Boris’ rich investors won’t build the affordable housing London needs

Boris Johnson is heading down to Cannes this week to flog regeneration projects to investors and developers at MIPIM, the world’s largest property fair. He told the BBC he was going to “lobby key investors and developers to help double house-building, including more affordable homes”.

And yet affordable housing is the last thing on their minds, and the Mayor is all too happy to wave through regeneration schemes with or without it.

Take Mount Pleasant, for example. He took this decision out of the hands of the two local councils at the request of the recently-privatised Royal Mail Group, who own the site. They want to get planning permission so they can sell it on to a developer with a big mark-up.

In their plans, only 12 per cent of the homes would be affordable. The councils think it could be at least 50 per cent. But Boris took it off their hands before they could say no and is likely to wave it through.
The Mayor has been travelling the world to sell London. His argument is quite simple: building lots of homes is the only way to solve our housing crisis, and this is the best way to achieve that.

But what sort of homes? More expensive flats for rich investors, which could be left empty, or rented to insecure and overcharged tenants?

What’s more, the Mayor wants to stop prices rising by building more homes, and he can only build more homes if prices are rising. Spot the flaw?

I obtained copies of a brochure he took to China last autumn. One introductory page gives the game away:

“London has wealth preservation benefits, outstanding long term capital growth and an increasingly strong rental market.”

The message, in plain English, is that you can make lots of money from rising house prices and rents, and we won’t tax your profits away.

City Hall recently produced new research on London’s housing needs. To fix our housing problems over the next ten years it suggested we needed to build 62,000 homes a year, of which 41,000 should be affordable homes. So two thirds should be affordable homes.

But the Mayor keeps signing off developments like Mount Pleasant that are a long way from providing this. At Earl’s Court, only 11 per cent will be affordable, and those will only replace homes that are being demolished to make way for the expensive flats. At the Heygate estate, 25 per cent will be affordable, but these will only replace half of the 1,023 existing council homes being demolished.

The Mayor even signs off developments without any affordable housing at all, like One the Elephant, which I asked him about last October.

These are developments for the benefit of rich investors, leaving only crumbs for ordinary Londoners.

The simple truth the Mayor needs to learn is this: going to MIPIM isn’t the answer.

We need to bring in a land value tax to reduce demand from investors so that people on average incomes get a fair chance of buying their own home. For all those people stuck in the private rented sector for years to come, we need longer tenancies and rent controls modelled on success stories on the continent.

And if we are going to build 41,000 affordable homes a year, we need much more investment from public, not private, purses.

By Darren Johnson, Green Party member of the London Assembly