Comment by KaiserPro | Hacker News Reader

Comment by KaiserPro | Hacker News Reader

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Ex council resident here.

This block was clad as part of the "warm safe and dry" initiative. This was funding provided by central government to make sure that council housing was energy efficient, resistant to both criminal and antisocial damage.

Also fixing roofs. You'd be surprised how many time roofs fail on council houses.

> The national government voted against banning this cladding

This isn't really true. They voted against a specific amendment that demanded that rented accommodation be fit for purpose. (Local councils have had the power to condemn accommodation, but they then have to re-house the tenants. its really complex.)

The scandal here is in three parts:

1) The people that inspect building regulations are paid for by the developers, and not by councils. So there is lots of "optionality" in an otherwise good set of rules

2) The fire ratings of materials appears to not be independently vetted. I'm not sure how they are vetted, but this is a massive failure in the entire system.

3) The firebrigade having shit kit, also failed to learn from larkenhall.

> ignored serious safety complaints from the residents

Local residents always complain about everything. I know because I used to be the vice chair of the Tenants and residents association. 25% of the time they are correct.

Grenfell has some interesting features:

1) it wasn't being managed by the local council. It was owned and run by a "TMO" this is quite common.

2) they appear to have added new flats, which subsidised the works, again quite common.

3) leaseholders were not billed for the repairs. This is very unusual. Normally they'd be liable for a pro-rated proportion of the total bill (ie if the building has 100 flats of the same size and 10million pounds spent, they would be liable for 100k) I was stung for 50 grand, others in my estate had bills of 70k+

This is not the first time that a block of flats has killed people because of shoddy work. What is unusual in this case is that according to the paper work, the work was done to the correct standard.

I felt this tragedy closely. As a fellow council resident, I know how easily it could have happened to me. Fortunately for us, we chose our house specifically with fire in mind (larkenhall fire having happened months before) I was lucky because I had a choice. If I had been a tenant, I'd have little choice.

> Local residents always complain about everything.

In this case there had been a previous fire that revealed that the cladding was dangerous.

The residents were complaining not about the same kind of abstract risk that we deal with in IT, like "what if Microsoft Azure ceases to exist overnight", but a real risk of death with a recurring proximal cause.

The flat members had spent serious time and effort trying to bring attention to their plight, and they were ignored.

This was the worst part for me. You could literally see the words online of the resident who said that if nothing was done this would end with charred bodies.

It's not such an exaggeration to say that corporate manslaughter was legalized here.

> The residents were complaining not about the same kind of abstract risk that we deal with in IT,

No, I agree. I should have been more nuanced in my point. during renovations the sheer number of complaints are enormous.

They range from (and this is based on personal history):

o We don't want a flat roof, they leak

o the scaffolding is allowing people to climb into my bedroom

o the builders are swearing

o the builders are dropping rubble on the walk way

o we are being charged to much for item x, look here's a quote from supplier z

o I don't like that the builders are speaking language y

o they are using flammable hole filler

I was lucky that on my estate we had a number of people who both had the ability to get the council to do things, and run multi-million pound public procurement contracts. we had the expertise to tackle both the council , the Quantity surveyor, the main contractor, the sub contractors and the site team.

our estate was just under a thousand homes. Grenfell was < 200. Whats more there were less people in grenfell that had grown up with the council house system. We were lucky that we had a number of residents that moved into the place originally, so knew all the tricks.

Again, I'm trying to get across that its not as clear cut in hindsight.(apart from the corruption, that is clear cut.) The residents would be complaining about safety because thats often the _only_ way to get people to listen.

This should not however lessen the tragedy, and more importantly the motive to change. None of this is acceptable. Residents should be listened to. Standards should never be corrupted.

It seems there wasn't collective agreement with residents about safety concerns of the cladding, since if there was, surely residents wouldn't have rejected the installation of an adequate sprinkler system? The council leader has publicly said residents (collectively) didn't want the added disruption during the refurbishment.

> surely residents wouldn't have rejected the installation of an adequate sprinkler system

Possibly their idea was that if they allowed the sprinkler system they would have to give up on preventing the cladding.

The people that inspect building regulations are paid for by the developers, and not by councils. So there is lots of "optionality" in an otherwise good set of rules.

Please let's say this part quietly. Somehow we haven't started doing this in USA yet.

Maybe not for buildings. But Boing controlling Boing with the 737 max does sound similar?

Yes that sounds familiar. Due to that and so much more, it wouldn't be surprising to see this phenomenon in USA building inspection as well. Only, I've built several buildings in the last decade, and I can confirm that the building inspectors (who in every case worked for the relevant local fire department) are very professional and very opposed to letting unsafe shit be built for the use of the public.

It would be very hard to privatize building inspections in the US for two reasons.

1) It’s controlled locally, which means it would have to be privatized city by city or county by county.

2) Building code varies by city and county, which makes it much easier for the county to enforce directly.

That isn't as good a firewall as one might imagine. Organizations like ALEC push through lots of abusive crap at state and municipal levels. They've got their fingers in hundreds of pies at the same time. If locals aren't paying attention, they can have the laws in force and be on to the next town before anyone realizes what happened.

apples to oranges. The USA isn't willing to invest in a branch of the FAA that can actually go through every aspect of the engineering of the 737-max in order to understand if it's working effectively.

Even with the MAX disaster, aviation standards are significantly better than the 70s/80s.

Boeing + Airbus have a very very very vested interest in making sure that aviation is safe, and appears very safe (which is why Airbus did NOT go on the attack on Boeing's safety. It would hurt the entire industry).

Building codes and fire safety are something that should damn well be simple / codified enough that it's inspectable by a reasonable person.

Boeing did lie about shit. Middle management pushed some real bullshit with the max.

1. "Boeing + Airbus have a very very very vested interest in making sure that aviation is safe, and appears very safe"

2. "Boeing did lie about shit. Middle management pushed some real bullshit with the max."

So how are these two things squared? I'd say clearly Boeing has other interests which compete with safety, like profit. The difference between "appears safe" and "is safe" can be profitably "arbitraged", until you mess up and get caught.

It doesn't seem their very very very vested interest in making sure aviation is safe was sufficient to replace outside supervision after all.

Well you have conflicting stereotypes in this area: the other being that you're heavy on building regulations and 'codes'.

In my (British) conception of America, that way trumps privatisation/corporate empowerment.

'An Englishman's home is his castle.'

In Houston Texas the developer does their own inspections.

No a city inspector goes by before a CO is issued.

> The people that inspect building regulations are paid for by the developers, and not by councils. So there is lots of "optionality" in an otherwise good set of rules

As an American, this is wild to me. I’m not sure how it works for our public houses, but as a private citizen I actually have to pay the local city to bring a government inspector out and double check any electrical, plumbing, etc. work that I do. The people that built my home decades ago likewise had to pay a percentage of the home’s value to the city for inspection.

The idea that a developer anywhere can decide who gets to inspect their building seems like an obviously bad idea.

What is "resistant to both criminal and antisocial damage" ?

Why would people make major repairs to be resistant to 'criminal' damage? And what is 'anti-social' damage?

I think there is some lingo lost in the transatlantic here.

The idea is that the cladding won't be stolen off the side of the building to be sold (criminal) or torn off by bored vandals (antisocial).

Wow, the thought never crossed my mind. My family works in construction, one of my family members owns a myriad of mostly low income properties, and I wouldn't have fathomed this was an issue to the extent that it affected actual construction materials. The world is indeed diverse.

Pretty common in some areas in the US for lower income properties, especially in very rural but poor areas. I considered starting in the business until I helped do maintenance for a friend who owned in some "rough" spots.

While somewhat rare, you'd eventually end up doing silly things like having to run PEX plumbing because some tenant ripped out the copper pipes as they got evicted.

Air conditioner condenser units are also stolen quite a bit for some reason as well, so you get to box those in a locked cage.

Any large property with common areas (e.g. a large multistory apartment tower) is much worse, and has to be designed with damage resistance in mind. In fact it got so bad here we abandoned even trying to develop that sort of public housing arrangement as the living conditions became unbearable.

Just items like easy-to-paint-over materials due to graffiti matter when you are sending a crew around once a week to paint over the last round of tags.

> Local residents always complain about everything.

Only true because the UK has a horribly regressive stance on renters rights.

Can you expand on this?

To my knowledge - as a one-time lettings paralegal - we have some of the best tenancy rights in the world.

That would be in comparison to some mainland European countries, such as Germany, where tenants are more like a leasor, in that they can decorate, improve, etc.

> 3) leaseholders were not billed for the repairs.

I would assume that most, if not all, of the Grenfell residents were renting. I don't think they'd be liable for repairs?

Right to buy will mean that most of the flats will have been bought. The buyers would then become leaseholders, and most leasehold agreements make you liable for the cost of repairs to common areas. Those buyers may have then sub-let their flats (and those renters won’t normally be liable for repairs), but it’s no uncommon for families to buy their council homes and continue living in them.

In theory reserve funds etc should prevent surprise bills, but that isn’t always a guarantee.

For those not familiar with how flat purchases work in the U.K. We have a crazy system where people purchase “long-leases” for their flats, you don’t own the flat, your just renting it for a long period of time (normally 99 or 999 years depending on your landlord). When you sell your flat, you’re just selling the remaining period on your lease (the 99 years doesn’t reset). And yes this does mean that once the lease expires you no longer own your flat anymore, there are ways of purchasing extensions etc but it’s a bit much to put into a HN comment.

> For those not familiar with how flat purchases work in the U.K. We have a crazy system where people purchase “long-leases” for their flats, you don’t own the flat, your just renting it for a long period of time (normally 99 or 999 years depending on your landlord). When you sell your flat, you’re just selling the remaining period on your lease (the 99 years doesn’t reset). And yes this does mean that once the lease expires you no longer own your flat anymore, there are ways of purchasing extensions etc but it’s a bit much to put into a HN comment.

That sounds like real estate in China: the government owns all the land, but sells "land use rights" that last for a maximum of 70 years.

https://en.wikipedia.org/wiki/Chinese_property_law#Procedure...

In Australia, the entire city of Canberra is leased from the federal government, with most blocks being on 99 year leases.

The original idea was a Georgism-inspired approach to capturing land value increases through rent to help fund the city's development, but nowadays it functions effectively like freehold, as most lessees do not have to pay anything other than nominal rent, and you can renew your lease effectively automatically every 99 years, with the added interesting complexity that the government uses additional lease clauses as a form of planning controls.

Singapore and the Middle East come to mind.

Imo, it's a good thing, since that mandates that the local municipalities have to keep maintaining the standards for the provision of services in areas with limited leases. On the other hand, areas with hands-off sales usually have very shoddy local services and shit maintenance.

My parents live in a relatively cheap area in a Middle Eastern city, where you can't buy the property, but only lease it for 99 years, yet the services there are far better than those in the more "glitzy" uptown areas with more expensive flats. It was the same story when I was flat-hunting in Singapore - locals prefer living in the HDBs while renting out the freeholds.

Singapore is also very similar.

The thing to point out here is that you must pay three things:

1) a one off fee for the actual lease, for a 125(typically but it can be 999 years for private leaseholds, and <10 for commerical property) year term. This is normally 10-70% of the going rate for a similar freehold property.

2) each year for the "ground rent" ie a "pepper corn" or nominal fee to the person who actually owns the building (this is nominally fixed at £1-100, but in some recent scams they are exponential)

3) "reasonable" maintenance. this is normally paid to either the council for a ex council house, or a management company. They may not be the same entity as the freeholder. You cannot be compelled to pay for "improvements" only reasonable upkeep.

Once you have a leasehold, it is tradeable like a freehold.

This isn't really the whole story. You have a defacto ownership of the property and the "landlord" has a legal obligation to renew your lease should it come close to expiry.

> "landlord" has a legal obligation to renew your lease should it come close to expiry.

This isn’t true. Your landlord has a legal obligation to offer a renew at a fair price (method of calculation is laid out in law). But they have no obligation to actually renew if the leaseholder doesn’t make them. Long leases can absolutely expire, doesn’t happen very often, but it’s certainly not impossible.

> But they have no obligation to actually renew if the leaseholder doesn’t make them.

I don't understand your point. My understanding is that if there is more than 21 years left on the lease the landlord has zero recourse to not give you a renewal of, I think,50 years, and if you apply for it and they fail to respond it renews automatically.

Most people facing this will engage long before 21 years as well

Your original comment suggested that renewal was in some way automatic. It isn’t, the leaseholder has to request it.

We’re not actually disagreeing here, I just found your original comment ambiguous.

> give you a renewal of, I think,50 years

Based on what my solicitor told me, I think you get a 999 year lease with peppercorn rent. But I could never find source for that.

You can take the freeholder to a tribunal to force them to renew the lease, but in addition to the lease, you have to pay their legal costs.

So if the leaseholder is bot cooperating it can get very expensive. If the lease goes below 80 years even more so.

> We have a crazy system where people purchase “long-leases” for their flats, you don’t own the flat, your just renting it for a long period of time

Who owns the flats then? A lease of 99 years with rent I would assume easily covers the outright cost of the flat. Seems crazy to me that this system continues to function.

> Who owns the flats then?

The building owner (freeholder), who is normally also the superior landlord.

> A lease of 99 years with rent I would assume easily covers the outright cost of the flat.

You pay annual ground rent, UK law means that this is pretty much capped to £250 per year outside of London, and £1000 per year in London. Most ground rents are below that (£30-£100 per year outside London, £200-£500 inside London).

So for most leases the ground rent over the lease period doesn’t even come close to the premium (the amount paid the purchase the lease, or what most people would call the cost of the flat).

If you do a statutory lease extension (which costs money), then the lease is extended to 999 years, and the ground rent drops to a peppercorn (another bit of crazy English law https://en.m.wikipedia.org/wiki/Peppercorn_(legal) ).

Recent scan has been doubling ground rent every 10 years - effectively 7% increase a year

Usually real estate companies or the original developers. It creates all sort of opportunities for abuse. Most of these long term leaseholds have a symbolic rent (“peppercorn rent”) though unscrupulous developers started setting up contracts with an initially small rent but with a steep contractual step up over time (most people do not read the small print). The servicing of the property is also often a way to squeeze leaseholders. The landlord has control over the servicing company and can overcharge through the service charge.

There are some projects of laws to remediate this mess, but this requires to overwrite private contracts, something gvts have been reluctant to do so far.

Generally there's a management company. In some situations owning your flat automatically gives you a share in the management company. Other times the company and the freehold - as it's called - are owned by a third party.

You don't pay rent to the freeholder, but you do pay "management fees" which are supposed to cover insurance and "admin." You may also pay "ground rent" which is a small-ish fee to cover use of the land on which the building stands.

In reality freeholders often do a deal with insurance companies. They get insurance at a reduced rate and don't pass on the savings to leaseholders. There are various other scams that can make leaseholding a nightmare.

This is all completely unrelated to renting. As a leaseholder you're an owner, for varying values of "temporarily".

If your flat has a 999 year lease you can easily sell it on or if it has a share of the freehold.

If it's <99 years nd there's no share of the freehold it gets harder to sell. And by the time you get to <50 years you're going to have serious problems selling it, unless it has some outstanding features or benefits to compensate or you're in a market segment which is happy to treat the money as a simple rental (which does happen, especially at the high end).

Hawaii real estate has a similar dynamic.

How else would it function? In a multitenant property there's not any clean way for people to own the freehold to pieces of it.

I don't really see what the issue is, it's just another option. You can buy a freehold, a leasehold for typically a kiloyear new or whatever remains (which will be accordingly cheaper), or rent.

In Scotland and elsewhere in Europe you have “commonhold” where tenants own the freehold of their flats.

Edit: sorry, in Scotland it is called freehold or feuhold not commonhold but could be considered equivalent. I believe commonhold is also used in the US.

Yes, I just wouldn't call it a 'clean way'. It's not an easy thing to which there's an obvious solution making the freehold/leasehold split bonkers.

Never heard the phrase "commonhold" used in the US, but it seems similar to "condominium".

Huh, thanks for that - I honestly thought that was just what you (North Americans) called blocks of flats (resp. apartments) - I had no idea it was actually more specifically/correctly a particular (presumably commonplace) ownership structure for such buildings.

It’s really cheap. It certainly helps people stay housed. Contrast this to the system in the United States where renters can be evicted anytime. Most rental contracts are only for a year and rents can be increased at will.

In fact, I propose that we incorporate this system at a larger scale in the USA.

It is not really cheap at all. Freeholds do not trade at a significant premium compared to leaseholds. And for flats, outside of Scotland, there isn't really an option.

The same system works wells in Singapore but it’s for three tiers of income and over 75% of population lives in govt owned housing.

Housing obtained at subsidized rate shouldn’t be treated as a speculative asset as the people signing up will likely never qualify for housing loans, normal interest rates or even have the ability to put down down payments. Especially in desirable areas. The goal is to provide stable affordable housing for those who are housing insecure. The market place has been made accessible to them for habitat and not to get an unfair advantage as a speculative play.

Do you have any source where I can look at the numbers?

ETA: the same system here in the us is called BMR or below market rent apartments. It’s not social housing or section 8. There are also 55+ only senior communities to assure that seniors are not priced out due to housing insecurity/eviction threats.

I have no numbers, but that was my understanding of the market when I bought a flat.

The government does sell leaseholds of their home to council tenants through the right to buy scheme, but in general leaseholds are not a government scheme: they are sold and bought between private parties.

In the past I understand that a significant percentage of the UK population used to be council tenants but the through the right to buy scheme the government got rid of a lot of housing stock and it only replenished a fraction of it.

> We have a crazy system where people purchase “long-leases” for their flats

"Purchasing" one of these "long-leases" strikes me as doublespeak, a gimmick no different from prepaying 99 years of rent. Ownership doesn't expire.

Why on earth would one do this?

It's an historical artifact from a time when people lived and worked on the nobility's land as literal serfs. The UK is just dreadful at progress, especially when it doesn't serve the elite. The whole concept of a 99 year lease was actually a major victory for commoners / compromise with the nobility and landlord class. While that compromise is no longer part of living memory (1920s) it's certainly still viewed as the furthest acceptable limit by many hereditary and institutional landlords.

One would do this because there is legislation in place which can be used to force an extension of the lease, at a fair and controlled rate. https://www.lease-advice.org/advice-guide/lease-extension-ge...

This is I think generally (although not exclusively) used for "buying" an apartment (ie a "flat" in the UK), rather than a free-standing house -- what in the U.S. would be a condominium. Such as it would be in the case of Grenfell Tower.

Condominium ownership required specific legal authorization in the U.S., which only happened mid 20th century. Before that there was no way to have different people owning different units in a larger building. The closest thing to it was a cooperative, in which you also don't really own your unit as real estate, although it isn't quite the same thing as a UK leasehold, it overlaps.

So, the UK didn't even pass similar legislation to legalize a condoninium-like ownership structure ("commonhold") until the 21st century. And it's still not quite the same. And for whatever reasons hasn't taken off much, maybe because the leasehold system was already so developed at that point. Switching over ownership structures in existing properties is of course a big hassle (why are there so many more cooperatives than condominiums in NYC, even decades after condos were legally authorized? that's part of it)

So, people do it, because that's what evolved from the particular historical and political context to allow "ownership" of an apartment in a building. There's noting "natural" about condominiums, they needed specific legislation to make them possible in the USA too.

In the context of council estates specifically, well there's a bunch more historical and political context. Land ownership and tenure is a social and political construct, it isn't "naturally" any particular way, it turns out.

One reason it hasn't taken over is because the banks are reluctant to lend for such properties as there is less clarity on who's responsible for maintenance.

For some reason not a problem with US condominiums, I wonder if there are different legal factors involved. But yeah, ownership is it turns out built on a whole suite of legal structures and social practices built up over time, there's nothing surprising about a different configuration existing in the UK than the USA.

It is not a problem in most of the world. It is just good old inertia and I guess lack of legal precedents.

> Why on earth would one do this?

There’s no real alternatives (other than living on the street). Why would builders and landlords give up such an obvious advantageous arrangement?

People are pushing for change, common holds are slowly becoming a thing. But ultimately there’s a housing shortage in the U.K, and beggars can’t be choosers. It sucks, but you can’t argue with reality.

> "Purchasing" one of these "long-leases" strikes me as doublespeak, a gimmick no different from prepaying 99 years of rent. Ownership doesn't expire.

It’s just like purchasing a future, or any other time bounded asset. Your purchasing the opportunity in a manner of speaking, your ownership of the lease never expires, it just becomes worthless after 99 years.

99 years is pretty short, they're accordingly cheaper / harder to sell at the bottom end.

More typical might be you buy somewhere with a 550 year lease, and sell it ten years later with 540 remaining.

Clearly that barely had an impact on the value; probably it appreciated in value over that time, judt not quite as much as a comparable freehold.

Leasehold property rights/regulations in the UK:

https://www.gov.uk/leasehold-property

Many local authority run buildings do not have sinking funds, so large bills can happen.

An outcome from Grenfell is the government is considering mandatory sinking funds.

https://www.whatdotheyknow.com/request/how_many_tenants_at_g...

14 flats were "privately owned" which is code for "right to buy" leaseholds (normally 125 years)

You are correct the renters are not liable for the cost of repair directly. The council pays on their behalf. Through a huge bureaucratic process the council then gets a settlement from the government.

Council Tenants rent the flats/houses with basic furnishings (ie kitchen with cooker and bathroom) all of which can be (but not always) repaired by the council.

Council Residents have a long term leasehold, and only have the right to windows, doors and the walls. Everything else they have to look after.

Right to Buy - many of the council tenants will have bought their flats.

In the UK people have the right to buy their council housing, and many do.

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