Clarion has been given the green light by Merton Council to redevelop three housing estates in the borough.
The housing association will invest £1.2bn in building 2,800 homes across three existing estates: Eastfields and Ravensbury in Mitcham and High Path in Wimbledon, SW19.
It joined up the planning and development of the three to cross-subsidise the cost.
According to Paul Quinn, director of Merton regeneration at Clarion Housing Group, only the High Path estate in Wimbledon is financially viable to redevelop on its own, as it can be densified, land values are higher and it is next to South Wimbledon Tube.
The Mitcham estates were not viable for development on their own, due to location and a larger proportion of right-to-buy homes. The surplus Clarion makes from Wimbledon will pay for the other two.
“It makes it especially complicated,” said Quinn. “Because we are already cross-subsidising within the estates across tenures, we are building homes for sale and homes for rent to cover the cost of replacing all the social rent and affordable rent, but equally we are cross-subsiding across the three estates.”
Quinn says the plan means all the properties will be regenerated, and Clarion expects to make a small surplus overall, which will be reinvested.
Replacing all homes
The three estates comprise a total of 1,200 homes, of which Clarion intends to demolish all but 91 and use densification to finance new units. Of the 2,800 new homes planned, all existing residents will be rehoused, and all the existing socially and affordable rented homes, are being replaced.
The remainder of the new homes, about 1,800, will be for private rent or sale, to pay for the rest.
This make the affordable provision about 30% – though Quinn points out all of that number are either affordable or social rent, and it does not include the Right to Buy units being replaced.
“It is much more complicated to assemble the sites and the support of local people. So the resident offer we pulled together is the key to the project getting this far because we needed to demonstrate to all those resident homeowners that we were going to treat them fairly,” said Quinn.
We are very conscious of how poorly regeneration has been portrayed, particularly in London
Right to Buy has proved to be a major obstacle for estate regeneration across London and about 40% of the existing homes are owner occupied. In a novel new programme, Clarion is either offering to buy out the existing owners at current market value plus 10%, or provide them with an equivalent new home.
If they are re-provided, there is a tapering agreement in place, which means should the owner choose to sell after redevelopment, they would only receive the market value of the previous unit, though the longer they stay the more value they receive.
In total, Clarion expects to rehouse about 200 existing owners.
Changing perceptions around estate regeneration
Quinn says it has been a long process of consultation and complicated modelling to ensure it all worked – both financially and for residents.
“What we did here, was at the same time as developing the physical offer, to simultaneously develop the residents’ offer: what financial compensation you could expect, what your accommodation might look like, and how that impacted on you, based on your tenure,” said Quinn.
The model being adopted for the redevelopment is a significant attempt to move away from the controversy that has surrounded some councils and their estate regeneration schemes. Clarion appointed Membership Engagement Services, part of the Electoral Reform Society, to help with extensive tenant consultations that were developed and launched alongside the masterplan.
You can put the community at the heart of it, and you can build high quality neighbourhoods
Quinn said: “We are very conscious of how poorly regeneration has been portrayed, particularly here in London, though there are a number of very good schemes coming forward, particularly where particular housing associations are trying to bring forward quality regeneration.
“Our Merton offer, that resident offer, that is us putting our money where our mouth is, that we are serious about place making, about retaining communities and design quality.”
“That it how we will be doing all of our regeneration projects through Clarion, through that sort of resident offer. We are keen now, having secured planning, to promote that regeneration can be done well, you can put the community at the heart of it, and you can build high quality neighbourhoods”
The total redevelopment will also include 97,000 sq ft of retail, leisure, office, work and community space. The GLA’s Homes for Londoners 2016-2021 programme is also providing £15m in financing.
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