decision wrong, visit some of the soulless post-war estates on the edge of Glasgow, Merseyside and Humberside that are themselves the subject of renewal.

From where I’m sitting, the two camps are both right and wrong. In some of the renewal areas I side with the demolition men; in others, I’m with the conservationists. There is no one solution.

In making my judgment, I start by looking at the prospects for the sub-regional economy. In this respect, it is usually best talking to the cold hearts at the Treasury, the Audit Commission and Office of National Statistics, who will give you a realistic appraisal. If, even on the most optimistic equation, the population is going to decrease, then it is a simple matter of economics: there are not going to be enough people to fill the homes and some of the least popular accommodation will have to come down. In these circumstances, we should look at radical surgery.

Once you’ve got a take on the overall economic equation, the next thing to do is look at the mix of accommodation available. So, for example, one of the problems in Gateshead, Tyne and Wear, is that too many homes of the same type – two up, two down, sometimes with an additional box room. This means that the city is ceding too many of its aspirational families to surrounding suburbia, reducing the economic wealth of many of its neighbourhoods and adding to commuter traffic. This provides the rationale for clearing some homogeneous stock and building a wider mix of products. The aim should be mixed-use, mixed-tenure, mixed-scale communities.

Only when we have a take on these two big contextual issues, is it sensible to look at the circumstances of the particular district or neighbourhood. At this level, a key question will be, has the neighbourhood gone past the tipping point? In other words, whatever the state of the physical fabric, is the social stigma attached to this place so severe in terms of abandonment and crime that the only way forward is to start again?

Whatever the state of the physical fabric, is the social stigma attached to a place so severe that the only way forward is to start again?

Here is where I would urge caution. Over the past few years, we’ve funded a variety of tools that have brought neighbourhoods back from the brink, with only limited demolition. Take the work of Manchester Methodist Housing Association in Levenshulme and Salford. Using a mix of refurbishment, new build, home zone principles and intensive neighbourhood management, they have been able to turn whole neighbourhoods around. In the Northmoor Road area of Levenshulme, house values have gone from virtually nothing to £75,000 for a terrace house.

The dwellings can also be tackled as well. Urban Splash has rightly received a lot of publicity for its proposed scheme to convert “backs” terraces in Salford into one-bed open-plan living spaces. But the reality is that CDS Plus Housing Association is doing much the same thing in the Liverpool 8 area, backed up by intensive neighbourhood management. Others are knocking through terrace houses laterally to create bigger family dwellings. Somewhere in east Lancashire there’s rumoured to be one family who have bought up and knocked through an entire street of terraces.

Some of the problems of the inter-war and post-war estates can also be tackled innovatively. CABE has done brilliant work on remodelling Radburn estates through selective demolition and what is colloquially known as “alley-gating”.

Having seen these success stories, I am convinced that a significant amount of housing, particularly the late 19th-century stock, can and should be retained in the pathfinders, particularly in those neighbourhoods that lie in the heart of the major conurbations – Manchester/Salford, Sheffield, Liverpool and Newcastle/Gateshead. In these areas, there is no reason why, with a sophisticated strategy, demand cannot be brought back into line with supply while retaining valuable stock that, once knocked down, could never be replaced. Not only is this strategy sustainable but it also helps community cohesion and is often better value for money. It can also often achieve quick results.

So back to the question – keep or clear? To the extent that the nine pathfinders are about dealing with the realities of long-term population decline, then yes, let’s clear and be bold about it. But in neighbourhoods that are capable of turn-around, the bulldozer merchants should keep clear while we look at what can be saved.