New deputy mayor for housing James Murray failed to impress members of the housing committee of GLA, at his first appearance.
Questioned on his plans to improve housebuilding in the capital, Murray laid out his ideas to improve affordable housing provision, and to work more closely with housing associations. But he said any targets would depend on a revision of the London Plan, and would need more clarity from government on funding.
Committee chairman Andrew Boff declared himself underwhelmed after the meeting, telling Property Week the new administration is too laid back: “They should at least tell Londoners when they’re going to get somewhere and exactly what they’re going to provide. They’ve got the worst of two worlds. They’re saying that there may or may not be a 50% affordable housing target on development, which is going to be a disincentive to develop.”
Questioned at the meeting by Boff, over what targets he would set, Murray responded: “Any target which is going to be set Londonwide will be included in a new London Plan,” something that the mayor is reviewing urgently. “So the actual numbers will become clear.” He added he would “make sure we focus on what sort of homes we are building within any numerical target that is set”.
Boff also wanted to know if homes would be “genuinely affordable”. Murray responded: “You have to have a range of different affordable products,” and that would include “social or submarket rent, a London living rent product which we are keen to develop, including shared ownership, which we see as a good route for first time buyers. We want to make sure all those products are within the geniunely affordable bracket.”
Pressed once more on a building target, he said: “There is a general feeling that we need to increase the number of homes being built in London massively.” Whilt a new target would be defined in an updated London Plan, he acknowledged that preparing it was a “frustratingly slow” process. “That could take two years, how are you going to measure your success in the meantime?” pondered Boff.
“City Hall cannot do this alone,” said Murray. He is speaking to councils, housing associations, businesses and government “to make sure we have the funding, the resources we need”. But he acknowledged that funding remains “the elephant in the room” that needs sorting out.
On planning, Murray said he hoped for more “confidence and certainty” from the planning system. And he added: “What we’re keen to do quite quickly is to make sure that we develop a framework for build to rent investments whereby you have appropriate planning treatments, whereby you have understanding of how things are treated in terms of, do you covenant the land, how do you make sure it’s earmarked for private rent and so on – what is the right way of doing that to make sure that we encourage that investment and give it a real backing from City Hall.”
Murray confirmed the mayor’s affordable aspirations: “We want to increase affordable housing across the board.” The team is still looking at mechanisms to transition from current situation to the target of 50% – “making sure the route there is done with care”.
He declared himself supportive of housing zones: “What we’ve been starting to discuss is, are there areas where greater capacity is needed to help drive forward the overall development of an area.”
“It’s all very well designating an area as a housing zone,but if it then needs extra capacity to help bring things together and drive development, that’s where we need to identify where extra resource might be necessary.” City Hall to act in support.
City hall wants strategic relationship with housing assocs. “If you’re giving grant to housing associations, you tend to give it on quite a piecemeal basis. You tend to have quite a transactional relationship with them. Where housing associations are keen to move toward, and I think where there is opportunity for us to forge a new relationship, is where you have a medium or long term relationship, where you look at their overall development pipeline, and you say ‘what do you need to accelerate these big schemes – do you need a bit of help in terms of unlocking infrastructure, do you need some money to help the tenure mix’…. so I think it’s about looking at their overall programmes and working out what they need over a few years. This will only be possible if we have funding certainty.”
Committee member Tom Copley was concerned that some housing associations are moving away from their social mission: “Will you also be a critical friend – I am slightly concerned…..that some of them seem to be transitioning more like private developers. I have nothing against them cross-subsidising, but it seems to me they’re building an awful lot of private.”
Murray: “The emphasis is on genuinely affordable is across the board. Housing associations are an absolutely key player in that.”
Copley also asked about other aspirations. “Do you see Homes for Londoners evolving into a landlord, directly providing housing, not just commissioning it?”
Murray replied: “I think in the immediate term, the thing to do would be to get building, so I think setting up a landlord function would be a bit of a stretch.”
LPA Perspective: Murray’s first interrogation at the hands of the housing committee delivered some broad brush strokes indicating the direction of travel. But there was nothing, as yet, that will really start moving the housebuilding needle in London. And, with Brexit debates in full swing, many in development are finding them a reason to delay taking important decisions on new developments.
So the new mayor’s 50% affordable housing target remains a distant threat, not likely to materialise until a new iteration of the London Plan wends its way, slowly, through its adoption process. In the meantime, we are promised a ratcheting up of expectations from current levels, and City Hall has said it will help boroughs defend viability arguments that seek to knock back the amount of affordable delivered.
But until funding from central government is agreed, some of Murray’s plans will be held up. Greater long term planning with housing associations is welcome, but will only happen if the on-off funding tap can be fixed.
The meeting also skirted around the elephant in the room – the role of housing associations. Murray said he is keen to work with housing associations, but admitted he had a skirmish with some of them in the last year, over policy towards starter homes. And comments from some of the housing committee drew attention to the inherent tensions within this sector.
Some housing associations are keen to turn their back on affordable housing provision, fed up with diminishing grants and capped rents; yet they are structured, almost universally, as charities, which have at their heart a social, rather than a commercial role. Copley may not like them acting as private developers, but the funding environment has pushed many towards developing homes for profit (either rented, or sold), as the only practical way to ensure they can fund their social housing plans.