Wednesday, 26 March 2008

Ken vs Boris on the Issues (3): Housing

This is the 3rd in a series of posts on Question That examining the policy differences between Mayoral candidates Ken Livingstone and Boris Johnson.

Housing is an issue of importance to just about everyone in the city, and one over which the elected candidate will have significant power. The Mayor is directly responsible for a housing & planning budget worth more than £1 billion a year. Ken Livingstone intends to use this money to build 30,500 new homes in London every year for the next three years, including a total of 50,000 'affordable' homes, keeping to a policy target of 50% 'affordable housing' in London.

Affordable housing is a Mayoral race buzz-phrase if there ever was one. A definition provided by Ken's planning strategy document The London Plan describes affordable housing as:

"housing designed to meet the needs of households whose incomes are not sufficient to allow them to access decent and appropriate housing...[comprising] social housing, intermediate housing and, in some cases, low cost market housing." (The Draft Mayor's Housing Strategy, pg30)
This definition is required in order to contrast Ken's plans with those of Boris Johnson. Boris, too, talks about affordable homes (the word 'affordable' appears 99 times in Boris's 'Building A Better London' Housing manifesto (PDF)), and matches Ken's promise in the London Plan of 50,000 new affordable homes by 2011. However, Boris's intention to abolish Ken's policy of ensuring that 50% of new homes are 'affordable' has drawn controversy.

Boris's housing manifesto emphasises home ownership throughout. The headline policy, the introduction of a new scheme called FirstSteps, is a shared ownership-based scheme aimed at helping low-to-middle income Londoners to "get on the housing ladder". The manifesto pulls no punches about just how hard it is for Londoners to do so at present, stating for instance that choice of location for the average first time buyer is restricted to just 2 East London boroughs (Building A Better London, pg8). The pledged introduction of Below Market Rates homes would surely go some way towards alleviating this, but will it be enough?

Using Boris's stated average first-time buying price of £289,167 (BaBL, pg7), the cost of a BMR home at 20% below market rate (BaBL, pg9) would still be over £230,000, and the corresponding deposit (based on the figure given on page 7) would be around £49,570. The plan is somewhat lacking in specifics, but from what detail is provided I don't see how this is going to be much help to all but the highest of the earners who qualify for the scheme.

That leaves social housing, and private rental as the only options available to a very large proportion of Londoners. Boris Johnson proposes to abolish the London Plan target of 50% affordable homes, and attacks Ken for failing to keep to the target with regard to new developments (BaBL, pg15). The proposals to agree unit-based affordable housing targets with borough councils (BaBL, pg17) may reduce bureaucracy and streamline the process, but Boris's line has previously been criticised for not representing a firm commitment to social housing.

Both Ken and Boris have promised a boost in the supply of larger homes suitable for families, improved tenancy deposit schemes for private tenants, and investment in the renovation of London's estimated ~85,000 empty houses.

Overview: Boris Johnson's proposed abandoning of the 50% affordability target for new developments has been the headline-maker here - this time, I consider, for good reason. The Tory candidate may be right in suggesting that the target hasn't been maintained. However, the non-commitment he provides, in combination with the insufficiency of the described FirstSteps scheme in the face of London's wide gap between wages and house prices, suggests a step backwards for Londoners on average incomes and below.
Verdict: Ken's clearly the better candidate here.


Anonymous said...

The 50% target has never been achieved. In fact the proportion of 'affordable housing' has declined on Ken's watch. So what's the point of the 50% target?

Boris wants:
Release GLA-owned land and £130 million from the Regional Housing Pot to launch a new 'FirstSteps Housing Scheme', which will be open to first-time buyers frozen out of Government schemes

Work with the boroughs to build 50,000 more affordable homes by 2011

Invest £60 million from the Regional Housing Pot to start renovating the capital's 84,205 empty properties to help low-income Londoners off waiting

Incentivise the boroughs to release dormant housing to those stuck in bed and breakfast accommodation, by returning the Mayor's precept to them

Work with local councils to deliver more family-sized homes

Increase shared ownership schemes for low-income families by a third

Protect private tenants from unscrupulous landlords by publishing an online 'Fair Rents Guide'

Explore the possibility of a tenant deposit scheme with a guaranteed arbitration period of one month

Mark Wadsworth said...

Most housing policies are complete bollocks. There are 7 million people in London, at least half a million move away every year and half a million move in (or whatever). If by a miracle, you produced more 'affordable housing', then fewer people would move away and more would move in, that's all. This can only be fixed at a national level by imposing land value tax that will prevent housing bubbles arising.

QT said...

mark: I agree that the policies that I have discussed in this post are not the real answer to the problem of unaffordable housing in London. Really, it's a way of allaying the symptoms, rather than the cause. However, wider solutions like the one you suggest are not within the scope of the Mayor.