Sadiq Khan’s housing manifesto is the political equivalent of a cover band: it hits all the right notes but with something sadly vapid about its performance.
For all of the bluster and recent controversy, Labour mayoral candidate Sadiq Khan has published a bunch of eminently sensible suggestions today on housing. As ever, there’s a chunk of over-ambitious nonsense that isn’t workable in the least (such as 50 percent affordable housing). Other things which make some sense (the London Living Rent) are equally undeliverable due to lack of powers.
However, the guiding principles of making things fairer and recognising that housing failures impede prosperity are hard to dispute.
In A manifesto for all Londoners, Khan outlines his “home for Londoners” policy stating that the “housing crisis is the single biggest barrier to prosperity, growth and fairness facing Londoners today.” He has promised to build “thousands more homes every year” and suggested that Londoners would get “first dibs” on new homes. These are laudable aspirations, but things he has no control over. Since the 1980s when councils largely stopped building homes (with thousands being sold off under Right to Buy), the private sector has been the majority player in housing development.
According to the ONS, annual private sector housing completions have averaged 11,300 homes a year in London during the last five years.
The reason so much stuff is pre-sold abroad all around securing banking finance to build them. It’s a function of the market. Housebuilders don’t really care where they sell their homes. But if any business – selling cars, razors, phones or homes – was able to sell a job-lot in one go and secure their financial position, they’d all do the same.
It’s true that the social impact of the private housing market is far greater than that selling mobile phones. And this is where planning policy will need to evolve. Whether it’s legally possible to enforce the sale of homes to a particular party remains to be seen.
Khan’s criticism of developers not providing the “properties that London needs” is fair to a point: there’s far more posh housing that the market can take. Discounting of this stock is now happening for the first time in years. And many commentators believe the bottom is about to fall out of the prime central London market. Many agents would have people believe that rich Iranians are about to come in and save the day. To be frank about it, there’s more chance of them sorting out our nuclear energy woes.
In the defence of developers, both land and construction costs have sky-rocketed. And if you’re relying on the private sector to deliver a policy need (build homes) it will only do so where there’s a fair reward for the risk taken. With councils often opposing high density projects, it means that what is built will inevitably be pricier. The problem is, to a large degree, self-perpetuating.
So what’s the solution? Well, the reality is that we have no genuinely strategic level plan for housing. There’s a London Plan, but individual councils aren’t joined up in the least. One scheme that gets lauded in one part of town can face vicious opposition in another. I’ve worked on a few such examples; councils often compete and oppose schemes on each other’s borders. We need a genuinely joined up view and could do with cutting the number of local authorities from 33 to five or so.
Just like they have in New York.
While this idea would go down like a turd in the Thames with many council folk, the cost savings and efficiencies would be innumerable.
The suggestion by Khan to set up a new team “at the heart of City Hall” including housing stakeholders across all areas including councils, housing associations, developers, investors, and residents organisations seems a bit pointless. We need action and direction. Leadership should be offered by democratic individuals. One mistake people make is thinking that each and every planning decision should be a referendum and open to a public vote. We need a firm policy that can be stuck to, creating more talking shops achieves nothing.
On the contentious issue of social housing there’s been a lot of fuss around a pledge to introduce a “living rent” – essentially a cap on rents based around local earnings. It is senseless to try and interfere with a free market in such a way, particularly with large investors now queuing up to build homes for rent. Other than being a daft idea, it is also something the future mayor would have no powers to enforce. The result would be to spook investors and have fewer homes built.
Khan does make reference to attracting institutional investment into build to rent, riding on the coat-tails of recent excitement about a new rental market. His pledge to fight to embattled renters with the “naming and shaming” rogue landlords is a well-trodden path that will do little to help anyone. Only full-on regulation of letting agents – which successive government have somehow failed to enact, would make any real step-change.
This is the same for much of what is proposed today: many laudable ideas, mostly recycled, without too much detail in how any of it will be delivered. Once again, housing is a political football and the game remains a goalless draw.
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