For a Socialist Architecture. Part 1: The Facts in the Case of Patrik Schumacher

At the invitation of the Architecture Society of the University of Cambridge, it was announced that, on 13 May 2019, Patrik Schumacher, the Principal at Zaha Hadid Architects, gave a lecture titled ‘Architecture and Urbanism in the 21st Century’ in the Department of Architecture. In response, a group of postgraduate students invited Architects for Social Housing to give a presentation that would introduce students to the writings of Patrik Schumacher. ASH presentation was in two parts: the first offering a critique of Patrik’s various statements about UK housing provision; the second presenting an alternative model of architectural practice to the neo-liberal architecture of Schumacher’s Parametricism. We titled our lecture ‘For a Socialist Architecture.’

1. The Capitalist Housing Crisis

Last November I was commissioned to write an article about London’s Centre Point Residences (above), the former office block that had been refurbished and converted into residential property selling between £3.7 million for a 2-bedroom apartment and £55 million for the penthouse. The building was in the news not because of these asking prices, which are commonplace in London, but because the owner of the building had taken all the unsold properties – about half the total – off the market. The reason for this decision was that, with the uncertainty in the UK property market caused by Brexit, overseas investors were not buying such high-value London property until the market had stabilised, and the owner was not willing to sell at lower prices.

Given a housing crisis in which 1 in every 52 Londoners are now registered as homeless, this was an opportunity for me to examine three of the more glaring fallacies in UK housing policy. These are:

  1. That attracting investment in UK residential property from the private sector, including foreign investors, overseas buyers and offshore financial jurisdictions, should be the primary source of revenue for house building;
  2. That according to the law of supply and demand, massively increasing the supply of residential properties for market sale will reduce house prices in general; and
  3. That the sale of prime and super-prime residential properties for the highest possible market price will cross-subsidise the provision of so-called ‘affordable housing’ UK citizens can afford to rent or buy.

I argued that all three of these principles are fundamentally flawed as a model for the provision of housing:

  1. Because private investment in the UK property market had transformed our housing into a commodity;
  2. Because the law of supply and demand doesn’t describe that property market, whose financialisation by global capital has driven prices up, not down; and
  3. Because far from cross-subsidising affordable housing, private investment is instead funding the estate regeneration programme that is demolishing tens of thousands of council homes to make way for the development of primarily market-sale properties.

The only conclusion I could reach, therefore, was that UK housing policy has been designed not to house its citizens but to generate the vast profits for those who build, sell and invest in the UK property market.

As I finished this article, I realised that I had in fact written my response to an article by Patrik Schumacher titled ‘Only Capitalism Can Solve the Housing Crisis’. This had been published that April by the Adam Smith Institute. the think-tank named after the eighteenth-century economist and inventor of that fictitious construct called the ‘free market’ to which Neo-liberals point when they argue for the removal of all state intervention in capitalism. I therefore sent my article to Patrik, pointing out that, rather than being based on theories about how capitalism can and should work in an ideal world, housing policy should respond to the all-too-real evidence of what capitalism has produced in the real world.

In response Patrik denied both the empirical evidence for my claims and any causal relationship between these effects and the marketisation of housing provision to which I attributed them. But the response I want to focus on is his third denial, which unlike the other two is worthy of consideration, and which I want to take as the framework for ASH’s presentation today. Patrik wrote to me:

‘Your idea of reverting to state provision of most housing appears plausible only in the myopic perspective of providing housing, but becomes utterly implausible and a-historical when the overall socio-economic context is taken into account. There are good reasons why the UK moved away from the post-war socialist model: it was utterly unsustainable and increasingly at odds with the requirements and opportunities of post-Fordism.’

I agreed with Patrik that there were, indeed, good reasons why the UK moved away from the state provision of housing, but these were that it radically reduced housing costs for the British population, liberated millions of working-class families from housing poverty and disease, freed middle-class mortgagors from a lifetime’s debt to banks, deprived private landlords of the profits from the exorbitant rents they had previously and are once again charging, and curbed the outrageous profits the private building industry has been making for the past decade and more. And, of course, because neo-liberal lobbyists for that industry, such as the Adam Smith Institute and – whether he admits it or not – Patrik Schumacher himself, have worked hard to convince anyone who will listen that handing over the population’s housing needs to the market will – for the first time in history – miraculously meet those needs.

But Patrik did have a point, which ASH wants to begin to address in this presentation. Within the overall ‘socio-economic context’ of the UK today, when there is a cross-party consensus from the political establishment on the marketisation of housing provision, and whatever party forms a government there is no longer the political will to make the state responsible for housing its citizens, how do we meet the housing needs of an increasingly homeless population? Is a socialist model of housing provision, as Patrik Schumacher asserts, ‘utterly unsustainable and increasingly at odds’ with the UK economy? And in the absence of a socialist government – let alone a socialist revolution – on the horizon, what would a socialist architecture look like? These are the questions we want to begin addressing today.


2. The Regeneration of the Heygate Estate

Let’s start with Patrik’s assertions about the existing conditions of housing provision in the UK. In October 2016 ASH organised a demonstration outside the Royal Institute of British Architects to protest against the nomination of Trafalgar Place (above), designed by dRMM Architects, for the Stirling Prize. The Stirling Prize is awarded to the UK building that has supposedly made the greatest contribution to the evolution of architecture over the past year, and we argued that Trafalgar Place, the first development site of the regeneration of the Heygate estate, should not be nominated.

For forty years the Heygate estate had provided over 1,200 council homes in the Inner London Borough of Southwark. In 2002 the estate was targeted for regeneration, and over the subsequent years the demolition costs alone came to £15 million, an additional £44 million went on emptying the estate of residents, and a further £21.5 million was spent on planning its redevelopment – a total of £80.5 million. In 2010, international property developers Lendlease was awarded the development contract, and the 22-acre site was sold to them for an astonishing £50 million, making a total loss of £30.5 million for the council. In comparison, a year later a neighbouring 1.5 acre site, one-fifteenth the size, sold for £40 million. It will surprise no-one who understands how these things work that many of the key councillors involved in the redevelopment deal are now working for Lendlease.

According to Lendlease’s masterplan, the 1,214 council homes on the former Heygate estate will be replaced by 2,704 new properties. However, following a viability assessment by the real estate firm Savills, a mere 82 homes have been promised for social rent in a borough with 18,000 people on the housing waiting list. Trafalgar Place, which is part of Lendlease’s £1.5 billion Elephant redevelopment, provides 235 of those new properties, of which only 8 are for social rent. While leaseholders on the Heygate estate were offered on average £120,000 in compensation for their demolished 2-bedroom homes, a 2-bedroom property in Trafalgar Place was put on sale for £725,000. In 2013, when the last resident had been evicted, just 45 of the Heygate’s 1,034 tenanted households have moved into the new homes to which they were promised the ‘right to return’.

The demolition, privatisation and redevelopment of the Heygate estate under the cloak of ‘regeneration’ is typical of housing provision in London, socially cleansing both tenants and leaseholders from Inner London neighbourhoods, freeing up council land for redevelopment, and building the highest-value properties possible in order to release the latent value of the highly lucrative land. From this brief summary I hope it will be seen that the estate regeneration programme is not something that only effects council tenants, but is the driving mechanism of London’s housing boom, and one that is being exported across England and Wales.

3. An Urban Manifesto

So, what is Patrik Schumacher’s solution to the crisis of housing affordability this boom has produced? At the World Architecture Festival held in Berlin in November 2016, the month after our protest, Patrik presented an Urban Manifesto to make London’s housing provision more efficient. These were his 8-points:

  1. Regulate the Planners. Development rights must be the starting point, then circumscribe the planners’ scope and reasons for constraining them.
  2. Abolish all prescriptions of land use, except those determined by the market, which alone has the chance to calibrate this intricate balance.
  3. Stop all vain and unproductive attempts at ‘milieu protection’.
  4. Abolish all prescriptive housing standards in terms of unit sizes, tenancy mixes, etc. Stop all interventions and distortions of the residential property market.
  5. Abolish all forms of social and affordable housing. No more imposition of quotas of various types of affordable housing. Phase out and privatise council housing. Phase out the housing benefit system.
  6. Abolish all government subsidies for home ownership such as Help to Buy.
  7. Abolish all forms of rent control and one-size-fits-all regulation of tenancies. Instead, allow for free contracting on tenancy terms.
  8. Privatise all streets, squares, public spaces, parks and possibly whole urban districts. To this end, Patrick asked us to imagine 80 per cent of Hyde Park redeveloped as a new city in the centre of London, arguing that we need to know what such undeveloped land costs us, and suggesting that this can only be known through a bidding process.

In elaborating on point 5, Patrik showed some photographs of the ASH protest at the RIBA, and made the following comments:

‘You have this backlash against so-called “social cleansing.” This is a demonstration we had outside the RIBA during the Stirling Prize. I find it problematic to use a phrase like social cleansing, which alludes to genocidal ethnic cleansing, when socially-renting tenants are asked to move and offered a new place somewhere else. They were given these houses for free, and now they’re given another new one for free – what a tragedy for them! The fact that somebody has enjoyed the privilege of a subsidised central location for some time in my view does not and should not establish ownership over this public resource. Is it not fair that now it’s somebody else’s turn to enjoy this central location? Especially if it is those who really need it to be productive, to be better able to produce the support required for those who are subsidised all along and will continue to be subsidised? I’m thinking about my people, who are working very hard and generating value, having to commute or having flat-shares, when these spaces are left to people who – you know – are free-riding for decades since, and supposedly for decades to come. Central London locations are a precious productive resource that, for the sake of total social production and prosperity, should be allocated according to market principles – that is, to the uses most urgently demanded by the economically most potent and thus most productive users, who serve us most effectively.’

As you can imagine, Patrik was crucified for these comments in the press, both architectural and national. Politicians and architects alike jostled in the aisles of political correctness to denounce him as everything from ‘out of touch’ to a ‘fascist’. However, ASH was not among their ranks. On the contrary, while we strongly disagree with Patrik’s description of estate communities – which includes members of ASH – and oppose all but two of his proposals, he was merely expressing in principle what is already being done in practice by every council, housing association and property developer in this country.

Now, in his defence I should point out that, by his own admission, Patrik had no background in housing, either as an urban theorist or as a practitioner with Zaha Hadid Architects. And, since he had identified ASH in his presentation, we invited him to meet with us in a public forum to debate these solutions. Initially he was enthusiastic about our proposal, and ASH was suddenly inundated with offers to host the debate. However, in the meantime Zaha Hadid Architects had published a rather pompous open letter (‘Zaha Hadid did not write manifestos. She built them!’) distancing the practice from Patrik’s Urban Manifesto, and the trustees subsequently banned him from drawing further negative publicity to the Zaha Hadid brand. The debate was called off. So much for the freedom of the market.

4. UK Housing Policy and Practice

But setting aside the bad faith of the architectural and political commentators, let’s turn to clarifying the more obvious misconceptions and inaccuracies in Patrik Schumacher’s 8-point Urban Manifesto.


1. Far from restricting the rights of developers, as Patrik asserts, planners have had much of their regulatory powers removed: through the Housing and Planning Act 2016 that grants developers planning permission in principle to any residential development on brownfield land (mapped above) through the creation of Opportunity Areas that make the London Mayor and not the local council the planning authority; through viability assessments running to several thousand pages demonstrating why developers making unprecedented profits apparently cannot afford to meet affordable housing quotas; through withdrawing public scrutiny of those assessments behind the cloak of commercial confidentiality; through former or existing councillors working for consultancies employed by the developers applying for planning permission; through developers and housing associations funding the placement of architects in local authority planning departments; through Section 106 agreements being discharged by financial contributions for affordable housing provision to be built off-site; and through numerous other ruses that are now the norm and not the exception in developers gaining planning permission for their schemes from councils and the Greater London Authority.


2. Far from calibrating the intricate balance of land use, as Patrik argues it will, the market is selling hundreds of plots of public land to developers (mapped by the New Economics Foundation above), who rather than developing it for housing provision are holding it in land-banks, with the 10 largest house builders in the UK sitting on land with planning permission sufficient to build over 404,000 new residential properties, and holding option agreements with landowners on enough land to build another 480,000. Only 5 per cent of land in England is owned by householders; while 18 per cent is controlled by corporate structures and offshore companies.

3. Far from ‘milieu protection’, as Patrik claims is currently happening, ASH has mapped  237 housing estates in London alone that have recently undergone, are currently undergoing, or are threatened with regeneration schemes that will result in the mass loss of homes for social rent leading to the social cleansing of their residents from the neighbourhood, the borough, and in some cases London itself.


4. Far from prescriptive housing standards restricting development, as Patrik laments, on private developments there are none of the space standards required of social housing; and so-called ‘micro homes’ (such as The Collective above) modelled on student accommodation, which were recently promoted by a policy researcher at Zaha Hadid Architects in an article also published in the Adam Smith Institute, and are now being subsidised by the London Mayor, propagate the lie that housing costs are primarily determined by the materials required to build them rather than land values and the profits of the developers realising them.


5. Far from imposing social and affordable housing quotas on developers, as Patrik denounces, even the new and deceptive category of so-called ‘affordable housing’ accounted for just 16 per cent of all residential new-builds in London in 2016-17: with homes for social rent, the tenancy type in most demand, making up just 5 per cent of completions; homes for affordable rent, set at anything up to 80 per cent of market rate, a further 5 per cent; and shared ownership schemes, which are far beyond the means of most Londoners, the remaining 6 per cent. The other 84 per cent were properties for market sale.

As for Patrik’s proposal to privatise council housing, under Right to Buy legislation nearly 2 million council homes have already been sold at a discount since 1980, a quarter of which are now owned by private landlords; and at least 36 per cent of London council homes sold under this scheme are now being rented out at market rates by private landlords, with over 2,300 of these properties being rented back to the councils that sold them in order to house their homeless constituents. Over the same period, hundreds of thousands of council homes have been lost to stock transfers to housing associations, with only 1.6 million council homes left in the UK today compared with 2.4 million housing association homes, with many of the latter being converted into affordable rent. Indeed, in the three years leading up to 2015, the number of housing association properties for ‘affordable’ rent increased from 7,350 to 123,260, with 76,259 of these being converted from homes for social rent.

However, we agree with Patrik that Housing Benefit should be phased out. Housing Benefit in the UK for 2018-19 is estimated to be £23.4 billion. This represents 2.9 per cent of total public spending and 1.1 per cent of national income. The vast bulk of this public expenditure, at least £23 billion per year, is going into the pockets of private landlords. Where ASH differs from Patrik is that we believe this money should be used by the state to build housing for social rent that would not only provide the housing UK citizens can afford, but also reduce rents on the private rental market.

6. Again, we agree with Patrik’s proposal to abolish public subsidies for home ownership such as Help to Buy, which has helped drive house prices up far beyond the means of most people, and merely increased the already vast profits of developers. Since it was launched in 2013, Help to Buy has handed over £10.7 billion of public money in 5-year interest-free loans to households earning up to £90,000 per year in order to purchase new-build private properties on sale for up to £600,000. One of the effects of this state subsidy is that in 2018 Persimmon, one of the four biggest house-builders in the UK, made £1 billion in profit, with nearly half its housing sales funded through Help to Buy.

But the public subsidy of private properties does not end with Help to Buy. Under the GLA’s Affordable Homes Programme 2016-21, developers are subsidised to build properties for both Shared Ownership and Rent to Buy schemes; while households earning up to £60,000 per year qualify for 5-year interest-free Government loans for the latter, as do households earning up to £90,000 per year for the former. What is lacking in this vast state subsidy of private home-ownership at the point of both construction and purchase is the funding for the maintenance of existing council estates and the investment required to build the homes for social rent we need.

7. Far from imposing rent controls, which Patrik demands are removed (and which have been easily circumvented by private landlords in cities, such as Berlin, where they’ve been introduced), and the imposition of one-size-fits-all tenancies, the marketisation of housing provision is building social segregation into London’s urban planning, with Inner London being cleared of its working-class and BME communities, and replacing them with gated communities (such as the Old Lilian Baylis School development above), poor doors, segregated gardens, ghettos of wealth and thousands of unoccupied and unsold properties. And without drawing undue attention to the personal fortune of Patrik Schumacher, who took home an estimated £5.3 million in 2018, only someone who isn’t forced to live in the private rental sector with landlords and estate agents that impose exorbitant rents and fees, neglect maintenance and refuse tenants on Housing Benefit could possibly describe tenancy contracts being ‘free’ from regulation as a positive thing.


8. Finally, although Hyde Park, like most parks in London, is regularly cordoned off from public access off for commercial ventures that range from music concerts to fairgrounds (above), it hasn’t been sold off – yet. Which is more than can be said for the public land that councils are selling off in sweetheart deals with developers in order to replenish budgets stripped to the bone by austerity cuts and thereby exposed to the market forces in which Patrik places so much faith. Far from needing to know the market price of such public places by putting them up for competitive tender, we need to recall the value they have for a public sphere under increasing threat by predatory market forces that bear no relation to Patrik’s fantasy of a benign ‘calibrator’ of public needs.


As for Patriks’ contemptuous description of council tenants as economically ‘unproductive’ benefit scroungers living in homes given to them for ‘free’ and ‘subsidised’ by the state in perpetuity, post-war council estates (such as the Central Hill estate in Crystal Palace above) paid off their construction cost and debt interest years ago, and are in fact generating profit for the councils that manage them – or would do if they weren’t busy demolishing them. And that cost and interest was paid off by the tenants, who were not given them for free but pay rent and service charges on their homes sufficient to maintain them until they are passed on to the next generation – or would be if councils weren’t deliberately neglecting that maintenance as part of a programme of managed decline preparatory to their demolition.


And far from tenants evicted from estates being given further ‘free’ accommodation, as Patrik claims, following changes to legislation in the 2011 Localism Act, councils can discharge their duty of care to tenants with the offer of privately-run temporary accommodation, often in outer boroughs. As the business of homelessness becomes one of the few growth industries in the UK, more and more of these tenants end up in homeless hostels (such as Boundary House in Welwyn Garden City above), with single mothers and their children housed in cramped accommodation for years on end.

But more broadly, Patrik’s unquestioned acceptance of the consensus that in order to solve the housing crisis we need to build hundreds of thousands of new homes a year has no basis in how commodity markets work. As I’ve said, while the so-called ‘law’ of supply and demand describes a capitalist dream of competitive markets responding to human needs, London’s financialised housing market is driven by profit yields. In the decade since the financial crisis, London house prices have risen from an average of £245,000 in April 2009 to a current average asking price of £614,000, and now cost more than seventeen times the average London salary of £35,000. In Inner London that average house price rises to around £970,000. In transport systems this is called ‘induced demand’, when building more roads actually increases traffic, and the same applies to the market equation between housing investment and property prices. Simply building more properties for investment by global capital will only push these prices up further. What is needed is a different model of housing provision.

In short, the factual basis for every proposal in Patrik’s Urban Manifesto is missing. But if we put aside, for the moment, asking why a person in Patrik’s position and with his influence is so misinformed about these facts – and yet is so ready to trade in the negative stereotypes about the working-class, black and minority-ethnic residents that make up a disproportionate percentage of London’s estate communities – the questions architects might want to ask in response include the following:

  1. What implications do these factual inaccuracies have for Patrik’s equally damning assertion that the state provision of housing on a socialist model is ‘implausible’ and ‘unsustainable’ under today’s socio-economic conditions?
  2. Does this sweeping dismissal have any more basis in reality than Patrik’s other stereotypes, or like them is it merely serving the neo-liberal agenda of his numerous supporters in the building industry?
  3. And by dressing the Emperor of Neo-liberalism in the clothes of what is trendily called ‘anarcho-capitalism’, is Patrik merely calling for more of the same but worse, while asking the rest of us to believe we’re witnessing something other than the naked ruthlessness of capitalism?

Screenshot 2019-01-22 23.40.37

6. The Housing Crisis

I haven’t much to say about Patrik’s vision of a free-market capitalism, except to point out that it has even less basis in the socio-economic conditions of the UK today than a socialist system. So let me recall, instead, some facts about housing provision under the reality of monopoly capitalism and the global economy (within the time limits of the lecture, these were communicate to the audience in a handout).

89 per cent of all new-build properties in London are residential units, and between 2014 and 2016 around one in six of these was sold to overseas investors. In 2017 that figure rose to 30 per cent, increasing to 50 per cent at the high end of the market. And in the second half of 2018, overseas investors purchased 57 per cent of all homes in central London locations (which now includes areas like the Vauxhall, Nine Elms, Battersea Opportunity Area above), and now account for a higher proportion of prime property buyers than they have at any time in the past six years. Although some overseas buyers might use the property as a home for a week or so during the year, most investors are either landlords renting the properties out on London’s unregulated rental market, or speculators accumulating profit on London’s spiralling housing market.

However, while non-domicile overseas investors purchase much of London’s residential property, more damaging still is the investment from offshore financial centres.  Offshore is not a geographical place but a global space where capital can accumulate untaxed in banks, corporations, investments and deposits registered in tax jurisdictions with secrecy laws. In the 10 years between 2005 and 2014, at least £170 billion worth of UK property was acquired by offshore companies registered in British Overseas Territories such as the Virgin Islands, the Cayman Islands and Bermuda, or in other tax havens like Luxembourg, Lichtenstein and Panama.


So what consequences does this global investment in London property have for the market’s ability to meet housing needs? 58 per cent of housing demand in London is for lower-mainstream properties and homes for sub-market rent; yet only a quarter of the roughly 38,500 properties with planning permission in the five years between 2017 and 2021 will go on sale at this price (above). This month, the number of unsold residential properties under construction in London has reached a record high of31,500. While thetotal number of unsold luxury new-build properties on sale for more than £1 million has hit a record high of 3,000 units. And more London properties were sold for £10 million or more in 2017 (435 in total) than in each of the preceding two years.

Unsurprisingly, the pre-tax profits of the four largest UK builders increased from 412.8 million in 2011 to £3.355 billion in 2017, an astonishing eightfold increase in just 6 years. Only Brexit, as demonstrated by the removal from the market of the multi-million-pound properties in Centre Point Residences, has dampened these profits. As a result of this property boom, the total value of the UK housing stock in 2018 was £7.29 trillion, having risen by a third over the last decade alone. Nobody will be surprised to hear that £1.77 trillion of that housing stock is in London, nearly a quarter of the total. Perhaps more surprising is that 72 per cent of the increase in housing value last year was due to house prices going up, while only 28 per cent came from new properties being built. Equivalent to 3.45 times the gross domestic product of the UK, and nearly 60 per cent of the UK’s entire net wealth, the UK property market now constitutes an economy in itself. It is this that UK housing policy is being written to keep afloat – at the cost of the housing of its citizens.

Home ownership in the UK, which peaked at 71 per cent in 2003, has been declining ever since and now stands at 63 per cent, with only 47 per cent of Londoners having a mortgage or owning their own home. Meanwhile, rents on London’s private market, in which 30 per cent of London households have to find a home, have risen to an average of £1,588 per month in January 2019, 70 per cent higher than the UK average of £932 per month. The total rent paid by UK tenants last year rose to £51.6 billion, more than double the £22.6 billion they paid in 2007. So-called ‘millennials’, born between 1977 and 1995, paid £30.2 billion of that rent, which is more than three times the £9.7 billion they spent in 2007.

At the same time, there are 20,000 long-term empty homes in London alone, with more than ten times that number across England. This doesn’t include the thousands of council homes awaiting demolition or sale on the private market. Half of the residential units in London’s new developments (for example, on Greenwich Peninsula above) currently stand empty, as do 19 per cent of all dwellings in Inner London. Unsurprisingly, the likelihood of a residential property being empty rises with its market value. 39 per cent of properties worth between £1 million and £5 million are currently under-used, a figure that rises to 64 per cent for properties worth more than £5 million. And of the properties purchased by overseas investors, 42 per cent stand empty.

As a result, at the end of 2018 there were an estimated 165,000 people homeless in London – meaning accommodated in temporary housing, bed & breakfasts and homeless hostels or sleeping rough – with over 300,000 homeless across the UK. These numbers, however, don’t include the hidden homeless, with an estimated 1 in 5 people under the age of 25 having couch-surfed over the past year – 225,000 of them in London. Roughly the same number, 244,000, are on council housing waiting lists in London. While across England, 1.16 million households are waiting for a council home.

These are the people Patrik Schumacher proposes abandoning to the judgement of the market. In ‘Only Capitalism can Solve the Housing Crisis’ Patrik concludes:

‘We urgently need a capitalist revolution, not only for the sake of prosperity, but also for the sake of justice, and everybody’s personal flourishing, dignity and self-respect. What is just about taking housing opportunities away from those who contribute more to the social product to [give them to] those who contribute less? That somebody’s rewards and living conditions correlate with his or her contribution to society is common-sense justice. Left intellectual ideas about a “decent” income, and living conditions as a universal basic right that must be guaranteed by redistribution, are going against the grain of the majority’s common sense of justice.’


6. The Bad Faith of Free-Market Capitalism

So, given the financial and political roots of the housing crisis, which is not confined to the UK but is a local phenomenon stretching from Barcelona to Sao Paulo, Melbourne to Bombay, Berlin to Moscow, how has Patrik Schumacher’s practice as an architect – and not only as an urban theorist – responded to and developed alternatives that might give us a glimpse, perhaps, of a future free-market capitalism in action?

I said earlier that Patrik has little professional background in residential development; but that changed in May 2018 when Zaha Hadid Architects completed its new block of luxury housing at 520 West 28th Street in New York where properties went on sale from $4.9 million for a 2-bedroom apartment to $50 million for the larger of the two penthouses. If this is the calibration of housing needs by the market, then anarcho-capitalism’s got some way to go.


Back in London, last December the ever-accommodating Lambeth council granted planning permission for Zaha Hadid Architects’ plan for a pair of 53- and 42-storey towers in the Vauxhall, Nine Elms, Battersea Opportunity Area. The scheme is being developed by Vauxhall Cross Island Property Holding Ltd, an investment group registered in the tax haven of Guernsey and backed by Rassmal Investments, which is registered in Dubai and financed by the Al Shawaf family, one of the wealthiest families in Saudi Arabia. This will be Zaha Hadid Architect’s first major mixed-use residential and commercial development in the UK, with the taller tower being a 618-room hotel and the shorter providing 257 residential properties. 23 of these, less than 9 per cent of the total, will be for a Rent-to-Buy scheme, while the rest of the development’s affordable housing provision has been discharged by a £30 million payment to the council for housing that will be built off-site, and most likely used to fund the council’s estate demolition programme.

This isn’t anarcho-capitalism guided by the ‘invisible hand’ of the free market. This is collusion between international property developers and investors, architects, local authorities, the GLA and the UK government. And far from calibrating the delicate balance of human needs, this collusion will further drive up housing costs for the people who live in London and across the UK. If we are to resist and come up with solutions to this capitalist crisis, it is vital that we see through the propaganda of lobbyists for the building industry and its global investors for what they are.

Nobody knows how many homes for social rent have been and will be lost to estate regeneration schemes like the Heygate (above). For the past 2 years ASH has been trying without success to get the funding to carry out the research on the 237 London estates we have identified so far. But Savills real estate firm, that great promoter of free market capitalism, and which is advising every London council, the GLA and the Government on its housing policy, has recommended demolishing the council homes of 400,000 Londoners in order to clear 1,750 hectares of council-owned land for the construction of up to half a million new residential properties.

This is the reality of capitalism, which creates not competition but the monopoly in housing provision we currently have (above); is not restrained by the state but in collaboration with it to implement the social cleansing of estate communities from the inner cities; is not restricted by government regulation but the author of the legislation and policy that is accommodating its private interests; and whose interest is not in meeting the housing needs of its customers but in increasing the profits of its shareholders. Unsurprisingly, and contrary to Patrik’s projections, the UK building industry has no interest in flooding the market with low-cost housing that would lower house prices and with it the vast profits it is making from the UK property market.

Faced with our current crisis of housing affordability, whose financial roots grow deep into the economy not just of the UK but of the world, what can architects do but bury their heads in the limitations of a developer’s brief, confine themselves to purely formal interpretations of housing typologies imposed by developers to maximise land values, attend endless award ceremonies to their own complicity in the failed and failing marketisation of housing provision, and in doing so become just another cog in the building industry – but with fancier spectacles?

Behind his bad faith, is Patrik Schumacher doing no more than describing the economic and professional conditions under which architects must work, and which they’d better get used to sooner rather than later? Or does an accurate understanding and factual knowledge of the consequences of UK housing policy, rather than blind belief and cynical trading in the myths told to justify that policy by politicians, developers, estate agents and architects, open up the possibility of a socialist architecture, even under existing economic conditions?

At ASH we strongly believe the latter to be true, and for the past four years, alongside our critique of UK housing policy and exposure of the disastrous impact it is having on housing poverty and homelessness, we have developed practical design and policy interventions in housing provision that demonstrate there is another way.

Part 2 of ASH’s presentation is titled The Principles of Architectural Practice.

Simon Elmer
Architects for Social Housing

Architects for Social Housing is a Community Interest Company (no. 10383452). Although we do occasionally receive minimal fees for our design work, the majority of what we do is unpaid and we have no source of public funding. If you would like to support our work financially, please make a donation through PayPal:

One thought on “For a Socialist Architecture. Part 1: The Facts in the Case of Patrik Schumacher

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