Up-and-coming areas of Ancoats (L) and shoppers pass rough sleepers in Piccadilly Gardens. Photos: Joel Goodman

The Manchester paradox

Manchester has a housing boom and a homelessness crisis at the same time—and it has George Osborne to thank for both
March 4, 2019

It is the great Manchester paradox. In the past few years, the self-styled capital of the north has become renowned for its residential boom—cranes, concrete and steel fusing in the air at a breathtaking pace; thousands of new flats crowding into the Victorian gridlines of its city centre. But it has also become notorious for a serious homelessness problem. At street level, the piles of sleeping bags come into sight the moment you emerge from the city’s Piccadilly or Victoria stations. New figures released this month revealed that 21 homeless people died in the city in 2017—that’s more than in any other local authority area in England and Wales. You hear this mismatch remarked on every time a party conference is held in the city, every time Londoners relocate north for a few days, and on the tram as you enter town from any direction.

This isn’t, of course, the only city where you can find affluence and squalor side by side. Despite the absence of recession and employment that is plentiful by the standards of recent history, homelessness has been rocketing nationwide. But the contrast in Manchester is singular. It is here we can most starkly see the twin faces of the legacy of nearby Tatton’s ex-MP, the former chancellor George Osborne. A champion of austerity, he was also reported as telling the cabinet: “Hopefully we will get a little housing boom and everyone will be happy as property values go up.”

In Manchester, at least, we have got that boom. The gentrification it spurred has doubtless improved the lives of many aspiring people—and yet, as you look down from the new skyscrapers to the streets below, it is hard not to wonder whether it came at the expense of others.

Boom town

The last chancellor’s “northern powerhouse” policy—some serious devolution, a dash of infrastructure investment, the trade delegations to China—has helped money flood into housing, as ambitious local leaders have opened their arms to developers. And the results are now playing out. Currently there are nearly 80 cranes on the city’s skyline, hoisting up a forest of apartment blocks to mainly house young professionals, a generation starting to turn their back on London for a better quality of life.

Some 10,000 flats are being built in the city centre, while 2,000 were completed last year and another 9,000 are expected in the next three, in what property journalist David Thame—who has followed the city’s progress for decades—says is unmatched in the western world.

He recalls the vision of the last generation of urban transformers: “They wanted large-scale urban regeneration fuelled almost entirely by the private sector, with clever leverage of a small amount of public resources.” This vision was unfulfilled in most inner cities in the 1980s and 90s, and Manchester was no exception. Despite some successes, like the rebuilding of adjacent Hulme, a generation ago, Manchester’s post-industrial centre itself remained desolate, only a few hundred people wanting to live there.

But today? With a bit of cunning statecraft and relatively modest public outlay, this city has got an influx of foreign investment, particularly from the Far East. “This is the wet dream of the 1980s,” says Thame, “and it’s happening in Manchester… That’s what we’ve got.”

The state of the skyline is “jaw-dropping,” he adds, and unimaginable anywhere in the UK outside of London. “You might see that in the Gulf or parts of China, but nowhere else in the world do you get that scale, apart from Manchester.”

There seems to be little question that the new flats are meeting a suppressed demand among a generation unable to buy. The building boom may be recent, but the demand it answers has grown up more gradually. Manchester has had in spades all the things that have made inner-city living newly fashionable in Britain: expanding universities, canal-side flats, burgeoning eateries.

As mortgages have dried up and the city’s drive to retain graduates has paid off, as the relocation of much of the BBC to Salford has brought new media status to the region, and as the Northern Quarter has blossomed into a hotpot of thriving tech start-ups, a generation of millennials has made Manchester their home.

Even if rents in the city centre have recently levelled off slightly, they are still rising—and they are already up nearly 30 per cent on five years ago. Just 0.3 per cent of properties stand unlet for more than six months and Manchester council calculates that even after all the development is complete, there will still be an undersupply of around 750 homes each year in the city centre, when projected against demand, so the pressure on rents looks likely to carry on building.

That desire to live there, which the city hall’s research has found extends to key workers like teachers and nurses, is also borne out by the extraordinary revival of Ancoats, on the fringe of the city centre.

The heart of the original northern powerhouse, this Victorian mill neighbourhood was the subject of Friedrich Engels’s The Condition of the Working Class in England, but by the noughties was essentially a vast slice of crumbling real estate owned by what was then Northwest Regional Development Agency. In the past four years, the neighbourhood has gentrified in the blink of an eye. Now regularly named in surveys and in the national press as the best place to live in the country, its cobbled streets are packed with micro-breweries and converted loft apartments. All of this would have been almost unimaginable to those running the city 25 years ago.

Bust town

The highly contentious claim of Osbornomics was that such private prosperity would actually be supported by the big spending squeeze of the last few years. A smaller state running a smaller overdraft was, the chancellor liked to argue, the way to avoid “crowding out” private enterprise and investment. But even if the hard-hat economics of the Osborne Treasury flourish in Manchester’s skies, there can be no disputing the dark shadow that its austerity policies—particularly benefit cuts and freezes—has cast over the bottom end of its housing market.

Rough sleeping, which has officially rocketed 18-fold to around 130 people in Manchester since 2010 (the real figure, campaigners maintain, is much higher), is merely the visible face of that. The bigger cloud looming over the city hall’s housing department is the invisibly-raging family homelessness crisis, numbers up more than 10-fold to 1,400 in four years.

A range of benefit cuts have all played their part in this. For instance, as the city hall has had to mete out Whitehall-imposed cuts in council tax benefit and emergency loans. So there are many holes in the safety net. But charities single out two culprits. First, “no-fault evictions,” which become more likely when rising rents give landlords a reason to terminate tenancies and re-let. And, secondly, squeezes and freezes on local housing allowance (LHA), the benchmark that determines how much housing benefit private renters can get.

As rents have soared, it is this last squeeze that has hurt the most. There is no longer a single ward in Manchester where the LHA actually covers the average rent. A report for Manchester Metropolitan University last year explained that the “significant and growing gap” between the LHA and rent was “a ‘double whammy’ for some households—increasing the likelihood that their tenancy will be ended by their landlord, and making it difficult for them to find alternative, affordable accommodation.”

If you take Moss Side as an example—an area two miles south of the city centre that has the eighth highest child poverty level out of nearly 10,000 council wards nationwide—the cheapest three-bed home I could find on Rightmove was a grotty flat over a shop, listed for £700 per month. Local housing allowance for a poor family entitled to a three-bed is just £532.

Familes are facing evicition notices in parts of the city previously considered affordable, or even dirt cheap, including Moss Side itself and Rusholme. And, with a dearth of social housing and little available in the anarchic private rental sector, often there is nowhere suitable to put them. They end up in an emergency stop-gap—one that can last for years.

If families are lucky, they’ll avoid staying in a hotel for too long, but they are unlikely to enjoy much more security when they get moved on. “You will often get people coming in who are in temporary accommodation—sometimes in B&Bs but more so in temporary housing—with damp and pest control problems,” says Manchester Shelter’s Lauren Edwards.

You see a lot of families making two bus journeys to school. The children are getting up early, their days are long, they’re tired. If they are in their older school years with a lot of work and revision it’s really impacting on their educational achievement.” So much for the hype about the powerhouse unleashing aspiration and upward mobility in the inner-cities. Edwards elaborates on other ways that all this gets under the skin: “It’s the general instability and not knowing how long you’re going to be in that house for. And then there’s the impact of conditions on health.”

Single mum Georgia—not her real name—is a typical case. Evicted from her house on the border of Moss Side, she found herself in a battle to keep one of her three young boys, who has special educational needs (SEN), in the same school. “The landlord decided to sell up and wanted everybody out,” she says. “I didn’t want to go down the homeless route, I just wanted to get a house, but there was nothing coming up. The council were just saying ‘there’s a housing crisis in south Manchester, there’s nothing available.’”

Instead, they were initially placed in a notorious bed and breakfast on the other side of the city, bars over the windows, rum types roaming the corridors. “There were some dodgy characters but we just used to go in and go out again,” she says. “It would have been a problem if we’d been there much longer though. I wouldn’t let my kids use the communal areas.”

Then she found herself in temporary housing in north Manchester, five miles away from her son’s school, with water pouring in through the kitchen ceiling. She succeeded in getting them moved, but the council placed her in Oldham—another five miles further away—and that house, too, had water streaming through the ceiling. “They told me I wouldn’t be able to get south Manchester at all because I was not a high enough priority on the social housing list, regardless of the fact my son had SEN and needed to stay in the school.”

In the end, her son went to live with her father so he could be closer to school, meaning she could only see him at weekends; she was left feeling “hopeless.” Eventually they were found a house in east Manchester, miles from the Moss Side community in which she grew up and the family support network she’d previously had on standby.

I’m just stuck here with my kids and no support, because I’m just too far away,” she adds. “They should take into consideration if someone has grown up in a local area, place them nearby—at least no more than one bus ride, not two or three.”

But the council is struggling to take such human considerations into account because there are 5,000 families officially classed as being in “urgent” need of social housing—their needs judged more pressing than Georgia’s were. Where is that going to be found when, according to the government’s figures, in the five years to 2017, just 110 new social housing units were built in Manchester, while 521 were sold off under Right to Buy? Many of these sell-offs eventually end up in the private rental sector, or even pop up on Airbnb.

One despairing housing official tells how the council’s social housing provider is scrabbling around to buy back properties that were some time ago sold under a huge Right to Buy discount for less than £20,000 (“some people could probably buy that on their credit card,” they point out) but which have since shot up in value and now cost £120,000 to buy back from the market. The resulting shortage leaves countless families in Georgia’s position: unable to afford the private rental sector, unable to get into social.

Take single mum Katherine, who was in temporary housing in Gorton for a year after a no-fault eviction from a house in Rusholme. “It was a hellhole,” she says, digging out videos on her phone of leaks, rat -droppings and flies. Gorton councillor Julie Reid is finding ever-more of her casework consists of such tales. No-fault evictions are becoming a major problem, she says.

“It means they literally have to accept eviction and present at the homelessness bit of the town hall so they can be found somewhere else. There was one girl who was offered a Travelodge 12 miles away with no support whatsoever. She was pregnant though and needed to be near the hospital, plus she had a three-year-old. In the end she accepted a B&B, full of old men on drugs. She found hash and all sorts in her baby’s pram.”

Many young children are living in such flea-ridden local hotels: no visitors allowed, no cooking facilities, sometimes just a suitcase worth of possessions allowed under their “license agreement” with the hotel in question.

City limits

In council meetings, concerns are regularly raised about pregnant single mums sent miles to B&Bs, families placed in scummy hotels alongside recently-released criminals. Recognising the problem, the city last year promised to provide more family housing, which is costing it £10m a year in temporary accommodation bills—much of it going to private lettings agencies—and £3m on hotels.

It sounds like a decent, pragmatic first move. But it is unlikely to be enough. And inevitably, the bleak juxtaposition of Manchester’s two housing extremes has had an effect on the city’s politics, which are in effect all about internal Labour politics. The party is so dominant here that a few years ago it held every single council seat—and even now their grip stands at 94, opposed by only two Lib Dems.

The Corbynite wave of left-wing selections has brought in some new radicals, who are pushing for more affordable and social homes to be built, including in the city centre, arguing that profiteering developers need to be squeezed harder for contributions towards fixing the problem.

Planning meeting after planning meeting sees fractious council members asking similar questions, increasingly willing to publicly push back against the city’s famously pro-developer outlook, a stance that would have been unthinkable a couple of years ago. Momentum member Sam Wheeler, a city centre Labour councillor elected last year, reflected that shift in dynamic earlier this year when a developer agreed—for the first time—to include affordable units within a new city centre skyscraper.

After months of hard campaigning by Labour backbenchers and housing activists, we have won the argument,” he said, but he insists this isn’t enough. “I will be meeting with the developers and making the position of Mancunians in my ward absolutely clear. If you want to make money out of our city, then you will pay your way like the rest of us.”

Away from the city hall, Andy Burnham, the former New Labour cabinet minister turned metro-mayor for the wider Greater Manchester region, has also made much of the contrast between Manchester’s housing haves and have-nots, ever since he campaigned for the job, with a special stress on rough sleeping rather than broader homelessness. In 2017, he promised to end it by 2020, an ambitious pledge that potentially leaves him vulnerable to accusations of broken promises.

But there has been some action since, with councils across the region opening up beds every night between November and April to try and get people off the streets. There is some evidence it is working, too: at the last count, numbers were down 18 per cent across the broader Mancunian conurbation. But, as the sleeping bags outside Piccadilly and Victoria attest, this is not matched in the gleaming city centre, where numbers are up by a third, and charities and homeless officers admit they can’t keep pace.

Julie Boyle, who started working at city centre youth charity Lifeshare nine years ago, now volunteers at an evening soup kitchen run by the charity Coffee4Craig, used by homeless people. She says the problems they see are a maelstrom of drug addiction, compounded by the recent emergence of “spice,” cuts to drug and support services, and welfare changes—especially Universal Credit, which pays the individual and leaves them to settle the rent, rather than paying the landlord directly: “if someone gets handed over a few thousand, are they going to pay their dealer first or their rent?” Boyle asks.

“The entrenched rough sleepers almost all have addiction problems and getting them into rehab is so difficult.” It’s the lack of services, the problems with benefits and the substances in combination which “trip people up”—and in a way that makes them hard to help. Because even if “you might get them somewhere to live,” there’s “the social isolation, because having a roof doesn’t mean they’re OK—they still need support and help.” Rather, “it’s the holistic thing” you have to work on to keep it there.

As anxiety has risen and pressure has grown, the leadership of Manchester city council—long viewed by some as more interested in creating an attractive housing market for young professionals than in building social housing—has recently revised its affordable housing policies, and is placing new stress on the homelessness crisis.

Thame, the veteran property journalist, cautions against blaming all the problems on the property and building boom, however. “Manchester appeals to the international investors who are paying for these new apartment schemes because it is undervalued and capable of enormous growth—which it is,” he says. “But homelessness is growing because our government, at various levels, has chosen to regard a problem of housing as basically a problem of home-ownership, which is quite a different thing. The people who need housing can’t afford the ‘affordable’ housing—can’t afford to buy full-stop—and that wilful policy mismatch, not the skyscrapers, accounts for the problem.”

Essentially, the housing being built is for one set of people who want it and will gladly live in it. But another set of people are not being catered for at all.

Richard Leese, the council’s veteran leader, admits only one half of the housing equation—building for commercial demand, as opposed to meeting social need—is being addressed. Manchester is partly playing catch-up after a long period when nothing was being built,” he says of the market-rate rentals being built in town. “This is often presented as an either/or with social or affordable housing. It shouldn’t be an either/or.

The problem is not what we’re building, but what we’re not building. In the current climate it also needs to be social housing—and we are not building that, or at least not at anywhere near the numbers we should be doing.” Much the same thing has been true across most of the country for a very long time: council housebuilding fell off a cliff in the mid-1970s, and has never bounced back—councils were put on a very tight financial rein in the 1980s, and more recently they have faced even deeper retrenchment than Whitehall. The pain is redoubled for a city like Manchester, where the council tax base (which is, ludicrously, still calculated on 1991 property values) limits the scope for plugging the gap locally. So expanding that tax base is, of course,  yet another reason for the city to foster that forest of market-rate flats.

As a councillor since 1984, Leese takes a long view: “If you go back in the statistics, we have had homelessness of this scale before. The last time was in the middle of the Thatcher years, with some similar causes, particularly cuts, austerity, clamping down on benefits. In some respects, Manchester had only just recovered from the 1980s recession.”

Aware of criticism from within his own ranks on the council’s track record around homelessness and affordability, he insists most of the levers still rest with central government. Stable three-year tenancies—in place of today’s six-month shorthold tenancies—would “cost the government nothing,” he notes, while also joining a chorus of local Labour voices demanding that the Right to Buy precious social homes be at least suspended. As it stands, he says, “we need 5,000 family homes—now. But you can’t build at that rate.”

For the foreseeable future, Manchester’s painfully irreconcilable symbols will remain: skyscrapers climbing ever higher, while families crowded into grotty hotel rooms and sleeping bags on the pavements wound the city’s conscience. While the government can proudly point to Manchester’s skyline as a symbol of economic recovery, the social crisis forming underneath could take longer to turn round. Perhaps in 30 years’ time, a Manchester council leader will say the city is only just, deep down, recovering from the 2008 crash. For now, the story of housing Manchester is not a tale of one city, but two.

Photography by Joel Goodman

Edit 05/03/2019: This article originally said that there had ben 21 deaths of homeless people in Manchester in 2011. The figure actually applies to 2017.