This is John Major's "civilised and human housing". During his visit to the estate last month he repeated the promise made by almost every politician since the Sixties about the next phase of public housing: that this time it would be better.
"Those dreadful old eyesores are going to disappear," the Prime Minister declared, gesturing towards four 19-storey tower blocks and the system- built, five-storey flats put up by planners in the Sixties. The flats are known as "the snake blocks", the name coming from a reputation for crime and drug-ridden delapidation so serious that 80 per cent of the tenants put in transfer requests.
What is replacing all this - what took Mr Major to Hackney - is London's biggest single social housing project, a pounds 100m partnership between Hackney council, the Government, a clutch of housing associations, Laings construction company and the residents; a model mix of public and private cash, training, education, housing and social facilities.
Open concrete, tired grass and lifts stinking of urine are being replaced by grid-pattern streets and the "defensible space" of neat brick walls and iron railings that front the dinky, yellow-brick, traditionally built houses and flats. A paved, traffic-calmed street dotted with well-protected trees provides a safe area where children can play in sight of parents and neighbours. Nothing experimental here, just highly insulated, low- rise dwellings with a 60-year design life and 30ft gardens for the 70 per cent of homes that have them.
With the scheme has come not just housing but also imagination: heavy use of local labour with training thrown in and a community hall to help to keep the community together - another of the Prime Minister's boasts about this flagship development. There will be a small element of self- build, a new nursery and creche, a primary healthcare centre, and one for elderly residents in a tower block that is to be refurbished at a cost of pounds 60,000 for each flat, and reserved for over-fifties.
By 2001, when the Holly Street project is completed, this should be a dream world for the residents of the first 59 homes in phase one.
Already, in many ways, it is. Sonia Dennis, 34, a legal secretary with Islington council, moved with her children David, 10, and Michael, eight, from a one-bedroom flat in the snake-blocks in February. The old flat used to flood - downwards from the squatters who left the bath on upstairs; upwards when the drains blocked and faeces blew back up the lavatory.
"It is wonderful," she says, gazing at the new garden, the well-fitted kitchen, the pristine white walls. Across the road, Edna remembers having to watch James every time he went out to the playground from her tower block flat. "I'd stand at the window watching him, for however long he was out there. When he came back I used to tell him always to come up the stairs. I said, 'Don't go in the lift. If you scream on the stairs, at least I'll hear you'."
Amid this euphoria, it seems cruel to carp. Yet ask the new residents of Freshfield Avenue whether they have any complaints and they say "too small". It is one of two pieces of grit in this oyster of a development that could yet see some mistakes from past housing disasters repeated.
One is the Government's housing finance regime, which could finally leave a social mix on the new estate that would defeat the determined efforts to retain and rebuild a community. The other is the size of the smallest houses, yet another attempt to get a quart of housing to the pint pot of cash.
To gain Government approval, almost as many homes have had to be built as on the old estate. Rooms in the new housing are often smaller than those in the old. The narrowest houses, built for four people - who can include two strapping teenage sons - are just 12ft 5in wide. Tenants have had to leave wardrobes and armchairs behind because they were too big to fit in.
"I was shocked when I tried to put the chairs in the living room - it was so small," Sonia says. Karen Davis, 31, worries where her children will study once they reach secondary school and are still sharing a bedroom. "When you've left the sort of flat I have, you can't complain. But they could have given us more space. I dread to think what it will be like when the children are 14 and 15."
It is not just the tenants on the design committee who think these houses are too small. In acknowledgement of that, the next phase has been made half-a-brick wider and a little longer. But at a meeting with the architects, builders and everyone else involved, Dick Martin, the tenant's vice-chairman, protests they are still too narrow, and almost everyone agrees.
"Horrendously skinny," Tony Allen, the local councillor, says. "We accept that," says Miranda Ferrier, of the Circle 33 Housing Association. "Everyone accepts that. But we can't make the units any wider." If they did, the deal done with the Government would come un-stitched. And some new housing association houses are even smaller than those on Holly Street.
The anger is strongest among tenants living in homes built in the "austerity Britain" of theForties and early Fifties after Aneurin Bevan, as housing minister, laid down much more generous space standards. Mr Gilmour has been in such a flat, pin bright and beautifully kept, for 42 years. "It's daft that we're building smaller now than we did then. What will these skinny houses become like when you've got four people living on top of each other in them? I think the attitude is that these people haven't got much, they don't want much, so they will accept anything. "
Laings will build 200 even smaller houses for sale in the last phase of the deal on the 1,000-home estate. But Patrick Hammill, the Holly Street architect, says: "There is an essential difference between private housing and the social rented market. Housing for sale is almost invariably under- occupied. People buy these small homes as starter homes for singles or couples, maybe have a baby, and move on." The tiny two-bedroom homes on Holly Street are expected to be occupied by growing families of four.
To date, this problem has not arisen. The first skinny homes are occupied largely by lone parents with one or two smaller children. For them, for now, they are fine. But it is unlikely such generous allocation policies can last throughout the development, and there will be problems of too few adults to large numbers of teenagers if they do.
The other looming cloud is social mix. One of the reasons why tower blocks failed was that anyone who could do so moved out. By the time the new slab blocks were built, those rehoused were too often a heavy concentration of families with the most social problems and highest levels of unemployment; new welfare ghettos were created.
Some recent housing association developments have already repeated that. As the Government has demanded associations use more private cash and less central grant money, rents have risen so that fewer low-paid workers can afford them. More tenants depend on housing benefit and income support. New communities have been created that are so short of work and dependent on benefits they struggle to function.
At Holly Street, the Housing Corporation at first insisted that 70 per cent of the development go to the homeless. For phase one, it has relented so that 75 per cent of the occupants have come from the estate. But Stuart Woodin, of Claws, a design consultancy agency retained to liaise between the tenants and developers, says: "That has been done on a rain-check basis. Which means the final phases are likely to be almost all homeless. The final mix may contain only 40 per cent of existing residents when up to 70 per cent now want to stay."
On council figures, more than 60 per cent of residents already live on benefit. By the end that figure could be much higher. "That could have a profound effect on trying to regenerate," Mr Woodin says. "There is a lot of good here. But there is risk that we're creating a new set of problems with high child densities and high concentrations of poverty in homes with not enough space."
Others are more optimistic. Tony Allen, the local councillor, says: "The risk is in our minds all the time. But I think if you give people decent living conditions - and at the moment they are decent, if small - if you give people the opportunity to know each other, if we provide, as we hope we can, a training trust owned by the tenants, and give people the chance to create employment and small businesses, then I think they will begin to feel they own the community. And it will work."Reuse content