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| How Sadiq Khan has been tackling London's housing crisis so far How Sadiq Khan has been tackling London's housing crisis so far | |
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| It’s almost six months since Sadiq Khan became London mayor and opinion polls suggest that Londoners are pleased with him so far. He’s had a high public profile, addressing the capital’s security concerns, making friends with Hillary Clinton and even being lauded by the Evening Standard. Khan has allied with London business groups and others to lobby national government for infrastructure investment and stronger devolved powers. Brexit, which he and most London voters opposed, has added edge and urgency to this campaign. He’s also made starts on tackling London’s harmful air quality, sizing up barriers to social inclusion and recalibrating Transport for London to meet some of his bolder policy goals. | It’s almost six months since Sadiq Khan became London mayor and opinion polls suggest that Londoners are pleased with him so far. He’s had a high public profile, addressing the capital’s security concerns, making friends with Hillary Clinton and even being lauded by the Evening Standard. Khan has allied with London business groups and others to lobby national government for infrastructure investment and stronger devolved powers. Brexit, which he and most London voters opposed, has added edge and urgency to this campaign. He’s also made starts on tackling London’s harmful air quality, sizing up barriers to social inclusion and recalibrating Transport for London to meet some of his bolder policy goals. |
| But his biggest challenge is what is now routinely called the London housing crisis. This is the issue Londoners are most concerned about. Accordingly, Khan dubbed the mayoral election a housing policy referendum. A large part of his approach to this complex policy area will be trying to increase the delivery of homes that are affordable for people on low and middle incomes. Khan has so far not set a target for the absolute number of what he calls “genuinely affordable” homes to be built in his four-year term, but he has committed to a long term goal of 50% of all new London dwellings meeting that definition. How well is he doing so far? What progress is he making towards honouring other housing pledges in his manifesto? | But his biggest challenge is what is now routinely called the London housing crisis. This is the issue Londoners are most concerned about. Accordingly, Khan dubbed the mayoral election a housing policy referendum. A large part of his approach to this complex policy area will be trying to increase the delivery of homes that are affordable for people on low and middle incomes. Khan has so far not set a target for the absolute number of what he calls “genuinely affordable” homes to be built in his four-year term, but he has committed to a long term goal of 50% of all new London dwellings meeting that definition. How well is he doing so far? What progress is he making towards honouring other housing pledges in his manifesto? |
| A lot of the work on housing has been hard graft behind the scenes. There is a widely shared view that Khan’s deputy for housing and residential development, James Murray, has applied himself to the vast task with an energy, an intelligence and a political will that was lacking in Boris Johnson’s time as mayor. He has been nurturing the broad consensus that unless London makes a better job of building the kinds of homes it and its people most need, everyone stands to lose - including the rest of the country. The goodwill of housing associations, boroughs of all political complexions, employers and commercial property developers has been sought. A dinner Murray had with new housing minister Gavin Barwell, who is also minister for London and MP for a marginal London constituency, appears to have gone swimmingly. | A lot of the work on housing has been hard graft behind the scenes. There is a widely shared view that Khan’s deputy for housing and residential development, James Murray, has applied himself to the vast task with an energy, an intelligence and a political will that was lacking in Boris Johnson’s time as mayor. He has been nurturing the broad consensus that unless London makes a better job of building the kinds of homes it and its people most need, everyone stands to lose - including the rest of the country. The goodwill of housing associations, boroughs of all political complexions, employers and commercial property developers has been sought. A dinner Murray had with new housing minister Gavin Barwell, who is also minister for London and MP for a marginal London constituency, appears to have gone swimmingly. |
| Khan has repeatedly stressed that altering the London housing equation so that it generates better results won’t happen quickly or easily. Sooner or later, though, Londoners will want to start seeing solid results. What follows is a round-up of Khan’s housing policy progress so far and some pointers to important things to come. | Khan has repeatedly stressed that altering the London housing equation so that it generates better results won’t happen quickly or easily. Sooner or later, though, Londoners will want to start seeing solid results. What follows is a round-up of Khan’s housing policy progress so far and some pointers to important things to come. |
| A trade-off with property developers | A trade-off with property developers |
| Later this year, after the government’s autumn public spending statement on 23 November, City Hall will issue its long-brewing supplementary planning guidance (SPG) designed to encourage higher “affordable” housing yields from planning deals struck between boroughs and property developers across the city. Like it or not, London depends heavily on private sector companies to finance and deliver buildings it needs - including much of its affordable housing. Inviting them to take a hike might get you a round of applause but, the ways things are now, won’t help put roofs over people’s heads. | Later this year, after the government’s autumn public spending statement on 23 November, City Hall will issue its long-brewing supplementary planning guidance (SPG) designed to encourage higher “affordable” housing yields from planning deals struck between boroughs and property developers across the city. Like it or not, London depends heavily on private sector companies to finance and deliver buildings it needs - including much of its affordable housing. Inviting them to take a hike might get you a round of applause but, the ways things are now, won’t help put roofs over people’s heads. |
| Khan’s SPG will effectively offer developers an incentive to ensure that the proportion of affordable homes agreed for larger schemes meets a minimum level, expected to be 35%. London mayors have considerable powers to intervene in planning arrangements being worked out at borough level. The SPG will show Khan willing to give a fair wind to plans enshrining the desired percentage, but take a long, hard look at those that don’t. The trade-off is that developers will benefit from the certainty this approach provides – they may have mastered the dark arts of viability, but the attendant aggravation costs them time and money too. The SPG will also set out what types of home called “affordable” by national government meet Khan’s more stringent definition of being “genuinely” so. | Khan’s SPG will effectively offer developers an incentive to ensure that the proportion of affordable homes agreed for larger schemes meets a minimum level, expected to be 35%. London mayors have considerable powers to intervene in planning arrangements being worked out at borough level. The SPG will show Khan willing to give a fair wind to plans enshrining the desired percentage, but take a long, hard look at those that don’t. The trade-off is that developers will benefit from the certainty this approach provides – they may have mastered the dark arts of viability, but the attendant aggravation costs them time and money too. The SPG will also set out what types of home called “affordable” by national government meet Khan’s more stringent definition of being “genuinely” so. |
| Increasing “affordable” supply with public money | Increasing “affordable” supply with public money |
| Khan has spent some of what’s left of the £1.25bn provided to Boris Johnson for 2015-2018 to increase the “affordable” housing component of housing planned for the first section of the vast Old Oak and Park Royal regeneration project in west London (whose overall stewardship under Johnson he’s described as “a mess”). He will soon produce a successor to Johnson’s funding prospectus, outlining to housing associations and boroughs what it will take for them to secure grants from him. This will be published following the autumn statement. City Hall is lobbying for further funding for affordable homes. | Khan has spent some of what’s left of the £1.25bn provided to Boris Johnson for 2015-2018 to increase the “affordable” housing component of housing planned for the first section of the vast Old Oak and Park Royal regeneration project in west London (whose overall stewardship under Johnson he’s described as “a mess”). He will soon produce a successor to Johnson’s funding prospectus, outlining to housing associations and boroughs what it will take for them to secure grants from him. This will be published following the autumn statement. City Hall is lobbying for further funding for affordable homes. |
| Building “affordable” homes on public land | Building “affordable” homes on public land |
| Prior to Khan’s election, Transport for London (TfL) had named a panel of developer partners to work with on jointly profiting from building on over 300 acres on 75 sites in its large land portfolio. Its prime objective was to make as much money as it could for the city’s transport systems. Khan, though, wants an overall 50% of homes built on these sites to be “genuinely affordable”. His manifesto specified that these would be part-buy, part-rent shared ownership dwellings prioritised for first-time buyers who’ve been renting for five years, especially in Outer London. It is another key strand of his drive to increase affordable housing supply. | Prior to Khan’s election, Transport for London (TfL) had named a panel of developer partners to work with on jointly profiting from building on over 300 acres on 75 sites in its large land portfolio. Its prime objective was to make as much money as it could for the city’s transport systems. Khan, though, wants an overall 50% of homes built on these sites to be “genuinely affordable”. His manifesto specified that these would be part-buy, part-rent shared ownership dwellings prioritised for first-time buyers who’ve been renting for five years, especially in Outer London. It is another key strand of his drive to increase affordable housing supply. |
| Since the election, Khan has put in place arrangements for 200 out of 400 homes he wants built on TfL land at Kidbrooke station to meet his requirements and urged the transport body to prioritise some of its smaller sites elsewhere. An announcement earlier this week concerned two of these. One is called Landmark Court near London Bridge station, which has been lined up for more than 100 homes, of which “at least 35%” will be affordable. The other is called Fenwick South, which is actually owned by Lambeth Council. The building of 55 social rented homes already planned for it as part of the agreement that will extend the Northern Line into Nine Elms will now begin early next year - sooner than expected. TfL will be responsible for delivering the homes, which will be owned and managed by Lambeth. | Since the election, Khan has put in place arrangements for 200 out of 400 homes he wants built on TfL land at Kidbrooke station to meet his requirements and urged the transport body to prioritise some of its smaller sites elsewhere. An announcement earlier this week concerned two of these. One is called Landmark Court near London Bridge station, which has been lined up for more than 100 homes, of which “at least 35%” will be affordable. The other is called Fenwick South, which is actually owned by Lambeth Council. The building of 55 social rented homes already planned for it as part of the agreement that will extend the Northern Line into Nine Elms will now begin early next year - sooner than expected. TfL will be responsible for delivering the homes, which will be owned and managed by Lambeth. |
| A best practice guide for estate regeneration | A best practice guide for estate regeneration |
| Another way Khan could increase the supply of affordable homes would be by helping boroughs to add to the number on council-owned housing estates. Recent research has emphasised that many of the biggest Inner London estates have already been rebuilt or replaced, but that the potential exists to “densify” others to the tune of an estimated 4,000 to 8,000 homes a year. The problem is that such “regenerations” have the potential to be contentious, contested and to go very wrong – not least for people living on them. One positive route through this difficult terrain is to find ways of “densifying” without extensive demolition and temporary rehousing, with current residents directly benefiting from the results. When he was Islington Council’s housing lead, James Murray firmly favoured the latter approach. A “best practice” document, setting out the mayor’s principles for getting estate regeneration right, is expected to be published by the end of this month. | Another way Khan could increase the supply of affordable homes would be by helping boroughs to add to the number on council-owned housing estates. Recent research has emphasised that many of the biggest Inner London estates have already been rebuilt or replaced, but that the potential exists to “densify” others to the tune of an estimated 4,000 to 8,000 homes a year. The problem is that such “regenerations” have the potential to be contentious, contested and to go very wrong – not least for people living on them. One positive route through this difficult terrain is to find ways of “densifying” without extensive demolition and temporary rehousing, with current residents directly benefiting from the results. When he was Islington Council’s housing lead, James Murray firmly favoured the latter approach. A “best practice” document, setting out the mayor’s principles for getting estate regeneration right, is expected to be published by the end of this month. |
| Introducing the London Living Rent | Introducing the London Living Rent |
| Khan’s plan to bring in a new private sector tenure with rents set at one third of average local household incomes – thereby fitting his definition of “genuinely affordable” - was a major element of his housing manifesto. In September, he said London households typically earning between £35,000 and £45,000 a year - which would cover couples each earning substantially less than the average London incomes - would qualify for these new homes and be able to rent a two-bedroom flat for less than £1,000 per month, compared with the London average of £1,450. Subsequent published details indicate that the eligible household income range could be as wide as £25,000 to £60,000, depending on the area of London. | Khan’s plan to bring in a new private sector tenure with rents set at one third of average local household incomes – thereby fitting his definition of “genuinely affordable” - was a major element of his housing manifesto. In September, he said London households typically earning between £35,000 and £45,000 a year - which would cover couples each earning substantially less than the average London incomes - would qualify for these new homes and be able to rent a two-bedroom flat for less than £1,000 per month, compared with the London average of £1,450. Subsequent published details indicate that the eligible household income range could be as wide as £25,000 to £60,000, depending on the area of London. |
| The mayor’s intention is that this new form of tenure would enable tenants to save for mortgage deposits and move on to home ownership. It best described as “rent-indexing” rather than rent controlled according to one housing expert, though at City Hall they prefer to describe it as a form of rent regulation applied to a specific type of affordable home. Housing providers have said they would be able to supply London Living Rent properties, though some political debate has centred on how far they’d be affordable to renters earning the London Living Wage. The tenure period under London Living Rent terms will be “generally of up to five years”, says City Hall. Hackney Council, which is eager to help young, middle income residents remain in the borough as well as sustaining its social housing delivery, has pledged to be the first to see 500 London Living Rent homes built. It is thought that the very first London Living Rent homes could start to be built next year. | The mayor’s intention is that this new form of tenure would enable tenants to save for mortgage deposits and move on to home ownership. It best described as “rent-indexing” rather than rent controlled according to one housing expert, though at City Hall they prefer to describe it as a form of rent regulation applied to a specific type of affordable home. Housing providers have said they would be able to supply London Living Rent properties, though some political debate has centred on how far they’d be affordable to renters earning the London Living Wage. The tenure period under London Living Rent terms will be “generally of up to five years”, says City Hall. Hackney Council, which is eager to help young, middle income residents remain in the borough as well as sustaining its social housing delivery, has pledged to be the first to see 500 London Living Rent homes built. It is thought that the very first London Living Rent homes could start to be built next year. |
| Understanding the impacts of foreign buyers | Understanding the impacts of foreign buyers |
| Much blame for London’s high housing costs is routinely aimed at foreign buyers investing in absurdly expensive “prime central” flats, but the true impacts of such finance and the use to which resulting properties are put are varied and unclear. Khan is commissioning independent research into the phenomenon, hoping to get a fuller picture so that housing policy can be developed accordingly. Significantly, the remit for this research recognises that, for good or ill, overseas buyers continue to play a big part in enabling development in London to happen. Khan wants the final report delivered next spring. | Much blame for London’s high housing costs is routinely aimed at foreign buyers investing in absurdly expensive “prime central” flats, but the true impacts of such finance and the use to which resulting properties are put are varied and unclear. Khan is commissioning independent research into the phenomenon, hoping to get a fuller picture so that housing policy can be developed accordingly. Significantly, the remit for this research recognises that, for good or ill, overseas buyers continue to play a big part in enabling development in London to happen. Khan wants the final report delivered next spring. |
| Lessening the ill-effects of the Housing and Planning Act | Lessening the ill-effects of the Housing and Planning Act |
| During the mayoral election campaign, Khan’s Conservative rival Zac Goldsmith made much of an amendment to a piece of legislation that even fellow Tories thought very bad for London and which Goldsmith claimed would enable the forced sale of council homes to result in twice as many “affordable” homes being built in the capital as would be lost. But the true impact of the Act in London cannot be fully assessed until its accompanying regulations are published, interpreting the various elements that leave room for discretion. The EU referendum and its turbulent aftermath have meant progress on this task has been slow. The appointment of Gavin Barwell as housing minister (see above) and his suggestion of a shift away from controversial “starter homes”, thought largely useless as an “affordable’ product in London, towards supporting a wider range of relatively low cost homes, including for rent, have raised tentative hopes that the worst aspects of the Act as they could affect the capital might be reduced. | During the mayoral election campaign, Khan’s Conservative rival Zac Goldsmith made much of an amendment to a piece of legislation that even fellow Tories thought very bad for London and which Goldsmith claimed would enable the forced sale of council homes to result in twice as many “affordable” homes being built in the capital as would be lost. But the true impact of the Act in London cannot be fully assessed until its accompanying regulations are published, interpreting the various elements that leave room for discretion. The EU referendum and its turbulent aftermath have meant progress on this task has been slow. The appointment of Gavin Barwell as housing minister (see above) and his suggestion of a shift away from controversial “starter homes”, thought largely useless as an “affordable’ product in London, towards supporting a wider range of relatively low cost homes, including for rent, have raised tentative hopes that the worst aspects of the Act as they could affect the capital might be reduced. |
| Protecting the green belt | Protecting the green belt |
| Housing supply analysis published during the election campaign underlined how difficult it will be to increase the number of homes built in London to the overall 50,000 a year it is generally held to need - a figure Khan has acknowledged but not committed to - without boroughs bringing forward some of their green belt land for building on. But the issue is politically explosive and Khan has gone to considerable lengths not to ignite it, both during the campaign and since, making much of his rejection of Tory Bromley Council’s plans for a football stadium and flats to go on green belt land in Chislehurst. | Housing supply analysis published during the election campaign underlined how difficult it will be to increase the number of homes built in London to the overall 50,000 a year it is generally held to need - a figure Khan has acknowledged but not committed to - without boroughs bringing forward some of their green belt land for building on. But the issue is politically explosive and Khan has gone to considerable lengths not to ignite it, both during the campaign and since, making much of his rejection of Tory Bromley Council’s plans for a football stadium and flats to go on green belt land in Chislehurst. |
| A not-for-profit lettings agency | A not-for-profit lettings agency |
| In his manifesto, Khan promised to set up “a London-wide, not-for-profit lettings agency for good landlords, building on the work that councils have started, and ending rip-off fees for renters”. Word is that work has begun on this at City Hall, but it is at an early stage. | In his manifesto, Khan promised to set up “a London-wide, not-for-profit lettings agency for good landlords, building on the work that councils have started, and ending rip-off fees for renters”. Word is that work has begun on this at City Hall, but it is at an early stage. |
| Stopping “affordable rent” conversions | Stopping “affordable rent” conversions |
| A policy introduced by the Tory-led coalition government encouraged housing associations and councils to convert social rented homes to new, more expensive “affordable rent” tenures when they became vacant and were re-let to new people on waiting lists (with the strain often taken by housing benefit, the bill for which the government is actually trying to reduce). This was correctly seen as a threat to social housing numbers at a time when more, not fewer, are needed. Khan, committed to protecting social housing in London as “a vital asset”, has moved to block these conversions. City Hall says that under Boris Johnson’s’s 2011-2015 affordable homes programme, a total of 19,000 were approved (see “notes to editors” here) with 14,000 of those now completed. The rate of conversions has slowed recently, but Khan says he will work with housing associations through his affordable homes programme to put an end to them. | A policy introduced by the Tory-led coalition government encouraged housing associations and councils to convert social rented homes to new, more expensive “affordable rent” tenures when they became vacant and were re-let to new people on waiting lists (with the strain often taken by housing benefit, the bill for which the government is actually trying to reduce). This was correctly seen as a threat to social housing numbers at a time when more, not fewer, are needed. Khan, committed to protecting social housing in London as “a vital asset”, has moved to block these conversions. City Hall says that under Boris Johnson’s’s 2011-2015 affordable homes programme, a total of 19,000 were approved (see “notes to editors” here) with 14,000 of those now completed. The rate of conversions has slowed recently, but Khan says he will work with housing associations through his affordable homes programme to put an end to them. |
| Homes for Londoners team | Homes for Londoners team |
| Khan promised to set up a “new and powerful team at the heart of City Hall” to pull together all the mayor’s housing powers and resources and “break the homebuilding logjam”. So far, a Homes of Londoners governance board has been formed, chaired by Khan - it will meet for the first time next month, after the autumn statement - a “skills and capacity audit” is underway and an in-house team of experts on development viability is being assembled with a view to making the provisions of the supplementary planning guidance stick (read more on that here). Perhaps the “Homes for Londoners” title is best understood as a banner flying above various forms of co-ordinated action. | Khan promised to set up a “new and powerful team at the heart of City Hall” to pull together all the mayor’s housing powers and resources and “break the homebuilding logjam”. So far, a Homes of Londoners governance board has been formed, chaired by Khan - it will meet for the first time next month, after the autumn statement - a “skills and capacity audit” is underway and an in-house team of experts on development viability is being assembled with a view to making the provisions of the supplementary planning guidance stick (read more on that here). Perhaps the “Homes for Londoners” title is best understood as a banner flying above various forms of co-ordinated action. |
| Preparing for a new London Plan and housing strategy | Preparing for a new London Plan and housing strategy |
| Mayoral housing policy has to be in line with those enshrined in the London Plan, the name given to the mayor’s statutory “spatial development strategy” for the capital. The current London Plan is Boris Johnson’s. That doesn’t mean Khan is totally hamstrung by it, but it does mean he needs to put it through a full review which will result in a new version in up to three years’ time. That review is underway with the launch of a consultation document called A City for All Londoners. In this, Khan sets out the challenges posed by the capital’s rapid growth and some of the ways he hopes to meet them, including in housing. Themes include some of those mentioned above and homelessness, including rough sleeping. The mayor will also be producing a specific housing strategy to replace Johnson’s. It will come out some time next year. | Mayoral housing policy has to be in line with those enshrined in the London Plan, the name given to the mayor’s statutory “spatial development strategy” for the capital. The current London Plan is Boris Johnson’s. That doesn’t mean Khan is totally hamstrung by it, but it does mean he needs to put it through a full review which will result in a new version in up to three years’ time. That review is underway with the launch of a consultation document called A City for All Londoners. In this, Khan sets out the challenges posed by the capital’s rapid growth and some of the ways he hopes to meet them, including in housing. Themes include some of those mentioned above and homelessness, including rough sleeping. The mayor will also be producing a specific housing strategy to replace Johnson’s. It will come out some time next year. |
| Summary | Summary |
| The essential difference between Khan’s approach to housing policy and that of his Tory predecessor is that the Labour mayor is, as you’d expect, taking a more interventionist approach to shaping and regulating the huge, unruly beast that is the London housing market. He appears to be demonstrating far greater drive for getting more homes across the “genuinely affordable” spectrum built. His mayoral team and City Hall officers are of a high calibre and have demonstrated the pragmatic, consensus-building approach that is fundamental to mayors getting things done. | The essential difference between Khan’s approach to housing policy and that of his Tory predecessor is that the Labour mayor is, as you’d expect, taking a more interventionist approach to shaping and regulating the huge, unruly beast that is the London housing market. He appears to be demonstrating far greater drive for getting more homes across the “genuinely affordable” spectrum built. His mayoral team and City Hall officers are of a high calibre and have demonstrated the pragmatic, consensus-building approach that is fundamental to mayors getting things done. |
| London’s housing problems might be characterised as a combination of its booming successes over more than two decades and a consequence of successive national governments’ inadequate responses to the failure of the market to respond in the right way to its demands. Housing shortages and other problems aren’t new to London, and the current ones are beyond the power of any mayor to completely solve alone. But the hope is that Khan can provide strong, successful examples of how to make a start. | London’s housing problems might be characterised as a combination of its booming successes over more than two decades and a consequence of successive national governments’ inadequate responses to the failure of the market to respond in the right way to its demands. Housing shortages and other problems aren’t new to London, and the current ones are beyond the power of any mayor to completely solve alone. But the hope is that Khan can provide strong, successful examples of how to make a start. |