Last week, the Conservatives’ London Mayor candidate Shaun Bailey set out ideas for addressing London’s housing supply problems, notably the shortage of homes people on low and middle incomes can reasonably afford in the capital. In a speech and in a press release, he outlined proposals to, as the latter put it, “recapture the spirit and will of the Harold MacMillan era of British housebuilding”.
Spirit and will are all very well, but how could a future Mayor Bailey translate these into delivery, given the powers and resources at City Hall’s disposal?
These are quite limited but not insubstantial.
The Localism Act (2011) devolved to City Hall the power to distribute funds secured from national government’s affordable homes budget, although those funds are far smaller than the current Mayor would like and come with conditions, consistent with national government policies, about the sorts of “affordable” homes whose building costs they can help meet. Mayor Khan has used what flexibility there is in the deal to more closely meet his own, different, priorities.
Mayors produce a formal housing strategy, whose aims include hastening the readiness of land for development – including land owned by GLA functional bodies, most notably Transport for London – and to speed up delivery by designating “housing zones“. The idea with these is that City Hall, the relevant boroughs, house builders, TfL and other interested parties work closely together in to deliver homes in these areas more efficiently. It’s an example of London Mayors’ “soft power” to get people round a table and help co-ordinate their efforts.
Mayors can also influence the quantity and types of homes generated by property developers through the planning system at borough level. A 2008 planning law order gave them powers to intervene in planning applications defined as being of “potential strategic importance”, which can mean any development of 150 of more homes, any building more than 30 metres high (outside the City of London) and any envisaged on Green Belt or Metropolitan Open Land.
The very existence of these powers concentrates the minds of boroughs and developers on not negotiating schemes that fail to meet mayoral expectations, notably about the proportion of new homes to be “affordable”. To make his position clear, Mayor Khan has produced a supplementary planning document which effectively says to boroughs and developers that unless a minimum of 35% of homes proposed in a new project conform to his definition of “genuinely affordable” he will subject them to close scrutiny, demand changes and, if necessary, block or take over determination of the scheme.
Boris Johnson used these “call in” powers 17 times between 2009 and leaving office in 2016. Mayor Khan has done so 11 times in his just over three years in power, in keeping with his generally more interventionist approach to housing supply.
How, then, would a future Mayor Bailey use the housing tools at his disposal differently and, as he would see it, to better effect than Mayor Khan?
His central promise – his policy foundation stone, if you like – is to create an entity called Housing for London, which he describes as “a City Hall-controlled homebuilder” for “assuming control of the building process” in a way last seen in Britain’s mass building period after World War II – hence the reference to MacMillan. Bailey says this could be done using the powers London Mayors already have. So how?
Well, Housing for London would not be a “homebuilder” in the sense of actually building homes – in other words, Bailey is not proposing to set up a City Hall-owned house building company to do what the London County Council used to do. Rather, Housing for London would be “an advisory and consultative body directly answerable to the Mayor”. Bailey’s campaign team explained that it would be modelled on the local enterprise panel for London (LEAP), a group of business people, borough leaders and mayoral policy chiefs who work together to support the Mayor’s economic development strategy.
Once sites have been identified, Bailey would drive forward their development by means of mayoral development corporations (MDCs). Another product of the Localism Act, MDCs, like housing zones, relate to particular areas thought ripe for development activity and in need of it. But, unlike housing zones, they are formal, legal entities with their own organisational structures and powers. They supersede the relevant borough (or boroughs) as the planning authority for the area concerned, assume their compulsory purchase powers and become generally responsible for the long-term management of the territory in question. They are, in short, a much, much bigger deal and are ultimately responsible to the Mayor.
Two MDCs already exist in London: one is the London Legacy Development Corporation (LLDC), whose territory is the 2012 Olympic Park and some of its surrounding area. The other is the Old Oak and Park Royal Development Corporation (OPDC). Both were set up under Mayor Johnson. Bailey says he would establish a minimum of 20 new MDCs across London, with most of them likely to replace some of the 30 housing zones that currently exist.
What difference might they make? One arguable disadvantage is that they take a lot of setting up: a board and chief executive must be appointed, staff must be employed and so on. The two current MDCs are responsible for large, complex, multi-faceted regeneration programmes, rather than primarily housing-driven ones and it is said that some in City Hall have had doubts about the value of the OPDC. Johnson proposed an MDC to cover much of Haringey, including Tottenham, following the 2011 London Riots, but it was never formed.
Bailey, though, describes their virtues largely in terms of consolidating, along with the advisory Housing for London, the various components of the house building process under the mayoral umbrella, from identifying sites to accelerating construction on them. In his speech, he criticised Mayor Khan for relying too much on others to get the building part done and argued that his arrangements would put the Mayor more in control.
How would this actually work in practice? Whatever channels mayoral powers are funnelled through, the key factors in the house building equation are unchanged: availability of land, availability of money and the priorities of planning authority policy.
Bailey maintains that the land required to bring about a “big bang” in supply to meet London’s housing need is there, primarily owned by public bodies, including boroughs and Transport for London (which, I understand, he would relieve of its current property development wing). He also argues that GLA Land & Property, a company owned by the GLA to facilitate development on public land, is under used.
For finance, Bailey would draw on anything remaining of the £4.82 billion Mayor Khan has received from national government (part of a programme that runs until 2021) and then, presumably, seek more. He also likes the idea of housing companies owned by local authorities, such as Newham’s Red Door Ventures, and joint ventures such as that between Countryside Properties and Clarion Housing Group set up to build in Ebbsfleet Garden City, which is governed by its own development corporation.
As for the kinds of homes a Mayor Bailey would want to see built under his new wave of MDCs, the contrast with Mayor Khan looks very marked. I’m told he would dispense the current Mayor’s long term goal of making 50% of all new housing in London what Khan calls “genuinely affordable”, in favour of an overall goal of 35% of homes costing less than full market prices to rent or buy.
According to the draft of his speech, these could include Starter Homes, a tenure introduced under David Cameron but which has yet to be implemented anywhere in the capital and that Khan does not regard as “genuinely affordable”. Bailey also gives short shrift to setting targets and instead places great stress on local need to define what kinds of housing should be built: if, for example, Beckenham needs more social rent homes, Housing for London would enable this, presumably through an MDC. If Ealing needed more shared ownership homes, Housing for London would oblige accordingly. That is the sense in which the body would be, in Bailey’s words “a tax-payer owned housebuilder”, putting need before profit.
Does all this add up to anything more than an ostentatious rearranging of existing furniture? How enthused would boroughs be about having their planning powers usurped by MDCs, which might have very different ideas from theirs about what constitutes housing need? Ideally, the boroughs affected would work in partnership with the MDCs, as they do in the two London already has. But if priorities sharply conflict, how much co-operation is there likely to be? Unhappy boroughs, after all, would still own the land Bailey’s MDCs would want new homes built on. They cannot be forced to submit planning applications to MDCs that don’t conform to their own local policies. Another curiosity of MDCs is that they are not subject to the mayoral call-in powers described above. So, in that sense, City Hall’s powers would be weakened.
However, Bailey will maintain that bringing housing supply processes more under his own roof and using MDCs to drive delivery would be a more effective use of the levers he can use. He has presented his plans wrapped in rhetoric about by passing builders and developers who he accuses of land banking and rationing supply in order to keep prices high. Interestingly for a Conservative, he seems he wishes to be seen as a hands-on, can-do London regional leader in a way he says Khan has failed to be and in housing policy tradition to which his party can still, if distantly, lay claim. Will it strike a chord with voters? We shall see.
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