1. Accelerating Housing Development in London Findings and Recommendations Nancy Holman, Kath Scanlon and Christine Whitehead LSE London 23 June 2016 LSE

2. The Goal: 50,000 homes—more than double 2015/16 completions The Question What should be done now---and in the longer term---to make that happen?

3. Why is London different? Demand: –demographics –transport –range of available jobs –economic growth Supply: –flexible housing stock but –very expensive land, most of which is brownfield

4. …and further Size of social - market rent gap Shortage of intermediate and cheap housing Rental housing makes sense for more people than in the rest of the country Complex governance – 33 boroughs + GLA

5. Opportunities New mayor Political goodwill Better incentives for local authorities to allow development Possible changes in CPO powers

6. What should we be looking at? 1) Planning certainty Current system is costly, risky, time-consuming and encourages gaming ‘Viability’ rules make affordable housing harder to achieve

7. What could be done? A tariff would certainty and speed but provide less affordable housing on high-value sites At minimum we need –transparency of viability calculations –more expertise in local authorities and –incentives for developers to accept reasonable affordable-housing contributions

8. But most importantly The capacity to re-visit agreements through the viability policy should be revoked

9. What should we be looking at? 2) Housing Zones Currently 31, covering historically problematic areas Goal: 77,000 homes, 1/3 affordable Stakeholders jointly focus on well- defined ends Identified pinch points Real (though small) money available But no changes in planning powers

10. What could be done? Zones are promising BUT we should not dilute the concept – not helpful to do too many at the same time Make the current set work before adding more designations.

11. What should we be looking at? 3) Large sites The contribution of large sites in London, 2009-14 In 8 boroughs it would take 250 years to build these sites out at current rates Size in units % units in pipeline % of completions Number of completions Over 150027%1%<300 500-149920%4%< 2,500

12. …and small sites Numbers of small builders in London have fallen massively…and continue to fall Hard for them to play a role on large sites Difficult to find appropriate small sites Problems with finance and costs of planning permission

13. What could be done? On large sites Increase number of developers and types of unit on each site On small sites Better access to public/infill sites via –dedicated GLA support team –dissemination of good practice –standardisation of planning/legal processes

14. …and also Encourage different types of housing –custom build –modern methods of construction –community-led models –niche markets

15. What should we be looking at? 4) Purpose-built PRS housing Big advantage: speed 3,500 completed in London and15,000 in the pipeline Most investors require subsidy or guarantees. Long-term commitment? Rents generally high, and little contribution of genuinely affordable housing

16. What could be done? Some investors would provide discounted market-rent units if they could retain ownership but LAs uncertain Established corporate landlords should be permitted to control and manage affordable units HAs and local authorities should be encouraged to take larger role in market housing

17. What should we be looking at? 5) National policies and London reality National policy: owner-occupation – doesn’t work in large parts of London Housing & Planning Act will reduce quantum of affordable housing in London Boroughs hemmed in by rules on spending RTB receipts and housing homeless

18. What could be done? Central government: –encourage a flexible London-wide approach to housing targets, including more focus on rental Boroughs/GLA/central government: –agree a way to use RTB receipts and apply modified Starter-Homes provisions on a London-wide basis

19. …and importantly Everyone: –Recognise that deal making is possible—and necessary

20. Final observations 50,000 units is a massive challenge High % affordable: even more challenging Trajectory has been generally good except on affordability Governance a major issue – and devolution may be more difficult in London than in other cities Need a coherent programme of change

21. Conclusions The Mayor’s next London Plan must deal decisively with the housing issue (and much else) Trade-offs, deals, simplification and transparency are key Our recommendations are a start but on their own not enough….

22. Recap: our recommendations 1.Greater planning transparency, more expertise in local authorities and incentives for more affordable housing 2.Get rid of the viability rules 3.Make existing Housing Zones work 4.Get more developers on big sites and make more public land available to small builders 5.Let major corporate landlords manage affordable units 6.Adopt London-wide approach to RTB receipts and Starter Homes provisions 7.Make deals