Housing has been described as the ‘hardy perennial’ of London policy issues, being persistently at the forefront of Londoner’s concerns.
Perhaps unsurprisingly, housing was a key theme at The London Conference this year. Despite some positive signs in recent years such as modest price stabilisation and an increase in home ownership amongst younger people, the underlying trends remain troubling. As well as the continued inequality of space distribution between private renters and owner-occupiers, supply of new units has been slowing rapidly since 2015. This highlights one of the major flaws in relying largely on market-led solutions to housing supply, its inability to deliver counter-cyclically. This is why Centre for London is calling for a broader approach to housing than our present model.
If a new approach is to be successful, it will depend on tackling some fundamental questions.
How many and where?
The question of whether London currently has the capacity to meet assessed need (and what the true extent of need is) remains open and has been the subject of disagreement between the Mayor, planning inspectors and the government. The recent recommendations to revise down the small sites element of the city-wide housing targets in The London Plan bear witness to this disagreement.
However, despite the small sites element of housing targets being targeted for revision, where the rest of the units will go is not a done deal by any means. There are difficulties with finding sufficient and appropriate sites to build on. But London remains divided on whether we should focus our efforts on brownfield land or take another look at the role of the Green Belt. Speaking at The London Conference, Sadiq Khan dismissed the idea that the Green Belt could usefully provide housing land, calling it a ‘folly’ and coming down strongly on the side of densification of already built up areas. But many took a different view, although none of them were politicians standing for election. Some felt that without ‘wholesale destruction’, bits of the Green Belt with amenity value could remain, while using the ‘non-green’ bits for housing. On the other hand, prioritising brownfield land also comes with its own challenges and trade-offs. Increasing housing numbers on industrial land while not losing employment space is a big challenge, with calls for more creative configurations of developments as one solution.
Dealing with the complexities of accommodating growth within the city proper can run the risk of missing the bigger issue lurking in the background. The reality is that the economic geography of London isn’t contained within any of its administrative boundaries, but spills far over into wider East and South East England. London’s housing market is already impacting its wider catchment area, whether that be through increased prices in commuter towns, or housing those on London boroughs’ waiting lists in cheaper rented accommodation further afield. A narrow focus on accommodating all London’s growth neatly within Greater London Authority boundaries might detract from taking seriously the idea that London and its neighbours need to plan for growth collaboratively.
The failure of our current market-led model to meet need might be one reason why almost 70 per cent of Londoners feel that the types of housing being created in their area aren’t ‘for people like me’, and why the same amount want more council housing. But to deliver the number of affordable units necessary (32,500 per annum, with a 70/20/10 per cent social/shared ownership/intermediate tenure split), it has been estimated that there is an almost £5 billion per annum gap in grant funding for new social housing – before maintenance upgrading or existing homes. For reference, this is around seven times what London currently receives. Fiona Fletcher-Smith, a former Director of Development and Environment at the Greater London Authority, and current Group Director of Development and Sales for L&Q, forcefully made the case that government has to take grant funding for housing seriously again, as the cross-subsidy model was ‘bust’.
At the more modest end of the spectrum of policy levers, retention of 100 per cent of Right to Buy receipts, and absolute discretion on what that should be spent on was called for by Cllr Peter John, leader of Southwark and Chair of London Councils. In a conversation with Marisa Lago, planning chief for New York City, Tony Travers highlighted the scale of difference between London Council Tax bands and what New York City can levy as property tax based on capital values, leaving the local government finance professionals in the room daydreaming about the kinds of sums they could raise if London had the freedom to set its own council tax levels.
However, even if there was this funding available, getting public sector partners to collaborate meaningfully is far from an easy task. The different politics of places mean that not all are pulling in the same direction. The reluctance of some outer London boroughs to ‘do their share’ as one audience member put it, can hamper attempts to meet overall targets. At last count, five outer London boroughs had delivered less than 100 ‘affordable’ units in total since 2016, with some of these boroughs seeing a net loss. The challenge will be to get all to do their bit.
The fraught politics of housing aren’t confined to the ‘big picture’ national stage, however, or tensions between boroughs. At the grassroots level we’ve seen a profound breakdown in trust between communities, local authorities and developers. This has marred attempts to do the right thing, where communities have felt that the wrong thing had been done in the past. Cllr Peter John spoke about his experience in Southwark, and how despite council housing being desired by residents, they didn’t want infill developments on their estates. This anecdote is backed up by the data. Polling of Londoners shows that even where development would create housing which is affordable for residents and their children, there is still a reluctance to accept a certain scale. This raises troubling questions about the extent of public consent for the level of development the city is aiming for.
The answer must lie in making sure communities can benefit from development much more directly. Whether through tenure types which respond to local need and incomes, or providing new mechanisms for communities to share in some of the profits, it is clear that there is a lot more we could be doing. Fitting together this piece of the puzzle with all the many other moving parts represents one of the biggest tasks facing local, regional and national policymakers concerned with London as we go into Mayoral and General Elections in the near future. Keep an eye out for Centre for London’s upcoming contributions to helping solve the issue.