London’s housing crisis has risen to the ‘top tier’ of London mayor Sadiq Khan’s agenda, but the House of Lords may be able to help by launching a ‘deep inquiry’ into the real nature of demand in the capital. And while the government’s First Homes initiative is a welcome move in some quarters, there is too much emphasis on home ownership, the scheme is likely to result in fewer affordable rented projects – and may even be a ‘disaster’ for London.
Those were just some of the points made by the New London Sounding Board as it grappled last week with two main – and highly connected – topics of discussion: housing, and the main tasks new mayor Sadiq Khan should put on his ‘to do’ list.
The House of Lords has reorganised its select committees, it emerged, making the subject of meeting housing demand the first of its inquiries in a new built environment section, with a call for evidence on figures as they are approached by demographers and planning officers.
The requirement of the Government’s First Homes’ initiative to provide 25% of the affordable housing of all housing developments as first homes, is like Pocket Living’s offer as a discount market sale product, said the firm’s Nick Cuff. But at 70% rather than 80% it is predicated as coming out of the ‘subsidy wrapper’ created by private housing on a site. ‘It will leave very little room for a shared ownership product in the market to come out of negotiated supply going forward’, said Cuff. First Homes is thus ‘eating into’ other forms of affordable homes which on some sites are more needed or more in demand, he added.
Peter Eversden of the London Forum of Civic and Amenity Societies said forcing it upon local authorities was ‘completely wrong’ and that the scheme will not suit local authorities everywhere, and certainly not in London. ‘Their need for affordable homes is largely at the low-cost rental end’, he said. ‘First Homes being imposed seems to us to be a complete disaster for London…The government is absolutely fixed on the idea of everyone having the right to own their own home. And this is not a way of getting people on that ladder.’
Some local authorities and outfits like Be First have met a need in housing, however, Pat Hayes explaining that its strategy is to build out a substantial supply of homes for people who would never qualify for direct council housing or housing association homes’. ‘This is the time for municipal intervention into the market to start to deliver the supply that is actually needed and deliver in a way that it is good quality, well managed, housing, that people can move in to or move out of’, he said. The problem of the current system of buying or renting from the building society is that it locks people into locations, he added, which is bad for the labour market and mobility.
Indeed, suggested William McKee of the OPDC, the real crisis is in social renting, which has occurred since local authorities exited it on such a large scale. This is only beginning to be reversed now, without the pressures of the housing market cycle. ‘I think everywhere, but especially in London, we actually have to come to terms with the fact that some people probably may not ever want, or be able to own their houses and they need a pool of social rented’.
Yolande Barnes of the Bartlett Real Estate Institute suggested that a new type of tenure might be necessary (see the latest NLQ for more) with advantages for private landlords including tax breaks and in participating in the prosperity of their tenants. These would be with – initially - subsidized rents related to income, aligning landlords and tenants toward a return on investment. Essentially, there needs to be more flexibility between ownership and renting, Barnes said. ‘I think we've got to enable people to as it were staircase up and staircase down in different parts of their lives and, and flex rents on the same property so people aren't forced to move’
Schemes exist in New York along these lines, said sounding board chair Robert Evans of Argent, where people pay rent linked to their income. Hanif Kara of AKTII, moreover, said there should be a bottom-up approach on housing to consider and to encourage more people in who can actually build homes, a problem exacerbated by the pandemic and Brexit. Or, said Central’s Pat Brown, labour shortages because people are choosing not to live in London. This is as much an economic issue as it is a quality of life one, said Brown.
Tackling the crisis of housing supply, affordability and homelessness was ‘number one’ on a letter NLA sent to the potential new mayors of London before Sadiq Khan won the election, with other issues including resourcing planning and reaching zero carbon by 2050. But is there enough time for the mayoral term to address these meaningfully, wondered Nancy Elgarf of the Next Gen Sounding Board and G&T. And does the mayor and local authorities have enough powers, asked Jaffer Muljiani of BDP and Elgarf’s fellow Next Gen Sounding Board member.
The sounding board debated priorities, Sunand Prasad of Penoyre & Prasad saying that the country is already actually committed to a near zero built environment by 2035, but that the ‘unreadiness of the country’ was stark, and the sad thing was that there is no plan for that, albeit there will be a ‘roadmap’ at least by COP26. Perhaps a new letter to Khan could suggest that we need a plan for London to achieve goals by 2035, instead.
The ‘broken’ planning system should also get some attention, said Fred Pilbrow of Pilbrow & Partners, whose proposals for the Albert Embankment fire station were rejected by housing secretary Robert Jenrick and the Inspector after Lambeth’s consent and mayoral approval.
EY’s Adrian Katz, meanwhile, suggested that London is at a ‘profound turning point’ relating to the impact of technology and COVID. ‘We're all living a different life now - a life of Zoom calls and Deliveroo. And I think I would want the mayor to show leadership on addressing the question of what this means for a city like London, and what living in such a major urban centre will look like in the future’.
The economy of the capital in the immediate future was of key concern to LCA’s Robert Gordon Clark, particularly over the next two to three years. ‘[Khan’s] got to stand up for London and stand up for its economy and jobs in the city.’
Ros Morgan of the Heart of London Business Alliance added that one of the biggest challenges lies in the ‘levelling up’ conversation that needs to be translated from either/or to both in the way it affects London. But perhaps the mayoral position should be a business, not a political one, she added, having seen the mayor’s powers and budgets restricted for political purposes. ‘To me it’s just a route for inaction’, she said.
Devolution should move back up the agenda, suggested McKee, or, added Barnes, we should recognise the elephant in the room – the plain fact that demand for real estate has changed, in housing as well as in the workplace. ‘The interaction of those two is going to be absolutely critical to the future of economic geography in the country but especially the economic geography of London’.
Whatever is pitched should be done so positively, said MHCLG’s head of architecture Andy von Bradsky, particularly given the number of ex-GLA people in central government. But the resource issue for local authorities is ‘absolutely fundamental’, he said. ‘The research is quite stark. We do need much better resources in local planning authorities…the resources simply are not available either to deliver the coding work as expected, or the wider aspects of just business as usual planning system’.
Pat Hayes said a strong mayor should push for the retention of more of London’s wealth and address the ‘crazy’ funding model where TfL is still dependent on funding from the fare box. But any new letter, said Phil Graham of the GLA, should also make an ‘offer’ of what the sounding board, NLA and wider industry could contribute, as well as an ask – the ‘tightly focused’ points of the kind discussed earlier. This might have more traction and engagement, he suggested.