Boris plans London housing enterprise zones

London mayor Boris Johnson is looking to identify 10 enterprise zone-style residential areas which would enjoy 'light touch' planning regimes as part of a bid to deal with the capital's housing shortage.

London: mayor plans housebuilding boost
London: mayor plans housebuilding boost

The move is one of a package of measures contained in his just-published draft London Housing Strategy, which says the capital needs to build 42,000 new homes a year for the next 25 years.

This is significantly higher than recent construction levels of around 20,000 units a year.

The document, which is out to consultation until 17 February next year, breaks down the 42,000 homes a year as 15,000 affordable properties and 5,000 for long-term market rent, with the remainder for private sale.

According to the strategy, the Greater London Authority (GLA) will seek to develop new Housing Zones within some of the 33 "Opportunity Areas" designated in the London Plan, where development will be accelerated.

It said the new zones could benefit from measures including targeted tax incentives and lighter touch planning.

According to the strategy, Johnson has asked the government to work jointly on developing options for such interventions, while the GLA is also keen to work closely with boroughs to identify potential zones and plans to publish a discussion paper in on the subject next year.

Johnson said the capital’s current housing shortage was the result more than 30 years of under-supply that needed to be rectified by doubling construction.

"This requires a radical shift in how we prioritise housing to ensure we do not compromise our economic growth, and a collective effort from City Hall, government, and industry to treat housing as an essential infrastructure," he said.

"We are overseeing the largest release of public land for a generation to ensure we maximize housing supply".

The strategy also proposes:
  • The exploration of the potential to give councils more borrowing flexibility to fund housing development;
  • Looking at the creation of a "London housing bank" that could help to underwrite large-scale schemes or purchase market homes off-plan to help spur housing supply – a pilot worth a minimum £160 million is envisaged; and
  • Working with councils and developers to remove barriers to construction starting on sites with unimplemented planning permission in the capital – thought to amount to more than 200,000 homes.

Ian Fletcher, director of policy at lobby group the British Property Federation said that at a time when latest official statistics indicated that housebuilding was finally picking up across the country, measures such as tax incentives and lighter touch planning processes would allow the capital to capitalise on the momentum.

"The proposals laid out in today's draft housing strategy are an excellent step forward on the road to tackling the housing crisis once and for all," he said.

"We are wholly supportive of the mayor's intentions, and today call on the Treasury to help bring them into fruition through targeted tax and planning assistance, so that plans and ideas can become real investment and house building."

Ian Liddell, head of development at consultancy WSP, said the target of building 42,000 homes a year was a huge challenge.

"It’s hard to imagine, without significant change and investment, how we’re going to make a 50 per cent leap in house building year on year, particularly as only 12 of the 33 Opportunity Areas have agreed planning frameworks in place," he said.

"The only way to achieve this is give the mayor greater control over the planning system to fast-track development and infrastructure."

London Assembly member Tom Copley, who is Labour’s housing spokesman for the capital, said the strategy underestimated the city’s housing need.

"Independent experts believe we need at least 60,000 [homes] a year," he said.

"Funding for building affordable housing has dropped from £1.2 billion a year between 2008 and 2011 to just £1 billion for the whole of 2015 to 2018."

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