Even the developers think the Government’s latest affordable housing scam will damage the fabric of London

4th February, 2015 4:04 pm

You know your policy must be bad when even the people who stand to gain condemn it. That’s what has happened with the Government’s latest proposals to exempt developers from affordable housing contributions if they convert empty office space into housing. A lobby group representing a number of leading developers including British Land, the Crown Estate and Grosvenor Estates and Tory Donors, wrote to Housing Minister lambasting the idea for threatening London’s social mix.

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Commenting on the proposals, the Westminster Property Association’s letter said: ‘It removes an important element of developer contribution to the provision of affordable housing. The unintended consequences of such policies will actually lead to a further erosion of the ability of people from a wide range of backgrounds to live in the heart of the capital.’ The developers realise that in order to keep the public onside, they must show some consideration of wider social issues. This is an intelligent and important intervention which highlights the failings of the current mayor.

City of Westminster Council said it stands to lose up to £1bn from the policy – but eroding local government has never really seemed to worry the Tories who are in power.

London needs more housing. That, in essence, is the longer-term solution to the affordability crisis – it’s a supply and demand issue. Build enough housing and the price should (in principle, but I’m not sure how reliable economist have proved to be) come down. We do not need a further policy to line the pockets of wealthy developers by providing more homes for the super-wealthy in the heart of the capital – at the expense of ordinary Londoners who need to live and work in the city.

In the short-term, more robust action needs to be taken on prices. The rental sector has spiralled out of control. That’s why I believe reforms are necessary to ensure that tenants are not being ripped off and have security in their homes. We need to keep prices affordable for ordinary people but while respecting the right of the landlord to increase rents where necessary. The way forward is a fair rent system which restricts rent increases and ensures that private rented housing becomes genuinely affordable again. Otherwise London risks losing the skills it needs to thrive, as talented young people will no longer be able to come to the capital.

We also need to ensure our communities remain diverse and vibrant. Ripping potential business space out of a community to turn it into luxury housing (which will probably remain empty most of the time as it is bought up by overseas investors) and without providing any further affordable housing will decimate our city’s communities. It great to see the developers standing up for this but in reality, we should not be leaving this up to companies; we should have a strong Mayor who makes goods policies to keep London vibrant; and that’s the Mayor I would be.

Christian Wolmar is seeking the Labour nomination for the 2016 London mayoral election

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  • Ian

    Great to see a Labour politician not afraid to stand up for the interests of developers and big business.

  • PATRICKNEWMAN

    Caution about the relationship between new build and house prices is wise. Essentially supply is inelastic but demand….! Even a 200,000 annual build is at best adding only one percent to the supply and that assumes no loss of stock. London is the cauldron of prices and we are getting near the 10:1 ratio of the most expensive to the cheapest between outside London and say up North – for equivalent properties. There is no market solution available in London. It has to be controlled by the public sector and one wonders if a London wide housing authority with both commissioning and purchasing power but working under a national plan of building more affordable and social housing is needed. Economic regeneration in the regions would help. Study the economic effects of the massive migration of the BBC to Manchester?

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