This week, let’s explore the debate about the ‘benefits of growth’ through the experience of one local development, 291 Hills Road.
This project has generated considerable public interest ever since the plans for the demolition and replacement of ‘Raylands’, the existing Victorian house, were first submitted back in 2017. Although there’s still another six months to go before it’s completed, we’re now in a position to at least start assessing what’s been gained and at what cost.
What has been lost?
The most visible loss is the building itself, a characterful Victorian property in its own right and characteristic of the neighbourhood as described in the City Council’s 2012 Hills Road ‘Suburbs and Approaches’ study. Raylands wasn’t a Listed Building, or even recognised as a Building of Local Interest but it was a significant historical building on a visible corner plot, integrated into the streetscape of the area. This was afforded no weight in the planning process.
Looking beyond aesthetics and local character, Raylands’ size also accounted for considerable embodied carbon, now lost through demolition. This factsheet from UCL’s Engineering Department explains why, in carbon accounting terms, retrofit/refurbishment options offer many advantages over demolition and rebuilding. This principle was summed up by distinguished architect Carl Elefante: “The greenest building is the one already standing”. In the case of 291, there was no reason why it could not have been retrofitted to meet C21st standards, either as a single family home or subdivided for multiple occupants. Instead, it has been replaced by a carbon-intensive concrete and glass structure.
The scale of the redevelopment also required the removal of half of the mature trees on the plot, with all the accompanying biodiversity loss. It remains to be seen how many of the trees which the planners required to be protected from the developers’ chainsaw do actually survive the aftermath of the construction process, especially the deep excavation of the basement parking bays.
Finally, the footprint of the building relative to the size of the plot has made it hard to contain its negative externalities. There have been repeated issues with contractors parking on the pavement on Queen Edith’s Way, blocking the shared use path and damaging its surface. And the need to upgrade the utilities supply to the property has led to two weeks’ of lane closures on Hills Road (electricity) and now a full three week closure of Queen Edith’s Way (sewer upgrade). These have had a significant effect on people’s ability to travel safely and conveniently around the area, particularly the loss of segregated cycle provision on Hills Road which has encouraged cyclists on to the pavement, bringing them into direct conflict with pedestrians. Congestion, air pollution, lost productivity – I could go on.
And the promised upside …?
This is the point at which we shift focus away from the material cost to our neighbourhood and explore instead the nature of the public goods which, so the pro-development narrative tells us, this development will bring about.
The most obvious proposition is that it’s replaced housing for a single household with housing for 15 households, and that this should override all other considerations due to pressure of demand on Cambridge’s housing market. But as I’ve emphasised in previous posts, there is no possibility that we can build our way out of what is an affordability crisis because of Cambridge’s almost unique status as a magnet for global investment.
So the question then is – who is buying the property and what they intend to do with it? Is it individual owner occupiers, or is it investors who snap up Cambridge flats in particular because they know they will generate high yields as rental units? BBC journalist Mark Williamson has highlighted concerted efforts to promote Cambridge properties to the Chinese investment market, on websites like this and YouTube channels like this. Homegrown agents such as Savills are also in on this extremely profitable act. Note that the Savills website quotes the price of flats at 291 Hills Road in both UK and Hong Kong currency.
And happily for them, investment buyers are responding enthusiastically to the offer. I checked the Land Registry records earlier this week and, of the five sales recorded so far at 291, three have been made by an apparently Far East buyer via a London solicitor; one by directors of an investment company with £12m of properties; and one (perhaps) by someone who might actually live there.
Note also that the new flats at 291 are priced very much at the top end of the Cambridge market. The one bed flat currently on sale for £440k is the fourth most expensive property of its type on Rightmove today. Put down a 20% deposit (£88k) and you would still need an annual household income of £80k to qualify for a mortgage. The annual average salary within the Cambridge is £36k. And even that ‘average’ figure is distorted by the very high earners at the top of the distribution curve – a different picture would emerge by looking at the incomes for the 25th and 75th quartiles.
Of course, none of this is news. Savills noted the discrepancy between local sales and local purchasing power in a report they undertook for the Greater Cambridge Partnership back in 2017 (p22): “The large amount of new supply absorbed at values over and above what might be expected from the local income distribution suggests that sales may be being supported by investor buyers and higher salaries (potentially including London commuters).”
What all of this means is that, contrary to the impression presented to Planning Committee, the high cost of owning or renting these flats makes it shrinkingly unlikely they will be occupied by keyworkers at the Biomedical Campus, thus yet another missed opportunity to enable low-paid workers to live close to where they work.
However, an often-voiced proposition is it doesn’t really matter who buys the market housing provided that developers are required to deliver a proportion of affordable housing alongside. Well, that rather falls over when developers – such as those at 291 – submit viability assessments to planners which enable them to escape this responsibility. From 17/1372/FUL “A development appraisal which has been assessed by an independent valuer confirms that the development cannot support any affordable housing”.
You might find that conclusion surprising. I certainly did. So let’s quickly cross-check what we know so far. The site was sold in 2017 for £1.7m. The new development will comprise 1 x studio flat (£300k); 5 x 1 bed flats at £440k generating sales revenue of £2.2m; and 9 x 2 bed flats at £480k generating £4.32m. Of course, the developer may not achieve these numbers but as a rough estimate, they will get a return of £5.1m (£6.8m – £1.7m) after paying for the site and before deducting building costs, professional fees, etc.
It seems extraordinary to me that this is not deemed sufficient to make a contribution towards the city’s acute need for affordable housing; but because the details of these viability assessments are deemed to be commercially confidential and are redacted, we cannot see the numbers for ourselves. However, what we do know is that the project has contributed £36k in S106 payments ‘to mitigate the impact of development’. £36k on an assumed total sales revenue of £6.8m represents 0.5% of the value of the project coming back into our neighbourhood.
291 Hills Road is just one example of what’s happening in our city. There may be others where the profit and loss balance looks rather more favourable. But in either case, we deserve much more detailed scrutiny about what we are actually getting out of this, and who the winners and losers are.