Ken Livingstone’s ability to get major political issues aired and debated was demonstrated again yesterday with his speech on housing, which focused mainly on the private rented sector. He raised 2 key proposals which have got extensive coverage, for example here and here and here.
First, that he will launch a campaign for a London Living Rent. Possibly mischievously this has been interpreted as calling for a rent cap or rent control, but it is a different concept. It is about launching a campaign to raise the issue of excessively high and unaffordable rents, to undertake research into what is genuinely affordable compared to incomes, to set a benchmark against which real rents can be compared, and to develop ideas for future regulation. He argued that no one should pay more than a third of their income in rent (the traditional measure of affordability used extensively in the past is 35%, and there is more debate to be had about the precise level), and that rents had risen by 12% in the capital last year with no benefits for tenants in terms of improvements in the quality of the housing provided.
LLR obviously has parallels with the London Living Wage, which started as a campaign arguing that the minimum wage was unacceptably low given the costs of living in London, then gained traction when it was endorsed by Ken as Mayor and others, then developed into a reference wage now used by many employers. In that case, no legislation was needed, no mayoral powers were needed, but the campaigning skills of London Citizens, the mayor and others made a huge difference to the living standards of many people on low incomes.
Ken made the point that rent control has served some cities well, and cited New York. Research published last month by LSE showed that the countries with the most successful private rented sectors, like Germany, embrace both a measure of rent control and a stronger degree of security of tenure, which give confidence to both landlords and tenants. In London, excessively high rents fuel inflation, firms have to pay more to attract staff and the high cost of living remains a key barrier to London’s economic growth.
Of course Boris Johnson made asinine comments in reply. He says the mayor has no powers in relation to this, but fails to recognise that Ken achieved huge amounts in housing in London between 2000-2008 despite having few housing powers – he made advances by showing leadership and by using his planning powers in innovative and dynamic ways. Johnson achieves less despite the fact that he has stronger powers; regrettably they are not applied to serving the interests of Londoners. He also, equally ignorantly, said that rent control would dry up the market, but the evidence from major cities elsewhere shows that this is far from the case. The truth is that he is a laissez faire politician who believes in letting the market do its thing, whatever the cost to Londoners.
Ken’s second proposal was to establish a non-profit lettings agency. Although working across the spectrum of private renting, the agency would be likely to focus on the housing benefit market. As landlords become more resistant to taking tenants on housing benefit because of their fears that they will fall into arrears following the cuts to local housing allowance, the aim of the agency would be to put ‘good tenants in touch with good landlords’ to help modernise and professionalise the sector, and to cut costs for both sides. It would help develop smart regulation of the sector based on accreditation, licensing, enforcement of standards, and tenant deposit protection.
There is increasing anger at the role of agents in the housing market. Some are members of regulatory associations and try to provide services against a decent code of practice. Others are not, and encourage what Ken called ‘the churn and burn approach’. Agents get paid more for finding new tenants and rents tend to rise fastest when there is a high turnover – decent landlords tend to reward decent tenants by not increasing rents as fast as they would for a new tenant. The role of such agents therefore undermines the fair operation of the market, leads to unnecessary churn, and doesn’t even benefit landlords because they end up having to cope with void periods when no rental income is coming in.
Johnson again was against this. Just as his government has made clear it is on the side of the bankers versus the people, he is on the side of the estate agents versus the tenants. He has nothing to offer private tenants, and the fact that Ken has made the running on housing just as he has made the running on fares is a good sign that Johnson might be on his bike come May.
Ken has played a huge part in politics for a long time because he is willing to kick the hornet’s nest and provoke a real debate about the big issues that face ordinary people. The housing hornet’s nest has been waiting to be kicked for a very long time.