Nothing in London is quite so profitable as property development. I suppose this is the continuation of the process of sweeping away the derelict bits of Hackney for the 2012 Olympics.<p>It would be nice if economic activity wasn't quite so concentrated in unaffordable London. But I can feel the wave of money washing over the built environment even out here in Cambridge ("Silicon Fen"); it's just about commutable to North London, so buildings have been going up with the clear aim of selling to middle eastern or Chinese investors. It has its positive aspects - many of the cleared buildings were in terrible condition, ugly, or (as in Hackney) suffering from asbestos. But the new ones are still unaffordable. I'm fleeing to Edinburgh while watching professional couple friends get priced out of buying their first home.<p>Property booms cannot go on forever: <a href="http://www.theguardian.com/world/2014/feb/28/home-ownership-greece-property-market" rel="nofollow">http://www.theguardian.com/world/2014/feb/28/home-ownership-...</a> but we lack the leadership to resist this or to try and distribute industries more evenly across the country. (Mediacity is a token attempt at building a media cluster in Manchester while kneecapping the BBC and looting its buildings).
Article was removed - but google is all-seeing:<p><a href="http://webcache.googleusercontent.com/search?q=cache:www.theguardian.com/cities/2014/mar/07/tech-firms-belong-old-street-hackney-council" rel="nofollow">http://webcache.googleusercontent.com/search?q=cache:www.the...</a>
Gentrifiers complaining that they've been out-gentrified.<p>There were people living in Hackney and Dalston before the hipsters moved in and starting pricing them out of the neighbourhoods they grew up in, but what goes around, comes around.
This is what is wrong with the UK. Bubble property prices all over the country. And relative to incomes it is ALL OVER the country.<p>Everyone over 40 has a buy to let portfolio and those under 40 are stuck in rented property with few rights. Did you know in the uk if you rent you can be evicted for no reason at all? And if you will not or can not pay bubble prices for property you have to rent, live in poorly maintained housing and presumably never have children.<p>This is happening NOW and it is a disgrace.<p>Unbelievably it is being encouraged by the government with schemes to prop the bubble up further! But they are only a year away from an election now and its the older people renting out property who are most likely to vote and so the young just have to deal with it.<p>Actual wealth creation that can come from government support of startup hubs is the furthest thing from this governments mind. We're all too busy getting rich from doing nothing all day in someone else's office and waiting for the young to pay off our multiple properties mortgages for us to actually do anything creative or beneficial.<p>Im here and it makes me sick.<p>This government by the way, which is manipulating the housing market in such an anti capitalist way, is actually the more capitalist party of the two.
Nice little bit of criticism of the Hackney council and I like the summary of the startup scene in general:<p><pre><code> A common pattern in startups is to go to work for one,
watch it implode and team up with a colleague or two to
move on to another startup; repeat several times until you
have agglomerated a bunch of people you know, like and
trust; then do your own startup with them. </code></pre>
The statement that foreign students paying vast sums to study in UK is an "education bubble" is made kind off hand though and I would love to hear Cory expand on that idea.<p>As far as I can tell this is on the rise and is central to most university budgets. What could happen to "burst" this supposed "bubble"?
I've worked in the area since 2004. Although I agree with the points he is making, I don't really see the author coming up with any solutions. The problems are rooted in the right to private property.<p>I'm also fairly certain that Hackney have an issue with corruption. The way to flip properties in the area is to buy up a building with a B1 use (office), then apply to planning permission to build a residential penthouse or two on the top of the building. Build the flats, sell them for an insane amount of money to a couple of bankers, job done. I've been told off the record by estate agents that certain people have "more luck" with these applications than others, but what can you do?
This is nothing new and its been like that since the early 80s when Thatcher sold off the council housing stock at rock bottom prices. An area of London gets popular, money moves in pushing prices up and people out. City government does nothing. Rinse and repeat. All this has happened before, all this will happen again.<p>At the end of the 90s it was Notting Hill, now its Shoreditch, Spitalfields and Whitechapel with the gentrification wave pushing itself out east with Bethnal Green next in line.<p>Ultimately this will be the demise of the UK economy as all the money and jobs will focus on the southeast leaving the rest to fend for themselves.
Looks like it's been memory-holed.<p><a href="http://webcache.googleusercontent.com/search?q=cache:www.theguardian.com/cities/2014/mar/07/tech-firms-belong-old-street-hackney-council" rel="nofollow">http://webcache.googleusercontent.com/search?q=cache:www.the...</a>
They're also throwing out all the communities who are living "unauthorized" in warehouses and commercial units.<p><a href="https://www.youtube.com/watch?v=SVL50gwSLlE" rel="nofollow">https://www.youtube.com/watch?v=SVL50gwSLlE</a>
This is not some weird oddity due to council mismanagement, it's just the latest example of one of the greatest naturally occurring scams in history.<p>The process that's occurring is Ricardo's law of rent: <a href="https://en.wikipedia.org/wiki/Law_of_Rent#The_Law_of_Rent" rel="nofollow">https://en.wikipedia.org/wiki/Law_of_Rent#The_Law_of_Rent</a><p>It's counter intuitive, but brilliant once you realise how it works. Put simply, when a company makes more money due to the location they're in, the landlord gets all of the extra profit, not the company that does the work. Every time the company's profits rise, the rent will go up by the same amount. Free money without working if you own land, and very bad for capitalism.<p>In the case of Old Street, it used to be that there was little advantage to being there, so rents were cheap (not much competition). That attracted lots of startup types and now, the area confers a significant advantage due to the network of companies and people. The choice for a new startup is :<p>a) Old Street, where recruitment costs (for example) will be lower, or<p>b) Somewhere Rubbish, where you pay e.g. an extra 20k per year for recruitment.<p>If the rents are the same, everyone will want Old street for the 20k advantage, so the landlords play them off against each other: the offices go to the highest bidder. Whilst the extra rent you pay to be there is less than 20k, it makes sense to pay it as you're still ahead, so people keep upping their bids until the rent reaches ($rent_for_rubbish_place + 20k). The landlord gets it all for doing nothing!<p>It's a scam because it operates outside of free market capitalism: you can't manufacture more land at Old street roundabout (or move it there from elsewhere), so supply does not increase when the price rises. Not a free market. Also no jobs created by the price rises.<p>The solution to the scam is land value tax (LVT), which would reclaim the unearned money from the landlords (whilst leaving them their fairly earned money from providing the buildings). LVT done right would make corporation tax unnecessary whilst causing no price rises and no job losses. A massive boost for the economy. Seriously. No hyperbole - it works counter intuitively due to the fact that its not a free market in the first place.<p>Winston Churchill was strongly in favour of LVT and described land as 'the greatest of all monopolies'. He thought that taxing it was one of the most important political ideas of the century, so it warrants a bit of reading: <a href="http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html" rel="nofollow">http://www.landvaluetax.org/current-affairs-comment/winston-...</a>
my best guess for where the roundabout people will move to is Deptford - if they can cope with moving to "sowth louwdon" - home of two separate hack-spaces spc.com and a new men-in-sheds being set up by the peabody trust <a href="http://menssheds.org.uk" rel="nofollow">http://menssheds.org.uk</a> and Goldsmiths college