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Real Estate Developers Held a Conference in the Midst of London's Housing Crisis

Protesters gathered outside to heckle delegates, who seemed hell-bent on making London even more expensive to live in.
Simon Childs
London, GB
October 21, 2014, 10:00am

The MIPIM UK real estate conference took place in London for the first time last week, playing host to investors from around the world and politicians from up and down the UK. Those in attendance listened to a speech from London Mayor Boris Johnson in which he held up a decadently pricey redevelopment project as a beacon of the affordable new London, attended various panel discussions, and chatted about the big real-life Monopoly game they control over a load of free booze.

According to the host of one talk I went to, London, currently, is "buzzing."

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"The general sentiment right now is that we're on top of the world here in London," he said. That was the view from inside the conference, anyway. Outside, protesters were heckling delegates as they arrived, angry that for people struggling to pay rent, living in London can feel less like you're on top of the world and more like you're at the bottom of the pile.

You could be forgiven for thinking the delegates inside were laughing about the plebs protesting outside while knocking back magnums of champagne and devising innovative new ways to rinse the poor for even more rent. This is only partly true. In various talks reference was made to the protests, and some mentioned the fact that housing is a huge political issue. "The real estate industry is paying attention," seemed to be the message.

That can be taken as a victory for groups like [Radical Housing Network](http:// http://www.standardevening.co.uk/), which organized the picket line-the hecklers had forced people who would prefer to talk endlessly about real estate as a commodity to discuss housing as a thing that people actually need to live in.

That said, the protesters probably wouldn't have been too happy with the solutions that were being discussed, particularly the talk called "Exploring Healthcare: Opportunities for the Property Industry," during which people got very excited about making money out of the National Health Service. That panel included someone from Capita-an outsourcing company famous for processing disability benefits so slowly that a number of terminally ill people died before they got their money, and for the time it told some legal residents of UK that they were illegal immigrants who had to leave the country forever.

Asking a load of real estate investors to solve the housing crisis is kind of like asking a barman to cure your hangover. At times, this led to weird results and banal management-speak. The most bizarre came in a session about how to incentivize development, during which people were really concerned about "some sort of disconnect between the carrots and sticks."

Foreign investors have gained something of a pariah status in the UK by parking their money in UK real estate and subsequently jacking up housing prices. In a session called "Foreign Investment in Housing: Good for the UK or Good for Investors?" it was easy to see why people don't like them. The speakers were all very excited about Britain, and London in particular, which they saw as the "number one global city" that is seeing just the start of a wave of investment.

"London is our first choice for our international expansion platform," said Michael Purefoy from the Chinese conglomerate Dalian Wanda Group. But foreign investors also warned that if anybody tried to tax their massive profits any more, they would simply leave.

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Nick Candy, the developer behind the breathtakingly expensive penthouses of One Hyde Park, warned, "Whichever way they choose to tax it, every investor has a choice and they don't have to choose London. There are other places in the world; there are tax-free places-Singapore and Dubai-or higher tax rates like Los Angeles or New York. They have a choice. And unless we're competitive on a global level, London and the UK will suffer, simple as that."

(Obviously, some of Candy's clientele are already trying their best not to pay much tax. Last year, Vanity Fair reported that a high number of One Hyde Park apartments are owned by companies in offshore tax havens.)

Joe Burns, head honcho of "super-prime" developer Oliver Burns, said that foreign investment would provide the "expertise" to solve the housing crisis, as if everyone in the UK has just forgotten how to build homes that people could afford to live in, leaving us with no option but to consult some Malaysian venture capitalists.

He had more of a point, though, when he asked how more homes are going to be built without money from these people. The fact is, with budgets being cut, the only way local councils can afford to build houses is through private investments. But investors want to build posh flats, not affordable housing.

This was thrown into sharp relief by Lib Peck-leader of the council in Lambeth, South London-in a session called, "The Case for Investing in Affordable Housing." She talked a good game on gentrification and the importance of mixed communities, and spoke of "seizing opportunities for inward investment that matches our politics as well." But the tension between the two was made clear when she began to talk about "pragmatism" and "imaginative ways to bring in investment"-which sounded a lot like "doing what the developers want"-before discussing the protesters outside.

"It's not to say that I'm not drawn to some of their concerns around gentrification-I can absolutely understand them," she said. "But the naivety of just assuming that you can ignore the private sector when that's where the money takes us seems to be just that-naïve-and not really dealing with some of the problems we have."

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Lambeth resident Julian Hall has been fighting for the last few years to save his "shortlife" home from repossession by the council, who wants to sell it to developers who will turn it into a much more swanky residence. He'd been at the alternative housing conference that was taking place down the road. I asked him about the "naïve" comment.

"She would say that, wouldn't she?" he said. "The people outside were trying to make a point about the urgent need for [public] housing. The kind of deals that are being done with developers-and the percentages of [public] housing that people are getting out of them-are really not sufficient. If anyone's being naïve it's her."

If councils do insist on being tied to private investors for their housing funding, and attending events like MIPIM, then the outlook is pretty bleak. The agenda of these events, and the attitude of the attendees towards housing that people can actually afford, was laid bare by the MIPIM UK Awards.

To take a couple of examples of the victors, Michael Heseltine won the "lifetime achievement award"-his key achievement being the implementation the "Right to Buy" that sold off Britain's public housing under Margaret Thatcher. The regeneration of Earl's Court was given the "best future project" award. This 77-acre redevelopment will mean the demolition of two council estates-760 homes and upwards of 2,000 residents-and the Earl's Court Exhibition Centre. The new development will have over 7,000 flats-only 11 percent of which will be "affordable." A one-bedroom will cost £600,000 (nearly $970,000).

If local councilors continue to drink fizzy wine in places where these kinds of developments are held up as examples of best practices, rather than spending time with the communities that they destroy, we can only look forward to London becoming even more unbearably expensive for the people trying to live in it.

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Photography and additional reporting by Oscar Webb.