Raising incomes essential to lifting residents out of deprivation says report, but what about affordable homes?

 

Citing evidence from places that have bucked the stagnation trend, the report notes that cities with higher employment rates have higher disposable incomes. It highlights the importance of having a significant number of productive businesses that sell outside the local area (software, marketing, manufacturing) and bring in income from elsewhere – “putting money in residents’ pockets to spend on local services.”

 

“Reconnecting higher economic growth to living standards must be at the heart of economic policy if voters are to feel and see change in their communities,” the report concludes.

 

The report also recommends developing specialised industries and knowledge-intensive business services (KIBS) – high skilled jobs where worker knowledge and capability (rather than materials or machinery) are the main input. “As an illustration, compare two similarly sized cities: Bradford (£15,500 disposable income per resident, well below the UK average) and Edinburgh (£22,300, comfortably above). While the Scottish capital has almost one in four of its jobs in KIBS (including strengths in financial services), in Bradford it is fewer than one in ten.”

 

In Barnsley, the local authority has opened up industrial land to build a logistics hub and added 6,000 more private-service jobs, about a third of which are in KIBS.

 

Whether knowledge workers have relocated to the postcode for work – another process of gentrification that could make areas appear less deprived without improving living standards while increasing housing pressure – is not considered by the report. Research from 2019 has suggested that, while additional jobs for low-skilled workers may be created in areas with skilled employment growth, wages tend to fall for the poorest workers once their increased housing costs are considered.

 

Skills development is seen as essential to enabling people to access new jobs in a changing economy. The report praises Liverpool for its efforts in furthering skills and education, including Skills Bootcamps and free jobs courses.

 

In Greater Manchester, the improvement of transport connections including the Metrolink tram network is credited with granting physical access to job opportunities by connecting up neighbourhoods.

 

 

The report notes that better-connected south Manchester has seen more income deprivation improvements over the last 15 years – but also fails to mention that gentrification could be a factor in changes triggered by Metrolink.

 

Research into the impact of the Manchester’s tram network, published in the Journal of Transport and Landuse, showed evidence of gentrification in areas with access to the new light rail. The study, published in 2021, focusses on displacement as a measure of gentrification, and concludes that early results showed evidence of gentrification in areas not dominated by social housing. The article concludes that transport professionals should collaborate with housing policymakers and land-use planners to mitigate gentrification. The research was careful to underline that gentrification does not diminish the need to invest in transport infrastructure, but demands a more thorough consideration of what housing policy is needed.

 

Detail on how to preserve affordability is lacking in the Centre for Cities report, although it does admit that an increase in housing costs is problematic: “These costs can and do rise to an excessive level that harms living standards if not managed.” The report cites restrictive planning and urban boundaries as forces that uncouple supply and demand in housing, yet fails to make the case for an increase in social housing or controls to preserve affordability in gentrifying neighbourhoods.

 

The report does underline the importance of homes for workers in city centres, as a lack of housing “limits cities’ economic potential, as fewer people can live and work locally, reducing the size of the urban labour market.”

 

The report’s solution is for cities to remove “growth constraints” on development, although it admits there are challenges: “In theory, higher house prices should signal stronger demand and lead to more housing supply, but in practice this doesn’t happen.”

 

Josh Artus pushes back on the report recommendations: "Repeating the economic practices of capital and asset-based regeneration as a means to improving incomes, social outcomes and infrastructure is the definition of madness," the managing director of Centric Lab says. Artus is co-founder of the research hub which examines built environment impacts on health and wellbeing.

 

"If the problem grows greater than the rate of income, the money is pointless – something covered in this 2019 report," Artus says. There is a plethora of people and organisations demonstrating more effective community wealth building models, and it’s even working at a civic level."

 

Artus also points to the problem of large-scale reports based on postcode analysis: "The reductive communication of complex issues is easily weaponised with those who hold power to set the agenda," he says. "Do we really have a housing crisis when there are enough empty homes to house the population, or does this act as a convenient way to drive political capital towards setting a socio-political agenda where the key beneficiaries are the house builders who benefit from the narrative?"

 

Lees – who supported the development of anti-gentrification policy for Louisville, Kentucky – guards against over-simplified solutions: "There is no magic bullet on rising housing costs. There must be a multi-pronged approach that includes supply, affordability and stability."