Mayor of London – Page 2

Good advices?

[First published in Local Government Chronicle, 24 November 2020]

Choosing the right advisors is one of the most important decisions that political leaders make, as recent Downing Street dramas have illustrated. This is perhaps particularly true for the mayor of London, who unlike the prime minister or a council leader does not have the support of a party group, but only the watchful eye of a scrutinising London Assembly.

So, alongside City Hall’s expert staff, mayors need mates; their own people who can advise and represent them in such a huge city. The mayor of London can bring in 12 appointees, and the ways in which the three mayors to date have appointed and worked with their teams have been indicative both of their strengths and their weaknesses – as detailed in London’s Mayor at 20, a collection of essays, analyses and interviews looking back over the past two decades of the capital’s mayoralty.

When Ken Livingstone was elected in 2000, he came with a gang of advisors who had worked with him for many years – from the Greater London Council, from activism since then, from his parliamentary office. Most had worked with him when he had decided to run as an independent following Labour’s bungled attempt to fix candidate selection. Within weeks of his election, Ken had advertised posts as ‘policy advisors’, and many of these were filled by familiar faces.

The team were all broadly from the political left, albeit from different denominations; Simon Fletcher, Ken’s chief of staff and former parliamentary researcher, brokered agreement on priorities and positioning. The mayor used to describe advisors such as Neale Coleman, John Ross, Jude Woodward and Lee Jasper as being like ministers – with full authority to represent his views. The team was consistent through Ken’s two terms, with the mayor showing loyalty (and damaging his 2008 re-election campaign) when advisors became embroiled in newspaper allegations of cronyism.

Unlike his predecessor, Boris Johnson had no deep roots in London politics, and had only been an MP since 2001. There was no gang waiting in the wings when the ebullient loner was elected in 2008. Nick Boles, then Conservative MP for Grantham and founder of the Policy Exchange thinktank, worked with the new mayor to appoint deputy mayors.

The initial tranche proved shaky: one was prosecuted for fiddling expenses, another was found to have fabricated his CV, and a third senior advisor made comments on race issues that led to swift resignation. Tim Parker – a corporate restructuring guru appointed as chief of staff and first deputy mayor – left when it became clear that there wasn’t the scope or appetite for the application of his specialised skill set, and that Boris wanted to take decisions as mayor rather than acting as a media-friendly figurehead.

Other appointments were more stable, some becoming long-term Johnson allies. Munira Mirza, deputy mayor for culture and education, followed Johnson to Downing Street, as did chief of staff Eddie Lister, who is now temporarily filling the same role at 10 Downing Street. Lister, and Simon Milton the former Westminster City Council leader who preceded him at City Hall, took a relatively light-touch approach to policy co-ordination, leaving other deputy mayors, such as Stephen Greenhalgh, Kit Malthouse and Isabel Dedring, with space to develop policy positions, but also giving a looser sense of direction than under Livingstone.

If Sadiq Khan drew one lesson from Boris’s wobbly transition, it was not to make appointments too quickly. His deputy mayors were appointed painstakingly over his first six months in office. Senior local government figures such as James Murray and Jules Pipe, former mayor of Hackney, were appointed alongside former GLA officials Justine Simons and Shirley Rodrigues, and external figures such as human rights barrister Matthew Ryder, shadow transport minister Heidi Alexander and former Home Office special advisor Sophie Linden.

These appointments have been carefully judged, but the deputies are not close to Sadiq and his decision-making in the way that Ken’s were, or eventually Boris’s became. Less prominent are the inner circle of advisors who agree policy positioning: chief of staff David Bellamy, director of policy Nick Bowes, and communications and external affairs directors Leah Kreitzman, Paddy Hennessy and Jack Stenner.

The London mayoralty is an unusual role: it can be a springboard or a dead-end; it suits loners and mavericks, but requires constant coalition-building; it gives extensive powers of patronage and appointment, alongside singular accountability. It is a job to which the incumbent is elected alone, but not one which any mayor could hope to carry out alone. Appointing advisors and deputies is an early but critical decision, requiring trust and judgement. For a political loner like Boris Johnson it is a fraught business, and one that has given him a rocky start both as mayor of London and as prime minister.

City Hall – from glass testicle to white elephant

[First published by OnLondon, 3 November 2020]

So farewell then, City Hall.

I remember a conversation in early 2000, soon after I started working in the “transition team” that set up the Greater London Authority (GLA). We didn’t have a Mayor of London yet, but – as I explained loudly to someone in a noisy nightclub – I just really, really wanted to work in City Hall, the sloping glass blob by Tower Bridge that has housed the GLA for the past 18 years. On the site of Pickle Herring Street’s warehouses and wharves, looking north to London’s commercial heartland and east to the capital’s future, City Hall would be a very modern HQ for a very modern strategic authority.

While these shiny new headquarters were being built, London’s new Mayor and Assembly spent their first two years in Westminster’s Romney House, a former hotel that had been requisitioned by the government during World War II, and had served as a dumping ground for departmental detritus since then (and has now been converted into flats). Then, after a formal opening on 23 July 2002 by the Queen (“Your new building, which is so clearly based on ideas of openness and accessibility, will provide an exciting forum for Londoners as your debates ebb and flow”), we moved in.

Openness and accessibility may have been part of Foster and Partners’ design (alongside the government’s instruction to keep a cap on the new Authority’s staff numbers), but these features fell from favour in the aftermath of the 9/11 attacks in New York. Risk assessments were quickly undertaken and an awkward metal detector arch installed by the reception desk. The need to pass through this quickly killed off the idea of citizens being able to drift in from the sunken Scoop outside (which looked like it was purpose build for the skateboarders who security guards so assiduously chased away) into the lower ground floor café.

Security also killed off the rather romantic notion of the ramp above the Assembly Chamber, a slighter echo of Berlin’s Reichstag dome (designed by the same architects and completed in 1999), as a vantage point for citizens to watch new civic democracy in action. Not only was this quickly written off as dangerous (on account of angry firefighters, taxi-drivers and pigeon-feed sellers as much as terrorists), but walking on the ramp was so clattery that even GLA officers were banned from it during meetings.

The Chamber itself is a fine lofty room, which has been used in The Apprentice, for politics programmes and in James Bond films. But with the dead air of the ramp above it, the space it occupies is out of all proportion to its use. Monthly questions to the Mayor attract a smattering of journalists and school children, but other committee meetings are rarely that well attended.

And the real debates and decisions do not take place in the Assembly, but in the Mayor of London’s office (and the offices of his advisors) under the sloping glass eaves of the eighth floor. Ken Livingstone, who had derided the designs as a “glass testicle”, insisted on individual offices for his advisors “for all the plotting they need to do”.

Assembly members had individual offices too, but all staff – from the chief executive down – were in open plan desks arranged around the edge of the building, all uniformly grey to avoid any contrast with the bright yellow walls that the architects had chosen for the building’s core, to enhance the night-time profile it projected over the Thames. Meeting rooms with minimal natural light were clustered around the other side of the core, or buried in the even gloomier basement.

But for all its flaws – from leaking panes of glass and draughty entrance lobby, to the hassle of never knowing whether you would be waiting 15 minutes at security – City Hall had a public face: the lower ground floor café offered the opportunity to bump into the Mayor, Assembly members, GLA staffers, borough leaders and anyone else involved in policy in London. London’s Living Room, on the top floor, is a panoramic party venue – surrounded by a balcony with views over Tower Bridge, the City of London, and the sweeping railways and estates of Southwark. And though the building was clunky and cheaply-finished, it did feel like a place of power.

It is hard to argue with the £60m savings that will be realised by moving the GLA to The Crystal, an equally idiosyncratic building in the Royal Docks, or with the potential to accelerate redevelopment of one of East London’s most complex but isolated locations. But it is also hard not to worry that the move will diminish the GLA, making it just a little more marginal to the lives of Londoners.

London’s unfinished devolution

[Published by Centre for London, 3 July 2020]

Twenty years ago today, Ken Livingstone formally took on his powers as London’s first directly-elected mayor. His election had been a moment of high political drama rare in municipal government. Having legislated for a mayor and assembly in London, Tony Blair’s New Labour government had watched in horror as Livingstone – in their eyes a throwback to the 1980s ‘loony left’ – swerved all attempts to prevent his election, eventually running and winning as an independent against Labour’s Frank Dobson and the Conservatives’ Steven Norris.

The transfer of powers (unlike his successors, he had a two-month running-in period) was a much quieter event, despite the new Mayor declaring that it would be celebrated as “London’s independence day”, the occasion of the UK’s capital seizing back control of its affairs from the “most centralised state outside North Korea” (a favourite comparator).

Livingstone is no stranger to hyperbole, and his claim was probably not intended entirely seriously. The powers that he took on were limited and had been hard-fought by civil servants as the idea of a mayoralty took shape after the 1997 general election. Furthermore, London’s first mayor was denied control of London Underground while government struggled to finalise its disastrous ‘public private partnership’ scheme through 2000 and 2001.

But the powers were nonetheless significant: oversight of London’s police and fire services, a veto on major planning decisions, control of traffic lights, major roads, buses and (in due course) London Underground, and a new agency to manage European and domestic economic development projects. And all were drawn down from central government, rather than seized from London’s 33 local authorities who had repeatedly clashed with the Greater London Council, precursor to the mayor and assembly, in the 1980s.

Since 2000, London’s three mayors have shown themselves to be able advocates for the capital, leaders at times of crisis, and promoters of projects and policies that would have been impossible in the 1990s – from congestion charging, to London 2012, to cycle hire schemes. Their powers have been extended too, with affordable housing programmes, more extensive planning powers and stronger police oversight introduced through reforms in 2007 and 2011.

However, despite the extension of the mayoral model to other English cities in recent years and promises of a white paper, the advance of devolution appears to have stalled in the nation’s capital. The government’s recent interventions on transport and planning could even be seen as a rollback, as a former Mayor of London seeking to exert remote control over his successor.

But these interventions also highlight the flaws of the current system. Transport for London’s revenue base is so dependent on fares that government bailouts become inevitable during a shock like COVID-19, and a government that blocks mayoral plans to accommodate growth, without supporting any form of regional planning, is simply incoherent.

Recovering from the current crisis cannot be directed from Cabinet Office briefing rooms, or by despatching civil servants across the country to implement centrally determined policy. It will require agile and locally-appropriate measures across the country, from training programmes to targeted tax breaks. There are a thousand daily issues pressing on government right now, from infection monitoring to trade talks, so ministers do not have the time to micromanage planning policy and transport services, any more than they have the competence to do so.

Completing this unfinished devolution should begin with a discussion about money. The Mayor of London has extremely limited powers to vary council tax, and no powers over business rates or other property taxes. London’s shops and other commercial premises are taxed heavily while its richest householders pay some of the lowest property taxes in the world. This dysfunctional set up might be sustainable in boom times, but it could hobble the capital’s recovery in the tougher times that lie ahead. Responsibility for services without the power to set taxes makes for inefficient government and fudged accountability.

London’s mayoralty has proven itself to be a success over its first 20 years; it is time to take the next steps in loosening Whitehall’s grip on the capital and its finances.

Centre for London and LSE’s Professor Tony Travers are working on a book to mark the 20^th anniversary of London’s mayor and assembly, investigating the relative successes and challenges of the mayoralty to date, before asking what comes next for London. The book will be published in winter 2020.

Time for some conscious uncoupling of London\’s Green Belt

[First published in Estates Gazette, 1 November 2019)]

Tackling the housing crisis was top of Sadiq Khan’s policy agenda in 2016. So, with the next mayoral election six months away, the publication of the planning inspectors’ report into the mayor’s draft London Plan – the blueprint for London’s growth – is a big moment.

There is some good news for City Hall in the report, published last week. The inspectors back the mayor’s plan as a whole, his assessment of housing need and also his affordable housing policies – including the threshold approach to fast-track permission, which they say is “appearing to bear fruit”.

But the report does challenge the mayor’s assessment of housing capacity, and in particular his expectation that small sites could supply 25,000 of the 65,000 homes planned each year. As the inspectors acknowledge, this would require a 250% increase in building on small sites in outer London boroughs – the very locations where dense development can provoke the most furious rows among neighbours, politicians and community groups. “Whilst the policy approach is aspirational,” the inspectors conclude, “its delivery is not realistic.”

They recommend halving the small sites target to 12,000 homes a year, giving an overall housing target of 52,000 a year. Given that London is projected to need 66,000 homes a year, of which 55,000 are simply to keep up with population growth (the rest being to deal with the backlog of need), this would leave London with a worsening housing shortage. The gap looks even wider if you use the government’s new calculations of need, which come up with an annual figure of 72,000 homes.

This may all seem a bit moot when London is only building around 30,000 homes a year, but balancing need and capacity is a foundation stone of town planning. The inspectors reject the Sisyphean suggestion – made by former secretary of state James Brokenshire what seems like a political aeon ago – that the plan should be immediately reviewed. Instead, they recommend that the mayor should lead a strategic review of London’s green belt, in the light of the projected shortfall of land for housing (and industrial uses).

This presents the mayor with a dilemma. His commitment to tackling London’s housing crisis is matched only by his commitment to preserving London’s green belt. And you can see why. Green belt reviews are popular among planners and policy wonks, but toxic for the general public; recent polling shows that opposition to building on or reviewing the green belt is as strong as ever.

All of which may suggest that it would be a “bold” politician (in the Yes Minister sense of the word) who agreed to lead a green belt review in what may be a multiple election year. Positions are entrenched, and debates about the green belt can be as fervent – and as futile – as debates about Brexit. But there is an opportunity here too: the mayor could bring light where there is currently just heat, and show that elected mayors can take the lead where governments freeze like marginal-seated rabbits in the headlights.

A review, in partnership with councils and communities, would be an opportunity to discuss the green belt’s role as a constraint on sprawl, for public recreation and as habitat, and to consider how different land uses meet these aims – rather than defending the green belt as sacrosanct in principle while allowing it to be nibbled away and leap-frogged in practice.

It could explore different options for change, from allowing building in railway station catchment areas to planning and building urban extensions, as exemplars of “good growth” rather than incoherent and exclusive car-based suburbs. It could consider how to substitute for any green space lost, and how to enhance the quality and accessibility of what remains.

The inspectors’ report suggests that, having grown by 30% in three decades, London is starting to strain against its boundaries. It feels like the moment for an open and rational debate about how the next 30 years’ growth can be environmentally responsible and socially inclusive. The next mayor of London – whoever that is – should lead this debate.

Better rent (May 2019)

[Published on Centre for London blog, 23 May 2019]

In our world of clone towns, megabrands and oligopolies, we understandably venerate the small business, the sole trader or micro chain. Renting somewhere to live may be an exception. If smaller doesn’t mean better, could larger landlords help pacify London’s wild west rental market?

Private renting is heavily dominated by smaller operators: a 2016 UK-wide survey found that more than 50 per cent of rented homes were owned by landlords with three properties or fewer. Most small landlords are not professionals: they may have put spare cash into rental property to generate retirement income, or have retained homes as they have moved up ‘the housing ladder’, or in some cases may be owning and letting out property in one place, while themselves being renters in another.

Not all small landlords are rogues, but many have a bad reputation for good reason. Landlords and letting agents are blamed for shoddy conditions and delayed repairs, for inflated charges and deposits withheld without good reason, for taking advantage of ‘no fault’ evictions to change tenants and boost rents every year. In a landlord’s market, many of these practices are consequence-free – there’s no corporate reputation to defend, and unhappy tenants have limited recourse apart from moving on; there’s always someone ready to take their place.

Against this backdrop, the arrival in London of professional ‘Build to Rent’ landlords, who build flats, and let them directly to private renters, should be good news. Build to Rent landlords are professionals. They have corporate reputations to consider, and actively market their properties on the basis of the quality of accommodation and of the service that they can provide (albeit at a price).
Recent estimates suggested that around 50,000 Build to Rent apartments have been built or given planning permission since 2009. Their developers are an interesting mix: they include joint ventures, housing associations, traditional commercial developers, and institutional investors looking for long-term financial returns.

The Build to Rent sector only accounts for around five per cent of the one million private sector rentals in London, but the numbers are steadily growing. (Calculated from Housing in London 2018 tables.)

The sector may even be starting to have an impact on rental levels. Rental growth has slowed in recent years. Government data cited in the most recent edition of Centre for London’s quarterly The London Intelligence showed that rents are now static, having shot up from the end of 2010 to early 2017. Figures compiled from a Dataloft survey of new lettings tell a subtly different story. These figures show rents continuing to grow, with larger properties showing the fastest growth and one-bed flats showing the slowest.

Rival explanations for the deceleration of rent increases include suggestions that lower international migration levels are having an impact on demand, as well as arguments that recent completions are leading to a moment of over-supply – particularly of flats – before the market slowdown puts the dampers on new development.

But could the growth in Build to Rent have helped too? Many Build to Rent landlords offer three-year tenancies, with index-linked rent increases, as standard. Even if rents catch up with the market as a whole at the end of three years, these new tenancies could be helping to damp down growth right now. They may also explain the difference between continuing growth in rents for new lettings, and a more subdued picture overall.

This market moderation comes – whether by coincidence or not – just as the issue of rent control is rising back up the agenda. While government backed off proposals for minimum three year tenancies last year, it has proposed abolishing ‘no fault’ evictions. This may partly be in response to Mayor of London Sadiq Khan suggesting that rent control could be a key plank of his re-election campaign – though this would still require government support through legislation.

Build to Rent landlords say that heavy handed rent control will simply kill off their business model. They already struggle to make schemes stack up, they say, competing for land against developers building for sale, who can afford to pay 30 per cent more for land. Removing their ability to charge what the market can afford in rent will push scheme viability even deeper underwater.

But ‘rent control’ can take a number of forms, from formal setting of private rents, to simply index-linking rises during the course of longer tenancies. If more and more Build to Rent property is offered on the basis of three-year tenancies with index-linked rent rises, the sector may be able to offer a self-regulation solution. This may not tackle all the issues of affordability in London’s rental market, but could forestall the need for legislation, sidestep parliamentary battles, and sustain sense in London’s rental market without stifling a sector that is just finding its feet.

5 ways mayors have changed London (Nov 2018)

[Originally published on Centre for London blog, 7 November 2018]

This year, the London Mayoralty turns 18 years old and ‘comes of age’. During this time, London’s three Mayors – Ken, Boris, Sadiq – have used the limited levers that they had – sometimes to breaking point – to improve the city.

But what impact have they actually had? Here’s five ways that the Mayors have transformed our city since the Mayoralty was established.

1. Leading London’s urban renaissance

The London Plan, as adapted and evolved by the three Mayors, set a world standard in promoting smart growth, sustainable development, urban renaissance. The plans committed to accommodating growth within the city, focusing on public transport walking and cycling, developing ever more ambitious housing targets, renewing the public realm, and harnessing the dynamics of development to create a fairer and greener city.

2. Driving transport innovation

The Mayor’s ability to integrate transport and development – the envy of other cities like New York – has been central to the London Plan. But Transport for London – chaired by all three Mayors in a signal of its significance – has also led policy innovation in transport – from the original congestion charging zone, to bike rentals, to the Oyster card and contactless payment, to the ultra-low emissions zone.

3. Providing civic leadership

The Mayors have also provided a focal point for civic leadership. This has not just been a matter of fronting bids for major events, and representing the city in trade fairs and Whitehall spending rounds. It has also sadly meant leading the city at times of tragedy – after the London bombings in 2005, and the terrorist attacks and Grenfell Tower fire that the city faced last summer. The Mayors have, with differing emphases and tone, presented London and the world with an image of capital that is inclusive, tolerant, diverse, open, united. It’s an aspect of the Mayor’s role that is not mentioned in any statute, but eighteen years on you wonder how we lived without it.

4. Doing deals with central Government

Having a Mayor has enabled London to do deals with central Government on how to finance and deliver major infrastructure projects. These deals – on the London 2012 Olympics and legacy, on Crossrail and on the Northern Line Extension – have helped London to accommodate its growth, to weather the storms of the financial crisis, and to transform areas benighted by decades of underinvestment – while also building world-leading capacity in major projects.

5. Making the case for more power

And the Mayors have secured new powers through statute.

In 2006, the Mayor was given powers to stage the London 2012 Olympics – which was fortunate given that he and the government had committed to do so the previous year.
In 2007, planning powers and housing powers were strengthened, as was the London Assembly’s role in approving mayoral appointments.
In 2011, policing oversight – always a bone of contention between the Mayor and Home Secretary was reformed, as the Metropolitan Police Authority was replaced by the Mayor’s Office for Policing and Crime
Also in 2011 the Localism Act empowered the London Assembly to reject mayoral strategies, and passed control of HCA and LDA land to the Mayor, delegated the affordable housing budget, enabled the Mayor to establish Mayor Development Corporations – shifting the focus of the GLA from strategy to delivery.But progress since 2011 has been faltering. There have been devolution deals on the Adult Education Budget, agreements on health and social care, and discussions on justice devolution. But despite two London finance commissions, and strong representations from the Mayor and London Councils, further devolution feels like unfinished business.

And at no time since the Mayoralty was set up 18 years ago have the challenges facing the capital looked more daunting. Local government services are under increasing pressure. A cooling housing market is leading to a slowdown in the construction and availability of affordable homes. Migration from the EU and across the country is falling. And all of this before Brexit.

Against that background, we need to rethink the way London operates for new times. We need to continue to make the case for new powers for the Mayor – across housing, taxes, and skills, to help London meet the challenges ahead.

From adhocracy to algorithm – notes on mayoral style (July 2018)

[Originally published in OnLondon, 7 July 2018]

Halfway through his first term, there are some curious paradoxes about Sadiq Khan’s tenure as Mayor of London. He has a solid record of announcements under his belt, from a remixed London Plan to cash for affordable housing and eye-catching initiatives such as the borough of culture or ballots on estate regeneration.

While there’s a mounting funding crisis in Transport for London, initiatives such as the Hopper fare for buses have been successful, even if pedestrianising Oxford Street has fallen foul of Westminster Council politics. And Sadiq has campaigned for a capital-friendly Brexit, been vigorous in promoting London’s openness, and appointed well-respected and diverse deputy mayors and committees of advisors.

And yet. And yet. Despite assiduous media management, there are some voices – from Greater London Authority officers to housebuilders to senior borough executives – who talk of the Mayor as remote, inaccessible, disengaged. You can’t meet with him or speak with him, they say. You think you’ve agreed something with a deputy mayor, they complain, but then Sadiq does his own thing. It’s all smoke and mirrors, run by a tight gang around the Mayor who already have their eye on his next big job.

It’s worth pausing to ask whether these murmurs of discontent are simply the protests of the former in-crowd feeling the chill of a change in administration and a significant change in political direction. There’s certainly some of this, and you could argue that previous mayors were perhaps too eager to court housebuilders to little effect in terms of housing delivery.

But I think there’s something more – a change in style, or even mode of governance. Boris Johnson and Ken Livingstone both governed in a highly personal manner; they wielded their authority in a way that the sociologist Max Weber might have described as “charismatic”. For Ken, leadership was a matter of drawing together the factions and alliances that had enabled him to rise to the top of the Greater London Council, doing deals with developers even when he felt like bringing a long spoon, schmoozing the blazered sportsocrats of the International Olympic Committee, and alternately raging at government and wheedling powers and resources from it.

Boris’s regime was even more personalised. From successes such as the promotion of the “Olympicopolis” legacy plan for the Olympic Park – now renamed Eastbank – to more questionable follies such as the ArcelorMittal Orbit, the Garden Bridge and Emirates cable car, his most prominent initiatives were high risk, opportunistic deals, bearing only a glancing relationship to mayoral powers or remit, but using sheer force of personality to lever resources from high net worth individuals and corporations.

All of which seems very far away from Sadiq’s approach. He’s not interested in doing deals, you sense, but in tightening and adjusting the policy levers at his disposal to secure the results he wants. His governance rests on the “legal-rational” (Weber’s term again) basis of the mayoral powers and remit, with decisions taken calmly and rationally – albeit with a keen eye for politics – rather than on the basis of deals done personally or with subordinates.

It’s a fundamentally different model, and one that other people in City Hall (perhaps lower down the pecking order and therefore less likely to miss direct access to the Mayor) relish. One said to me, “With Boris, you got the feeling that he had a highly-tuned machine that he couldn’t be bothered to steer. With this lot, you get clear direction, and authority to go out and do things.” It is also probably more like the technocratic mayoralty that I and fellow members of the transition team expected before the first mayoral election in 2000, when we played “war games” about how the newly established Mayor and London Assembly would operate in practice.

Whether Sadiq’s approach will be more or less successful than his predecessors’ remains to be seen. A city cannot just be governed by deals with developers and ad hoc initiatives devised in Davos cloakrooms, but it probably can’t run like an algorithm either. The Mayor’s resources are limited, so he needs to work with investors and developers to build the city he wants. With a few exceptions, I applaud Sadiq’s policies. But I wonder how some of them will be implemented.

Cool markets and hot debates – Housing in London

[Originally publiched in OnLondon, 23 Feb 2018]

The number of houses and flats in London grew by nearly 40,000 in the year ending March 2017 – faster than it has since the mayoralty was established in 2000 and only just short of the former Mayor’s annual housing target. Some of the growth was down to controversial conversions of offices to homes (“permitted development”), but 30,000 new homes were built too, which is an achievement to be celebrated.

But what if this is as good as it gets? It seems almost churlish to make the point, but there is a pile up of indicators suggesting that new home building in London is about to slow down sharply. The first alarm bell is rung by falling house prices and transaction levels, as highlighted in Centre for London’s The London Intelligence bulletin at the end of January.

House prices across London have fallen at their fastest rate since 2009, and the fall in prices and transaction levels has been particularly sharp in relation to flats in the centre of the city. A recent survey by Molior Consulting confirms this top-of-the-market slow down: less than half of the luxury flats that were started last year were sold (off-plan or on completion).

Molior’s figures refer to flats selling at around £3 million and these may seem pretty remote from the concerns of most Londoners – luxury flat developers are pretty low on the league table of much-loved London professions. But all the moving parts are connected. As housing grant has reduced, more and more affordable housing in London is delivered through developer obligations. While the number of affordable housing starts supported by mayoral funding has been rising, as the £3.15 billion funding package agreed with the government in 2016 feeds into the system, developer contributions still account for 50 per cent or more of the total. If the flow of luxury flats slows, so will the flow of affordable housing.

And there are other factors suggesting that supply is slowing. NHBC – the National Housing Building Council – issues warranties for around 80 per cent of new build homes in the UK. These tend to be issued just before construction work starts and therefore give a good indication of future supply. The number of warranties issued in London fell from 26,000 in 2015, most of which will have been built in the bumper 2016/17 year, to 17,500 in 2016, and stayed at that level in 2017.

While the market cools, the politics of housebuilding in London are heating up. Haringey’s proposed joint venture with Lendlease is only the most prominent of a number of controversial partnerships for housing estate redevelopment. Campaigning in Haringey has unseated council leader Claire Kober and probably sealed the fate of the Haringey Development Vehicle itself. Other councils and developers will at the very least be more cautious about joint ventures – which typically take years to plan and even longer to implement – and nothing will happen before local elections in May.

Finally, Sadiq Khan’s draft new London Plan presents a tough policy environment. The Mayor has tightened affordable housing targets, proposed residents’ ballots for estate redevelopment schemes, restricted use of industrial land and shifted the burden of development on to the Outer London boroughs, where new development is most controversial politically. Many Londoners would support most if not all of these policy positions, but the assumption that developers will live with them in return for a stake in London’s super soaraway property market may be outdated. There is already talk of some of London’s biggest housebuilders shifting their focus to Birmingham, Manchester and other places where the market seems more buoyant.

In short, the prospects of accelerating housing delivery to meet the new London Plan target of 66,000 homes a year are looking slimmer by the day. But perhaps a sharp slowdown of housebuilding would not be such bad news after all. “Never let a crisis go to waste,” in words variously attributed to Winston Churchill and Rahm Emanuel. For some years now, London’s housing market has hobbled along like a Heath Robinson contraption, with housing shortages driving land price inflation, social housing becoming an exercise in gamesmanship rather than provision of public goods, and housing targets always soaring ahead of supply like the stakhanovite fantasias of soviet planning.

Perhaps, if this model starts to look broken, we can look for alternatives. All sorts of magic bullets – housing estate redevelopment, Green Belt liberalisation, public sector land – have been aimed at and missed London’s housing targets to date, so we should be wary of singular solutions of blinding simplicity. But we could start to think about possibilities – about packages of measures that could fix London’s dysfunctional housing market.

This may indeed mean thinking about the Green Belt and estate redevelopment – ways of finding the land needed for new homes – but we also need fresh approaches to how homes are built and paid for. If slow sales are deterring traditional housebuilders, how can we rethink the institutional framework, funding structures and building methods?

Could housing benefit payments support borrowing to build, rather than being funnelled to private landlords? Could local authorities borrow more, directly or through central government bond issues, or work with pension funds and other long-term investors to find sites and build homes for rent, providing a stable income stream for both parties? Could off site construction be used at scale to supply local authorities and developers across the capital with low cost homes for vacant sites?
Tackling London’s housing crisis may mean going after some sacred cows: more focus on rent rather than sale; a positive approach to public investment and less worrying about how borrowing is treated in public accounts; more aggressive approaches to land hoarding; more direct public sector involvement; perhaps even a development corporation that can push through planning and construction across the capital.

Some of these options may be controversial – though a consensus for a radical package of reforms is growing among London’s politicians and housing experts – but watching as the market sputters to a halt seems even less attractive. To adapt Sherlock Holmes, “When we have eliminated the impossible, what remains, no matter how unpalatable, must be the housing delivery plan.”

But is there the political appetite and will to match the urgency of the challenge and the scale of the opportunity? Mayor Khan has already announced that he needs a five-fold increase in government funding for affordable housing, and roundly condemned the autumn 2017 budget for its failure to commit investment at this level. For its part, the government is cash-strapped, Brexit-blinkered, and unlikely to see much political capital in helping out a Labour mayor or London itself. The challenge – to Whitehall and City Hall – is to rise above the politics of the housing crisis, to take shared responsibility and shared credit for the bold steps needed to fix London’s broken housing market.

Found in the suburbs

[Originally published online by the Guardian, 6 December 2017]

The London plan, the latest draft of which was published at the end of November, is the great ocean-going liner of London mayoral politics. It carries as its cargo all the mayor’s most important policies, as it sails from draft to adoption, navigating the choppy waters of public consultation and examination-in-public on its way.

As soon as the plan’s two to three-year journey is completed, it turns round to begin afresh the process of review and redrafting. It is the keystone of mayoral strategies, and one of the most powerful tools the mayor of London has to define the shape of London. It regulates the use of land – a scarce asset in a growing but constrained city – and over time all 33 London boroughs should ensure that their plans and planning decisions fall in line with its policies on what should be built where.

This concentration of mayoral powers in planning means many policies take on a spatial complexion: while the mayor cannot tax or ban unhealthy fast food shops, he can propose that they are located away from schools. He cannot license nightclubs, but he can require developers to meet the cost of soundproofing if they build alongside nightclubs. He does not manage financial services, but he can preserve land for offices in the Square Mile and Canary Wharf.

If you are a hammer, everything looks like a nail; and if you are a planning document, everything looks like a land use issue.

At the heart of the latest London plan is its focus on annual new housing supply, raised from its previous target of 42,000 to 66,000, with half being affordable. It’s an ambitious target, considering that the present supply of new homes, 29,000, is less than half the new target – but the mayor argues that the capital’s crisis over a lack of affordable homes requires a big step up. Few would disagree with that.

Some of the proposed homes may be built outside London – the plan commits to working more closely with neighbouring councils, a scheme that will be considered in a forthcoming report by Centre for London and the Southern Policy Centre – but the priority will be building homes within the capital.

Alongside investment in affordable homes, which Khan says needs to be increased to £2.7bn, and land at the Olympic Park and Old Oak Common, the mayor must rely on his planning powers to achieve his target. In some cases, he will be able to intervene himself in planning decisions, but can only do so where certain conditions are met, such as schemes with more than 150 housing units or buildings over 30 metres tall.

In most cases, he will have to rely on the policies and planning decisions made by individual London boroughs and some outer London boroughs, who are being asked to double or even treble their speed of housebuilding – and who may be reluctant to do so, given the concerns of local voters.

So the plan seeks to make it easier for boroughs to grant planning permission and harder to refuse it. High density in itself, for example, can no longer be a reason to turn a scheme down – although there is sensible provision for careful scrutiny of the design of the highest density schemes.

There is also a sharper focus on smaller sites, which are expected to account for 25,000 of the 66,000 new homes a year. The plan says smaller sites should be prioritised by boroughs, with design codes drawn up to identify opportunities for new development, particularly around transport hubs, and a presumption in favour of giving planning permission.

But all this relies on developers wanting to build. For 20 years, London’s housing market has boomed, so the challenge has been how much the mayor and boroughs can secure from developers in terms of social housing and other community benefits; where permission has been refused, developers have often come back with a better offer.

At the launch of the draft plan, London’s deputy mayor, Jules Pipe, was adamant that it would not stifle development or undermine viability of schemes. But planning as a tool works better at directing development than initiating it. There is already a growing backlog of planning consents that have been given, but where houses have not been built, and without a dramatic increase in funding, the mayor has only limited powers to get homes built.

The draft plan does want to find incentives for homes to be built faster, and a switch to more rental developments and smaller sites should help, but at a time when London’s housing market is cooling, planning permission will only be half the battle.

This article was corrected on 12 December to clarify the mayor’s target of £2.7bn to invest in affordable homes.

He\’s Only Making Plans for London

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[Written a few weeks ago, and published on MJ website 10.11.16]

Almost drowned out by the noise over airport expansion, Sadiq Khan issued A City for All Londoners this week, the vision document that will underpin the Mayor’s strategies, and in particular the London Plan, the city’s spatial blueprint.

What then does this tell us about what we can expect from Sadiq’s mayorality? The changes are subtle – many paragraphs would not look out of place in Boris Johnson’s 2008 Planning for a Better London – but they do signal shifts in emphasis and focus.

There is no change in the Mayor’s commitment to protecting the Green Belt, but there’s a strong focus on the intensification of existing development, for example, in town centre locations and around transport hubs, with a particular focus on TfL and other public sector landholdings. Big sites and opportunity areas like Barking Riverside, which has been promising to deliver 10,000 homes for the past 15 years, are still part of the story, but as Centre for London’s report Going Large emphasises, these can be challenging to deliver. Looking at existing town centres and transport hubs for new growth opportunities acknowledges the limits of a ‘big site’ approach in a city that is growing as fast as London.

There’s also a welcome emphasis not just on housing numbers, but on the creation of neighbourhoods. This includes reference to mixed-use development, and a ‘good growth’ strategy that encompasses affordability, quality of place, social infrastructure and zero-carbon initiatives. The document largely steers clear of the more controversial aspects of housing policy, with no mention of estate redevelopment (as discussed in Centre for London’s recent Another Storey), 50 per cent affordable housing presented as a long-term target rather than a day one stipulation, and only a cursory reference to ‘lack of transparency’ in foreign ownership (although an investigation into the latter is planned).

A further subtle shift can be seen in Sadiq’s proposals for economic development, as the self-styled “most pro-business Mayor yet”. While maintaining the strength of the central London’s business districts, including through opposing office to residential conversions, A City for All Londoners emphasises the potential for more development, including offices and hotels, in well-connected outer London centres.

Transport and environmental issues are discussed together, confirming pledges on air quality, and setting out a vision for ‘healthy streets’ (using a pedestrianized Oxford Street as an example), which enable walking and cycling. Major infrastructure schemes – like Crossrail 2, East London river crossings and the Bakerloo Line extension – are plugged, with an emphasis on their integration with new development, as is the takeover of suburban rail that Centre for London proposed earlier this year in Turning South London Orange. But there is also a strong focus on behaviour change – to reduce car use, and deliver a ‘feet first’ plan for central London.

The document also touches on some of the less tangible aspects of urban infrastructure, social cohesion, mental health, community safety, active citizenship, and volunteering. There’s a reference to economic inequality also, including the establishment of an Economic Fairness Team to push for better workplace standards. Cultural infrastructure – from theatres and galleries to skate parks and gay pubs – is presented as central to London’s success, and the Mayor argues for ‘agent of change’ measures to ensure that long-standing clubs and music venues are protected from noise complaints from new residents.

Though it has dominated public life for five months, references to Brexit are few and far between. The EU referendum result is delicately described as “not what I and many London businesses had hoped for”, but the Mayor is cautious in pushing for special provisions for London. Fiscal devolution – the focus of the reconvened London Finance Commission– is only mentioned in passing, and immigration is set aside as a matter for government despite recent publicity for the idea of regional visas. Understandably perhaps, the Mayor is avoiding self-fulfilling prophecies of doom, or grand claims for what he can deliver – particularly where this will need government agreement, or depend on the murky ebb and flow of Brexit policy and negotiation.