Tuesday, 26 November 2013

Boris the Builder. Can he fix it?

London’s ebullient mayor Boris Johnson rarely shies away from largesse, particularly when it comes to building projects. Think only of the 2012 Olympics and the somewhat more speculative “Boris Island” airport. If the airport is ever built (a long shot), the first planes may be landing just about as the last houses are being delivered under his 20-year plan to add nearly a million new homes to the capital.

His Draft London Housing Strategy (see Briefing, Industry and Politics) envisages building 42,000 homes a year, every year for two decades (by which time he just might be Britain’s longest serving Prime Minister). That’s between two and four times the fluctuating annual total for the past 30 years and exceeding even the build rates of the 1960s and 1970s.

The consultation paper (for which submissions have to be returned by 17 February) envisages “Housing Zones”, similar to the old Enterprise Zone, where there will be tax breaks and easier planning regimes; £1bn a year of public investment from 2015 - 18; a new housing bank; land made available by the Greater London Authority; and an attack, including the threat of compulsory purchase orders, on any developers judged to be hoarding their land. Interestingly, there is the proposal put forward by practitioners on the “build-to-rent” sector for special planning treatment on the basis that properties will be available for private rental at below market rates for 10 years.

All individually do-able stuff, except who’s going to “do” it? Not housebuilders. Their open market model simply doesn’t work on anything like this scale, particularly with rivals breathing too closely down each other’s necks. Their five-ish year plus "strategic" land banks also risk the ire of County Hall. The private rented sector could finally get the kick start it has needed, especially if it can level the playing fields (metaphorically, unless this is where Boris has earmarked for land) in terms of the premium housebuilders can pay for land. But it would take the sector 20 years to build itself up to these sorts of volumes. It could possibly done on a mixed-use PFI-style model, with construction groups in charge, but where would the workers be found, especially if half of the population of Warsaw is busy on the Thames Estuary Airport?

In short, there are a lot of good ideas in the report, but, to employ an Olympics metaphor, the bar needs lowering. My guess 25,000 – 30,000 units-a year-tops. And if BAA refuses to budge from Heathrow, build them all on Boris Island.

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