We need Homes for London
February 3rd, 2014
When it comes to housing, the Greater London Authority lives very much in the shadow of its predecessors. Both the Greater London Council and the London County Council before it built thousands upon thousands of homes to meet the needs of London’s growing population. From the LCC’s distinctive five story brick blocks of flats to the GLC’s brutalist monoliths, the capital is indebted to the vision of its former civic leaders, few greater than Labour’s Herbert Morrison.
Housing has been a key responsibility of the Mayor since 2007, when Ken Livingstone secured £5 billion of housing investment from the then Labour government as he took over the Homes and Communities Agency’s responsibilities in London. But swept from office less than a year later, the work begun by Ken on delivering London’s affordable housing programme was placed into the hands of Boris Johnson.
Boastful Boris has always taken the credit himself for the affordable homes that were delivered using money obtained by a Labour mayor from a Labour government. Yet he now looks set to fail to meet his own target of delivering 100,000 new affordable homes by 2016. His new draft London Plan says that London needs 42,000 new homes each year, despite his own research showing that the real need is up to 62,000. He has refused to lobby for better regulation of the private rented sector in which a quarter of Londoners now live, and rough sleeping in London has doubled since he became mayor in 2008.
Enough is enough. It’s time for a radical transformation of the Mayor’s approach to housing.
A Wednesday’s London Assembly budget setting meeting I put forward proposals to create a new body, Homes for London, which would draw together all of the Mayor’s work on housing, land and planning. Homes for London would make sure that housing is invested in as infrastructure, in the same way as Transport for London does for transport. As part of this, a London Housing Corporation would be established to directly deliver the homes that London needs.
The need for Mayoral intervention is clear. The private sector isn’t delivering the homes London needs. Housing associations are finding it increasingly difficult to raise the funding they need to build social and affordable housing. Some councils in London are building new council housing for the first time in decades but are still heavily restricted by the government-imposed borrowing cap. This is why the Mayor must step in directly.
The new London Housing Corporation would be able to borrow against the GLA’s revenue stream and utilise the Mayor’s own colossal land bank to deliver new homes. By building a mixture of social housing, key worker housing and homes for sale the Mayor can ensure that mixed communities are created and that private sales cross-subsidise genuinely affordable homes let out at council rents with lifetime tenancies. Those worried about more borrowing should remember that the revenue stream created through rents would pay for these homes over the long term.
But the Mayor doesn’t just have to rely on the GLA’s borrowing power. He should be approaching institutional investors such as pension funds to enter into agreements with Homes for London to provide up-front funding for new homes in exchange for a guaranteed return on their investment.
Over the coming months I shall be working up detailed proposals for exactly how Homes for London and the London Housing Corporation would work and the volume of housing that could be delivered across all tenures. What is absolutely clear is that unless the Mayor adopts a far more interventionist approach, we are not going to solve London’s housing crisis any time soon.