We have a new mayor who says that his main priority is to fix the housing crisis. But how? All politicians claim to want to do something about the horrific housing situation in London, but in recent years the situation has gone from bad to worse. With a new mayor comes new hope that he might take at least some of the action necessary to fix London’s insane housing market. Here are my suggestions for five things the new Mayor could do.
This is not a comprehensive list, and some of the things in it rely on the Mayor lobbying for extra powers. One of the problems of the mayoralty is that the office holds few powers. However, from the beginning it was envisaged that the soft power of a mandate from the second largest electorate in Europe would mean that the Mayor of London could wield significant influence in lobbying the government and banging local authority heads together.
1. Enforce the planning system
Town planning is perhaps one of the most important and powerful tools at the disposal of the Mayor. The Mayor has the power to take over any significant planning application and determine it for himself. In theory the Mayor must determine any application in accordance with planning policy, but in practice the power is much broader than that and all planning authorities frequently disregard large swathes of planning policy in their decisions.
The previous mayor used this power to ram anything, and I mean anything though the planning system. According to campaigners at Norton Folgate, Boris Johnson determined 14 planning applications and decided 100% in favour of developers under his tenure as Mayor. This included the famed Mount Pleasant sorting office site where the newly privatised Royal Mail were seeking to squeeze out affordable housing against opposition from two local authorities.
The impact that had on development in London was much broader than those 14 applications. The message sent to local authorities was clear: oppose developers and I will overrule you. This dissuaded many local authorities from fighting bad planning applications because they thought it pointless. As a result there has been a lot of bad development. Boris wasn’t the first Mayor to behave in such an authoritarian way. Before him, in his conviction that building up (apparently regardless of how high) was best for London, Ken Livingstone threatened to ‘crush’ any local authority that stood in the way of new high-rise in the centre of London; a policy that gave us the now infamous Vauxhall Tower.
A Mayor more serious about sustainable development could put their power to good use and reject applications which don’t include enough affordable housing or which seek to demolish affordable homes and replace them with luxury apartments.
2. Control capital
Foreign people are not damaging London, but foreign money is. If you allow every oligarch in the world to dump vast amounts of cash on the capital it is inevitable that prices will go crazy. And it is the desire on the part of developers to cash in on some of that offshore gold that is causing many of the worst excesses of their industry.
There is a myth propagated by the development industry and Boris Johnson that without this flood of questionable cash all development activity in London would grind to a halt. It is apparently their view that only with funds from, for example, the Cayman Islands, can we build the housing that London needs. The suggestion is that our money isn’t good enough and that we should be grateful for the few crumbs of affordable housing that is thrown down to us (from the top of a glass tower). It is sickening that a politician who championed the free movement of finance is now leading a EU referendum campaign obsessed with stopping the free movement of people. Those priorities surely tell you a lot about the kind of man our former Mayor was.
Anyone with the most basic understanding of economics (i.e anyone that uses money) has some concept of supply and demand. Currently, fuelled by offshore cash, demand is greatly outstripping supply, but that demand from offshore is not the only demand stimulating the London housing market. There is a huge domestic demand for housing and it is frankly ludicrous to think that domestic demand alone would not be able to support the building of new housing.
Yes, relying on domestic demand could change the form of development. Domestic demand is for lower rise, better quality homes that people actually want to live in rather than the junk Tony Pidgley is busy selling to the Chinese. It may mean lower profits for developers, but whether developers are making comfortable profits or obscene profits should be of little concern to us.
The new mayor needs to make every effort to curb the flood of foreign cash that is playing havoc with our housing market. To be clear, this is not about foreign people. In fact, most of the entities buying new homes in London aren’t people at all but offshore shell companies. There is no reason why these paper companies should be given preference in the housing market over real people, from home or abroad.
Although his powers are limited in this regard, the Mayor can certainly do more than simply ask developers to market their overpriced homes for the offshore market in this country first.
A good start would be to follow the path tried by St Ives and place a planning condition on all new homes that requires them to be used as a primary residence. This would stop new housing supply from being soaked up by the super wealthy looking for second, third or fourth homes.
A smart political move would be to lobby the government to grant the him the powers to restrict the purchase of homes by non-resident corporations. Politically this is a win-win. If the government caves to his demands he gets to claim a major victory by being the person who has stopped London being sold to the offshore pound. If the Conservatives refuse to give him the powers to tackle the housing crisis then that would scarcely reflect poorly on him.
3. Take back our land and build some homes
With rising land prices, land owners seem to have no problem with sitting on their assets for years while they seek to wear down the will of the planning authorities. The Mayor even does it himself! At 8 Albert Embankment the Fire Authority have a 1 hectare site that has been derelict for ten years while they have pursued a series of failed attempts to build luxury housing.
Public authorities have the power to compulsorily purchase land in the interests of regeneration. That is a power that they have been happy to use if it helps Tottenham Hotspur build a new football stadium, for example, or if it helps developers get rich from demolishing social housing. So why not use that power for the public benefit? If a developer has been sitting on land for years, persevering stubbornly with another absurd scheme to build a 200m pole with luxury sky gardens, why does the Mayor not just take that land off their hands, rather than let their greed blight our communities?
4. Responsible landlords
One of the biggest and most-publicised factors driving up housing prices in London is the private rented sector. The ease with which landlords can leech off the success of London’s economy should be of great concern to all. Can you imagine how much more vibrant London would be if people were able to spend more of their earnings in the local economy (markets, high streets, and more), rather than see their hard earned cash siphoned off through their rent into an offshore bank account?
At some point we need to move to some form of rent capping. This is not about stopping landlords from making an honest profit, but it is about stopping exploitation. Capping rents is not a power the Mayor has, but one he needs to fight for. In the mean time he can at least enforce some common decency in the rental market.
Being a landlord has responsibilities. It isn’t an open opportunity to squeeze as much as possible out of our pay packets without bothering to take care of basic maintenance. A few councils have introduced licensing schemes to make sure that landlords at a minimum have a obligation to provide housing that is safe. Those schemes, with stiff penalties for those that do not meet them should be introduced on a London wide basis.
5. Stop the madness: a moratorium on estate ‘regeneration’
The housing market in London is not one market. People who buy £5m penthouses along the river are not in the same market as a couple on minimum wage. Since 2010 we have seen the shocking spectacle of London boroughs demolishing affordable housing to be replaced with luxury homes. The promise was given that redevelopment would see an increase in the supply of affordable homes subsidised by new market housing. That simply did not happen. Instead we saw a vast transfer of wealth from middle and lower income earners to the rich.
There is no benefit to Londoners from the current model of estate regeneration being pursued by councils in London. If anything, the demolition of vast numbers of affordable homes simply makes things worse. Stopping it all will do no harm. There should be a moratorium on the so-called ‘regeneration’ of housing estates until strong policies are in place to make sure that all can share in the profits generated by increases in land value.
It’s time to pick sides
London is a city with real problems that cause real hardship and real suffering. Many of us who were raised here and call it our home are devastated watching our city being torn up and sold off to the highest bidder. This is our message to the new Mayor: telling us that your dad was a bus driver and that this is the greatest city in the world a thousand times will not solve anything. The time for simple slogans is over, we need the complex answers to the difficult issues.
Driving though the kind of reforms we so desperately need to save our city from reckless greed will inevitably involve upsetting some powerful people. Again and again during the Mayoral campaign we heard that Sadiq Khan wanted to be the mayor for everybody. However, fixing the housing crisis may mean that you can’t be the Mayor for the rapacious developer, the slum landlord, the City CEO and the majority of Londoners. If he tries to be, the next four years will be little more than a wasted opportunity.