The Mayor of London’s Housing Powers
Notes on housing for an unserious Mayor
Last week it was reported that Sadiq Khan, the Mayor of London, is planning on diverting funds away from the £4 billion Affordable Homes Programme (AHP) toward a new scheme to purchase homes from the open market (the Council Homes Acquisition Programme; CHAP). These homes will then enter the councils’ social housing registers.
This is annoying and foolish for many reasons:
As has been demonstrated time and again, the UK housing crisis is a supply problem. We don’t build enough houses in the places where people want to live, especially London and the South East. Taking supply off the market in the short term may be helpful to social renters, but will only exacerbate the problem in the medium-term. This is a zero-sum transfer from the private rented sector to the social sector.
Because it’s a zero-sum transfer from private renters to social renters, it pits these two groups against each other, accelerating rent growth for ~30% of Londoners in the former group.
Acquiring existing homes is expensive! Some two-thirds of the market value of new housing stock is the value of the land, so two-thirds of this money will be spent underwriting the scarcity premiums currently being paid by renters and buyers alike. This is especially infuriating in a city where councils own one-fifth of the land. (In certain boroughs, such as Islington, it’s even higher.)
The announcement says that the number of homes bought through CHAP will be capped at 10%, representing an increase in council stock of ~2,500. At a median home value of £500k, this ~2,500 increase in stock will cost £1.25 billion of public money. This is 10-ish per cent more expensive per home than a recent regeneration project in Sutton, much of which will be funded by the private sector. New housing delivery is an increase in supply; Khan plans to spend more money per home to increase supply by zero.
Policies like this give the impression of a Mayor fundamentally unserious about fixing the problems in London housing, and reveal the lack of understanding about, or a lack of interest in, the levers that he can pull to address them.
It’s easy to complain though. What proactive steps could the Mayor make to help the housing crisis? Well, it turns out, there are plenty of things that are well within his power which would boost supply of both market-rate and social housing.
The London Plan
In the UK system, development is shaped by a ‘Local Plan’ – a binding policy document that sets out the spatial strategy, restrictions, design codes, and other considerations that apply to new development. Applications are then evaluated against this plan, as well as any regional or national rules. Does the proposed development meet the design code? Is it to be located in a conservation area, and does it meet the heightened standards for that area? Is it within guidelines for the access and environmental and waste management and crime and heritage constraints and all the other things we use the planning system to address?
The Mayor of London is responsible for the London Plan, and therefore is able to alter or supplement it. There are many changes to this document that would meaningfully improve housing delivery in London.
One such change would be to remove the current Strategic Industrial Land policy to allow much more residential/mixed redevelopment on what are currently industrial sites. As Samuel Hughes writes:
One is allowing industrial, retail and logistics sites to be redeveloped for housing. Somewhat surprisingly, there is actually a lot of scope for this. The reason is that the London Plan contains an amazing ‘Strategic Industrial Land’ policy that essentially bans housing on vast swathes of the city, requiring that they be used for industrial or retail purposes only. This is why swathes of inner London are still covered by one-storey light industrial sheds surrounded by surface-level car parks – what Create Streets call ‘boxlands’ – an astonishingly inefficient land use in a city with some of the most expensive housing in the world. Allowing some of this to be redeveloped as dense, mixed-use, traditional urbanism would make a considerable contribution to addressing the housing crisis.
Promoting more mixed-use development on this existing land by removing these restrictions could be done in a matter of weeks, and the market would move in short order to develop more housing. In the same post, Samuel also encourages estate regeneration: redeveloping existing social housing into higher-quality and higher-density schemes. This is exactly the sort of thing the AHP can be useful for. Roughly 40% of inner London is social housing, and regeneration has proven time and again to be popular with existing tenants. So far no new affordable homes have been started with the £4 billion AHP programme; this would be a smart place to begin.
The London Plan encourages the development of surplus TfL land for housing on “all suitable and available brownfield sites”. This requirement could be strengthened, compelling TfL to allow residential development over their stations. Many tube stations are single- or two-story and could easily support a few dozen flats built over them with appropriate foundation engineering:
Borough Tube Station, yet another example of the horrendous use of space in Central London
Aside from increasing housing stock simpliciter, this would enable more housing stock directly above and/or adjacent to public transport, which is (almost by definition) the most efficient place to put it. TfL have a lot of land that could be redeveloped, and since it is already publicly-owned a significant part of the value uplift could be directed to improving transportation infrastructure, to the benefit of all Londoners.
There are also many restrictions to development in central London that harm our ability to build more homes. Approximately 15% of London land is designated as a conservation area, which goes as high as 72% in Kensington and Chelsea and 77% in Westminster. Removing some of these heritage designations and relying on design codes to prevent the most egregious architectural errors could help simplify brownfield redevelopment.
Similarly, 22% of London land lies within the Green Belt; a policy designed not protect the environment nor to give Londoners access to nature, but merely to contain urban development. Much Green Belt land is not green at all, and could be added to brownfield registers, producing a marked improvement in the quality of the urban landscape and increasing housing supply to boot.
There are other regulations in the London Plan that could be removed to help drive housing delivery. There are no national requirements on minimum sizes of housing stock, but following some national guidelines the London Plan sets both minimum gross internal floor areas (39m2 for a one-bed, one-person home; over four times larger than the equivalent number for Paris) and minimum bedroom sizes, along with levers of veto to discourage the development of one-bedroom studio flats. These restrictions could be loosened, allowing for greater density and the freedom for poorer workers or students to decide whether they wish to trade off living centrally for less space (see, eg, the chambres de bonne of Paris; read the excellent Order without Design for more on this topic).
And, of course, most of all, the Local Plan could include much more aggressive density guidelines, encouraging both high-rise development in central locations and mid-rise gentle density in Zone 2 and the suburbs. Densification must be a big part of the story: if London had the same density as Paris, there would be 30 million Londoners! The Mayor has the power to suggest and even make these sorts of amendments to the London Plan. It is either a failure of imagination or a failure of competence that he doesn’t.
Advocacy and Lobbying
A lot of the Mayor’s power comes from advocacy and lobbying. The Mayor could be a lot more muscular with borough councils on hitting housing targets, for instance, as well as pushing for new regional infrastructure funding, such as the ill-fated Crossrail 2, which will drive value uplift and could even be paid for in part by releasing council land to the market through mechanisms like Community Land Auctions. This could both increase supply and also make it easier to commute into central London from currently underserved places, increasing the effective accessible size of the city and encouraging further agglomeration effects.
There are other, softer levers that the Mayor can use to encourage housing development. He can push for much more transparency and reporting on development density within Greater London. He can call on London MPs to support development in their constituencies. His office could also provide support for digital local plans, digital tree protection orders, and other technological innovations that help add clarity and certainty to the system.
Finally, under no circumstances should he be advocating for rent controls, mortgage payment freezes, or anti-gentrification policies, ideas that have proven time and again to not work. They might appeal ideologically to his base, but they make the problem worse, not better.
Strategically Important Applications
In cases where borough councils are especially intransigent, the Mayor has powers to take over strategically important applications to help push them through (which is especially important in cases where larger housing developments face asymmetrically NIMBY local opposition, such as Helen Hayes’s opposition to a 100% affordable housing development because it was seven stories tall, or Greg Hands’s opposition to a new high-rise development in Earl’s Court).
The Mayor should be much bolder in doing this. Significant amounts of London could be given strategically important status, enabling fast-track approvals and providing financing through public-private partnerships via the London Development Agency.
In many cases it could also help local authorities reorient their development away from institutional capture by NIMBYism, by providing political cover. They can blame the Mayor on new development, and gradually enjoy the benefits of an increased tax base and better urban design and infrastructure. I’m sure that plenty of councillors and planning officers would support such development privately.
Conclusion
None of these interventions are silver bullets, and reasonable people can disagree about the details. But the Mayor has a substantial amount of power that he lacks the political courage, interest, or infrastructure to wield. Most importantly: he needs to say loudly, to Westminster, to the councils and constituencies within his jurisdiction, and to the rest of the country, that London should continue to densify, continue to grow, and continue to build.