Richard Blakeway is the Deputy Mayor for Housing, Land and Property in London
This month Bill de Blasio was elected as mayor of New York. One of his big promises? To build more affordable homes; way beyond the flagship Bloomberg plan to build 165,000 over more than a decade.
The lesson from New York is how the profile of housing has grown globally and how all successful global cities, from London to Hong Kong to New York, are facing a housing supply and affordability challenge. And in London this is not a new idea for us. Over the last five years we have built record numbers of affordable homes for low paid working Londoners; we have bought thousands of empty homes back into use; we are helping about 50,000 Londoners to buy their first home with part-buy, part-rent schemes.
The problem is this housing challenge hasn’t occurred overnight – it’s been at least thirty years in the making. And it is this crucial point that was so sadly lacking in Alex Morton’s slightly fruity attack on Boris Johnson’s housing policy. This omission is all the more surprising given how Policy Exchange has cogently argued that housing delivery has struggled since the creation of the 1947 Town and Country Planning Act.
For over 30 years only half the number of homes have been built in London. The number of homes being built has increased despite the phenomenally challenging economic climate of the last five years. New housing stats have increased by 77% in the last quarter compared to the mid- 2009. The Mayor’s programme of low cost homes for working Londoners is well on track to meet its 100,000 target – with 67,000 completed already and delivering more than any time since the early 1990s.
But, as we have made clear in London government, more needs to happen and house building needs to be doubled to levels not seen since the 1930s. So how? The case against City Hall is that we should focus less on making development viable; more on building low density terraced housing; and get on with it because every home not built in London will threaten the Green Belt. Interesting stuff but it misses the point.
Everyone agrees that whatever gets built should meet high design standards. It is complete nonsense to say that the space standards introduced by the Mayor, in response to evidence that the smallest homes in Western Europe were being built in London, prevents houses being built. The space standards have proved hugely popular in addressing poor designs while at the same time cutting around 300 unnecessary codes imposed on the industry. Yet in addition to interiors it is also critical that homes are built to familiar street patterns. In itself that doesn’t mean only terraced houses should be built in London. Apartments, as much of London’s Georgian stock now is, have a major role to play in London and have done since the Edwardian Manson blocks graced Kensington. Building at very low densities will mean London simply fails to meet its housing demand – in itself this would be a major threat to the Green Belt.
Nor is it unreasonable for City Hall to focus on viability when around 200,000 homes have been consented in London but not all are being built. There are numerous reasons for this – capacity, capability, finance and onerous post-planning obligations. It’s also fair to say that too many sites are owned by those uninterested in building who are instead speculating in the London housing market by trading planning consents. That’s why ‘build it or lose it’ has merit. The finance of housing is critical. There is a popular but overstated view that all London’s homes are being brought by foreigners. In fact, by value, it’s about 6 per cent (and that includes Irish nationals) – about the same levels as 1990. But if banks demanded fewer pre-sales before committing debt, if buyers could secure a mortgage approval that lasted longer than a few months, and if house building had a greater mix of finance (a major feature of every other country’s housing market) overseas sales could feature less and, crucially, more homes would be built overall.
The mayor’s 2020 vision sets out a whole range of policies to build more homes, regenerate areas and create fantastic new places to live. This is happening on disused brownfield land across the capital from the thousands of homes on the Olympic Park, to Battersea power station, to the land around the O2 at Greenwich to development around East Croydon. In addition more can happen by releasing surplus public land – something the Mayor has led in London with over 300 acres released since the last election providing a boost of £3bn; bringing pension funds into the market to boost supply; supporting small builders who have left the construction industry droves over the last 20 years; a massive expansion of part-ownership (on top of the 50,000 Londoners who are being helped to buy through the mayor’s funding); allowing councils to do more and so on.
Meeting the housing challenge in London will take many years, as it did when London government was first established in the early 20th century in part to respond to appalling housing conditions then. So perhaps the biggest move would be to give the local government in London more power. The ability of City Hall to tackle housing has transformed under Boris Johnson with the mayor, for the first time, having investment powers and direct control of land. These powers are
being used to the full. But overall London government, like all cities around the UK, are fiscally constrained compared to friends abroad including, of course, New York. Just take stamp duty. This is increasingly a London tax with just under half now being generated in the capital. Arguably if London was given control of this tax, as Wales and Scotland will have soon, both the receipts could be used to deliver the infrastructure necessary to get homes built but the tax itself could be reformed into something more progressive and less pernicious.