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Transport Infrastructure Again Created Problems By Limiting The Mobility Of ...

Transport infrastructure again created problems by limiting the mobility of the workforce resident in Docklands as well as the ease with which non-residents could commute in.
Property Boom
The acceleration in property prices had begun in 1981, affecting the whole of the UK but particularly London (DCC 1990: 9). This helped accelerate development in Docklands. Commercial rents on the Isle of Dogs began to rise rapidly in 1987 (DCC 1990: 11), helped by a shortage of supply of office space in the City (ibid: 10). This was a consequence of the ‘Big Bang' in the City, where trading became computerised and more space was required, along with fittings able to support large IT networks.
It appeared at this point that the property-led approach to regeneration was a success. However, the EZ incentives led to a lack of balance of development, as terms were more favourable for commercial developments than housing. The rates holiday and tax benefits meant local and central governments generated little tax revenue that might have been used for social purposes.
For property developers who were working in the housing sector, profitability was the key driver, leading to the building of a large amount of more upmarket accommodation for owner-occupancy that was well beyond the means of local residents. Much was also high density e.g. prestige flats suited to single-person, affluent households and professional couples rather than families.
Lipsey notes that in periods of rapid economic growth, poverty is easier to address because the increase in income across the working population is large enough for redistribution without reducing it (1979: 693). However, this requires Government intervention. The approach in Docklands was interventionalist, but in favour of private investors rather than the established communities. This accelerated growth without providing social benefits, causing a greater differential between those benefiting from development and those unable to participate in it.
Property-led growth focuses on quantity of capital, yet studies carried out well before the 1980s suggest that education and innovation (through research and development) are major contributors to growth (Lipsey 1979: 702): both were rather overlooked in Docklands.
Property Crash 1989-1992
The UK stock market crashed in 1987, but the momentum of building and investment in Docklands was not immediately affected. Rents continued to rise from £8 per square foot in December 1985 to £21 in the latter half of 1988 (DCC 1990: 12).
Paul Reichman of Olympia and York, a major investor in Canary Wharf (along with a number of other major projects globally), anticipated substantial growth in the service industry, requiring office space, still woefully inadequate (International Business Week 29/01/1990: 33 quoted in DCC 1992: 4) in Europe.


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