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CROWN TENANTS ”SUBSIDISED”?
Posted At: 11 January 2007 02:28 On behalf of the Crown Resident's Association could you please reply to the following enquiry:
Why does the Crown Estate, which is not a social but a commercial landlord, rent property at discounted rates to London key workers?
Is this practice a government directive or are there government financial incentives for the commissioners to lower the potential profit from urban residential lettings?
Thank you,
Susan Di Santo
From:
"Hemingway, Lori" <Lori.Hemingway@thecrownestate.co.uk>
Dear Mrs Di Santo,
We write in response to your email of the 11th January.
First of all we would point out that we were surprised to see that this enquiry was sent on behalf of the Crown Residents Association and was posted through our public enquiry portal. The normal protocol for CRA enquiries is that they are sent via the Chair and/or Secretary of the association directly to the Area Manager at Cumberland Market. For this reason we have copied the Chair of the association in on this reply.
In response to this query we have very little to add to the response sent to you recently by the Head of Legal following your individual request for this information. This was:-
"The existing rent policy is rooted in the decision taken by the then Commissioners in the 1930’s not to charge Market Rents for the rented properties in Cumberland Market, Millbank and Victoria Park. Prior to 1980 The Crown Estate set its rents on a contractual basis. In 1980 the Commissioners became subject to the provisions of the 1977 Rent Act which had introduced the concept of regulated rents set by the Rent Officer. This system although far from perfect provided for rents to be set reasonably with a degree of objectivity and fairness and it allowed an easy transition to the new regime and policies continued largely unaffected. In 1988, policies needed to be thoroughly re-examined. The new Housing Act introduced Assured tenancies allowing landlords to charge unregulated market rents. The Commissioners responded by re-stating their intention to charge affordable rents and the present Board have retained that policy to this day." As can be seen this practice is one that was adopted voluntarily by The Crown Estate Commissioners and is not as a result of any government directive or incentive.
We trust this answers your query.
Regards
Lori Hemingway
From:
Susan Di Santo [mailto:susandisanto@yahoo.co.uk]
I am writing again as a member of the CRA committee and not via the the Chair and/or Secretary since there has been no acting secretary for a number of months.
I'm sorry but Although you have quoted that, "The existing rent policy is rooted in the decision taken by the then Commissioners in the 1930’s not to charge Market Rents for the rented properties in Cumberland Market, Millbank and Victoria Park. etc..." The historical account in the letter does not explain the fundamental reason why the Commissioners in the 1930’s, or 2007, do not charge Market Rents - when the corporation describes itself as “not a social landlord” and is registered along with social landlords with the Independent Housing Ombudsman.
The CRA committee would like the point about rents being described as "subsidised" clarified and reviewed; as a matter of reasonable political correctness and to improve landlord/tenant relations.
The Crown Estates are not the property of the Commissioners. Residential tenants' rents indirectly, or in part go toward the running of the residential estates; incorporating paying local management costs; salaries. The underlying aim of the rent scales are to encourage and maintain a reliable key workforce, whose wages are fixed and scrape along behind rates of inflation.
If this understanding is accurate then it is not justifiable for tenants to be told that they are "subsidised" tenants by local managing agents. The attitude fostered by this inaccuracy does nothing to encourage positive communication and relations between tenants and local managing agents.
Susan Di Santo.
From:
"Hemingway, Lori" <Lori.Hemingway@thecrownestate.co.uk>
Dear Mrs Di Santo
Thank you for your email of the 31st January. Please accept our apologies for the short delay in responding. We are sorry that you feel that our reply did not answer your query sufficiently in respect of why the rent policy was introduced in the 1930's. However, we are not able to expand on this as the records we checked are silent on this matter. The current view, as stated in our 2006 Annual Report, is that contributing to Affordable Housing is an important aspect of our Corporate Responsibility Objectives.
The fact remains that The Crown Estate has voluntarily chosen not to charge Market Rents for a number of properties within it's portfolio, which means that these properties are let at between 40% to 60% less than could be achieved on the open market.
By not seeking to let these at open market levels The Crown Estate is effectively subsidising the difference in what we charge and what we could achieve. We do not believe that the use of the word subsidy is "politically incorrect" or that it has any effect on what you term landlord/tenant relations as you claim.
With reference to our membership of the Independent Housing Ombudsman Scheme, all registered social landlords in England and other housing bodies belong to the Service on a mandatory basis, under the provisions of the 1996 Housing Act, The Crown Estate, as a private landlord, is a voluntary member.
We trust this has answered your query but, would respectfully suggest, that any future correspondence from, or on behalf of, the Crown Residents Association is forwarded through the normal channels and not the external website portal.
Regards
Lori Hemingway
From:
Susan Di Santo <susandisanto@yahoo.co.uk> Dear Lori,
Thank you for your reply reflecting the general conceptual attitudes of your corporation.
The Crown lands and dwellings etc are not the property of the Commissioners, and the profits from rents are decreed to benefit civil list expenses and taxpayers generally. In this perspective, the role of your corporation is one of caretaker. The commissioners are granted the position to do this commercially and your accounts show that profits from rents pay substantial salaries and bonuses to the senior commissioners . It is difficult to see how it can be said by local manging agent that they are subsiding the tenants - it could be contested that our rents, effectively, subsidise Crown Estate salaries, taxpayer and civil list. The actual money (generating any "subsidy") is primarily paid by tenants.
In regard of rent being less than (synthetic) market values, these homes are actually rented on discounted terms, (rather than subsidised). Compared with the commercial market, the rates appear better value. However the interiors of homes on this dated residential estate are fitted with the cheapest fittings that would need considerable upgrading to genuinely merit high market value. In addition, the later, profit-driven conversions of the original tenement-style architecture on this estate have a negative effect on tenant's sense of privacy. No amount of pretty gardening outside can change this. On the whole the estate dwellings are comparably inferior in standard and value to the average local authority, or other housing association, property.
It is the deteriorated management culture and gracelessness, with which the term "subsiding" is used that is objectionable, apart from being inaccurate. Rather than labour the point with you I shall be taking the matter up with through advised channels with the CRA and the relevant management development staff.
Susan Di Santo |
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