Down but not out in London, Manchester...

Britain's housing shortage could be solved by renovating inner-city estates, argues Anne Power, in the latest in a THES series on social exclusion

People who have nowhere to live are society's most excluded citizens, which is why the right to housing is widely accepted in Europe as a social right. Precariously poised between being housed and homeless they are often concentrated in areas where no one with money, education, choice or prospects would go.

Since the 1960s, house-building and conversion have broadly kept pace with a rapid expansion in the number of British households. For most people, housing conditions have improved beyond even the wildest predictions.

But there are problems. Acute homelessness exists alongside an apparent surplus of less desirable housing. Often people with health problems or struggling with other intensely chaotic social pressures end up ejected from homes they cannot manage. Street sleepers in central London are the result. In addition, European cities are sucking in large numbers of immigrants, often sub-legally, with little cash or clout - forming that group of "new poor" that make London, Paris, Berlin and Rome share some characteristics of third world cities.

At the starkest end there are houses in Tyneside, Greater Manchester, and Merseyside with almost zero value. A terrace of 12 houses recently sold for Pounds 10,000. Hundreds of thousands of homes are in ex-heavy industrial communities where regeneration money has not yet turned the tide. There is a crude housing surplus in many such areas.

The first to lose population are usually council estates but they are soon followed by housing associations, private landlords and owner-occupiers. As a result social conditions are often chaotic. Half-empty schools, very few earners, many lone parents bear testimony to the struggle.

Most people affected are white, the descendants of the industrial working class. Those stranded by economic collapse often chose home and community over risky job prospects and possible homelessness in a new area. But their choice was betrayed by area decline - unforeseen in its depth and strength. Houses have gardens but youth has no prospects.

At least three million households live in poor inner cities or outer estates. There are 2,000 unpopular estates, housing a million families, where two-thirds of households are jobless and therefore poor. The concentrations of poverty are far higher among council tenants and particularly their children. Council estates have come to symbolise social problems in a very acute way.

In London and the South-east large unpopular council estates display particular problems - intense competition for space with disproportionate concentrations of ethnic minorities, the very top and the very bottom of the global job market within half a mile of each other. Some estates already house a majority black community not by choice but by force of pressures at the bottom. Social breakdown occurs through the opposite pressures - competition for homes and for low-skilled, low-paid jobs.

Unemployment on the string of council-owned estates nearest to the richest square mile in the country is over 60 per cent, yet City Airport cannot find skilled workers for its expanding market.

Is it too late to do anything? Seeking possible solutions to British problems, I visited Europe's large, difficult, publicly-subsidised estates. I found a strikingly similar trend towards high concentrations of disadvantaged groups, inadequate supervision of communal areas, poor facilities and transport, intense social and family problems, large numbers of empty homes, disproportionate concentrations of newcomers and vulnerable minorities.

In response, special rescue programmes had been developed by social landlords and other agencies, local and central government. They placed innovative management teams on estates, opened the door to resident initiatives, encouraged co-ordination of the many services tackling problems, attracted new facilities by upgrading existing ones, and let more homes to stable tenants, sometimes by reducing rents, always by increasing guarding and security. Environments were made greener with senior, estate-based managers put in charge of continuous cleaning and supervision.

Residents developed a pride of place. Crime rates fell, empty property was filled, facilities doubled, income rose.

A crucial factor in the strong management response of continental landlords was their non-political, non-profit, part private financial structure. A similar process was witnessed in a few bold experiments in Britain, often with tenants in a leading role.

Could we extend these isolated efforts across 10,000 estates in public ownership? Only if we make broader changes. We could move towards the continental model of non-profit company style landlords, which run as businesses comparable to housing associations. Private lenders could then invest in estates, as two adventurous housing companies taking over run-down estates adjacent to the City have done. The strong backing of Bangladeshi and Cockney residents goes hand in hand with that of City bankers. The role of "super-caretakers", responsible for keeping continental flats clean, repaired and secure should be implanted in every British estate. It is fundable from rents; it repays landlords handsomely; it creates jobs; and it restores pride.

And estates should not only be for the more desperate. They should be open to everyone.

Poor neighbourhoods are only an extreme version of wider city problems. They can be made to work only in the context of cities working. People have been clamouring to leave cities for the suburbs, and suburbs for small towns and villages since the first world war. But we can no longer accommodate even half the homes we say we want outside cities.

The government has handed the new Urban Task Force a key challenge, urban renaissance. On this hinges the resolution of social exclusion by housing and area. If estates and Victorian streets are linked into cities where people want to live and are managed as though they matter, they will be an invaluable long-term housing resource for the millions of new households we are creating.

Anne Power is deputy director of the London School of Economics' centre for analysis of social exclusion.