London’s poor facing squeeze amid housing-benefit cuts

[mia]

http://www.washingtonpost.com/world/londons-poor-facing-squeeze-amid-housing-benefit-cuts/2011/06/16/AGA37adH_story.html

Poor immigrants struggling to survive in one of the world’s most expensive cities, the family of four nevertheless lives in a sunny, two-bedroom flat in an enclave of urban privilege. Their benefactor: the British government, which covers 85 percent of their $3,600-a-month rent through welfare benefits giving tens of thousands of low-income earners access to even the best neighborhoods. But the clock on such subsidized London lifestyles is suddenly running out.

The Conservative-led government is rolling out Britain’s most sweeping welfare reform since the 1940s, taking aim at the ballooning bills in cities such as London, where a few families receive as much as $160,000 a year to ensure economic diversity and quality housing for the poor in some of the priciest districts in the world. Yet as benefits are rolled back, academics are warning of a major side effect: an exodus of the poor from central London in numbers not seen since the demolition of soot-caked Dickensian slums in the 19th century.

London’s population shift may emerge as one of the most dramatic examples of the deficit-busting crusade taking place across Europe and now under serious debate in Washington. On this side of the Atlantic, cash-strapped nations from Greece to Ireland — drowning in debt in the wake of the Great Recession — are rolling back famously generous welfare programs that they can no longer afford....

Critics say the reforms could result in a polarization of the classes in this city of 8.6 million, ultimately giving rise to American-style ghettos. Over the next four years, experts say that roughly 82,000 poor families are likely to be forced from expensive apartments in central London and, quite likely, into cheaper accommodations on the fringes of the city or beyond. By 2016, one University of Cambridge study shows, the cuts would leave only 36 percent of London neighborhoods accessible to low-income earners, down from about 75 percent in 2010....



"reforms could result in a polarization of the classes...ultimately giving rise to American-style ghettos."

Makes me wonder how welfare reform here will effect our ghettos.


Edit: Copied too much - removed first paragraph.

[woo me with science]

1. "American-style ghettos..."

:(

[Shagbark Hickory]

6. I guess we're renowned for something. nt

[dipsydoodle]

2. That is not a very popular example over here

$3,600-a-month rent.

As it says - the clock on such subsidized London lifestyles is suddenly running out. Trust me - there are other parts of London which would cost far less than St Johns Wood.

Aside from that the chances are at the time that family came over from Kosovo anywhere in the UK was probably better than what they'd left. It would've been cheaper for the government to simply buy them a house elsewhere to put a roof over their heads. Well - I am of course assuming that's what the US government does for immigrants too. :sarcasm:

[mia]

3. Our section 8 housing will likely migrate farther into the suburbs, too.

Lots of empty homes there with yards for gardens.

[dipsydoodle]

4. That isn't in fact necessarily a common example

Issues regarding the general affordability of living in Central London have been going on for at least 30 years.

Other than it maybe being an otherwise blank news day I'm not sure why they've picked up on this.

:hi:

[Bluenorthwest]

5. That which is called the 'average rent, 2 bedroom Central London'

Comes to just over $2,400. 375 Pounds a week. Outer London, bit cheaper. $1375. We got the Google.

[dipsydoodle]

8. I didn't mean

it wasn't a good example of London rents - I meant they shouldn't there.

£28,600 would buy a house in Wales outright. http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=502690&in_page_id=57

If you divide $3600 / £ 2250 into that it would be paid for in just over a year. If ,in this instance, they didn't like Wales then given that issues in Kosovo have been resolved there would be nothing to prevent their return there.

[dixiegrrrrl]

9. Keeping in mind that most benefits for "the poor" are really subsidies for the non-poor.

Housing subsidies go to ....the landlord (s). Who jack up the "fair housing value" price.
We saw that here for the Sec. 8 HUD program, in which a working person would pay 500.00 for an apt
but the Sec. 8 payment for a "poor" person would be 800.00 to the landlord.
( I have seen that with my own eyes)
So, the people who *should* be yelling about withdrawal of the subsidies would be the landlords, unless they can
rent to someone else for even more money.

another subsidy that is really about making someone else rich:
food stamps.
The stamp recipient gets very little in terms of value, but the "stamps" are now on debit cards, and BOA is the sole contractor of making those cards,and can make a fortune from the deposited Federal money until the card holder withdraws the value via the card over the month.

Not just "the poor" will experience the unseen ripple cost of dumping a lot of social programs.

[Shagbark Hickory]

7. In fairness, it sounds like there was some waste in there to trim out. Paying 85% on $3600?

[JVS]

10. They should pay companies to move north from London.

Places like Birmingham, Liverpool, Yorkshire, and Coventry could really better deal with an influx of jobs and also population, and it could take some of the insane pressure off the London real estate market.