The late afternoon sun fell on the anomalous pine trees of Gillett Square, London N16, and on the wooden decking below, giving it a fleeting look of lunch in the Alps. To the east, just visible at the far end of Gillett Street, the Kings-land Road ran its usual choppy course: hipsters and the homeless, Jamaicans and Turks, Vietnamese up from the Shoreditch end and the odd Haredi Jew heading north to Stamford Hill.

Gillett Square is Hackney’s great regeneration project. Once a disused car park full of drunks and dealers, after 25 years of funding drives and architects, bulldozing, building and PR, it’s now Dalston’s ‘town square’. In the beginning, it was the first of Ken Livingstone’s ‘100 new public spaces’ and a model for future development. Its proud parent, Hackney Co-operative Developments (HCD), calls it: ‘A place to walk through; a place to sit; a place to share; a place to meet; a place to see, hear, feel, smell, taste and discover wonderful and incredible things.’ HCD puts on events almost every day: on Monday you can play ‘giant chess’. On Thursdays through the summer it’s a ‘pop-up playground’. ‘Durable and intriguingly shaped equipment transforms the square into an adventure wonderland for children to discover, create and enjoy’, says HCD.

The sun fell on the pine trees, on the platform, on the multicultural food stalls and, that Thursday, on what looked like a scene from a zombie movie. My small son and I approached from Mildmay to the east. As we arrived, a man lurched out of the doorway of the Vortex jazz club and into the path of the pushchair. He had a tin of Foster’s in one hand and a scarf wrapped right up from his neck to his hairline. To get the can to his mouth he had to push it up under the scarf, which he did.

Behind him, an Irishman stood, shouting and swaying. He had a bottle of Corona in one hand and a pram in the other. On a bench beside him sat a box of 24 Corona Extra and two women, one with a baby, the other with a blue plastic bag of Stella.

There was a pop-up playground, though it had not transformed the square into an adventure wonderland. Some grubby foam shapes had been scattered on the ground, but over the long summer the HCD events team have lost heart. A small boy ran in circles, crying and chasing two older girls who’d nicked his bike. The Irishman lunged at the girls as they passed: ‘Come here. I’ll spank ya!’

Cedd and I headed for the pines to regroup. On the wooden platform a black guy stood with a can of Stella beside a toddler in a pushchair. If only HCD had scheduled a bring-a-bottle-and-a-baby party, they could have counted it a success.

Along the square’s undeveloped side, a long bench of West Indian men and women sat and smoked weed with great concentration and intensity. Drifts of sweet smoke floated over the prams, the kids, and a gang of seven- or eight-year-old boys who’d turned up to play table football and, to be fair to Gillett Square, did look as if they were having fun.

If you build it they will come, I suppose — especially if they’re already there. And that’s what wasn’t clear to me when I first walked into the square, and what HCD are so keen to ignore: for all the cash poured into it, this place belongs to the down-and-outs. It always has. In 2012, six years after the square’s official opening, a musician and photographer called Roland Ramanan began to take photos of the regulars. It’s a beautiful, terrible, touching series of men and women on the very edge: in the square, passed out on mattresses in collapsing council flats. In an interview for Vice, Ramanan said: ‘Many of the residents… have roots going back to that spot for a very long time. They were there long before the square, long before it was a car park, and they have fond memories of sitting there with their brazier in the winter to keep them warm, helping people with their shopping.’

The HCD team dreamt of a future for the square full of diverse thirtysomethings enjoying an evening with Kate Tempest under the pines; of inter-generational games of Carrom — and they’ve succeeded in part. Those things do go on, and will for as long as there’s the money and the will to keep putting out the pop-up playgrounds. But what they’ve made for the long term, when the Lottery money runs out, is a refuge for the very people they pushed out — those most bewildered by the pace of change.

Since that day, I’ve been back to Gillett Square to sit and take stock. This is Corbyn country — or near as dammit. When we passed the scarf-headed man on the west side of the square, we crossed over from Corbyn’s constituency to the next. The cry of the Corbynistas is always against gentrification, but the irony is that gentrified Gillett Square has become a showcase for the UK’s real problems: alcoholism, addiction, poverty, babies born to drunks with their lives already shredded. Not long after Gillett Square’s grand opening, it had to be designated a Controlled Drinking Area — meaning the police can confiscate cans at will. A few years ago, the gang kids with their foot-long knives arrived and began to pick on the poor drunks. A new public consultation into how to solve the antisocial behaviour closed this week.

It’s not just Gillett Square, or Dalston, or even London. We’re a mess. If, for instance, you list the world’s countries by how much mothers drink in pregnancy, Britain comes fourth. We’re worse than Russia, but better perhaps at not facing these things. When I crossed the square that Thursday, I avoided looking into the Irishman’s pram. I didn’t want to meet that baby’s eye.

Easier, by far, to march against the opening of another Starbucks.