The billion pound Manchester question: Who has benefited from the city's breakneck growth?
Critics say we have built a neoliberal playground for developers and affluent newcomers. But that’s not exactly what the data shows
“I just want to introduce my favourite topic, and that’s the council’s new partnership with Abu Dhabi United Group to build housing.”
Dr Jon Silver is giving a tour of Ancoats, taking people around the new developments, and it’s being captured for the 2020 BBC documentary series Manctopia. Silver, a university researcher in urban geography and a prominent critic of Manchester’s property-led regeneration, is telling his tour group about the big overseas investors that have descended on the city. “What we find is they’re here to extract from the city. They’ve not come to make it a better place, they’ve come to profit,” he says.
But then he’s interrupted by a member of his group.
“Don’t you think they have made it a better place though?” interrupts Anne Worthington, a born and bred local from Collyhurst, who has joined the tour. “What was actually here before all this happened?” She gestures at the blocks of flats surrounding them.
“I think the question is what could have been here…” Silver responds, but Worthington has more to say.
“It was derelict!” she tells the group. “You can’t have all this and then say ‘yeah, but we don’t like where the money’s come from’. I’m taking it. My area’s taking this.”
The debate made good TV because of a seeming role reversal – an academic arguing that development is harming Manchester’s less affluent communities, versus someone who lives in one of those communities who was willing to defend overseas investment. For anyone who watched the whole documentary series, which showed that Worthington herself was set to lose her council house as a result of the regeneration programme in Collyhurst, the exchange with Silver took on extra meaning. If she was willing to defend the way Manchester is changing, that counted for something.
When I spoke to Silver recently, he described that scene as a “cheap edit”, cutting out a longer, more positive conversation that didn’t get included. But his disagreement with Worthington highlighted the question of who is winning and losing in this era of steroidal growth in Manchester.
And that’s not just the central question of the documentary – “It is the Manchester question”, as my editor put it, when I first suggested this piece.
On the one hand, many people feel uneasy when they see yet another block of flats going up. Manchester seems to work well for the property developers and the international pension funds that bankroll them – as well as the many (generally middle class) twenty and thirty-somethings flocking to the city. But a lot of people feel there’s nothing for ordinary Mancunians, those who have always lived here – who are powerless as their city undergoes an extraordinary transformation.
But there’s another view, articulated stridently by Worthington, that all of this is to be welcomed. While much of the North has stagnant economies, closed high streets, and low wages, Manchester is bucking the trend. Companies want to invest here, and ambitious young people want to move here. Shouldn’t we welcome those things?
Let’s tease out the critical line of argument, which you hear expressed quite often when people talk about how this city is changing. Manchester’s growth, according to this view, has been principally driven by property development. In the council’s eagerness to bring new money in, any scheme which promises hefty council tax returns (by creating lots of new homes) has been waved through.
As Isaac Rose at the Greater Manchester Tenants Union puts it: “Cheap land disposals favoured developers, ‘Section 106’ money for social projects went uncollected, and a planning regime contorted itself again and again to ram through developments.” As rental yields – the amount you can earn from renting out property — have skyrocketed, international developers have piled into the city, spotting a chance to get rich quick.
At the same time, the argument goes, almost all of the new housing that’s been built is well out of the reach of ordinary Mancunians. It’s often said that many people have been “priced out” of areas like the Northern Quarter and the city centre and that this growth has also failed to benefit the surrounding towns around Manchester like Oldham and Bolton; indeed, it may have worsened their plight by sucking in their best talent.
Not everyone who critiques Manchester’s growth model would sign up to every point of the arguments above. And of course, this isn’t just about Manchester, but parts of Salford too. But you hear arguments like this a lot and I’ve sometimes wondered whether they reflect reality.
For most of my pre-journalism career I’ve been a policy analyst, so I’m used to poring through reams of public data in order to analyse how local economies work. For the past six weeks, I’ve been doing just that — reviewing countless datasets about earnings, jobs, house prices, employment sectors and poverty in order to attempt an answer to that big question about Manchester: who has really benefited from the remarkable economic growth we can see all around us?
Cui bono?
All of this starts with that growth – which has indeed been rapid in recent years. It isn’t hyperbolic to describe Manchester (the city, rather than Greater Manchester) as having undergone a “growth miracle”. The total number of jobs in the UK increased between 2000 and 2021 by 21%. In Manchester, that was 49%. It’s also much stronger than Leeds (18% growth) and Liverpool (35% growth), and has really taken off in the last ten years.
And of course, those new jobs attract people to move to the city. According to the ONS, Manchester’s population increased from 423,000 to 550,000 between 2001 and 2021 – a staggering increase of 30% in just two decades. Within the city centre, it’s much higher.
Who is benefitting from that population boom? Well, yes, the landlords certainly are. While the number of owner-occupier households has increased a bit over the last two decades, the number of rented properties has climbed much more sharply, more than doubling since 2001.
Is this, then, the conclusive proof that Manchester’s growth model is all about extracting value for landlords and developers? If so, it doesn’t seem to be showing up in the data. If that was what was happening, we would expect to see a growing chunk of the city’s economic output (which we measure using something called “gross value added”, or GVA) to be going towards the real estate sector.
When we look at the figures, we don’t see that. The long-term trend is slightly upwards, but not dramatically – certainly not enough to signal a reshaping of the city’s economy. Currently, real estate accounts for around 9% of the city’s economy, which is one of the lowest in the country, and well below the national average of 14%. In some areas of London, like Wandsworth and Barnet, that figure is well over 30%.
(This might be slightly underplaying the true value if rents are going directly abroad. In a 2018 study, the aforementioned Silver found that within Manchester, 55% of all private rented sector units in the pipeline involved at least some international finance. But in many cases the money would still be received by a UK entity, so that’s unlikely to be hiding a lot of money flows.)
The displacement question
Either way, it’s clear that all this development has allowed the population of central Manchester to expand, via a model that largely appeals to young professionals. But does that mean that people are being displaced? That’s something a key claim that gets made about Manchester, often featuring the word “gentrification”.
In “Against the Manchester Model”, widely-shared article for Tribune magazine last year which called Manchester a “singular case study of neoliberal urbanisation”, Rose highlighted the view that the city’s regeneration has been “predicated upon the expulsion of the urban poor from the city centre, and the creation of parallel worlds made safe for middle class consumption.”
The displacement argument posits that people aren’t just being pulled in, but communities are being pushed out of areas that have become unaffordable. It seems intuitive, but we need to think it through further.
Those who are trying to argue that all the housing development around Manchester has made it a more expensive place to live have to make the case that fundamental laws of economics are being broken. Basic theory states that when you increase the supply of something, its price will decrease – there’s more of it available to those who want it, with those offering it competing with each other. New flats themselves might be expensive, but adding more housing to the market should make other properties less expensive.
If you want to argue that new developments are in themselves making Manchester more expensive, you have to prove that we’re seeing “induced demand”. That’s the theory that new housing actually creates demand to live in a place. It could do this, for example, by creating a cool “feel” to a place that makes it more desirable to live in, if the building looks good or has good public realm designed around it.
There haven’t been detailed studies in Manchester, but one study from San Francisco (an area with an even hotter property market) has found that any effect is more than outweighed by the downward impact on prices from new supply. San Fransisco isn’t preposterously expensive because new homes are being built. It’s preposterously expensive despite that, because there’s such a huge demand to live close to the Bay Area’s high-paying jobs. Prices have gone up — but that doesn’t mean the new housing has caused them to go up.
What seems to be true, though, is that as prices have risen, the way the whole market works has been professionalised, leading to more cut-throat practices. When I speak to Rose, the area director at GM Tenants Union, he highlights the growing market power of one company – Thornley Groves. This lettings agent, which is backed by a London-based company, recently acquired ten smaller agents in the city in just over a year, tripling in size. They now manage 6,000 properties – a hefty chunk of Manchester’s property market.
While your traditional landlord with a couple of properties on the side might be broadly happy to keep known and trusted tenants in place at an agreed rent for many years, a professional outfit knows exactly how much a two-bed in Fallowfield is worth – with no qualms about removing those who can’t pay it. If market power becomes concentrated in the hands of a few big companies, they can start to put prices higher, as tenants lack other options.
The key question, though, is whether the rising prices are displacing people? It’s very hard to prove this – public data doesn’t track individuals over time. We put a call out on twitter and no response was forthcoming. But we can use the census to look at the number of people in “elementary occupations”, as an indicator of what’s happening to those on low wages. These include roles like cleaners and bar workers, where staff are often on minimum wage.
What we actually see is that far from being displaced, there are now many more people living in the centre who work in these lower-paid roles. The blue areas on the map below show where the number of these people living in the area has increased, the red areas those where it’s gone down. In the Ancoats and Northern Quarter area (marked on the map) there are now over 300 more. It’s not that professionals have moved in and have pushed others out. It’s just that an awful lot of people have moved in.
In fact, when we look at the areas people in low-wage jobs are leaving, it's much more in the suburbs – with areas like Reddish, Cheadle, and Altrincham all seeing a significant drop in the number. To understand this, it’s worth listening to a BBC Sounds podcast from five years ago about the new residential towers going up in Manchester. At one point, the presenter Mark Ovenden chats to a new owner of a flat in Salford Quays, who says he’s looking to move out to Chorlton or Didsbury in ten years. “So what happens if every other one of the 50,000 or so residents of the new city centre all decide to do roughly the same thing at roughly the same time?” he asks.
It’s a good question. The increase in one specific type of property seems bound to have skewing effects elsewhere in the market. Maybe those effects are still to come – but the data suggests they’re already underway.
Who are the jobs for?
I’ve mainly been looking at the negative argument against Manchester’s growth, as it’s the one that seems to get the most air time. But there’s a positive take. What about those new jobs we started with? Shouldn’t we be hailing what’s been achieved in Manchester as a truly impressive feat? While many places try and fail to create quality new jobs, Manchester has pulled it off – in style.
I’m interested to know, though, whether the opportunities this is creating are actually open to those growing up in the poorer parts of the city. To find out, I go to Harpurhey, an area in the top 10% of places with the worst deprivation in the UK. Do those growing up here see the rapid growth of Manchester as an opportunity for them?
To find out, I speak to Amanda Naylor (CEO) and James Hampson (Head of Fundraising) at the Manchester Youth Zone, a centre in Harpurhey for young people. It’s an impressive facility, with basketball courts, a climbing wall, art areas, and cafeteria which provides free meals for children. I didn’t realise places like this still existed – but they’re hugely popular, having 800 visits in an average week.
They start by giving me an overview of the children they work with. Most come from deprived households. There’s a lot of temporary housing in the area, which brings a real mix of cultures, including first-generation immigrants to the area.
Hampson says that a big part of their strategy is to connect young people with the opportunities in the city centre. They run a “work safari” programme where they take young people into workplaces there. “We want a kid to be able to look at this building at the back of King Street and know what happens... It’s demystifying the town centre for them.” Hampson tells me.
There’s a lot of demystifying to be done. Naylor gives me one example of a visit with their kids to Fieldfisher, a solicitor’s firm based on the top floor of a tower in Spinningfields. When the lift doors open, the children have never seen a view like it. “One of the kids said: ‘Oh my god! Is this London?’”, Naylor recalls, even though they’d only just driven down the road in the minibus. Hampson describes the main purpose of the visits as telling the children: “you’re allowed to be here”.
Many of the children they work with just never go to the city centre – getting there costs money, and when you get there everything costs money too. Indeed – a lot of them don’t really see themselves as being from Manchester at all, but Moston, Blackley, or Harpurhey, with Manchester being “over there”.
I arrange to come along to a session with some of the older teenagers. Most of the kids are too interested in table tennis or football to talk about Manchester’s job opportunities but I get talking to one girl going into year 10, who is happy to open up about her life. It’s not been an easy one – her dad left the family a long time ago, and they’ve been moved several times around Greater Manchester. Over the last year her anxiety has become extreme to the point of passing out, meaning she rarely leaves the house. “I don’t love my life”, she tells me.
Does she see a future for herself, working in one of Central Manchester’s office blocks? “In my dreams,” she replies. She tells me she can’t ever see herself having the confidence to try to make it in that world.
So are these jobs creating more social mobility in Manchester? To know that, we need data that follows people through their lives. One study has done this by using a dataset that ties the earnings of people’s parents to their own earnings. It looked at boys born between 1986 and 1988 across the country, and then how much they were earning at 28, based on where they grew up and how much their parents earned.
Across the country, those born in richer households are earning more. But Manchester is actually one of the places in the UK where the gap is smallest. That’s in common with a lot of London boroughs, but different to cities like Leeds and Liverpool where the gap is larger. This is a promising data point – it means that all of the job creation is giving opportunities for those with a hard start in life.
It’s also notable that the city stands in sharp contrast to many of the outer boroughs around the outside of Greater Manchester – where parental earnings have a much bigger impact on children’s earnings.
So, we’ve seen signs from the data that concerns about Manchester’s growth solely benefiting middle class people or pushing out working class people don’t seem to be supported by the data. In a sense that’s a relief — it would be a horrible waste of resources if one of the fastest-growing cities in Europe was building an economy that completely excluded the poor or was designed only to benefit wealthy property developers and house high-earning BBC executives.
Nonetheless, poverty in the city remains high, and at the last reckoning deprivation was the second highest in the country after Blackpool. Part of that story is the many people who are out of work – and therefore not benefitting from the new jobs. And even if new developments aren’t causing higher prices, the rising cost of living is definitely adding to the burdens many face.
And, as the last map shows, there is one strand of the critiques you hear of Manchester’s growth which I’ve found more evidence for. That’s the argument that the ripple effects of growth in the centre don’t seem to have permeated significantly into the outer boroughs. Look again at the chart we started with, but this time adding in the other GM boroughs:
While Trafford and Salford look to have benefited somewhat from the growth miracle, Oldham, Tameside and Rochdale all took a long time to recover from the financial crisis and only have marginally more jobs now than they did in 2000. Most of Greater Manchester’s boroughs are below the UK line, meaning they’ve fallen behind UK jobs growth even while Manchester has surged ahead.
Almost everyone I spoke to for this piece acknowledged that it’s a complicated picture. There are lots of things we can’t see — and that allows powerful narratives to form. My own view, trying to read the data as objectively as I can, is that jobs growth has been broadly good for the people of the city, including its poor, and when you have jobs growth you need housing growth. We could contrast Manchester to Cambridge, another city with a big jobs boom, but far less ability to provide housing. Affordability pressures there have become intense.
But there are still questions to be asked about the type of housing that’s been provided. Rather than the number of homes, a better question is about the type of homes. A huge amount of one type of product — high-rise flats — has been put on the market. That benefits a certain demographic but creates pressures elsewhere. The best evidence we have for displacement suggests that where it is happening, it’s in the more affluent suburbs, not the city centre. And Manchester still hasn’t proven that what’s happened in the centre has done enough to benefit the other GM boroughs. Until that happens, tensions between our city region’s centre and its periphery are bound to continue.
This is the sort of article that led me to becoming a paying subscriber a few months ago.
I’m not going to go into detailed commentary because I could go on all day, and I’d be repeating a lot of what’s in the article, but the salient point for me is around the increase in housing needed for job growth and the city centre becoming a place that people actually want to live and work. I was in a meeting recently with a company with offices in Leeds, Liverpool and Sheffield and they said they struggle to recruit graduates in those locations because they all want to work in the Manchester office.
It’s true there’s a generation of young people living a 10 minute bus ride away where far more needs to be done to help them chart a path to employment in the city centre (if that’s what they want) but I believe this can be done whilst attracting talent from across the country.
Final point, there’s nothing that annoys me more than the lazy commentary that Manchester is no longer for Mancunians.
This is a great piece. It perfectly illustrates the serious journalism that we get by paying for the Manchester Mill.
I have always regarded it as obvious that building flats where bright ambitious young people want to live is good for Manchester. Accordingly I welcome a serious attempt to look at what the data shows.