Sadiq Khan’s plans to bring in a 50% affordable housing provision on London sites has come under renewed pressure, as GLA members unpick a plan to apply the ratio to a Transport for London site in Kidbrooke.
Tory members of the administration says a demand for increased affordable housing collides with Transport for London’s mission of achieving best value for its assets. They argue that TfL’s mandate requires it to maximise profits when selling assets, under GLA legislation. And, if the organisation is pushed into selling sites at lower than optimum prices, then it will face a shortfall in its plans to fund key infrastructure upgrades from the asset sales.
The south London site has the potential for 400 homes to be developed. Greenwich borough, in which it sits, currently requires 35% affordable housing from developments. Khan has promised the site will be the first of a “wave of sites” that will deliver thousands of new homes. Alongside a national rail station, the project will include a one acre site owned by Network Rail and will also deliver an upgrade to the Henley Cross bus station.
TfL will look for a development partner to take the project forward, with the aim of completing it by 2020.
Said Khan: “Getting homes built on public land can be hard,–but after being elected I set to work immediately to make sure we get building on more of the hundreds of sites owned by Transport for London, stretching right across the capital, that have been allowed to languish unused for far too long. This site in Kidbrooke will be the first of many we are fast-tracking to build genuinely affordable homes for Londoners.”
Graeme Craig, TfL commercial development director added: “Kidbrooke is the first of over a hundred sites that we are looking to develop to help us meet London’s critical need for housing. This is also one of a number of ways we’re generating substantial non-fare revenue to reinvest in modernising London’s network to make it better for everyone.”
But Keith Prince, Conservative transport spokesman on the GLA, said: “Selling Transport for London’s land with a massive 50% affordable housing requirement ensures it will be sold for well under market value. Sadiq should have checked if selling TfL land for under market value was legal before promising this requirement, as all bodies have to achieve best value when selling public property.”
“Not only could it have legal repercussions, it is bad for an organisation that has a £640million Khan-fares-freeze sized hole to fill in their budget.”
The mayor’s office responded: “Sadiq has asked TfL to deliver 50 per cent affordable housing across their portfolio of sites and to balance this with a need to boost income.”
“This land at Kidbrooke lay largely unused for the previous Mayor’s entire time in office, but under the new Mayor’s direction will now both generate income for TfL and see hundreds of new homes built – half of which will be affordable homes for Londoners to rent and buy.”
Reports suggest Khan can issue a “mayoral direction” to order TfL to sell at a lower price, in order to achieve his desired outcome. A briefing document on the site also explores the possibility of a joint venture vehicle to take ownership of the site, or the mayor using grant funding to make up any shortfall.
LPA Perspective: This smells like a politically motivated roughing up of Khan, the first of many similar skirmishes as his political rivals hold policy to account. But it touches on a major issue, which needs to be further aired and clarified: should public bodies that own sites seek the highest price, or best value?
A similar issue was recently aired at a GLA committee, where a London region of the National Health Service admitted it had beaten down local planners on affordable housing, in order to raise the open market value of a site. The reason was because that local organisation needed as much money as possible, to plough into a new hospital. No matter that more affordable homes could, perhaps, have housed the very nurses and junior doctors needed at the new hospital.
Indeed, should Transport for London sell at all? As an organisation with a long term view, perhaps it should be building houses for rent on its land assets, and then enjoying a rental return in perpetuity, rather than a single lump sum from a site sale.
If Khan can come up with a clearer policy on how public bodies should square this circle, much time and effort could be saved – and this argument about under-exploitation of public assets might actually be laid to rest.