The Brunswick Model of social housing provision

I’m starting this blog with a slightly longer post on one of my favourite places in London: the Brunswick Centre, a Brutalist masterpiece strikingly inserted into London’s Georgian Bloomsbury in the 1970s.

At the Brunswick Centre, the London Borough of Camden has entered into a highly unusual social rented housing arrangement: a long term agreement with the Centre’s owners to lease all of the flats at a below-market rate, which Camden then rents out individually to its council housing tenants. I call this arrangement the Brunswick Model.

A brief background

Built in the early 70s, The Brunswick Centre was a bold urban experiment.
However, post-completion it fell fairly swiftly into a decline that continued for decades. This decline was reversed in 2006 following a major redevelopment of the ground floor, public realm and building envelope.

Pedestrians have priority in the public realm which is generous and diverse as it weaves from Marchmont Street through the Centre’s privately-owned central retail spine, past a cinema and down a grand staircase to the local park. Pavements have ample space for cycle parking, and the surrounding street carriageways are narrow.

The long-established small independent shops and restaurants facing the Brunswick across Marchmont Street still appear to do brisk business. They seem to coexist well enough with the new higher end retail chains attracted to the Brunswick following the redevelopment. The persistence of these small businesses supports the local multiplier effect – the economic upshot of spending in the local economy.

Although privately owned, the Brunswick’s residential accommodation is leased by Camden Council, who manages it and rents it out as affordable housing. The upkeep of the council flat interiors, corridors and stairs is Camden’s responsibility and consequently they were not refurbished during the 2006 makeover.

How did the arrangement at the Brunswick Centre come about?

In the 60s, private developers had bought the land from the Foundling Hospital Estate, but their high-rise residential tower designs ran into trouble following planning height restrictions and the new Labour government’s laws protecting the rights of existing tenants on the site to be displaced by the scheme.

At this point Camden stepped in to take on a 99-year leasehold – set at below-market rates – on the project’s residential element, thereby rehousing all the people who had been moved from the site to build the Brunswick Centre.

The Brunswick Model of council housing — a council’s long lease on a block of housing which is then sublet to council tenants, arranged in Camden’s case to rescue a stalled development and rehouse the tenants it displaced — is quite rare in the UK The only other Brunswick Model I know of occurs at Nottingham’s Victoria Shopping Centre. (Thank you to Municipal Dreams’ John Boughton for pointing this out.)

Appraising the Brunswick Model

Lovers of modernist architecture are indebted to Camden for facilitating this great piece of building now protected by a Grade II listing. But was the Brunswick deal a good decision for Camden, its tenants, and the neighbourhood?

Cons

• The terms of the leasehold can complicate maintenance and repair arrangements. Friction has frequently arisen between the residents and the Brunswick owners over the management, maintenance and development of the retail and public realm elements; that said though, the Brunswick has a vocal tenant’s organisation that has proved it can stand its ground on occasion.
• An outsourced deal could be worse value for money to Camden if Camden had the appropriate skills and resources to fundraise and build its own housing.
• The arrangement also places a potential cash-flow strain on Camden’s Housing Revenue Account as Camden has to manage variable rental income from its tenants against a fixed monthly lease payment to the Brunswick’s owners.
• Finally and probably most importantly, the high turnover of the Centre’s ownership has meant that Camden has had only a superficial relationship with its succession of landlords. Nottingham’s Victoria Centre has similarly seen a high turnover of ownership. This has hampered opportunities for negotiating and implementing long term strategies benefit both the Council and the Centre’s owners, such as joint maintenance, repair and upgrades, and joint residential/retail tenant initiatives.

Pros

• The arrangement was a simpler way of expanding Camden’s affordable housing provision whilst only minimally impacting its ability to borrow further.
• As an alternative to a Council arranging a large number of individual tenancies with as many different private landlords – as they are sometimes obliged to do when demand for social housing outstrips supply – the economies of scale of the collectively bargained Brunswick Model means lower rents for council tenants, better security of tenure, and simplified administration.
• Camden’s council housing tenants in the Brunswick have benefited directly from uplift of the quality of the public realm and retail facilities financed by the Centre’s owners, without suffering the resultant increases in rent which individual private tenants in the neighbourhood have had to endure.
• The arrangement has allowed Camden some control over the socioeconomic demographics in the neighbourhood, enabling it to steer towards a healthier mix of ages and family types so often absent in the rapidly gentrifying central London neighbourhoods. A corollary of this is that without the Brunswick Model arrangement in place, residential prices and living costs at the development would have risen along with the gentrification of parts of the Centre’s neighbourhood, to the detriment of the long-established businesses and long-time residents there.

Local authorities’ struggle to meet demand for council housing

Low cost housing remains in short supply, especially in the super-heated property markets seen in many UK cities today.

A local authority that has access to capital — be it land or borrowing — can build more council housing. Restrictions on council borrowing generally meant that an authority could grow its council housing stock only by redeveloping its land. Such regeneration schemes can be poor value for money for an authority insufficiently skilled in negotiating the best deal with private developers or lacking expertise to carry out such an exercise in-house. Recently, a number of high profile regeneration schemes – such as the Heygate Estate in Southwark – have highlighted these can result in a net loss of social rented housing.

It is commonplace for demand for council housing to significantly outstrip demand, even in local authorities with access to land, borrowing or estate regeneration. This has in part been due to shrinking council housing stocks prompted by the Right to Buy initiative from the 1980 Housing Act.

When there is a council housing shortage, individuals must rent accommodation from the private sector. To help with this, local authorities administer payments of Housing Benefit by Central Government to cover these accommodation costs. A problem with the Housing Benefit is that it is set so far below the local average market rent in any location that many recipients have to move, often to other cities, to find private accommodation they can afford.

The Brunswick Model is available for local authorities to provide council housing when their access to capital is constrained, and the right conditions for estate regeneration don’t exist. With it, they can collectively bargain long term tenancies with private landlords at rents that closer to the levels at which Housing Benefit payments are calibrated.

Applications of the Brunswick Model

The Brunswick Model is available to authorities because of their unique collective rent raising capabilities, thereby extending their housing portfolios without significantly impacting their balance sheets.

The Brunswick Model gives local authorities the ability to help shape neighbourhoods outside the confines of their own property holdings. It could be used to encourage necessary urban development which doesn’t (yet) have the backing of private capital, such as brownfield sites in unpopular neighbourhoods with good long term prospects, such as proximity to existing or planned transport interchanges. Being a ‘first mover’ by signing a long-term lease with a private developer in such areas automatically lets the local authority apply the brake on any future gentrification, as already discussed.

It is also an opportunity for local authorities to team up with socially responsible developers in supporting experimental architecture and urbanism — such as ultra-low carbon innovations — where the private sector is reluctant to do so.

In times of economic uncertainty or even recession, when private investment can be scarce, the Brunswick Model allows the local authority to stimulate its local economy, allowing a local authority to use its reliable collective rent raising ability to guarantee a developer a long-term rental income, which the developer can use as debt collateral for its development.

Past and future

What could parts of UK cities have looked like with the bold application of the Brunswick Model?

Could it have helped the Battersea Power Station project be realised in the economically unstable 1980s when its location was still highly unpopular despite being so central, and the UK economy was sluggish? Could the social cost of not housing thousands of families in affordable accommodation over more than three decades have been foregone whilst at the same time experimenting with innovative architecture, best of breed sustainability design and providing a public realm that is welcoming to all?

Local authorities should add the Brunswick Model to their arsenal during this, the greatest housing crisis in living memory.