Sadiq Khan has called for TfL to sell its land to developers at below market value in order to provide the 50% affordable housing pledge from his manifesto.
This really shouldn’t come as a surprise, particularly given the recent noises from city hall about a blanket 35% affordable housing requirement on private developments. Many within the development industry have long called for such a move as the price of land drives up development costs and makes it difficult to provide a high level of affordable housing.
Public land in London is vital if the capital is going to reach its significant housing target. TfL has land available to provide a significant number of homes, as such this policy is likely to be supported by Londoners and the development community alike.
However, the challenge for London goes far beyond just the level of affordable housing provided. The tenure is also a crucial factor. Many London Boroughs have struggled to incorporate shared ownership effectively and the previous Conservative administration’s starter homes remain, as yet, unclarified.
Some Boroughs, such as Camden, are looking to remove shared ownership entirely from their emerging plans. Starter homes are a very ‘conservative’ idea and as such were never likely to find a great deal of support within the more Labour capital. Developers may find that a useful bargaining tool will be increasing the level of social rented homes within their tenure mix.
Those Councils that have already set up their own development companies will see an opportunity to build up their own land and develop it themselves. This will likely lead to increased competition for land so the private sector may need to get creative.
It is good to see the Mayor tackling housing head on, however the sale of public land must be able to demonstrate value for the taxpayer (as the investors in TfL). The provision of affordable housing, even a newly formed ‘Homes for Londoners’ class, could be exactly the sort of ‘value for money’ public sector leaders are looking for and will be welcomed by many.