Former London Mayor Ken Livingstone
File photo by Luke Thomas
By Nicholas Olczak
June 8, 2008
LONDON, England — When Ken Livingstone was elected as London’s first Mayor in 2000, the biggest challenge he faced was the city’s growing housing crisis. London had 60,000 homeless and 200,000 in temporary accommodations. Conservative reliance on market forces had left the capital critically lacking in housing. The former Mayor’s Housing Commission estimated that over 43,000 new homes were needed each year for the next ten years to accommodate London’s swelling population. More than 28,000 of these units had to be affordable to low to middle income Londoners to protect against being forced out by rising prices.
The new Mayor rose to this challenge with characteristic boldness. His 2002 London Plan required boroughs to build 23,000 homes a year and set an ‘aspirational’ target of 30,000 new homes. Most controversially, the plan made boroughs insist that 30-50 percent, or approximately 10,000 of these new homes, were affordable. They had to ensure that seven out of ten of these should be for rent, reflecting Livingstone’s belief that this was the best way to help the lowest income Londoners.
Have these measures been successful in bringing affordable housing to London?
The political manipulation of the issue makes this somewhat difficult to answer. Livingstone asserted that he had great success. Just before the mayoral elections last month, the Mayor’s Office released statistics showing that 31,430 new homes had been delivered between 2006 and 2007, an increase of 83 percent over the net production in 2000. Affordable housing had risen 72 percent since 2000 and between 2006-2007 totalled over 11,000 new homes.
Evening Standard editor Andrew Gilligan calls these claims “lies,” stating that under Livingstone affordability had dropped to 34 percent, lower than in 2000. Others have argued that Livingstone’s statistics were deliberately misleading, measuring affordability on housing units, not floor space.
Livingstone claimed a 2004 Vauxhall development had 40 percent affordable housing, but this was only 20 percent of the total floor space. A 2007 Hyde Park development claimed 50 percent of its units were affordable, but these represent only 12 percent of its floor space. Developers have frequently met quotas by building low standard, poky flats far away from more luxurious constructions in much the same way as San Francisco has allowed for “offsite inclusionary” housing development.
London’s larger developers repeatedly attempted to get around Livingstone’s affordability quotas. Property specialist Richard Ellis records a large increase in applications for 14-unit developments as developers try to avoid the “affordability trap” imposed on sites of 15-units or more. Large developers threatened to pull out of projects altogether, pressuring City Hall into relaxing its demands.
“If [Livingstone] insists on 50 percent, I believe housing construction in London will grind to a halt,” the Chairman of Berkeley housing warned in 2002.
Developers claimed that without grants, the cost of developing affordable housing made many projects economically infeasible.
Dealing with developers, Livingstone was caught between the need for more houses to support London’s economic growth and the need to also ensure affordable housing for lower income citizens. Repeatedly he compromised on affordable housing quotas to ensure something was built. When a 360-unit Bethnel Green site provided just 34 affordable units, Livingstone remarked: “That’s one of those sites where we’ve looked at the figures and you can’t get any more than that without the scheme not being viable.”
Similarly, he allowed a Royal Docks scheme to go ahead with 25 percent affordable housing because it provided an aquarium with the expectation of drawing millions of tourists.
Many began to view Livingstone’s housing policy as inconsistent. He was accused of attacking councils and certain developers for not reaching targets, but at the same time showing great flexibility with others.
Earlier this year Livingstone was accused of “rank hypocrisy” after allowing for the development of a a block of 800 luxury flats in London’s upscale Victoria area that did not mandate any affordable housing requirements. In exchange, the developers promised to give £120 million ($240 million) to the City’s transit budget.
Livingstone also faced significant opposition from several of London’s 33 councils. In 2004, homeless charity, Shelter, said affordable housing plans were being “undermined by local authorities that are turning down planning applications.” Shelter said councils feared new affordable housing would place high demands on local infrastructure and undermine their support by changing the political complexion.
Livingstone claimed Southwalk council deliberately held up a development near City Hall, refusing to give up a share of council-owned public land. He criticized Wandsworth local council for making only 15 percent of its new housing affordable between 2004 and 2006. He attacked Hammersmith and Fulham for reducing affordability by 20 percent.
All three councils accused Livingstone of being obsessed with statistics contending they are instead focused on increasing their total new housing supply to bring housing prices down. This is in line with the national government desire to help first time buyers, they argued. Livingstone’s ability to intervene in planning decisions only extended to sites over 500-units, making him almost powerless to overrule these autonomous actions.
Both Wandsworth and Hammersmith and Fulham are Tory-run councils. Their resistance to Livingstone, like that of the larger developers, was enthusiastically backed by the British Conservative Party. The Conservatives took issue with Livingstone’s intervention in the housing market, and when he realigned with Labour, they saw broader political capital in exposing his failings.
At the same time, the Labour Party never fully supported Livingstone’s drive for rental accommodation, concerned instead with helping first-time buyers. As Shelter spokesperson perceptively recognized, Livingstone suffered because, regarding the solution to affordable housing, “there may be a consensus in Whitehall, but not a consensus in the country.”
Getting enough affordable housing built was challenging enough. Yet when this aim was achieved, Livingstone then faced the additional hurdle of ensuring housing remained affordable and available to those who needed it. When lower income workers did not move into housing classed as affordable at Imperial Wharf, because it was still too expensive and poorly marketed, these flats were quickly sold to professionals at inflated prices.
Earlier this year the press reported that over two-thirds of housing in London is being bought up by ‘to let’ investors. Homeless charity, Crisis, describes how this has been “unbalancing the market… with prices being driven further out of the reach of most working families, never mind the poorest.”
And if there’s any indication as to how Conservative Party Mayor-elect Boris Johnson will tackle London’s housing crisis, Johnson wrote in November: “Hundreds of thousands of London families are being pushed into poverty because of the cost of housing and for the sake not just of the economy but of humanity we need to do something to help. And that means increasing supply and it means releasing land for development.
“But I am convinced that we will get the best results if we work with the London boroughs, not bullying and berating them, and not getting too hung up on percentages of affordable accommodation.
“I understand the motives of those who set a 50 per cent target and yet I think they would acknowledge that the best has sometimes been the enemy of the good.”
The Hunger Site
June 10, 2008 at 12:04 pm
In my opinion, citing the “Evening Standard” as a reliable source in relation to the previous Mayor is indicative of yet more tory fodder.