Amid all the talk of credit crunch, downturns and recession, this could actually be a great opportunity to look at urban regeneration a little differently.
I’m no economist, but in common with all of you I’ve been learning a lot of new two-word jargonese over the past few months. As chair of the British Urban Regeneration Association and the head of regeneration for what they tell me is the largest property consultancy in the world, I am readily assuming a patina of expertise. I can blag it with the best of them. I can now bandy about terms like “credit crunch” and “sub-prime”; I can litter my communications with references to the crisis at Northern Rock or Soc Gen or even the A&L; I even found myself referring to “mono-line insurers” in public the other day (please don’t ask, I got away with it on that occasion by the skin of my teeth).
Whether you believe what one large developer told me the other day – that “America is going to suffer a total collapse” – or whether you believe CB Richard Ellis’ line (there will be significant adjustment, but this is no 1991), there is no escaping the fact that things in regeneration are going to change.
Anyone with a social conscience is duty-bound to observe that the mis-selling of loans-for-homes to vulnerable American folk who couldn’t afford them, and the subsequent packaging up of these loans, slicing them every which way and selling them on, leading to contaminated debt markets and, most crucially, a complete collapse of trust, is nothing short of criminal. It’s also, arguably, almost inevitable in the land-of-the-free-and-lack-of-planning-controls, but that’s another story.
Whatever the morals, the question is, what effect will all of that have here in the UK? So far, even the experts cannot agree on what level of exposure we all have.
Well, I am a glass-half-full sort of person. You could argue that if I wasn’t I wouldn’t have tried to begin a large-scale regeneration project. Frankly anything I’ve been involved in has looked distinctly suspect in the balance-sheet department at the outset.
Bearing that in mind, it’s important to remember what the late great Ian Dury would have termed our “reasons to be cheerful”.
Many projects now will not get started without some form of intervention from the public sector. This also means that the good guys will have more control over the outcome of regeneration schemes, which can only be positive.
Fact one: the massive over-supply of homes in the US is not replicated here; in fact demand still outstrips supply in almost all areas of the UK. All right, there are a few conurbations with some drastic over-supply of blocks of dreary two-bedroom new-build flats, but don’t try and tell me that we’ve only just noticed these aren’t sustainable. The housing market here has a huge way to go before there will be any repeat of the negative equity crisis of 1991. We still need new homes. And someone will find a solution to the glut of two-bedroom flats.
Fact two: many projects now will not get started without some form of intervention from the public sector, meaning those with urban regeneration professional skills will be hugely in demand. This also means that the good guys will have more control over the outcome of regeneration schemes – the mix of uses and tenures, for instance – which can only be positive. It is another way of making the mainstream developers, agents, investors and the like look at things differently.
Fact Three: as any downturn bites there are inevitable job losses. Of course this is bad, but wherever there are job losses there is also a concomitant rise in innovation and business start-ups. This is an opportunity of major proportions for the urban regeneration professional. We are getting much better at clustering BME and micro businesses in managed space projects, and indeed in many cases these clusters can form an anchor for otherwise marginal developments. There’s no denying it’s tough, but we can make this work.
And these are only three good things – actually there are many more (the potential narrowing of the north-south divide in the UK for just one example). As yer man Nietzsche said: “What doesn’t kill you makes you stronger”. This isn’t going to be as bad as the last downturn and those invoking the term “recession” are so far overeacting.
I would urge you all to keep your nerve and just apply a little extra rigour to all you seek to bring forward – the fundamentals don’t change. In the meantime, let’s hope I’m right!
Jackie Sadek is director of regeneration at CB Richard Ellis and chair of BURA