Neighbourhood Unions: Building collective financial power in the asset economy
An invitation to experiment and explore
The UK is in the midst of a cost of living crisis and an unprecedented fall in living standards. Brexit, COVID, and the war in Ukraine have worsened the problem. But it’s the long term trend towards an economy defined by asset ownership that means the poorest are being hit the hardest whilst landlords, energy companies, and large corporations continue to extract huge profits.
As Christine Berry has written, rentierism — making money by controlling access to scarce assets — “is the preferred business model for today’s economic elite, since it is both easier and more lucrative than actually doing anything useful.”
The institutions of collective action through which we might push back — primarily unions — are struggling to adapt to the asset economy. As part of the GLA’s Designing London’s Recovery programme, Dark Matter Labs started an inquiry into the possibility of a new institution: the Neighbourhood Union.
A Neighbourhood Union would organise around the multiple forms of rent that are extracted from a local place: housing rent, utility payments, ground rents, service charges, small business rent. It would aim to build power through enabling people to identify and contact others who share the same rentier, and support them to take collective financial or legal action. Longer term, it would be a step towards greater neighbourhood democracy, and help empower residents to shape the development of their local area.
This blog summarises our work so far. There are many unanswered questions — legal, functional, organisational, digital, and more. But from all the conversations we’ve had, we are confident that there is something here. There is a gap, a need, a space to work into.
We know that to make Neighbourhood Unions a reality will be a collaborative effort with the thinkers, activists, funders and communities working on this already.
This blog is an invitation. We are based in Hackney, so building Hackney Union first feels like a natural starting point.
You could be a small business or resident in Hackney; a member of a local trade or renters union; a community group that wants to find new tools to campaign; or a funder interested in supporting radical, long term change for a new economy. You could be none of those, but just interested in exploring this with us, and working to make it a reality.
If so — we’ll be at Pub in the Park on Wednesday 13th July, and Thursday 18th August, from 6.30pm. We’d love to see you there.
The problem: collection action in the asset economy
Rentierism runs through every part of the cost of living crisis. The energy price cap jumped by over 50% in April, doubling the number of households in fuel distress; meanwhile, Shell made £7.3bn in the first three months of the year — its highest ever quarterly profit. Rents in London jumped 14% in one year; compounding the affordability crisis in which an average Londoner commits almost half of their gross-median pay towards a one-bedroom dwelling. Meanwhile, the average house gained £33,000 in value in the last year — more than the average salary, funnelling a huge amount of wealth towards landlords and homeowners.
Who earned more: you or your house?
Annual median employee incomes (after tax) against average house price increases for 2020–21 by local authority*
In the absence of structural economic change led by the government, we rely on public and civic institutions to push back. The (often unfunded) struggles of marginalised groups — including communities of colour and working class communities — have frequently laid the foundations for the organising work that has succeeded in doing so.
However, the move towards the asset economy presents new challenges. The main vehicle of collective action — trade unions — are focused on employment. Whilst unions like IWGB are thinking creatively about their options for collective bargaining in emerging sectors (such as the gig economy) and finding new ways to exert leverage (such as targeting company owners and organising across sectors, as Alice Martin documents), they are still not focused on the relationship between owners and renters.
Other forms of union have emerged — in particular, tenants unions such as London Renters’ Union (LRU), or community unions such as ACORN. Whilst they have won many important victories, their organising model — based mainly on direct action, in-person peer and expert support, and public pressure of landlords — is hard to scale and lacks the ‘hard power’ of exerting real pressure on profits that traditional trade unions had via strike action.
There’s a gap: a need to focus on the asset owner-renter relationship and building collective financial power.
Our enquiry: The neighbourhood union as a new institution of solidarity
We began with the idea that neighbourhoods could provide a strong centre of gravity around which to organise. People often identify strongly with their local area, and remain there for a long time. Broad based community organising has always centred local leadership and place.
A Neighbourhood Union would aim to build the collective power of different groups — residents, small businesses, leaseholders — and connect their struggle to questions of local, democratic ownership. We see this as a complement to trade unions (organised around work) and renters unions (organised around tenure).
Our research — including interviews with members of London Renters’ Union, leaseholders, lawyers, policy makers, and think tanks — suggested three design principles for such an institution:
- Principle 1: Focus on one-to-many ‘relationships of power.’
- Principle 2: Combine digital and social infrastructure
- Principle 3: Provide practical tools & services for collective action
Principle 1: Focus on one-to-many ‘relationships of power’
As Deepak Pateriya has argued, understanding how power operates is a critical step in making change happen. Within a neighbourhood, there are a wide range of relationships that are characterised by a ‘one-to-many’ relationship between a rentier and a renter, resulting in a significant difference in power. These include:
- Corporate landlords (or managing agents) and residents. Many landlords own multiple properties, and the build to rent market is growing rapidly, in which each landlord has hundreds or thousands of tenants. Banks are increasingly getting in on the act, with Lloyds aiming to become one of the UK’s biggest landlords in the next 10 years.
- Commercial landlords and small businesses. The level of SME debt has massively increased since the pandemic, with 33% now sitting on debt more than ten times their cash balance, and the general moratorium on commercial evictions ended in March. Whilst the government may be willing to take action to prevent commercial landlords from simply sitting on empty property, there is currently little scope for small businesses to engage in a collective conversation.
- Freeholders and leaseholders. Many leaseholders have been shouldered with extremely high costs for building repairs, which are often too high to pay and make it impossible to sell their flat. Some have started local groups, but often limited to their own building — as finding others with the same freeholder is hard to do.
- Utility companies and customers. Energy companies have made huge profits as a result of the increase in prices while millions of people are struggling with bills. Water companies have paid out £13billion in dividends in the last 10 years, whilst in 2020 Thames Water dumped 400 Olympic sized swimming pools worth of raw sewage into the river.
The advantage of focusing on the ‘one-to-many’ relationships is that it makes new forms of collective action possible. If my landlord only owns one property, then there are no other tenants with whom I could take action. If they own multiple buildings, then we could exert real pressure by withholding fees or bringing multiple legal cases.
The relevance of these one-to-many relationships will differ in each neighbourhood, and there may be others that are not included here. A Neighbourhood Union would aim to be a forum within which these power dynamics are analysed and coalitions built — with a focus on the possibility of disrupting flows of finance in an area.
Principle 2: Combine digital and social infrastructure
Our starting point in this work was that a digital platform could help address the problems of fragmentation and distance in trying to bring together people who might be scattered across a neighbourhood, and who do not work together. Organisations such as Common Knowledge and My Society are showing the potential of using digital tools to amplify the power of organisers.
We think a digital platform could offer:
- The ability to identify and connect with others who have your landlord. For example, by uploading information from a tenancy agreement, a platform could match you with other members who have the same landlord.
- New participation pathways for those who would be unlikely to attend branch meetings of tenants unions.
- An information hub that helps to signpost towards resources that might be helpful in a dispute with a landlord, utility company or freeholder.
- Providing easy-to-access tools for collective action (see below).
One message that came through clearly in our conversations, however, was that digital infrastructure alone would never be enough. Social infrastructure and interactions are vital to build trust, relationships, and solidarity between members. Places like the Floating Front Room, which acts as a long-term neighbourhood platform co-owned by local communities, provide creative inspiration for how to build the necessary physical roots in a place. The Local Trust’s work on social infrastructure shows the critical role it plays in shaping residents’ sense of identity, fostering civic pride and building bonds that encourages peoples’ participation in their community. Groups such as We’re Right Here and Renaisi are working on creating the conditions that communities need to thrive.
Whilst being digitally native would be the starting point, a Neighbourhood Union would need to have a physical home, or at least access to physical space.
Principle 3: Provide practical tools & services for collective action
Our conversations highlighted some of the practical difficulties in organising. Leaseholders who were protesting against the astronomical amounts they were being charged by their freeholders spoke of the difficulty in finding others with the same leaseholder, and the lack of forums on which to communicate. Those that had managed to organise themselves were often doing so via WhatsApp — but one renter we spoke to said that their landlord had managed to infiltrate their WhatsApp group.
Managing a dispute is difficult enough when there is just one person. Collecting and documenting evidence, staying on top of communication with a landlord / company, filing the right legal papers — it all takes work. Coordinating that across a group who want to take collective action is a massive task. One benefit of being digitally native would be to offer tools and services that make it easier, such as:
- Collective case management (document storage, messaging);
- Collective legal action;
- Collective financial action (eg. withholding rent, bills or service charges).
Unions have always provided practical and legal support — and the new unions mentioned earlier, such as IWGB, are also taking action to shape the law in new areas such as the use of facial recognition technology or Uber drivers’ employment status.
Neighbourhood Unions would aim to combine some of the best practice from new housing unions and new workplace unions in threatening the bottom line whilst working within a community.
In the long term
The outline we have sketched above imagines a Neighbourhood Union as an institution that can push back against rentier asset owners. A group of leaseholders withholding service fees; a group of residents withholding their water bill; small businesses collectively negotiating rent. In the medium term, this would be an enormous win. But in the longer term, it could take a more proactive, positive role, and help shape local development. A Neighbourhood Union could — like a Community Land Trust — own assets on behalf of the community. Following Community Wealth Building principles, it could enable members to spend money collectively, for example on maintenance & renovation contracts, in a way that retains money in the area.
Neighbourhood Unions of this kind would be part of the wider movement for civic organising that is taking root. There is growing recognition that the deep, structural and complex challenges we face require more than just policy change — although the Renters Reform Bill and the end of Section 21 no-fault evictions will be a massive step forward. But whether it’s responding to a pandemic, addressing the cost of living crisis or confronting the climate emergency, we need new institutions for collective actions as much as we need new policy.
If you’re interested in exploring this work further with us, please get in touch, or come and join us on July 13th at 6.30pm, at Pub in the Park.
Dan Wainwright info@darkmatterlabs.org
Tom Beresford tom@darkmatterlabs.org
With thanks to all those we spoke to in writing this blog for their time, insight, and care.
