Boris Johnson today published his second ‘Draft London Housing Strategy’, almost exactly two years after he published his first Draft London Housing Strategy. After five and a half years in power, you would think that he might have got a bit further with it by now.
To be frank, it wasn’t worth the wait. This document tells us about a long list of things that will be published in the new year – the evidence base, the prospectus for the next round of ‘affordable housing’ grants, further revisions to the London Plan. It wastes space justifying various Government policies like changes to housing allocations and the use of flexible tenancies, and the supposed value of ‘Help to Buy’. It is unconvincing in its analysis of the huge changes going on in the London housing market and fails utterly to address the challenges that have to be faced (for example the effect on the city of the projected growth in the number of households or the implications of the prediction that private renting will overtake home ownership as the biggest tenure by the mid-2020s). It also adheres to the Boris tradition for obfuscation, right down to lumping together affordable and social rented homes in the table at the end – to hide the fact that there will be none of the latter – and glossing over the further decline in funding that is available for new homes.
‘The Strategy’ is bewilderingly short of strategic assessments and nowhere does it address the key risk – what will happen to London if the population grows as predicted but insufficient homes continue to be built? 3.3m households now will become 4.4m within 25 years. There is a long term requirement for up to 60,000 extra homes a year but even the strategy’s highly optimistic assumptions only lead to 45,000 – against a historic average achievement of 20,000 a year in the last 20 years. Nothing is proposed to deal with big current issues like new housing developments being advertised abroad and sold off plan before any Londoner has even considered whether they can buy one. Despite becoming the dominant tenure, the strategy makes it clear that the private rented sector is to be regulated by platitudes.
Looking for the beef amongst the waffle, there are some suggestion as to how the ever diminishing pot of money available to London will be spent. The strategy sets an ‘interim’ target (interim, after 5 years consideration?), to guide funding for the period 2015-2018, that there should be at least 15,000 ‘affordable homes’ each year. Of these, Johnson says 40% will be flexible low cost home ownership and 60% will be ‘affordable rent’.
Of the affordable rent, half (4,500) will be capped at ‘low affordable rents’, prioritised to those in greatest need and in low income employment, and let without security of tenure (ie on fixed term tenancies). Many of these will be smaller homes targeted at under-occupying households. ‘Low affordable rents’ is simply not defined but is very unlikely to be as low as social or target rents. The other half will be at ‘discounted’ rents set at either 80% of market rates or at the local housing allowance level. These will be targeted at people in work, but it is unclear as to whether these will be people who qualify for in-work housing benefit or people on much higher incomes. If it is the latter, then the money is being misapplied; if it is the former, it will add pointlessly to the housing benefit bill – it would have been better to spend the money on subsidy to keep the rents down in the first place.
So, there will be no new homes set at existing social rents. And worse, housing associations will be encouraged (on pain of not getting a contract for 2015-18) to ‘dispose’ of existing stock to generate funds for the new programme, and to ‘convert’ existing social rented homes into ‘affordable rent’ at up to 80% of market levels when they become available to let. No assessment is made of balance between the number of new homes gained and the number of existing homes lost as a result of this policy.
The strategy adopts the usual Tory stance of suggesting new priorities for social housing allocations, in this case people in work, without ever addressing the issue of who will be less of a priority as a result. It is a fiction that the strategy is ‘balanced with the need to ensure the most vulnerable are looked after.’ As is evidenced by the almost dismissive discussion of homelessness, the most vulnerable are being abandoned.
I doubt if it will make him feel better, but there are a small number of proposals with which I agree, largely to do with funding. A London housing bank would probably be a good thing. I welcome the mayor’s support for lifting the cap on council borrowing for new homes using HRA resources. Major reform of property and land taxation is worth pursuing, although I note this document admits that the reform would have to be fiscally neutral. His general support for shifting funding from ‘benefits to bricks’ is also welcome although the policies in this strategy will push rents up and make the problem worse. I would also have my eye on housing association surpluses but I think Johnson misjudges the state of their finances and how they have been impacted by the first round of ‘affordable rent’. It is also good to see that there is a further move towards pan-London lettings, a process started by Ken Livingstone when he was Mayor which seemed to have stalled.
In amongst the pretty pictures of nice new houses, this strategy is largely about ending social rented housing in London, abandoning the poorest Londoners to the private rented sector – potentially at great cost in housing benefit, and deluding a generation of Londoners that there will be a home ownership option for them when the tenure is in steep decline. There is no vision, there is no appreciation of the scale of what is needed, and there is no honesty about the constraints imposed by austerity. Can we have another draft draft draft please?
About my last blog, which had a blank page under the heading ‘What the London mayor knows about housing’, I have to own up to the idea not being entirely original. Decades ago, a wonderful footballer called Len Shackleton, who scored 6 goals on his debut for Newcastle United but then disgraced himself by also playing for Sunderland, wrote an autobiography. Known as the Clown Prince of Soccer, Shackleton had a chapter called ‘What the average football director knows about football’ above a blank page.
*No Direction Home was the name of the Martin Scorsese film of the life of Bob Dylan.