Khan's goal of 50% affordable housing in London would require a revolution, by Richard Garlick

London's new mayor Sadiq Khan wants 50 per cent of new homes built in the capital to be "genuinely affordable".

James Murray, his new deputy mayor for housing and the former housing lead at Islington Council, is the person charged with making this happen. The task is formidable. Only a quarter of the homes built in London in 2014-15 were affordable, and Khan last week claimed that the proportion in the planning pipeline is around one in eight. Bringing that share up to 50 per cent would require a revolution in housing provision in London. How do Khan and Murray think it can be done?

Murray highlights one factor as crucial. He argues that landowners need to know that planning authorities are serious about achieving the level of affordable housing stipulated in their local plans. If landowners do not believe this, they won't accept prices for their sites that are low enough to allow for that proportion of affordable homes, he reasons. In the New Statesman last year, he wrote that London should "reset the terms for dealing with developers through clear affordable housing requirements that are robustly enforced".

This sort of bullish talk explains the reports that some property industry figures lobbied hard against Murray's appointment. The lobbyists will no doubt have pointed out that, were rigid affordable housing requirements to drive down land prices, landowners might simply decide to hang onto their assets, rather than sell them at rates that would make significant affordable housing viable.

Nonetheless, there is some heavyweight support for firm affordable housing quotas among housebuilders. Both Berkeley Group and Barratt Developments have said that, subject to certain conditions, they would support the imposition of a requirement for 30 per cent affordable housing on large new London schemes. "If you tell us guys to produce 30 per cent affordable, we will adjust the land value," Berkeley Group chairman Tony Pidgley told Planning in March.

Whether such an offer would be adequate for Khan to achieve his goal is open to question, even if affordable homes on housebuilder-led projects were supplemented by schemes on mayoral land with a higher proportion of social housing.

Anyway, Murray has already said that the mayor will consider affordable housing on a site-by-site basis. This would seem to rule out a flat rate, although Murray has also said that the mayor is considering a minimum percentage of affordable homes on housing schemes.

Murray also told trade publication Property Week that the mayor's 50 per cent target is a long-term strategic objective, presumably aiming to manage expectations about how soon it will be achieved. He seems to want to reassure developers that the mayor will not be unreasonably dogmatic about affordable housing.

Nonetheless, for reasons that Murray has himself explained, the mayor can't afford to be too emollient on this issue if he is to reach his goal. Khan will need to send out a message that he will be firm about his affordable housing requirements if he is to change the way the London property market prices land.

Richard Garlick, editor, Planning richard.garlick@haymarket.com  


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