Kath Scanlon, Christine Whitehead and Nancy Holman Rising to the challenge: London’s housing crisis Kath Scanlon, Christine Whitehead and Nancy Holman London School of Economics 1 December 2016

Our interim view in June 2016 We now have a real opportunity with many things pointing in the right direction BUT there has to be a coherent package not just tinkering We identified five core issues: Planning certainty and viability: the system is dysfunctional Large sites need infrastructure and there aren’t enough small sites Purpose-built PRS showing promise Housing Zones focus attention but few results yet Policy and expenditure often works better at London-wide level

What we did in summer/autumn Talking with stakeholders better to understand their priorities: Land availability/ green belt Viability Local planning powers including impact of permitted development Build to Rent space standards and modified regulation to make it work Addressing homelessness London housing policy specifics - notably emphasis on owner-occupation

Addressing the issues: London Data Net new additions > 30,000 for last year of old Mayor’s regime (some of it from permitted development) GLA SPG on affordable housing and viability and Build to Rent London Living Rent

Addressing the issues: national Autumn Statement Funding for 90,000 affordable homes in London (not all new) – calling London’s bluff? Infrastructure funding for LAs tied to enabling housing More freedom on mix of affordable Some minor changes to help homelessness White Paper (expected later in ‘autumn’ – now January) to set out coherent approach covering viability? objectively assessed need? site development timetables? etc etc?

Affordable housing and viability GLA’s new approach: developers offering ≥ 35% affordable housing will not have negotiate or provide viability information Should—in principle—lead to greater certainty and affect land values …and increase % of affordable housing from current levels Actual impact will depend on how market perceives—an experiment in behavioural economics

Large sites and small Large sites: high % of planning permissions but low % of output, reflecting standard developer business model and need for £££ of infrastructure investment Compulsory annual monitoring often not followed up Adding Build to Rent can increase build-out rate Housing Zones target medium-sized sites—focus is good but outcomes still unclear More small sites would help SME builders and improve choice

Build to Rent Advantages: professional management, speed of delivery, contribution to placemaking, meeting needs of underserved market segment but rents are relatively high and subsidy (not necessarily financial) often required Operators want to own/manage all units, including affordable (discounted market rent) —but some boroughs reluctant to allow Housing associations and local authorities now becoming involved as providers Living space and internal organisation – should standards be different from for-sale units?

Permitted development Does provide a lot of units so at some level it works Doesn’t provide affordable housing or community facilities—and this should be changed There may be a trade-off between numbers and quality cf Vantage Point (Archway): TfL continue to own land and gets good rental return. Space standards based on tenants spending more time outside individual homes but elsewhere in the building

‘50,000 Homes’ an ambitious goal… but not enough Into the future, younger households will face even worse conditions We call for a London Emergency Package: Money, land, and public-sector involvement Backed by central government, GLA and boroughs Providing homes for young households Proposal to be fleshed out by summer 2017