Critically acclaimed musical Standing at the Sky’s Edge has been a resounding success in the UK this year. A melancholic love letter to the Park Hill estate in Sheffield, the show has put urban planning centre stage. It traces Park Hill’s origins as a 1960s brutalist social housing estate for local workers, then as a landing point for burgeoning immigrant communities, and now as a privatised landmark, popular among middle-class millennials fleeing London for cheaper cities. As one character, Nikki, tells it: “They did kick people out. They promised them they could come back, but as soon as they’d finished tarting them up they flogged them all off to posh pricks like her.”
The pain in this story is not usually mentioned in coverage of Park Hill’s other recent claim to fame: its acclaimed renovation. Not only was the 2013 redevelopment (Phase One) shortlisted for prestigious architectural awards, its recent environmental refurbishment (Phase Two) was named AJ Retrofit of the Year 2023, also winning in two sub-categories. The renovation has been praised for showing that it is possible to drastically improve the energy efficiency of even neglected, decades-old spaces. It is, according to judges, “an important precedent for how the UK should deal with its ageing housing stock”.
Park Hill reflects the strange dynamic between the two greatest challenges facing homes across the world. On the one hand, Standing at The Sky’s Edge tries to articulate fatal, chronic problems of affordability, homelessness and gentrification, but leaves the looming threat of climate crisis — commonly and wrongly assumed to be far-off and slow-moving — conspicuously absent. On the other, efforts to reduce Park Hill’s greenhouse gas emissions are too often lauded without consideration of its economic and human backstory. Park Hill serves as a forceful reminder not only that insecure housing systems and growing environmental pressures concern the same buildings and the same people, but that they cannot, in fact, be separated at all. There is an urgent need for campaigners, researchers and policymakers alike to look at housing and the climate crisis as shared challenges, seeking common responses and a more strategic approach to tackling them.
Homes as assets: how financialisation makes both the housing and climate crises worse
Park Hill was constructed in the early 1960s, at the end of the UK’s post-war social housing construction boom. Political attention was by this time starting to shift away from social housing provision and towards promoting the dream of a “property-owning democracy”, a Conservative Party commitment that former Prime Minister Thatcher herself explicitly championed in her first speech as leader to the Conservative Party conference in 1975. Today, around two thirds of UK households own their own home, compared to less than ten per cent at the start of the twentieth century. The way in which this shift has been managed, in the UK and in many countries abroad, has had long lasting and devastating effects.
A foundational driver of the homeownership dream was a move towards framing the purchase of homes as an investment, such that homeowners have an interest in their home not only as a secure place to live, but also as a purchase whose value should continue to rise. This crucial element of the homeownership dream was enabled by a combination of UK government policies in the second half of the twentieth century, including liberalised mortgage lending conditions and the retraction of support for social housing.
As explained by the New Economics Foundation: when growth in mortgage lending outpaces new building supply, “more money chasing the same number of homes” results in price inflation. As mortgages were liberalised in many countries, including the UK, into the 1970s and 80s, house prices began to rise in a feedback loop: as they inflated, buyers were encouraged to take out ever-bigger loans, and banks could more confidently offer them. In this same period, alternatives dwindled as state investment in the public building stock around the world was slowed or repealed. Estates like Park Hill became increasingly neglected due to lack of funding, with many homes sold off without replacement. People became trapped permanently in extremely poor housing conditions, with those that could afford it fighting for a way out, into the market. Homes became, rather than simply a place to live, financial assets.
This route to mass home ownership has had a direct effect on affordability, with house-price-to-income ratios rocketing in the many countries which undertook similar financial reforms. One OECD study, for example, found that financial deregulation between 1980 and 2005 “has increased real house prices by as much as 30 per cent in the average OECD country”. In these countries, including the US, France and the Netherlands, a huge proportion of bank lending goes to mortgages, diverting funds from productive investment (including retrofits) and leaving homeowners highly vulnerable to wider economic conditions, interest rate changes and credit crunches.
Importantly, this housing-as-a-market system has overlooked environmental consequences. In a market, price competition is expected to drive quality and reflect priorities like condition and environmental performance. But house prices are in large part set by the value of the land a home is on, the infrastructure and conditions in the local area, and the health of the wider economy and interest rates — not the state of the home itself. The extent to which house prices reflect physical condition and environmental impact is therefore enormously diluted.
Accordingly, across the UK and beyond, high house prices bely the millions of homes in poor condition, uniformly low energy efficiency performance and continued dominance of fossil fuel gas boilers. In the UK, house prices are only slightly higher for homes with higher energy efficiency ratings, and show no difference at all in areas of high housing demand. The uptake of heat pumps has been shockingly slow, home energy consumption (and thus fuel bills) remains stubbornly high and there is little evidence of mass preparation for rapidly rising heating and drought. The underfunding in the public sector that has complemented financialisation leaves social homes in a similar situation. The financialised housing market is thus utterly and abjectly failing to drive or even accommodate the environmental action our homes require.
[.box][.box-header]There is an alternative: Property-linked finance[.box-header][.box-paragraph] “Property-linked finance”, or green mortgages, are loans that include additional money to pay for environmental and condition upgrades. These are safe bets for both banks and buyers because they can be partly paid back by the reduced fuel bills that retrofits achieve. These are intriguing because not only do they create investment in climate measures, they are also potentially a first step towards directing mortgage finance to actual improvements in a home’s quality and condition. They are financing structures that invest materially in homes, rather than just feeding their inflated prices.[.box-paragraph][.box]
A deregulated system: the split incentive
The other obvious implication of turning homes into an asset class with reliable returns is that demand for homeownership is no longer just about habitation. While landlord investment in homes has always existed, the practice becomes particularly attractive when gains from steadily inflating house prices can be expected on top of years of rental income. As the numbers of overseas non-resident landlords, corporate landlords and financial investor groups like hedge funds and asset managers increase, ever-more finance-focussed, metricised and corporatised forms of landlordism emerge.
The economic and social effects of landlordism are well-documented, and need little further elaboration here. But an additional problem with landlordism arises with respect to the climate crisis in the form of the “split incentive”. Absent regulations, and when tenants have little to no power in the rental system, landlords have no incentive to improve energy efficiency or provide heat pumps in the homes they own, because, so long as these changes do not impact house prices, the tenant will reap all the benefits, including savings on fuel bills, better air quality and protection from rising temperatures. Surveys show that landlords are less keen to make environmental investments in the homes they own than other groups, and UK private rented homes have notably worse environmental ratings than social rent homes.
This problem tends to be worse in financialised housing markets, which also typically have the most deregulated conditions for landlords as an inducement to invest in homes. In Germany, which has a greater proportion of renters, who stay renting for longer, and are more likely to be involved in tenants unions, there exist much stricter regulations for both rented and owned homes than in more financialised housing systems such as the UK’s. Environmental performance is now becoming part of this arrangement: all German buildings are subject to common energy efficiency regulations; dates have been set that require the phaseout of fossil fuel heating and landlords are required to bear the costs of emissions generated by tenants for home heating, reflecting the fact that they hold the responsibility for installing clean heating systems and upgrading the building fabric.
Build mania: new homes with a vast carbon penalty
Financialisation is a negative force for both the crises in housing condition and affordability and in addressing the role of homes in the climate crisis. At the same time, the improved condition and environmental performance of homes tend to go hand in hand: Phases one and two of the Park Hill redevelopment have not only improved the blocks’ condition but should have reduced fuel bills and will protect people from rapidly accelerating heat risks. Regulating rented homes properly and restoring funding to social housing providers can do much to improve living conditions and take action on the climate crisis at the same time. Climate and housing campaigners thus have many of the same battles to fight, and would do well to collaborate more closely.
But climate and housing campaign priorities are potentially less easily aligned when it comes to housing supply. Increasing housing supply is seen by most campaigners and advocacy groups as a central route to combatting inflated house prices. While this is emphatically not the sole solution to housing crises and high house prices, a far greater availability of quality, genuinely affordable homes would certainly help alleviate poor housing conditions and provide decent homes for more.
This approach poses an existential environmental challenge, however, in that new homes have truly enormous consequences for the climate. Even when created with ultra-low energy demands, renewable energy sources and protection from climate risks and on land that has already been built over, new homes are almost always built from concrete and steel. These materials have vast greenhouse gas, pollution and ecological impacts. Concrete alone is responsible for a full five to ten per cent of all global emissions, sucking up a tenth of industrial water use and depending on quarrying that chokes local areas with dust and eats up natural resources.
Importantly, however, there are routes forward here: one reason Park Hill has been so celebrated is that it demonstrates the potential for high quality environmental refurbishment of a listed building, avoiding the wasteful and socially destructive demolition of peoples’ existing homes. Elsewhere, designers are pioneering large-scale timber homes, reuse of materials, building extra storeys on existing buildings and supporting more efficient use of existing building stock — nearly a fifth of US office space is empty, for example, and with the right regulatory environment could be converted into quality homes without the need for large amounts of raw materials. These are all significant changes that can be done badly: in the UK, lax regulations that encourage developers to turn non-domestic space into homes have needlessly allowed shoddy home conversions. But done right, they represent radical improvements in how we design and adapt buildings, and they are urgently needed. Despite this, the need for an enormous shift in how we build is rarely part of the conversation about housing supply. Indeed, the “build build build” approach to homes is often associated with arguments for deregulating planning systems, not adding new requirements.
Housing and climate campaigners need to create constructive coalitions dedicated to unpicking and understanding the nuances and common ground in this particularly fraught space. In some places, this work has already begun, and conversations about the overlaps between climate and housing concerns have notably flourished in grassroots anti-demolition campaigns. But otherwise, the two conversations are distanced, with climate commitments by designers and engineers rarely referencing housing policies, and housebuilding debates frequently sidestepping climate concerns. Meanwhile, planning systems, which should be the ideal spaces for these detailed, serious, complicated decisions with permanent and long-lasting effects, are famously beleaguered.
Routes forward: homeownership as stewardship
The question of “who owns”, or how and whether you own, is central to considerations of financialisation, regulation and construction in the context of the climate crisis. In many economies, owning and not owning is split starkly along lines of existing inequalities in society, like race, disability and marginalisation. Funding conditions are too tight for social housing providers to retrofit their homes. Landlords are not held to their responsibilities to maintain decent, environmentally safe conditions in the buildings they own, treating them as assets rather than spaces that people must live well in. Within this fraught, atomised context, environmental concepts of stewardship, shared resources and community can feel far from achievable. As a result, many concerned about the climate crisis have returned to entirely different conceptions of ownership and living.
Community Land Trusts (CLTs) represent one particularly popular example of these models. Just as the first residents were settling into Park Hill in Sheffield in the 60s and 70s, Black farmers and activists in the US were buying land collectively. New Communities, the first project to be called a CLT, was established by Southern civil rights activists in Georgia in 1969, who bought 5,700 acres of land for collective and leasehold farming. The group still exists today, despite closing for a period due to loan discrimination, and has spawned dozens of similar projects around the US. Their “long movement” seeks to maintain access to land over future generations, preserving local habitats, farming areas collectively and creating spaces for community and social development. Today, CLTs are rising rapidly in popularity. The total number of European CLTs has increased tenfold between 2017-2023. In the UK, there are now around 500 CLTs with a reported pipeline of 300,000 new homes, with some building their own renewable heating supplies or regenerating depleted high streets without resorting to demolition. CLT numbers have also grown steadily in the US since the 70s, particularly in urban areas.
CLTs are almost always predicated on this combination of ecological and social principles. As a result, they claim increased participation by underserved members of their communities as well as positive social outcomes. Early studies find that new building proposals by community-led housing groups outperform national energy efficiency requirements. As Melissa Mean, founder of the We Can Make CLT in Bristol, which has started its own microfactory to construct local homes out of biomaterials, writes: “Rather than treating homes as financial products to be traded and extract a profit from, we are motivated by how much wider social value the homes can generate — things like jobs created, carbon saved, and increases in health and wellbeing”’.
CLTs are not easy to form and maintain: they require the capital to buy land; the time to develop expertise, community and roots and they can be arduous to set up and run. Some modern CLTs have been criticised for downplaying collective principles in favour of promoting individual homeownership. But there is no doubt that CLTs and other forms of ownership, stewardship and community wealth creation are surfacing ways of living that aim to be more economically healthy and environmentally sound to run. Community-oriented housing models suggest a way out of the ownership/renting binary, diffusing the knotty and competitive system that many economies have worked themselves into and that is proving so bad at adapting to new challenges. They show us that there are better routes for providing good, clean homes.
Park Hill itself shows little sign of being reimagined in this way. It was sold in 2004 for £1 by Sheffield County Council to developers, though the council has still reportedly contributed millions to the renovation. Rather than the exciting project the architectural community likes to claim, the estate has become a poignant illustration of the inexorable link between the housing and climate crises. Privatised, deregulated, and financialised housing systems are neither delivering safe, warm, affordable homes nor tackling the existential task of decarbonising and adapting our current building stock.
However, while both crises are escalating, they also have answers in common. There are specific first-step reforms to regulatory, planning and financing structures which will better protect people and address the climate crisis at the same time. There are natural opportunities for coalitions of campaigners to drive change and hold systems to account. And there are proven approaches to seeding and growing fundamentally more clean, stable and quality ways of living long-term. It is time that the housing and climate crises were treated as one exceptionally urgent story.
