Memorandum by Association of London Government
(AFH 50)
The Association of London Government (ALG)
represents the 33 London boroughs. It is committed to fighting
for more resources for London and getting the best possible deal
for London's 33 councils. As well as providing its member authorities
with a single powerful voice, the ALG lobbies for proper resources
for the capital and leads the debate on key issues affecting Londoners.
This submission outlines the position of the
Association of London Government in respect of affordable housing
and responds directly to the points raised in the Urban Affairs
Sub-Committee press notice announcing the establishment of this
inquiry.
THE DEFINITION
OF AFFORDABLE
HOUSING
The crucial issue for the ALG is how easily
people can obtain access to housing, of whatever tenure, in the
capital. Any definition of "affordable housing" must,
in our view, start from how easily people can find the homes that
will meet their needs.
The housing problems faced in London by "key
workers" such as nurses, police and fire officers are high
on the agenda for the city. Today, they can buy housing in only
two or three of London's 33 boroughs. There is also a severe shortage
of affordable housing for homeless households and other households
in housing need.
The physical access that people have to jobs,
shops, recreation and schools is also important when considering
affordable housing.
The Government's use of the term "affordable
housing" is set out in Circular 6/98, Planning and Affordable
Housing. It encompasses both low-cost market and subsidised housing
irrespective of tenure or the financial arrangements open to people
who cannot afford to rent or buy homes available on the open market.
What constitutes "low cost" market housing is unclear
and left undefined. "Low cost" will vary according to
location and people's ability to pay the rent or to raise money
for a mortgage.
The ALG supports a definition of "affordable
housing" that is similar to that promoted in Circular 6/98
but which provides greater clarity and emphasis on people's ability
to secure housing, to rent or to buy, based on their ability to
pay either the rent or mortgage. In setting policy within unitary
development plans (or their successor, local development frameworks)
it is appropriate for a local authority to set out its requirements
for different types of affordable provision, both in terms of
an overall requirement or in relation to specific sites—this
can be set in terms of cost to occupier and/or in terms of nomination
arrangements. The ALG supports the use of tenure as a factor in
the definition of affordable housing for planning purposes.
THE SCALE
AND LOCATION
OF THE
DEMAND FOR
AFFORDABLE HOUSING
Any provision of affordable housing must meet
the actual housing needs that exist. This means providing homes
that are of the right size and of a broad mix of tenures wherever
possible. This should include, where appropriate, supported housing
and specialist housing for specific client groups. Large single
tenure or single size developments should be avoided unless there
is a specific justification for them. The location of affordable
housing needs to be near public transport and community facilities.
Isolated and peripheral developments should be avoided. This is
critical if sustainable development is to be achieved on major
regeneration sites.
A balance also needs to be struck between the
need to offer individuals as much choice as possible over where
they live, with the need to ensure that developments provide a
mix of tenures within neighbourhoods. It may be appropriate to
provide shared ownership housing in an area which is primarily
rented housing, and focus on rented provision in an area which
is mainly owner occupied. It may also be important, following
on from this, to increase the proportion of affordable housing
in areas that are primarily owner-occupied. This may have cost
implications, but the ALG considers that maximising unit output
should not be achieved through concentration of rented provision
solely in the lowest cost areas. In our view, this can lead only
to further concentrations of poverty and wealth and all of the
associated social problems that accompany that.
THE QUALITY
OF AFFORDABLE
HOUSING
The ALG supports the standards set out in the
Government document "A decent home" (DTLR, March 2002).
This is a welcome start in ensuring that all social housing meets
set standards of decency by 2010. We believe that these standards
should be extended to private housing stock, including those built
for rent and for sale in order to ensure consistency and protect
all tenants.
High quality of design, including best practice
in construction methods, and good management is vital to ensure
the long-term success of schemes. This will become increasingly
important as densities of development increase to make better
use of scarce land. Higher densities in town centres, on sites
with good public transport and adequate access to community facilities
can be promoted where this can provide appropriate housing—but
that must be backed by quality. The sustainable residential quality
(SRQ) approach, which links higher densities to good quality design,
is endorsed. This includes consideration of car free development
and provision for bicycle storage, which can increase both housing
density and amenity provision.
New affordable housing cannot be planned in
isolation. Housing needs to be located within reach of existing
essential community facilities—public transport, schools,
health centres, doctors' and dentists' surgeries, shops and sports
facilities—with spare capacity or these facilities have
to be provided prior to completion of the housing scheme.
THE ADEQUACY
OF THE
EXISTING SUPPLY
AND THE
AMOUNT OF
RESOURCES AVAILABLE
The ALG's London Housing Strategy (published
February 2001), reviewed existing and projected supply in relation
to the estimated and projected need for affordable housing over
the next 20 years. These estimates (updated for cost increases)
are:
— 186,400 rented homes at £96,000
subsidy per unit: £17,895 million
— 37,600 shared ownership units at
£49,600 subsidy per unit: £1,865 million
— Total: £19,760 million.
Our strategy calculated that, to meet London's
housing need backlog over 20 years, the Housing Corporation programme
would need to be increased from the current £500 million
per year to £1,000 million per year. To meet the backlog
over 10 years, the programme would need to be trebled. Both these
figures assume the entire programme focuses on additional provision,
and does not include an element for units replacing demolished
affordable homes as at present.
THE EXTENT
TO WHICH
PLANNING GAIN
CAN FUND
THE LEVEL
OF AFFORDABLE
HOUSING REQUIRED
The continuing boom in the property market increases
the potential use of planning gain. As land and property values
increase the scope for negotiating greater planning gain from
developers as a percentage of final developer profit increases
as well. But planning gain should be seen as a supplement to housing
investment, not as a substitute for it. The Planning Green Paper
sets out proposals for tariffs to replace, in large measure, planning
obligations. The ALG would welcome further detail on how they
will be implemented. We are concerned that the introduction of
the tariff system should not result in any loss of mainstream
funding for housing provision.
The planning system sets out to balance land
use needs and the over-emphasis on one use can mean that other
planning needs, such as transport provision, travel plans, education
provision, health provision, open space and so forth, are overlooked.
The development of the tariff system will need to be closely assessed
to ensure that conflicts with the provision of affordable housing
do not occur. In the ALG's view, the tariff system should sit
alongside a revised Circular 6/98, setting out affordable housing
requirements, rather than acting as a replacement for existing
guidance.
There are concerns about whether planning gain
in London does in fact produce 10 per cent of affordable output
as assumed by the Government, as this figure is thought to include
some output funded from a combination of planning contributions
and social housing grant. The ALG would welcome further improvements
to monitoring.
HOW RESOURCES
SHOULD BE
BALANCED BETWEEN
SOCIAL HOUSING
AND OPTIONS
FOR OWNER-OCCUPATION
FOR THOSE
WHO CANNOT
AFFORD TO
BUY (INCLUDING
SHARED OWNERSHIP)
AND WHETHER
ANY ADDITIONAL
MECHANISMS ARE
REQUIRED TO
BRING FORWARD
SHARED OWNERSHIP-TYPE
SCHEMES
The ALG's estimate of requirements, as set out
in our London housing strategy, is:
— market provision 208,000 homes;
— shared ownership 37,600 homes; and
— LA/HA rented 184,000 homes.
These figures need to be reviewed in the light
of findings from the census and the GLA household survey, revised
estimates of population and household growth to be published by
the GLA, and work on affordability being undertaken on behalf
of the ALG by Professor Steve Wilcox. The ALG recommends that
the DTLR considers options for a sub-market rented programme and
for a range of financial options in relation to shared ownership.
Furthermore, the ALG believes that the DTLR should develop a mechanism
for employer equity shares as proposed by the ALG in 2000. (Copy
appended.)
WHETHER TARGETS
IN REGIONAL
PLANNING GUIDANCE
ARE APPROPRIATE
The most significant problem with targets in
Regional Planning Guidance is that they do not recognise the existing
backlog of unmet housing need. The Whitehead/Holmans estimate
referred to in the report of the Mayor's housing commission (Homes
for a World City November 2000) was of a requirement for a total
affordable housing programme of 224,000. Half of this, 112,000
homes, is to meet the backlog of unmet housing need, with 5,600
additional dwellings a year arising from household growth over
20 years. This can be compared with a housing capacity net estimate
of 380,963 (1997-2016, of which 110,844 was available 1997-2001)
and a net affordable housing capacity of 74,950.
This estimate of capacity is only 33 per cent
of the affordable homes required.
WHETHER TARGETS
ON DECENT
AND AFFORDABLE
HOUSING WILL
BE MET
BY CENTRAL
AND LOCAL
GOVERNMENT
The ALG is concerned that targets cannot be
met in London boroughs based on current and anticipated funding.
It is understood that the Government Office for London considers
there are four boroughs where achieving targets will be most problematic.
In some cases, targets will only be achievable if significant
resources are made available following stock transfer, which is
subject to tenant consent, or through the establishment of Arms
Length Management Organisations, which also require tenant support.
The ALG also recommends that the DTLR provide information on how
its decent homes target will be achieved in the private sector.
The ALG considers Government should set a target
to meet the unmet existing need for additional affordable housing,
and projected future need, by 2012, and that this target should
be the basis of both regional planning guidance, national and
regional investment planning, and targets for incorporation in
the London Spatial Development Strategy and in Borough UDPs/ Local
Development Frameworks.
WHETHER CURRENT
POLICIES AND
PRACTICES ARE
LEADING TO
THE CREATION
OF MIXED
COMMUNITIES
The current tenure breakdown within each borough
shows that the proportion of social housing stock (Local Authority
and Registered Social Landlord combined) ranges from 9 per cent
in Redbridge to 56 per cent in Tower Hamlets. Within individual
borough wards, the variation is greater and can range from 0 per
cent to close to 100 per cent. It should however be recognised
that the pattern will not be quite as polarised as the 1991 census
implies, given the combination of right to buy sales on council
estates and the extent of RSL acquisition of street properties
in predominantly private sector areas.
WHETHER MORE
"GREENFIELD" DEVELOPMENT
IS NEEDED
TO MEET
HOUSING NEED
Within London 83 per cent of all development
is on "brownfield" land. The ALG considers that it is
unlikely that London can meet the need for additional housing
entirely on "brownfield" sites within the boundaries
of the capital over the next 20 years. The Mayor's population
projections suggest London will have to absorb an increase of
700,000—equivalent to a city the size of Leeds—by
2016. Even by increasing densities and through regeneration of
major development sites it has yet to be demonstrated that this
level of development is practical and realistic within the London
boundary and without the use of "greenfield" development
land.
THE COST
TO INDIVIDUALS,
BUSINESSES AND
THE ECONOMY
RESULTING FROM
ANY SHORTFALL
IN THE
PROVISION OF
DECENT, AFFORDABLE
HOUSING
The lack of affordable housing has massive costs
to the households concerned, to local authorities and to the London
economy as a whole. Over 52,000 households in London are currently
living in temporary accommodation as homeless—with a massive
disruption to family lives and at an annual cost to local authorities
of more than £100 million. These figures are currently rising
by about 10 per cent each year. The shortage of housing also generates
increases in house prices, further limiting access to market provision
and increasing homelessness. This situation, exacerbated by population
mobility, has effects on the provision and costs of other services
provided by local authorities, such as education.
The absence of affordable housing causes major
recruitment problems in both public and private sectors. Lack
of affordable housing is one of the main reasons why public service
professionals leave London as is shown by Local Authority exit
interviews, especially when they need larger accommodation for
a growing family. The most recent London borough recruitment and
retention survey shows that most boroughs are reporting it difficult
or extremely difficult to recruit to the majority of local authority
posts—at a range of grades, and in most cases, even more
difficult to retain staff.
The DTLR/Housing Corporation Starter Homes Initiative
has had a limited impact, with only 13 key workers helped by the
end of March 2002, and with the programme limited to NHS staff,
teachers and police officers, and not covering other public sector
or private sector key workers. The total London programme should
help 4,615 key workers over the next two years, but this is marginal
in terms of the overall shortage of housing in London—for
both key workers and other households. A much more significant
increase in housing supply in London is necessary if the shortage
is to be overcome. As the London population grows, as it is projected
that the London economy and employment generation will also continue
to expand, housing supply must keep pace or the economic success
of London will be critically hampered, and the maintenance of
essential public services will be put at risk.
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