CROYDON COMMENTARY: Borough councils, including Croydon, have leant heavily on speculative developments to build new homes. But London needs a far more radical approach, according to CHRISTIAN WOLMAR, who is seeking selection by Labour to be the party’s Mayoral candidate
The London Labour Housing Group holds its hustings for the party’s mayoral candidates this Thursday. It will be a fascinating hustings because housing is the central issue facing Londoners at the moment. It will also be interesting because none of the candidates have really been tested on their housing policies.
What is clear to me is that developers are not the solution to our housing problems. The reason is a little-known thing called “viability”.
That’s why a radical council-led social housing building scheme is one of the core policies of my campaign.
But first, let’s look at what is happening on the ground:
Lambeth Council has a 40 per cent affordable housing target in the borough. An intuitive way to deliver this ambitious but desperately needed target is to ensure that 40 per cent of all new developments are affordable housing. Not so for the high-end Keybridge House development in Vauxhall – of the 419 new homes, a mere 19 will be affordable – that’s just 4.5 per cent.
What is worse is that the story is the same across London. Just down the road, the ultra-luxury (and ultra-lifeless) Nine Elms development in Battersea will see the development of 491 flats, the vast majority of which will all cost more than £1 million. How many affordable houses? A shade better than Keybridge House with a paltry 52, just over 10 per cent.
The trend is the same across London. In March the Greater London Authority released figures showing the number of affordable homes completed is now at a six-year low, despite annual pledges by Boris Johnson to build some imaginary number of affordable homes.
Why do we seem incapable of building enough affordable homes?
Part of the answer is the cost of land in London. It is just too lucrative for developers to do anything but maximise the number of full-value properties they sell, even with subsidies. That is understandable but it still does not explain why they are able to negotiate such low numbers of affordable homes in new developments.
Shrouded in a mist of legalese, viability appraisals provide the reasons why developers are simply unable to deliver affordable housing (or other worthwhile community amenities for that matter). Oliver Wainwright described viability wonderfully in a Guardian article last year.
“Presented as a precise science,” Wainwright wrote, “viability is nothing of the sort; it is a form of bureaucratic alchemy, figures fiddled with spreadsheet spells that can be made to conjure any outcome desired.”
This is why developers simply cannot be the solution to our housing crisis. It is just too easy for them to summon a viability demon to ward off the requirements set by London’s councils. The demon always wins.
I spoke with a former Labour councillor from Brent who told me councils simply do not have the resources or expertise to challenge viability assessments. “When I was on the council developers would bring in the piece of paper and the number of affordable houses would shrink. It is not a feasible way of delivering the affordable homes we so vitality need.”
As the next Mayor of London, I would tackle the issue of viability assessments. One way of doing this is to empower councils to start their own social housing schemes. Lifting the borrowing cap and allowing councils to build their own housing stock once again will cut out the viability assessment. Developers can either chose to undertake a council’s contract or not. It is a bit like the way the NHS negotiates favourable drug prices.
Almost all of Labour’s candidates have also had the idea of some sort of housing development corporation. But my Homes Delivery Agency will be designed in such a way as to tackle viability head on. It will have the expertise to assess these reports; it will have the teeth to say no; and it will have the means to deliver its own housing.
The developer-led scheme at Nine Elms is self-styled as the “greatest transformational story in the heart of London”. That is not true. It is just vacuous marketing speak. What is true, however, is that Nine Elms is emblematic of what is quite possibly the greatest transformational story in London’s history – the gutting of the capital’s soul by forcing ordinary people out of the city through sky-high house prices and a lack of high-quality and genuinely affordable housing.
It is time for this to stop.
- Christian Wolmar has been campaigning for three years to become Labour’s candidate to stand in next year’s London Mayoral elections. His campaign website can be found here
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