CityReads | Who Owns London?

337

Who Owns London？

London has been captured by a wealthy elite, changing the fabric of the city forevermore.

Rowland Atkinson, 2020. Alpha city: how London was captured by the super-rich, London: Verso.

Sources: 

https://www.versobooks.com/books/3179-alpha-city

https://www.tandfonline.com/doi/full/10.1080/02723638.2020.1833592

Who owns London? In recent decades, it has fallen into the hands of the super-rich. It is today the essential "World City" for High-Net-Worth Individuals and Ultra-High-Net-Worth Individuals. Compared to New York or Tokyo, the two cities that bear the closest comparison, it has the largest number of wealthy people per head of population. Taken as a whole, London is the epicentre of the world's finance markets, an elite cultural hub, and a place to hide one's wealth.

In his book, Alpha city: how London was captured by the super-rich, Rowland Atkinson charts the change in the capital since the 2008 financial crisis – and the way in which the city has been shaped to meet the demands of the ultra-wealthy whose new money sloshes around the city. 

That change is 'a Faustian pact, a contract taken out on the zero-contracted, with the price for success being the exclusion of the poor souls of the city while capital and the rich ride on', reckons Atkinson: 'Walk down any residential street in Westminster, for example, and you can be confident that, on average, every tenth home you pass is owned by an offshore company,' The source of the funds used to buy these homes and the people who own them are unknown. Offshore companies now anonymously own about 100,000 properties in England and Wales, nearly half of which (44,000) are in London. The consequences of this transformation of the capital for capital is the brutal expulsion of the urban poor, austerity, cuts, demolitions, and a catalogue of social injustices. This Faustian pact has resulted in the sale and destruction of public assets, while the rich turn a blind eye toward criminal money laundering to feather their own nests.

London is the alpha city

London, the alpha city, is the pre-eminent site of the rich. Wealth becomes a city industry in its own right.

Atkinson stitches together wealthy people and places in the city through a conceptualization of London as the "alpha city" (a term that Atkinson borrows from Richard Webber). Accordingly, the "alphaness" of London is expressed in several ways: by its hierarchical position at the top of rankings of global cities; through a city that is structured both socially and spatially in the service of wealth elites who have captured the political reins of power; and by defining the "domineering, swaggering and altogether ruder" character of those with extreme wealth in the city.

'Alpha' denotes both the beginning and the most powerful member of a group. London as an alpha territory is sufficiently large to generate its own gravitational field, a force that pulls in much of the world's wealth and many of its most wealthy individuals. It is to London that so many of the world’s ultra-wealthy come to live, invest or indeed hide. The city's abundant luxury homes and quiet districts offer them safe spaces insulated from the intrusions of unsightly poverty or anything else one might find disagreeable about city living.

Whether measured in terms of its wealth, GDP, cultural offering or liveability, London can confidently lay claim to being the alpha city. Its bright lights only cast other cities into the shadows. The international rich come to the city in search of prime assets to buy and sell, to take advantage of house prices cheapened by strong foreign currencies, to escape the insecurities or dangers presented by their own governments, or to offload bundles of criminally sourced cash, laundered through London’s real estate. Some even come to the city to live.

The alpha city is today more a place for money and the moneyed than it is for living in, and this has had significant consequences. The most important result perhaps lies in our losing sight of what cities are for – as places where people live and thrive, where the city's economy is set up to serve its residents’ needs, rather than being a magical playground for the super-rich.

This is a city increasingly for money, not for people. It is here that capital, capitalism and the capitalist elite come together. In doing so, these combined forces have torn up the mission statement of the city as a place for all.

There are significant and damaging consequences that come from the city's increasing devotion to capital. It is critical that we grasp the extent to which massive wealth, produced in a global economy that seems to generate new fortunes each day, has real and grounded impacts on the everyday life of the city. Capitalism delivers incentives for a relatively small group to rework the operations of the city. These tweaks bring further benefits to the wealthy and their adjuncts while casting adrift those in the wider community. London is also a kind of social centrifuge that increasingly, to paraphrase Shelley, spits out those damaged or unhoused by its workings – the poor and the unwanted.

Who are the super-rich in London?

London is a rich city however you measure it, and long has it been so.

London is an enormous honeypot of personal wealth: in 2017 it was estimated that its residents held around 2.7trn. This figure does not include the city's richer hinterlands that have long accommodated wealthy county and 'City' types who wish to live within reach of the fumes of finance in the capital.  The top ten London boroughs by property wealth are now worth more than North Wales, Northern Ireland and the whole of Scotland put together.

The 2015 World Wealth Report showed that around one in twenty of London’s population was a 'high net worth individual' (a dollar millionaire or with around £660,000 in non-property wealth), representing nearly half (44 per cent) of this group nationally (840,000). Yet the city also boasts 431,000 property millionaires, that is, households living in homes worth a million pounds or more (roughly one in twenty people).

If there are nearly half a million millionaires in London, then who are the city's real wealth elite? They constitute roughly the top 1 per cent of wealth (rather than income) holders in the city, around 88,000 in a population of 8.8 million. But this measure belies the vast variations of wealth even within this group – the tiniest cluster of the top 0.001 per cent are considerably wealthier than the remainder.

Many in London possess wealth that has been generated within the UK, and which may have been transferred across generations. But many of its most monied are what used to be called the nouveau riche; they possess wealth that was not inherited and that, in the case of many of the richest, has been generated as a result of regional and global economic and social instability. This instability has seen changes in national leadership, corporate ownership and the extraction of value through mechanisms that have created new and dramatic clusters of wealth, particularly among those benefiting from the shift to capitalism in the former Soviet Union and from financial and economic liberalisation in Latin America. Alongside these are the resource-based wealthy of the Gulf states as well as the new rich of East Asia and, to a lesser extent, Africa.

Real wealth is often defined in the various rich lists in relation to three bands: first, the High Net Worth Individuals (HNWIs) who hold between $1m and $5m in investable wealth, described somewhat cutely by Capgemini as the 'millionaires next door'; then there are those worth between $5m and $30m (known as the mid-tier millionaires); finally there is the rather wide band of those who have $30m or more, known as Ultra High Net Worth Individuals (UHNWIs). There are around 353,000 HNWIs and 4,944 UHNWIs, the latter forms only 0.05 per cent of London’s population (or just 1 in 1,785 people in the city).

In the UK we can find roughly a hundred billionaires, with their combined wealth of $253bn, of whom around 95 live in London itself according to the Sunday Times rich list, more than in any other city in the world. The city's rich are located mostly in the central districts of Mayfair, Belgravia and Knightsbridge (the core of the super-prime property market), the city’s northern suburbs and outside it to the west. London has also become increasingly popular over the past decade as a destination for the world’s rich: 2018 saw the largest single-year influx of HNWI 'golden passport' seekers (over 114,000) in the past ten years looking to use investment in the UK as a means of accessing citizenship. Who are London's rich and where have they come from? Why are they so attracted to this particular city? London is critical to the creation of a group identity among the rich, even if there are clear divides and sub-networks within the ranks of the rich themselves. This group forms a kind of congregation; we can see them in the city out in force, but there is no clear sense of community among them due to their increasingly diverse national, economic and political backgrounds. The city also operates as a kind of theatre in which money is translated into social and cultural resources that are sought out by new money.

A new nouveau riche, today's super-wealthy arrivals have come to London as one of only a very few possible locations. They come to do business but also to be received within the city's existing power networks and those domains that confer status. This kind of access begins with residence in the city's established luxury districts, its alphahoods, joining its notable clubs, and connecting with others in less formal settings where dusty codes and prejudices can be circumvented in new and often highly dynamic private circuits. If much of London was originally constructed to woo the wealthy from its rural hinterlands, today it plays the same role on a global scale.

How might we begin to unpick the groups and individuals that make up the rich of today's alpha city? One way into this question is to think of them in terms of three more or less distinct blocs. The first consists of the established rich. This group includes those with dynastic wealth and the more modest patrician elite who are anchored in the city’s established alphahoods. A second key group is today's equivalent of the nouveaux riche of the late nineteenth and early twentieth centuries. This bloc includes the various industrial, tech, finance, commodities, energy and utility barons. In the third group are the enablers, those who play the role of factotums to capital and the super-wealthy. These are the agents and managers who, in many cases, have become rich themselves, often by growing and deploying other people’s money. This group is critical to the story of the alpha city because it is they who have helped to create the kind of environment conducive to attracting the flows of mobile global capital and ensuring the influence of new money on the city more broadly. The enablers include key figures working in banking, the managers or CEOs of large firms, financiers, hedge fund managers, some politicians, and those working in real estate including developers and builders.

The alpha city is now characterised more by the purchase than the creation of great assets (whether these be galleries, museums, public spaces and infrastructure projects) by its wealthiest residents. Such purchases also include massive homes, major corporations and football clubs. The resulting culture of the city rests upon a distinctive mindset, one that is unquestioningly allied to the needs of capital.

How the super-rich have changed London?

The lifestyle and service needs of the rich create a distinctive geography driven in large part by their seeking maximally advantageous locations for their homes. Choice of location is determined by the proximity of workplaces, financial service providers, private schools and leisure and cultural infrastructure.

The geography of the alpha city's rich comprises in essence a golden arc that envelopes Regent's and Hyde parks. These are the alphahoods, the so-called prime and super-prime areas to which real estate agents guide foreign buyers with unlimited money to spend.

Some of the most spectacular changes generated by the rich and their investments can be seen in the city's many new buildings. The average age of London's skyscrapers (buildings taller than 100m) is only fourteen years in only the past decade (the alpha years of 2008–18) a further forty-four towers have been completed.

The alpha city is to the rich what bones are to the human body. It is here that the rich are supported by fine homes, clubs, power networks and a diverse cast of assistants. The alpha city is like a vast exoskeleton, whose uplifting and enclosing qualities support and enlarge the lives of its wealthiest residents. Its class of enablers and its homes, clubs and institutions are the very bones that hold up the body of the rich.

Whilst the super-rich might live highly isolated and fortified lives, Alpha City demonstrates the connectedness of their impacts around the city. In an explicitly geographical investigation, the influence of the super-rich is shown to spread through "those who court, support, laud and defend them" – the agents, managers, chauffeurs and nannies who service them, the infrastructure of exclusive transport, fortification and security systems that navigate the city for them, and the spaces of hotels, clubs, gated communities, luxury shops and business complexes that foster an urban ecosystem for protecting and privileging the super-rich.

Atkinson reveals the consequence of such geographical arrangements upon the psychic and social experiences of the super-rich: namely, that "the gritty realities of city life remain concealed from the wealthy themselves in a kind of urban theatre whose curtains, entrances, exits and trapdoors enable insulated worldviews shielded from social suffering".

The construction of a city for the rich and their investments has occurred alongside a deep crisis in the social life of the city; wealth sits alongside poverty and exclusion. London is a city of gross inequalities. More than a quarter of its households live below the poverty line. This stark figure is all the more alarming when we realise that half of all the wealth in the alpha city is held by the top 10 per cent of its residents.

Free-flowing wealth on the one hand; poverty, exclusion, desperation and violence on the other. This is the Janus-faced nature of the alpha city. Yet these two sides remain, ostensibly at least, connected by a political system that is supposed to mediate the excesses of capital and the losses to the social.

The accelerating death of the public city

One key symbol of the decline in living standards for London's 99 per cent has been the transformation of its high-rise buildings from being places accommodating those on modest and low incomes to being the homes of the rich. But this is only one element of a broader set of transformations in the city that speak of a continuing privatisation and loss of social support. Today even many of the streets of the city are now privately owned. In 2017 the Guardian was able to plot more than fifty public spaces in which private landowners and security staff now owned and controlled the streetscape at ground level.

The death of the public city has been brought on by a regime of political and private interests that have marketised, defunded, privatised, demolished, repaved and displaced it in order to cut a path for capital. The new primal law of the alpha city is that if significant money can be made from the erasure, construction or sale of property or land then this must be applied to any area of the city.

The loss of this public city can also be measured by the closure of core public facilities and amenities. This includes the roughly twenty public swimming pools lost in the past decade, many sold to developers; the closure of libraries (more than fifty across the city) and playing fields (fifty-four lost in the period 2009–18); and the loss also of thirty hospitals and several care home sites, most of which were also sold to private developers. The continued sale of public land by the state, local authorities and land-holding public institutions such as hospital trusts continues, providing temporary cash windfalls on a path to the apparent eventual demolition of all forms of public provision.

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