David Collins and Hannah Al-Othman www.thetimes.co.uk
In Manchester one property developer rises above the rest when it comes to helping the homeless and regenerating the booming city centre.
Tim Heatley, co-founder of Capital & Centric, is investing half a billion pounds to build plush apartments and a hotel as part of the city’s property boom. A well-known figure, Heatley chairs the Greater Manchester Mayor’s Charity, set up by Andy Burnham, the mayor, which has raised £2m for charities tackling homelessness. Despite this good work, however, an investigation has revealed that Heatley’s company has big developments that provide no affordable housing — a trend that is becoming common.
Manchester, a Labour stronghold, is in the grip of a housing crisis, according to MPs, housing associations, homeless charities and campaigners. More than 15,000 people are on the waiting list for social housing in Greater Manchester. Just over 7,000 are in a “higher housing need band”. More than 5,500 people are homeless, says the anti-poverty charity Greater Together Manchester.
The shadow housing minister, Mike Aymesbury, a former director of a housing association who was once a Manchester councillor, said developers often “hide behind viability” when they fail to meet affordable housing obligations. By this, he means developers claim their schemes are not worth building unless the requirements are waived.
The government defines affordable homes as those rented at no more than 80% of the market rate or sold below market value. Developers must create such homes as part of their projects or pay the council to build them elsewhere.
Capital & Centric is building 881 flats at Crusader Mill, Kampus and Talbot Mill, some priced at more than £1m. None is “affordable”. Planning documents also show Crusader Mill and Kampus will make no “section 106” payments. Talbot Mill, with more than 200 high-end flats, will provide £50,000 in S106 payments. The money goes into a pot for the council to build affordable homes elsewhere.
Crusader Mill and a block of flats called Phoenix, part of the same project, will cost a total of £40m. Heatley and his business partner expect to make £8m-£10m in profit.
Manchester’s Labour-run city council, led by Sir Richard Leese, which has control over planning decisions, says its starting point for negotiation on affordable housing is 20% on new schemes. However, developers often get consent for plans with 0%-3% affordable housing, or the equivalent in S106 payments.
A council insider defended the policy, saying: “Developers will only put a spade in the ground if a project is viable. And although we negotiate strictly, if the finance of a development doesn’t stack up, then it doesn’t get built at all.”
Heatley, 40, has won awards for his regeneration projects, creating buildings with expensive architecture that are energy efficient with green space. A star of the BBC documentary series Manctopia, which starts this week, he is transforming the area behind Piccadilly station, where oral sex is on offer for £4.99.
“I realise I’m the chair of the Mayor’s Charity for homelessness and built no affordable houses,” he said last week. “But this is a national problem. Developers who want to build affordable homes are being priced out when purchasing the land or buildings. A developer who decides to build no affordable homes as part of a project can bid higher.
“If I make an assumption that a huge percentage of my projects will be affordable housing, I’d never be able to buy the land or buildings. It means all developers are battling against each other because there is no national policy on affordable housing in our city centres.”
The government proposes to phase out S106 and create a flat-rate tax on a development’s value, which would pay for schools, transport schemes and affordable housing — and remove the power of councils to make demands of, or concessions to, developers.
Heatley, who is working on a future development with 100% affordable housing, says the solution should be national. “If Manchester alone brought it in, all the developers would go to Leeds and Sheffield. Otherwise the good guys who are socially conscious will always be squeezed out by the other guys.”
Sports stars have joined developers to invest in city-centre apartment blocks. They include the footballer Vincent Kompany, who is building 75 flats with M4nchester Two. Kompany, who has spoken out on homelessness, has no affordable homes allowance in his block.
Manchester Life, owned jointly by Manchester City’s owner, Sheikh Mansour of Abu Dhabi, and the city council, has built more than 1,000 homes. Not one is classed as affordable and no S106 payments are being made.
Former England cricket star Andrew Flintoff is building a 23-storey block in Castlefield with 335 luxury flats. The developer is providing a cash contribution of £1.15m, equivalent to 5%, towards affordable housing elsewhere.
But many Mancunians are being priced out. “Now you have Media City, Salford is becoming a really desirable place,” said Christina Hughes, from Winton, Greater Manchester. She pays £670 a month to rent a three-bedroom semi-detached house with a garden. “I’m managing, but I couldn’t pay any more.”
A Manchester council spokesman said: “The city is committed to building 32,000 homes between 2015 and 2025, including 20% affordable and social homes — 6,400 properties — as part of the city-wide target for affordable housing.”
Burnham said: “If you look at what Tim Heatley does, he doesn’t sell buy to let. He does a massive amount of work in this city and I’m grateful to him for what he has done on homelessness.”
The mayor called for central government to subsidise councils and private developers who want to build affordable housing on brownfield sites.
“It’s the system which is at fault. It’s easy to point to Manchester City Council or one particular developer. The current system doesn’t give councils enough power to provide affordable homes.”