Some six months after Rishi Sunak said he was “stepping in” to sort out London’s housing crisis, we’ve finally seen some action in the form of a panel of “expert advisers” appointed by levelling up secretary Michael Gove, who’ve been given only until 15 January to report on ways to deliver more new homes in the capital.
Nobody denies that the homes are needed. Supply, at around 38,000 a year, is well below City Hall’s 52,000 a year target. More and more Londoners can’t afford to buy, and increasingly can’t afford to rent either. There are 60,000 homeless households in temporary accommodation.
But that’s where the consensus ends. Sadiq Khan’s housing delivery taskforce, convened last year precisely to look at boosting supply, affordable supply in particular, identifies cash – or the lack of it – as the key factor. The taskforce wants an extra £2.2 billion to boost City Hall’s current 2023-26 government-funded affordable homes programme and asks for certainty about future funding too.
Gove has already ruled that out, though. It was “not right or fair” for the Mayor to rely on more “public subsidy”, he told Khan in a partisan pre-Christmas broadside when announcing the panel. For the minister, it’s Khan’s planning policies, set out in his London Plan blueprint for development citywide, which are in the firing line when it comes to getting new homes built.
It’s the familiar London dilemma – how and where to get those new homes underway. Should there be “densification” in the suburbs? Should the nettle be grasped and potential Green Belt sites be looked at, or the focus be on previously-developed “brownfield” sites? Or, as many experts urge, perhaps it should be all of the above.
Gove has made his mind up here too, it seems, siding with backbench suburban warriors led by Chipping Barnet’s Theresa Villiers, who derailed the government’s 2020 planning reforms and forced the abandonment of new homes targets seen as imposed on local areas by Whitehall.
The government’s wider planning policy changes, unveiled before Christmas by Gove alongside his London announcement, make this clear: no “densification” in the suburbs if development would be “wholly out of character with the existing area” and no requirement to consider the Green Belt in pursuit of homebuilding targets.
Villiers’s patch even got its own namecheck: councils, Gove said, would “have licence to resist insensitive over-densification in areas with a defined character – whether that’s the suburbs of Bexley or Barnet”. The narrow remit of his new panel, reflects this – to advise on how the London Plan could be improved “to facilitate the delivery of new homes on brownfield sites”.
There’s one problem though: there’s simply not enough brownfield land in London to meet housing need, according to a comprehensive 2022 analysis by consultants Lichfields. Nor, according to the same consultants, will the government’s wider policies on densification “deliver the homes needed across our cities and particularly in their accessible and well-serviced suburbs”.
What is available is often costly to assemble and develop, requiring grants for land clean-up and new infrastructure. After a squeeze on industrial land too over the past two decades, commercial uses are now increasingly in demand in a growing economy. The capital “cannot afford to lose any more industrial land”, think tank Centre for London’s industrial land commission concluded recently.
As for the Green Belt, back in 2019 the inspectors scrutinising Khan’s draft London Plan concluded that it should at the very least be reviewed “if London’s development needs are to be met in future”. The government’s own planning adviser, Nicholas Boys Smith, said just last week that it could not be “preserved in aspic for ever”.
Lichfields 2022 conclusion was stark: “If the Government wants to meet its target of building 300,000 homes each year, no source of land can be ‘off the table’…greenfield land development will still be needed in every region, to meet current housing need.” Interestingly, it’s Lichfields who have been providing independent expert support to Gove’s panel, which should mean some robust discussion over the next few days before the report is due.
But if funding and options other than brownfield are off the table, what realistically might come forward from the panel? One specific target is Khan’s insistence that larger developments include at least 35 per cent affordable homes, which Gove argues imposes “such significant costs that in many cases development doesn’t go ahead at all”.
Khan argues that his policy of “fast tracking” compliant schemes through the planning process has boosted much-needed affordable supply while overall delivery is up too, disproving Gove’s claim. Its impact on viability remains a concern for developers, though, which the panel will no doubt consider.
Gove has also hinted at creating new development corporations – bodies with their own powers to determine land use and grant planning permissions across specific sites, potentially overcoming what the minister sees as mayoral brownfield heel-dragging.
Could the panel recommend this as a way to kickstart his “Docklands 2.0” ambition for “tens of thousands” of new homes eastwards along the Thames, announced back in July?
Experience suggests this is not a quick or cheap solution. As Jonathan Seager from commercial lobby group BusinessLDN has pointed out, the government will “either need to put its money where its mouth is or provide London government with the fiscal devolution to invest in the transport infrastructure that unlocks this development”.
Proposals to dilute democratic control would also be highly controversial ahead of the mayoral election in May, as would any recommendation to Whitehall to water down the Mayor’s policy on affordable homes quotas while exempting the still Conservative-leaning suburbs from densification.
For Gove, is this really about more housing? Former Tory mayoral candidate and property industry veteran Steve Norris is succinct: “His recent announcement that he’s going to be really, really tough on councils who don’t build much might have fooled some of us were it not for the enthusiasm with which his announcement was greeted by Theresa Villiers.”
How will this end up? We’ll know in less than a week’s time.
X/Twitter: Charles Wright and OnLondon. Support OnLondon.co.uk and its writers for just £5 a month of £50 a year and get things for your money too. Details HERE. Photograph: New housing in Waltham Forest.