1 Introduction

As in previous recessions (Harvey 1989), the recent global melt-down has fuelled a debate about the nature of urban governance, including the relative role of the public and private sectors, across a broad range of activities related to urban development (Claessens et al. 2009; Martin 2011). The very fact that the onset of the recession was a catalyst for much of this debate is, in itself, an indication that somewhat short-term perspectives are an endemic feature of much academic discourse on such private/public relationships. This paper provides an empirical examination of the relative significance of the public and private sectors in the specific sphere of residential development within the central area of the city of Newcastle upon Tyne. Judgments on the significance and impact of the private and public sectors tend to reflect specific new policy initiatives and the nature of the prevailing ideology relating to urban development and urban policy, either as protagonist or antagonist. It is our contention that only with a long term perspective can a balanced assessment be reached. This paper is intended as a contribution to the assessment of policy and practice in relation to the role of the two sectors and that of the ‘third sector’ in change in residential provision in the city centre since the Second World War (Table 1).

Table 1 Residential development projects by scheme
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The recent ‘return to the centre’ of residential population in many United Kingdom cities has excited considerable attention amongst urban scholars (Tallon and Bromley 2004; Bromley et al. 2007; Rae 2013). After decades of declining population the core areas of most major provincial cities have shown a reversal in the first decade of the twenty first century and even earlier in some cities. However, whilst the outcomes may be similar in a number of cities, the actual processes at work are more likely to vary in detail and in the combination of different factors. Diverse catalysts may be identified and the momentum of development has taken different courses in different localities. Any mature consideration of policy and practice must not just recognise a particular outcome – an increase in residential development within the city centre – but also the role of locality specific factors. As implied by the title, we are concerned with the relative contributions of the public and private sectors in the urban renaissance, at least in terms of residential activity, of central Newcastle. The study area is the city centre proper (or Central Business District (CBD)) which provides a potentially rich and varied spatial and temporal context within which to examine the role of public and private influences in the return of housing to the heart of the city.

The role of the ‘market’ compared to ‘policy intervention’ in this process of bringing people back to live in the city centre is central to this discussion, indeed ‘city centre housing’ has often been represented as the triumph of ‘consumer sovereignty’ (Smith 1996). This argument has stressed the role of factors such as lifestyle and consumer choice and the response of builders and developers in meeting changing demands. Closely linked to this is the process of marketing particular images of urban living and its attractions and the associated commodification of urban space. The outcome is a demand for ‘new’ types of residential accommodation in ‘new’ residential locations (Davidson and Lees 2005). Some studies have emphasised the role of ‘non-traditional’ households, coupled with the growth of self-employment and small businesses as the main forces at work in explaining the attraction of the city centre as a residential location (Moss 1997). Empirical evidence has convincingly demonstrated that what has been called ‘gentrifier types’ have colonised city central locations (Nathan and Urwin 2006; Bromley et al. 2007). However, such features may be interpreted in several ways as other authorities have stressed that such factors may represent nothing more than a gentrification seedbed, resulting in subsequent instability as initial ‘pioneers’ are displaced by more affluent sub-groups (Hutton 2008; Bernt and Holm 2009). This latter point supports the need for longer term analyses of the processes at work rather than a ‘snapshot’ of a limited time frame.

A second major group of processes relate to the role of specific policies designed to encourage the growth of a city centre population. Foremost amongst these are policies relating to projections of housing needs (Holmans 2001) and the desire to encourage the re-cycling of ‘brownfield’ sites. The 1996 White Paper on housing set a target for at least 50 per cent of new housing development to be on such sites, a figure subsequently increased to 60 per cent (Adams 2004). This policy shift played an important part in introducing more housing and residents into city centres. At the local level, individual cities have followed specific policies to incorporate residential development within city centre regeneration initiatives (Rowley 1994; Seo 2002). Included amongst these are policies attempting to place artistic and cultural activities at the core of urban regeneration (Bianchi et al. 1992; Seo 2002). It is usually argued that a significant shift in the evolution of urban regeneration policy came with the election of the Conservative Party into power in 1979. From this point the role of the private sector within urban redevelopment was allegedly in the ascendancy, being driven by ‘urban entrepreneurialism’ while pursuing a neo-liberal agenda (Harvey 1989; Tallon 2010). Whilst much was made of this apparent change of direction both at the time and subsequently (Barnes and Campbell 1988; Deakin and Edwards 1993; Hill 2000), it will be argued here that such distinctions between the roles of the private and public sectors are far from clear cut, especially in relation to the provision of city centre residential accommodation. Furthermore, as much of the literature on city centre housing is concerned with a relatively short time frame or with specific policy initiatives, this inevitably colours the interpretation of the phenomenon. We argue that a comprehensive understanding of the modern history of residential development can only be gained through an examination of policy developments and patterns of investment over several decades.

In conceptual terms we argue that the recent historic growth of city centre housing has to be understood as an innovation – something that,initially at least, went ‘against the grain’ of ‘mainstream’ trends and developments – this being, of course, decentralisation/ counter-urbanisation/ruralisation etc. (Champion 2001). If we are to understand the nature of this change we need to explore in depth the initial sources of this phenomenon, how and why this historically ‘new’ type of development, a reversal of existing trends, came about. To do this we employ broader conceptions of the role of the city, of risk and how this may be managed. An “important and pervasive phenomenon within the development process is that of risk.” (Bramley et al. 2004, p. 112). For the private sector a significant part of that risk is related to considerations of efficiency/inefficiency and the implications of these for expenditure/profitability relationships. In the context of innovation, in this case new residential development, the problem is of course that the potential risk is very high. It is not very ‘efficient’, in terms of potential profitability, to expend resources within a potentially unstable property market. “Development work is a messy, time- and energy-consuming business of trial and error.” (Jacobs 1969, p. 90). But as Jacobs also observed, efficiency, including profitability, is essentially a product of earlier development work and the trial and error that is an integral part of this. Thus, there is a clear tension in the urban development sphere, as in most others, between the short term demands for profitable efficiency and the less easily quantified longer term requirements to find new ways of doing things. On balance, most of the structural features of the private sector point towards the former, leaving someone else to deal with the latter. In the context of the recent growth of city centre housing, the ‘latter’ is the public sector. The purpose of this paper therefore is to test the robustness of this conceptual framework, incorporating as it does the role of risk and uncertainty in innovation for the private sector in particular, in the specific case of residential development in central Newcastle upon Tyne.

Although there is a significant literature on the recent growth of a residential population in city centres, there are several reasons why this paper adds to this literature in a different way. First, much of the literature seeks to interpret the recent growth of residential population in the central parts of cities as a fourth phase in a ‘natural’ urban growth cycle of urbanisation, suburbanisation, de-urbanisation and re-urbanisation (Klaassen et al. 1981; Haase et al. 2010; Seo 2002; Couch 1999; Couch et al. 2009), almost as if this were a ‘natural’, inexorable process. Whilst so-called re-urbanisation may be presented as an outcome, it is argued here that this is essentially a reductionist interpretation and one that condenses a potentially large number of different processes to a conveniently over-simplified label. In fact, although initially small in scale and overshadowed by more spectacular initiatives, post-war planning in Newcastle contained a commitment to a residential function for the city centre and this provided a foothold from which a number of subsequent developments expanded. The key point is that the phenomenon of population growth in city centres is but one outcome of a range of processes that can produce very different outcomes in different areas and it is the purpose of this paper to trace the origins of these outcomes. But, following on from this perspective, is the very important reality of the sheer variety of types of city centre residential development in Newcastle, an issue that, in the search for overarching conceptual interpretation, has been frequently overlooked in previous studies of the phenomenon of city centre residential development (Allen 2007; Couch et al 2009; Bromley et al 2007).

Second, we argue that discussion of the phenomenon has been somewhat confused by issues of scale and the failure to specify with precision the exact nature of the spatial units under consideration. Thus, this ‘return’ to the city has sometimes been discussed in the context of the ‘core cities’ of large metropolitan areas or conurbations, sometimes in relation to the ‘inner city area’ of provincial centres (a term we understand to incorporate an inner ring of mainly original nineteenth century development surrounding the traditional central business district), and sometimes the central area or business district itself. Scale is important as, for any individual city, these three interpretations of ‘central’ clearly imply quite different attributes, problems, opportunities and policy interventions. In this study we are concerned with the space defined by a strict definition of ‘centre’. The study area, Newcastle upon Tyne city centre, is a compact, connected space bounded to the east by the central motorway, to the north by the Royal Victoria Infirmary and St James’ Park football ground, to the west by St James’ Boulevard and to the south by Neville Street and the Central Station (Fig. 1). Newcastle Quayside, which has seen the development of significant amounts of residential accommodation, initially due to the specific spatial policy interventions undertaken by the Tyne & Wear Development Corporation, is not included in the study area for that very reason. It owes its origin to one specific policy initiative and it therefore lies outside the purpose of this paper which is to examine the much more complex situation of the city centre proper.

Fig. 1
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Location of study area and Grainger Town Project Boundary. © Crown Copyright and Database Right 2014. Ordnance Survey (Digimap Licence)

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Leading on from this, much of the literature is concerned with assessing the outcomes of very specific policy initiatives. Whilst we are also concerned with measuring the impact of a variety of specific policies upon Newcastle city centre, we take a longer term view. The residential accommodation that is extant in Newcastle city centre in early 2014 is the product of a whole series of processes, some policy driven, others the outcome of socio-economic influences. There is a need to understand these processes in situ if we are to fully comprehend the complex and plural nature of city centre housing at the present time.

Our research objectives are (a) to produce a diachronic analysis of city centre residential development over the last four decades with the intention of revealing the multiple and diverse nature of this phenomenon both in terms of process and outcomes. We argue that this essentially empirical, inductive approach has the advantage of not being constrained by the shackles of any specific conceptual framework and is necessary to unravel the complexity that a longer term analysis inevitably reveals (b) assess the significance of the private and public sectors and (c) critique the notion that this process represents the fourth phase, termed ‘re-urbanisation, of a universally applicable, ‘natural’ urban growth cycle.

2 Antecedents—1950s and 1960s

Although it has been claimed that any consideration of residential development in Newcastle city centre post Second World War was, at best, minimal and for the most part notable only for its absence, this is not strictly true and such a judgement represents a good example of post hoc rationalisation (Tavansoglu 1996). It is unquestionable that post-war planning priorities for the city centre lay elsewhere but that does not mean that housing received no attention, even if its consideration was to result at first in a reduction. The first town plan for the city was being prepared towards the end of the war (Parr 1945) and although the text makes little mention of city centre housing it is clear that policy intended that it should be reduced, largely in the name of slum clearance, from a 1941 estimate of 4300 to 2232 (Parr 1945, p 90–91). The non statutory 1945 plan formed the basis for the city’s first official development plan under the 1947 Town and Country Planning Act (City and County of Newcastle upon Tyne 1954). It was clear that contained within this document was a statutory recognition that the city centre would continue to house some resident population with a target of 2,580 set for the end of the planning period.

This first development plan was reviewed in the early 1960s and a very different planning philosophy had emerged by this time (Burns 1963). The City Centre Development Plan had as its main objectives the creation of a city centre that looked forward, powered economic development and segregated land use across the city. The focus was on retail, commerce, education, culture and leisure. However housing was not completely absent with “..the latter (John Dobson Street) to involve a new Central Library and Museum overlooked by a residential tower.” (Faulkner et al. 2006, p. 238). Although it could be argued that, at this time the city centre “..makes a minimal contribution to housing the people of Newcastle” (Tavansoglu 1996 p. 21), the census of 1971 recorded 2,775 people resident within the area a figure not far removed from that envisaged in the post war planning documents.

In the mid 1960s a more specific recognition of the importance of city centre housing emerged. Reflecting on the Development Plan Review, Wilfred Burns, the city’s Chief Planning Officer, argued “..The shopping area…still needs tall buildings and the plan aims to kill two birds with one stone by providing buildings that will…be a pivotal force in the landscape, and by using these buildings for uses that add something more to city centre attractions. There will be dwellings for those that prefer a city centre location (probably not an insignificant number). “ (Burns 1967, p .35; our emphasis). In the text, a map of ‘central shopping redevelopment’ clearly evidences plans for at least four residential blocks in the northern part of the city centre around Haymarket, John Dobson Street and Northumberland Street.

Therefore, usually characterised in terms of neglect or non-consideration, the issue of city centre housing in Newcastle in the 1950s and 1960s warrants a more nuanced interpretation. Even if official policy initially was to reduce population levels, this was against the background of a significant presence of slum property within the city centre. But this did not imply an intended total absence of resident population from the city centre. Successive planning documents actually set ‘target’ populations and it is clear that there was a realisation that policies to encourage the attraction or retention of a city centre population in the future were highly desirable.

3 1970s—a decade of publically/third sector funded residential development

The preparation of the City Centre Local Plan which commenced in 1976 and was finally approved in 1985 signalled a more formal recognition of the role of residential development with the promotion of one or two bedroom housing within the designated Queen’s Square, Blackfriars, Quayside and Central improvement areas (Tavansoglu 1996). There was an increased emphasis on refurbishment complemented by some new build on infill sites and ‘residential development was seen as an important component of the mixed development areas as well as part of the general revitalisation strategy’ (Tavansoglu 1996, p. 210). As a consequence, in the years leading up to the early 1980s there was evidence of significant direct public investment into a range of schemes culminating in the addition of 542 units of residential accommodation (Fig. 2). Much of the investment came from the involvement of the North East’s leading Housing Associations (Table 1).

Fig. 2
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City centre residential developments, 1970 to 1990. © Crown Copyright and Database Right 2014. Ordnance Survey (Digimap Licence)

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The earliest of these schemes was Bewick Court (Fig. 3). The nineteen storey tower block was completed by the Woodlands Housing Trust with financial assistance from the city council. This development of 133 flats for rent to single people formed part of the Queen’s Square Comprehensive Development Area. The emphasis on the housing of young single people, at below market rent was particularly innovative in terms of city centre housing and was much removed from ‘market led’ approaches to such development. However, by 1977 there were reports that the scheme’s viability was under threat (Evening Chronicle 1977) and the Trust was defaulting on loan payments to the city council. Subsequently, North British Housing Association (now known as Places for People) became the new landlord (The Journal 1977). With a similar intent, although focused on a more transient young population, the YWCA also brought third sector charitable funding with the new build development of Clapham House (completed in 1982) on John Dobson Street close to Bewick Court, providing 51 flats for rent to single people.

Fig. 3
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Bewick Court (Photo: M. Barke)

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During the latter half of the decade there were two further significant developments of residential housing in the city but, unlike their predecessors, these projects involved the comprehensive refurbishment and re-development of existing properties. An important factor at this time was the 1974 Housing Act which allowed Housing Associations to develop using Housing Association Grant (HAG) (Murie 2008).

The first development centred on the St. Thomas Street area to the north of the city centre (Fig. 4). These streets consisted of early Victorian terraces of houses designed by the famous architect and cartographer Thomas Oliver (Buswell 1984). The area had originally been scheduled for demolition as part of the City Plan. Although this plan was abandoned, many of the properties had fallen into disrepair (Brown 1981) as the owners had adopted a policy of not re-letting properties when they became vacant. Residents petitioned the city council in 1976, complaining about the increased dereliction in the area and the need to retain city centre housing (The Journal 1976). The average length of tenancy was nineteen years and very few residents wanted to move away from the area (Architects Journal 1980, p. 127). Significantly, despite their high standards of space and design the city council could not attract a private sector partner so North Housing Association (now known as Home Group) negotiated the acquisition of the properties. North began a substantial refurbishment, using HAG, which brought 80 refurbished units of accommodation, ranging from bed-sits to five bedroom houses, into use which were mostly occupied by original residents of the area (Buswell 1984). The rising costs associated with the retention of the façade almost caused the project to fail but as a result of further grant funding from the city council, Tyne and Wear County Council and the Historic Buildings Trust, amounting to £250,000 in total, the renovation was completed. The Head of Planning for the city council at the time personified the council’s fiscal and policy commitment to the project and the retention of housing in the city centre despite the rising costs (Morris 1978).

Fig. 4
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St. Thomas Street area (Photo: M. Barke)

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The Crown Hotel conversion on Clayton Street West (Fig. 5) was completed by North British Housing Association in 1982 and was the largest scheme to date in terms of investment and units produced. The scheme used HAG which at this time amounted to a grant of between 80 and 100 per cent of allowable costs (Mullins and Murie 2006). The original frontage of the hotel was retained and 250 flats were developed in two separate schemes one behind the retained facade and the other on the site of demolished warehouses. Like the St. Thomas scheme, the Crown Hotel site suffered from rising costs in the 1970s and by 1981 the expense of saving the façade had almost trebled. Again, the public purse came to the rescue, increasing the proportion of grant paid (£380,000 in total) in order to complete the retention of the façade. These actions are indicative, not only of the continued commitment to the development of residential units in the city centre, but also of the growing importance of maintaining the fabric of the historic city (Morris 1981; Evening Chronicle 1982).

Fig. 5
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Crown Hotel Development, Clayton Street (Photo: M. Barke)

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This period of investment and development of residential accommodation in the city is significant in a number of ways. It is clear that the investment during this phase was wholly public/third sector, a significant number of units of residential accommodation were added to the city centre and the success of the developments provided unquestionable evidence that there was a demand from a variety of social groups for city centre residential accommodation.

The change of government in 1979 marked a sea change for urban policy with the private sector being seen as playing a much more significant role in the regeneration and redevelopment of urban areas. Entrepreneurialism was to be the main driver of urban policy, with a strong emphasis on property-led regeneration (Turok 1992; Tallon 2010). It was anticipated that this, coupled with demand for city centre living evident in the successful development of 542 units of accommodation would see the market step centre stage in residential investment. The reality in Newcastle city centre was, as the decade began, quite different.

4 The 1980s—a decade of private sector investment?

Two schemes in the early 1980s appeared to demonstrate evidence of the private sector beginning to show interest in city centre residential development. Brady and Martin Court was a development by Bowey, a local developer. Situated in the centre of the Newcastle Polytechnic city campus (now Northumbria University) the listed building was in urgent need of intervention, a project for which the Polytechnic had no funds. Despite being in an area designated in the City Plan for education, the city council sought a developer to refurbish the properties. However, Bowey’s involvement in the retention of the facade and development of flats behind only came about following the receipt of a £340,000 Urban Development Grant (UDG). This grant ensured the £1.27 million development was not only viable but that the risks for the developer were substantially reduced with the public purse providing 27 per cent of the total cost of the scheme.

At the same time Barratt, another Newcastle based builder, was developing 62 flats for sale in the Blackfriars Improvement Area. The total cost of the proposal was £1.3 million. However, similar to Bowey, Barratt’s risk was mitigated and the scheme’s viability greatly enhanced by the receipt of an UDG of £324,000 which represented 25 per cent of the development costs. Charlotte Mews and Blackfriars Court were completed by 1984 (Fig. 6). Furthermore, this area had been described as a ‘run down…part of the city’ (Evening Chronicle 1983) and it is highly likely that the attraction of this location as a place for investment in residential property was substantially advanced by the successful investment and restoration of the adjacent Blackfriars Friary site by Newcastle City Council. This ‘decrepit, dilapidated’ site was acquired by the Council in the 1950s and became the centrepiece of a renovation proposal in the early 1970s whose objective was to conserve the Friary along with the adjoining area which “..should be planned to provide central area housing, together with premises for small businesses and craft workshops.” (Heslop 1986, p. 14). The total cost was £600,000 of which 50 per cent came from Newcastle City Council and £100,000 each from Tyne & Wear County Council, the Department of the Environment and the English Tourist Board. This created a significant positive externality and important incentive for Barratt’s subsequent investment. It became increasingly apparent that private developers’ willingness to invest in residential development in the city centre was dependent upon the availability of significant amounts of public funding. Further housing association investment subsequently occurred in the immediate vicinity with North Housing developing 62 flats for market rent at Galen House. This was followed by the conversion by private developers of the John B. Bowes building, assisted by £363,000 UDG, into a mixed development of flats for sale and ground floor commercial units (The Journal 1991).

Fig. 6
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Charlotte Mews, Blackfriars Court and Blackfriars (Photo: M. Barke)

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As the decade progressed there was again a reasonable expectation, buoyed up by the success of these schemes which provided evidence of demand and successful returns on investment, that the private sector would begin to see residential development in the city centre as financially attractive in terms of efficiency and profitability and the state would no longer need to continue its role of financial enabler. However, despite this, there was no evidence of the private sector stepping forward to take the lead in developing residential accommodation in Newcastle’s city centre. Whether as outright funder or supportive facilitator, the state continued to be involved in all of the residential development that occurred in the 1980s.

In the latter half of the decade there was continued investment in residential developments in the city by three of the region’s largest Housing Associations. However their investment saw a shift away from renting to other tenures. In 1986 North Housing Association refurbished 30-47 Leazes Terrace, to the north of the city centre, into 33 residential units for sale. Completed at the same time, North British Housing Association converted 34 Clayton Street West, adjacent to The Crown Hotel, into eight units for sale. Opposite this development Nomad Housing, specialising in single person accommodation, converted the Clarendon Hotel into a mixed use development of shops, restaurants and flats, marketed for shared ownership, with the assistance of funding from the City Council, English Heritage and the Housing Corporation. The conversion of 31-33 Bath Lane, a disused warehouse, by a private developer into 10 residential units for sale was facilitated by the provision of £97,000 of UDG on a project with overall costs of £239,000. The UDG represented 40 per cent of the total scheme costs. The developers acknowledged that ‘the city council provided invaluable assistance and encouragement for the scheme’ (Gibbon 1985 p. 19).

One final development during this period, was a new build scheme by Abbey Housing a subsidiary of the Abbey Building Society. Located directly behind Eldon Garden, the western component of the city’s main shopping centre, Eldon Square, this high density development produced 116 units for sale (Fig. 7). Whilst this was the first private developer scheme without direct public funding it did receive indirect public support in the form of a land grant from Newcastle City Council. Zero land costs meant that for the developer, the project was more economically viable and risks considerably reduced.

Fig. 7
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Leazes Square and Mews (Photo: M. Barke)

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An overall assessment of residential development in Newcastle city centre during the 1980s must conclude that the shift to private sector investment in city centre residential was, at best, minimal (Table 1). This was despite the changing balance between the amount of public funding available to housing associations and the need to access private funds to make up the short fall. The Housing Act 1988 limited social housing grant, the replacement of housing association grant, to 75% of scheme cost. Therefore the reality was that while being increasingly perceived by Government as private sector organisations housing associations were, at that time, still funded to a significant extent by public monies (Harriott and Matthews 2004). The pattern of public sector subsidy to support private sector investment continued with scheme support averaging 30 per cent of costs. The risk ascribed by private developers to residential development in the city centre was still seen as too high so as to be inefficient in terms of profitability. Indeed, it could be argued that, in the case of Newcastle upon Tyne, the much vaunted role ascribed to the private sector in revitalising our city centres during the 1980s was in reality very muted (see Fig. 2).

5 Into the 1990s and the Grainger Town project

By the late 1980s and early 1990s development of residential accommodation in the city centre had slowed to a mere trickle. A number of factors were at play. Emphasis on regeneration and investment in residential accommodation had shifted to Newcastle Quayside with conversions and new build occurring in significant numbers. Urban Development Corporations (UDCs), of which Tyne and Wear Development Corporation was one, were generously funded and had an ability to provide mortgages, loans and grants (Oatley 1989) at a time when local authorities were being rate capped (MacGregor and Pimlott 1991). A range of problems therefore frustrated the anticipated growth in residential investment in the city centre by the early 1990s especially in the traditional CBD south of Blackett Street.

Investment was piecemeal in approach with grant assistance from Newcastle City Council, English Partnerships and English Heritage giving support to a limited number of small scale redevelopment and refurbishment projects. Single Regeneration Budget (SRB) funding was made available for Living Over the Shops (LOTS) initiatives (Robinson et al. 2001) but there were inherent problems associated with this approach (Goodchild 1998). Only 1795 Housing Association LOTS units developed nationally in the period 1992–1995 (Goodchild 1998 p. 79). These limitations to the development of LOTS were the result of numerous factors: the constraints on physical development caused by the complexity and layout of sites; high relative costs per unit; complex chains of ownership with multiple landlords per scheme; tensions between the length of leases granted and lack of investor confidence that change of use would not impact negatively on retail or commercial ventures; and risks perceived as the consequence of tenant behaviour (Goodchild 1998).

A distinctive aspect of Newcastle City Centre was its historical core which, despite modern development in the 1960s and 1970s, had seen much retained including mediaeval churches, stretches of the city’s original walls and the classical architecture of the unique Grainger-Dobson redevelopment of the 1830s–40s. This created a context for potential city centre residential development that was without comparison in the UK (Pendlebury 2002). Nationally, there was a growing interest and awareness of the role of conservation in the economic revitalisation of city centres but in central Newcastle the scale was different. 40 per cent of the buildings in the centre were listed as buildings of special architectural or historic interest and of these 12 per cent were grade one listed (Robinson et al. 2001). At the same time English Heritage became increasingly engaged in the urban regeneration agenda. A shift towards a more problem solving approach rather than conservation at any cost was highlighted by the introduction of Conservation Area Partnerships in 1994. These partnerships sought to link conservation with wider social and economic benefits and excellence in new design (Pendlebury 2002).

In 1992 the city council and English Heritage, recognising the limitations of the piecemeal approach to date and the challenges of attracting investment into the city centre when facing competition from the Quayside, commissioned a report aimed at identifying funding opportunities for the comprehensive redevelopment of what was to become known as Grainger Town (Fig. 1). The report acknowledged that funding opportunities through the pilot Conservation Area Partnerships were too limited and a further scoping report in 1996 resulted in the establishment of the Grainger Town Project (Pendlebury 2002). The bid for a six year SRB programme of £11 million was approved and commenced in 1997. Funding was received from other public sources including £25 million from English Partnerships, £3.22 million from the city council, £0.94 milion from English Heritage and £94,000 from the Heritage Lottery Fund. By 2003, the official end of the project, public sector investment totalled £40 million while private sector investment amounted to £145 million doubling the target set (Robinson 2003). The ratio of public to private sector funding in previous developments across the city centre, prior to the Grainger Town project, had been approximately 1:3 and the balance between public and private investment in Grainger Town itself followed a similar pattern with a ratio of 1:3.5. The inference is quite clearly that without the commitment of public sector resources, the private sector, all too aware of potential risks, is cautious where they invest. In the case of Newcastle this is evidenced by a hiatus in development in the city centre in the late 1980s and early 1990s and the growth in Quayside investment.

The relationship between the public and private sectors in facilitating investment in residential development in the city centre was not just financial. The Grainger Town project saw a private-public partnership established to ensure that the objectives of the project were met. These included some detailed outcomes for increasing residential investment and occupancy in the city centre, in line with similar aspirations demonstrated by several other northern cities such as Manchester (Allen 2007), Glasgow (Jones and Watkins 1996), Bristol (Boddy 2007; Tallon and Bromley 2004), Leeds (Dutton 2003), Swansea (Tallon and Bromley 2004) and Liverpool (Couch 1999; Couch et al. 2009). However, it is clear that, whilst the broad outcome may have been similar, rather different catalysts were responsible for the increase in city centre residential development. Early targeted regeneration initiatives have been highlighted in the case of Manchester (Hulme and Whitworth Street) and Glasgow (Merchant City) (Seo 2002). Somewhat later in Manchester and also in Liverpool (Couch 1999) the role of Urban Development Corporations was central, whereas in Bristol and Leeds, private sector developers appear to have been key initiators (Boddy 2007; Dutton 2003).

In most cities it would appear that the pinnacle of central area residential development was the late 1990s and early 2000s. But the early recognition by the Grainger Town Project of the importance of occupying vacant floorspace within the urban core had provided a different catalyst for Newcastle’s central area and one that produced a different context and added to a very different physical built environment for city centre residential development.

In the Grainger Town project housing was one of seven regeneration themes seen as being essential to the revitalisation of the city centre. Figure 8 indicates the distribution of residential development throughout the Grainger Town project area and the adjacent parts of the city centre. Throughout the life of the project residential development became increasingly more important to the success of the overall regeneration of Grainger Town, especially as city centre office development struggled to compete with the more attractive financial packages being offered by edge of town locations (Robinson et al. 2001). Residential development of vacant land and rehabilitation of listed buildings for residential use became a key element of the strategy. The scale of empty floor space and the, albeit limited, success of previous SRB funded LOTS schemes in the city were seen as key elements in achieving successful outcomes. However the level of public sector investment needed to facilitate this was substantial. The LOTS scheme, the largest in England at the time, supported development on Grainger Street and Clayton Street. Newcastle City Council and Home Housing Association had identified in 1996 the opportunity to develop 86 residential units in Clayton Street alone. The previous year the North East Civic Trust had identified 618 potential units for conversion (Robinson et al. 2001). English Partnerships and One North East funded several schemes and six of English Partnership’s ten schemes had a residential element to them. The Grainger Town project provided funding in the form of grant assistance to private developers to speed up rates of investment, gap funding to bridge the difference between development costs and scheme value at completion and grant support to Housing Associations to continue to develop for rent as market values increased through the life of the project (Robinson et al. 2001).

Fig. 8
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Residential developments after 1990 (Key as Figure 2). © Crown Copyright and Database Right 2014. Ordnance Survey (Digimap Licence)

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Despite assertions about the success of ‘up market’ apartment developments in several northern cities, it was recognised early on in the Grainger Town project that there was a weak owner occupier market in the city centre and that it would take time for one to develop. In this respect, Newcastle differed crucially from cities such as Bristol, Leeds and Manchester (Boddy 2007; Dutton 2003; Couch 1999) demonstrating again that not all the ‘resurgence’ of city centre residential development in UK cities followed the same path. Consequently, the use of public funding to coordinate the acquisition of buildings and land coupled with investment through the LOTS initiative, a feature of the early stages of the project, resulted in a focus on conversions to rent. Investments in Grainger Street, Clayton Street, Low Friar Street, Bath Lane, Pink Lane and Pudding Chare saw 116 units converted for rent between 1997 and 2000. The number of units per site is small with a maximum of 20 and the majority being below 10 (Fig. 8). The small scale nature of the developments is a consequence of the issues identified earlier (Goodchild 1998) associated with converting city centre premises from their original use into residential accommodation. Access to funding and a co-ordinated approach to the regeneration provided by the project team were acknowledged as one of the reasons momentum to convert empty spaces in the upper floors of properties gathered pace in Newcastle’s city centre.

As the Grainger Town project progressed, confidence in the return on investment amongst private developers increased. Jacobin’s Chare, a new build development of 33 units for sale adjacent to Newcastle’s Chinatown, commenced in 1997 with public sector support (Fig. 9). At the same time as conversions for rent were taking place in Grainger Street and Clayton Street, and investor confidence in the development of a successful owner occupier market grew, a number of larger scale investments in owner occupied schemes were made. Parrish View, a development of 38 units for sale, was completed between 2001 and 2003 in Pudding Chare. 2001 saw the first four of 13 apartments converted for sale in the Stamp Exchange Building on Westgate Road (Fig. 10) converted with the help of a £1.7 million subsidy from English Partnerships (Fisher and Gillen 2005). However, as the market became stronger the need for public subsidy finally diminished.

Fig. 9
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Jacobin’s Chare (off Stowell Street) (Photo: M. Barke)

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Fig. 10
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Stamp Exchange, Westgate Road (Photo: M. Barke)

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In 2002 the Project’s most prestigious residential development, 93a Grey Street, was initiated. Located to the north of the city centre, next to Grey’s Monument, itself subject to an investment in its public realm of £94,000, 93a Grey Street was a conversion of the upper floors of the Central Exchange Building, part of the city’s Victorian Central Arcade. This conversion resulted initially in 18 units for sale with a further five conversions in 2005 and represented some of the highest value properties for sale in the city centre (Land Registry 2013). Developed without public funding the apartments all sold with values between £220,000 and £560,000 (Robinson 2003). Opposite City Gate there was a further development of 38 apartments in the Print Works, a mixed use development, completed in 2003. Nevertheless, despite this long awaited market success it was recognised that, where scheme values upon completion were difficult to determine, public subsidy would still be needed (Robinson and Zass-Ogilvie 2010).

The initial Grainger Town project was to conclude in 2003 after six years. However additional funding was secured for the following three years, up until 2006, to allow for the completion of outstanding projects for sale including 93a Grey Street; 14 apartments at Bewick House, Bewick Street; the £15 million conversion of an art deco former warehouse into 83 flats at Central Lofts, Waterloo Street and the new build City Quadrant building, also in Waterloo Square, which was a mixed use development that added a further 60 units of accommodation (Table 1).

As a consequence of the growth in demand and rising market values a number of further outcomes have resulted. Residential development has competed very effectively with new office provision accounting for over half of the Grainger Town project developments. Research by Knight Frank concluded ‘city centre developments….can now generate potentially better returns from residential use than from commercial schemes’. (Ashby 2002). Perhaps most significant of all in terms of the impact of the Grainger Town project was the fact that developers looked outside the project boundaries for further investment opportunities (Fig. 8). By 2004 the city’s main retail street Northumberland Street, had seen its first residential investment with the conversion of the upper floors of Jackson House into 20 flats (Young 2004). One of the largest was the £5.65 million conversion of the former Swan House roundabout office block in Pilgrim Street to the mixed use 55 Degrees North complex, containing 165 apartments (Fig. 11). The City Gate development at the junction of St. James’ Boulevard and Bath Lane provided 57 apartments for sale (Table 1). As private sector investment grew it was increasingly characterised by mixed use developments where ‘high end’ residential provision went along with office, leisure, restaurant and serviced apartments for overnight/week-end breaks provision, all on the same site. In 2004 Frank Knight claimed that ‘mixed use development can offer superior returns…cater(ing) for the work, rest and play elements of people’s lives, will provide profitable to investors and developers alike.’ (Osborne 2004). It remains to be seen in the medium to long term whether such developments experience some of the problems of incompatibility of activities as the LOTS programme. In addition there was growing evidence of institutional investment in buy to let as new developments were purchased en masse, for example 38, Low Friar Street where 26 of the 29 flats were purchased on 19th May 2005 (Land Registry 2014).

Fig. 11
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55 Degrees North (former Swan House roundabout) (Photo: M. Barke)

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Overall, it can be claimed that investment in city centre residential development has, over the previous three decades, proved a considerable success. In the Grainger Town Project alone the number of residential units increased from 998 in 2003 to 1445 in 2009. Residential population levels had also increased from a pre project estimate of 851 people living in the project area to 1900 by 2009 (Robinson and Zass-Ogilvie 2010). To these should be added the examples cited above of developments just outside the Grainger Town Project boundary (Fig. 8). Although the data are for a larger area, the 2011 census population of the central area was over 4000 (Table 2).

Table 2 Population of Central Newcastle 1941–2011
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However the economic downturn in 2007 saw the rate of investment in city centre development decline considerably and there were many development sites that stalled awaiting investment at a time when available public sector funding was reducing. Perhaps the most significant of all is the site of the former Westgate House on Westgate Road. At the time that permission was given to demolish what was known as a major ‘city centre eyesore’, plans were in place for the development of 100 residential units for sale coupled with some commercial development. The scheme was seen as being a significant example of the continuing and growing role of private residential development in the city (Coulter 2004). However, in December 2014 the site of the demolished Westgate House remains undeveloped with outline planning permission renewed in 2011 for the development of office, retail and leisure facilities. What is of significance is that, despite the commitment of the city council to continued residential investment in the city centre, without the availability of funding at both local and national level, schemes not only stall but, as in the case of the Westgate House site, are seen as no longer viable. This is a far cry from the determination demonstrated by the commitment of significant amounts of public funds to ensure the success of developments in the 1970s, 1980s and 1990s.

6 Conclusion

This paper has demonstrated that the present situation with regard to residential accommodation in Newcastle’s city centre is the product of a ‘layering’ of policy interventions of varying strengths and from varying sources. Some of these are unique to the locality and, whilst the same ‘output’—an increase in residential accommodation within city centre areas - may be found in many urban areas, it is quite clear that rather different processes have been instrumental in producing the same phenomenon. In Newcastle, although the modern history of residential development is characterised by a very large number of individual schemes, the trend of development is clear. Post war planning policy had always envisaged a city centre residential population, albeit one living in replacement slum clearance property. Additional efforts to expand the residential population within the heart of the city in the 1970s were entirely publically or third sector funded. Despite the much vaunted emphasis given to the private sector in the 1980s, the vast majority of residential developments at this time benefitted from some form of public subsidy. The Grainger Town project was seen as a public-private partnership both in terms of funding and facilitation as, from the outset, it was very apparent that public sector funding was essential to the project’s overall success. This continued, if in a more strategic and coordinated way, the history within the city of providing public subsidy in order to facilitate residential development where the market, when left to its own devices, failed to do so. The development of properties for rent and the subsequent emergence of a self-financing owner occupier market came about as the result of coordinated public investment across the city centre. This also facilitated Housing Association development in the city when the private sector was reluctant to take the risk and ensured the creation of a mature rental market. What followed was an emergent market for properties for sale again initially supported by public sector investment in the form of UDGs, land grants and Housing Association investment. Evaluation of the Grainger Town Project acknowledged that while investment in residential development by the private sector would probably have occurred, without public subsidy this investment would have been much slower to develop and would have been even more highly selective in terms of location and property type (Robinson et al. 2001; Robinson 2003). At the time of writing (late 2014), the hiatus in residential development since 2007 has continued and it could be argued that, for any imminent recovery, important lessons have to be learnt from Newcastle city centre’s late twentieth century revival and the role of the public sector in facilitating it.

Through our reconstruction of the chronology of city centre residential development and our inductive approach to addressing the research question we have firstly demonstrated that it is indeed a palimpsest, a layering of different types of development, produced by different policies and processes not least the ideological policy commitment, demonstrated over many decades, to a resident population in the city centre of Newcastle upon Tyne. The account presented above further demonstrates the diversity of city centre living that has emerged since the early 1970s in the city centre. This variety (Figs. 3, 4, 5, 6, 7, 9, 10, 11) of tenure, size, location, value and development type demonstrates clearly that this diversity is much more prevalent than simple market, demand-led theories would imply. Secondly, the evidence produced here demonstrates that the role of the public sector has been absolutely fundamental in the promotion of residential development within the city centre. A variety of roles have been played – enabler, facilitator, funder - and, contrary to most ‘market-led’ interpretations of the phenomenon, the public sector has proven to be remarkably flexible in its support with a range of initiatives that have, in various ways, ameliorated the ‘risk’ involved for the private sector. Ensuring that private developers have seen investment in the city centre, where the market has been supported to grow, ultimately as both efficient and profitable. Finally, our findings have thrown some doubt on the underpinnings of large-scale urban growth cycle models that characterise the return of a residential population to city centres as a natural ‘re-urbanisation’ phase. There is very little that is ‘natural’ about such returns. Such an interpretation does not do justice to the reality which is that the residential accommodation that is currently present in the city centre of Newcastle is the product of a whole series of processes, policies, partnerships and socio-economic influences. The outcome may be glibly termed ‘re-urbanisation’ but the range of factors we have identified in this paper demonstrate that Newcastle does not neatly accord with such a ‘model’, that there is a myriad of influences present, most of which are ‘engineered’ rather than ‘natural’ and – most important of all – are not just a recent phenomenon in a cyclical process but have been ongoing for at least four decades. We are therefore in agreement with Champion (2001) that the suggestion of a natural progression through sequential stages of urban development does not “..adequately encapsulate the developments observed since the late 1970s, raising questions about whether it is sensible to try to impose any single model.” (p. 143). Rather than a ‘natural’ development, city centre housing in Newcastle is characterised by complexity and variety, the product of the interplay of different factors at different times and much more of a staccato process, with surges and halts in activity driven by external factors, policy changes, availability of finance and changes in the market.