Housing has been the public policy “elephant in the room” for too long. City businesses warn me that high housing costs are reducing London’s competitiveness as a location, colleagues across London councils say that housing features more and more at the top of their agendas, and all the declared candidates in the mayoral election cite housing as a key issue.
Make no mistake: housing is a problem that has to be addressed, and it has to be addressed now. The issue developed because of London’s phenomenal success in attracting people and businesses over the last 20 years, leading to a significant increase in the demand for housing. But there was too little extra supply to match that demand. If this were a free market, the supply of housing would have increased to match demand, but the market is not free – planning policy and other constraints severely restrict the supply.
Initiatives to deal with the problem include announcing ever-higher targets for house building in London (but no plan to deliver the targets), the designation of a number of housing zones (but no certainty that all the zones offer viable building sites), and initiatives which aim to help people pay high prices (which if successful just further increase demand).
These schemes tinker at the edges and do little to address the underlying problem of restrictions on supply. Without increasing supply, they will not help the big majority of people who never qualify for social, affordable, or key worker housing.
The City is keen to play its part in addressing the problem – directly and in moving the agenda forward.
First, we can look at our role as a housing provider. London is not a densely occupied city; there is significant potential to build more housing units on existing estates while improving the amenity and quality of life for current residents. Imaginative schemes have already been implemented in other authorities and we are keen to do the same. There is scope for a significant increase in market housing units on our estates, which will automatically bring more social housing and will entail no subsidy.
Second, we must examine the possibility of building housing on other land that we own, and we are currently reviewing whether we own any land which lends itself to housing development.
Third, we must use our convening power, bringing together industry and policy-makers to help spread best practice and take advantage of our expertise in financial and professional services. We must ask hard questions: are existing financial models fit for purpose? Do current planning regimes help or hinder the delivery of new housing units? Are all local authorities going beyond their statutory social housing obligations by acting as an “enabler” of more new housing units across the whole tenure spectrum?
The City has already helped launch the Housing & Finance Institute to facilitate an increase of housing supply of all types and to promote better delivery and financing of housing.
One thing is clear: the City Corporation is determined to play a part, along with other local authorities, in addressing one of London’s most serious issues.