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Mayoral Development Corporations not always easy answer, conference hears

Screenshot 2024 11 13 at 14.13.34

Screenshot 2024 11 13 at 14.13.34

The capital’s housing crisis loomed large over proceedings at think tank Centre for London’s annual conference yesterday, with the gathering reminded that one in four Londoners is living in poverty after housing costs are taken into account, that boroughs are at risk of running out of money due to the soaring costs of managing homelessness, and that ambitious new homes targets are looking increasingly unachievable.

In his keynote speech, Sadiq Khan (pictured) was blunt. “The truth is we’re in the midst of the most difficult period for housebuilding in the capital since the global financial crash of 2008,” he said. “If there was ever a time for more public investment in housing then it’s now.”

Such investment would also boost economic growth, the Mayor said, unveiling ground-breaking analysis revealing that rising house prices are a drag on the economy, whereas falls would have the opposite effect – just a one per cent improvement in affordability could deliver a £7 billion boost to the capital’s economy over ten years.

Could Mayoral Development Corporations (MDCs), with City Hall taking planning decision-making away from boroughs in designated areas in order to turbocharge housebuilding, be a way forward, as Khan has hinted? That was one of the questions posed to conference attendees.

The Mayor has significant powers under the Localism Act 2011 to create MDCs, but to date only two have been designated: the London Legacy MDC, set up to lead the development of the 2012 Olympics site, and the Old Oak and Park Royal (OPDC) MDC around the HS2 station and interchange now under construction and an important industrial park.

But that number could soon increase. “I will take decisive action where needed to…set up more Mayoral Development Corporations to boost overall housing supply and drive regeneration,” Khan said in his election manifesto in May. He has already announced he intends to use an MDC to bring forward the pedestrianisation of Oxford Street – a plan that has previously blocked by Westminster Council – and its boundary is expected to encompass its surrounding area too. Centre for London itself has proposed using MDCs to develop lower-quality areas of Green Belt land.

Are MDCs the way forward? At the conference OPDC chief executive David Lunts was cautious. His MDC had been established in 2015 by then London Mayor Boris Johnson, as a single body to develop the city’s largest “brownfield” site, around the proposed HS2 station, which straddles three boroughs, Ealing, Brent and Hammersmith and Fulham, with a target to build some 25,000 homes.

Transport links were already in place, with more planned, and much of the site was in public, albeit disparate, ownership, Lunts said. “But we started with no money and no assets of our own,” he added. “Everything had to be negotiated.”

The OPDC had “struggled” during the transition from Johnson to Khan, initially doubtful about what had been seen as a “vanity” project of the Tory Mayor, Lunts admitted. But plans are now agreed between the various public landowners, including government departments and Network Rail, effectively to consolidate their holdings into a single site ahead of getting developers in place next year. Two thousand homes have been completed, Lunts said, with a further 6,000 in the pipeline.

But he warned against a “sugar rush” of MDCs. As with the OPDC, new corporations would need money and their own assets, the right staff to run what tended to be complex projects – including negotiating with councils unhappy about being stripped of their planning powers – and long-term commitments to see them through the political cycle.

The OPDC may now be moving ahead, but discussions are continuing the Department for Transport, City Hall and Camden Council about a way forward for Euston station, with the council’s latest independent assessment suggesting that a “locally led” development corporation spearheaded by the council itself rather than the Mayor or Whitehall, would be the “best fit” for managing the project.

Meanwhile, Labour-run Westminster Council seems ready for a fight with Khan too over Oxford Street. The council is “far from convinced” about the desirability of pedestrianisation or the need for an MDC, council leader Adam Hug has told the Mayor. If it were to go ahead, he added, it should not extend beyond Oxford Street itself and other space required for pedestrianisation.

As with Euston, the matter is far from resolved. Details abut Oxford Street are still awaited from City Hall, with indications that its plan could include Marble Arch to the west and parts of Camden, while some businesses are calling on the Mayor to take over Soho as well and perhaps even Leicester Square. More MDCs may yet be part of the solution to London’s housing crisis and other challenges but they are not a quick fix.

OnLondon.co.uk provides unique coverage of the capital’s politics, development and culture. Support it for just £5 a month or £50 a year and get things for your money other people won’t. Details HERE. Follow Charles Wright on Bluesky and on X/Twitter. Photo from Mayor’s press office.

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