Homes for Londoners? Sadiq Khan’s Record on Housing

‘The housing crisis is the single biggest barrier to prosperity, growth and fairness facing Londoners today. I’ve found that, both as a MP, and throughout my campaign to be Mayor of London, it doesn’t matter whether you’re talking to business leaders, local residents, charities or community groups: far and away the biggest issue across the board is London’s housing crisis. The city’s shortage of decent and affordable homes is causing real misery to millions of Londoners, and damaging London’s competitiveness.’

– Sadiq Khan, Homes for Londoners, March 2016

Very few politicians deliver the promises they make when campaigning to be elected to office; none have ever improved on them. With the charity Shelter announcing that 170,000 Londoners would be homeless this Christmas, the London Mayor, Sadiq Khan, in a letter leaked to the Guardian newspaper, responded that he was ‘considering’ introducing rent controls in 2019. This May Sadiq Khan will have been Mayor of London for two years, so now seems like a good time to assess the gap between what he promised voters in March 2016 and what he has delivered to address London’s housing crisis.

In his election manifesto Sadiq Khan promised to build 50,000 new homes in the capital every year of his administration; he promised to maximise the affordable housing in new developments; he promised to build new social housing and other ‘genuinely affordable’ homes; he promised to support councils and housing associations to build them; he promised to grant funding and planning permission to estate demolition schemes only when it has resident support and it does not result in the loss of social housing; finally, he promised to ‘tackle’ the source of homelessness. He promised a lot more besides, but that’s enough to be going on with. So let’s look at how the man Time magazine last year included in its list of the ‘World’s 100 Most Influential People’ has met these promises. The Mayor’s policies on housing are published under the title of Homes for Londoners. Here are the three most important.

1. The Good Practice Guide to Estate Regeneration

When it published in draft form in December 2016, the Good Practice Guide to Estate Regeneration was universally denounced, not only by various members of the London Assembly but by the resident groups invited to comment on its proposals. A compilation of the lies used to justify the demolition of London’s council estates in the middle of a crisis of housing affordability, its sloppily written policy allowed the Mayor to renege on every one of his electoral promises.

To his assurance that a regeneration scheme would only go ahead if it didn’t result in the loss of social housing, the Guide now allowed their placement with so-called ‘affordable’ housing, a term introduced by the Conservatives and embarked by Labour. The promise that tenants and leaseholders would have the Right to Return to the redevelopment was now made contingent upon their ability to afford the hugely increased rents and property prices. And the condition that demolition would only go ahead with resident support was undermined by qualifications, ambiguities and evasions.

What quickly became apparent was that this document had been written not as a guide to ‘good practice’ in treating residents faced with the demolition of their homes, but to managing and overcoming the rising tide of opposition from the campaigns of resistance on the more than 200 London housing estates threatened by the estate regeneration programme.

2. Resident Ballots for Estate Regeneration

Unfortunately for Sadiq Khan, at the Labour Party Conference in September 2017 his old nemesis, Jeremy Corbyn, went and put his foot in it by announcing that councils would have to win a ballot of existing tenants and leaseholders before any redevelopment scheme can take place. This proposal was immediately and loudly rejected by London’s Labour councils, but it left the London Mayor in a difficult position.

To get out of it, in July 2018, as an addendum to the Good Practice Guide, Sadiq Khan published guidance on Resident Ballots for Estate Regeneration. This specified that only a single ballot will be permitted, and that it must be held as early as possible in the regeneration process, and specifically before even a private development partner is allocated. Under the current model of estate regeneration, however, the redevelopment of a demolished estate is entirely dependent upon the council’s private partners, whose financial investment in the scheme will determine what gets built in its place. Holding a ballot before those partners have been found, therefore, is nonsense, since neither the council nor their future partners can possibly be made to honour a proposal on which a viability assessment has not yet been produced. The residents, in effect, will be voting on nothing more than empty promises.

Once again, far from empowering residents, the purpose of this policy document is to manufacture resident consent to a demolition scheme they will not be able to change, and to which the council can point in the face of objection, claiming the new development to be ‘resident-led’.

3. The Affordable Homes Programme

Which brings us to what is being built in London, on both new developments and estate redevelopments. In June 2018, as part of his Affordable Homes Programme, Sadiq Khan announced that he had won a total of £4.8 billion from the Government to start building at least 116,000 affordable homes by March 2022. Unfortunately, this includes the Mayor’s new category of London Affordable Rent, London Living Rent and London Shared Ownership, all of which are considerably more expensive than Social Rent.

The definition of London Affordable Rent is typically vague, but the benchmark Sadiq Kahn has set for 2019-20 is £164.24 per week for a 2-bedroom home, which is roughly 1.5 times as much as Social Rent, an increase as prohibitive to estate tenants as any austerity measures imposed by the Conservative government. London Living Rent, the Mayor’s new category of affordable rent, is set at a third of the median income in the borough. On the face of it this sounds like a good deal, but if you live in the Inner London boroughs in which the estate regeneration programme is concentrated, this is around one-and-a-half times Social Rent. Worse still, this is a Rent to Buy product, and tenants who enter into this tenancy are required to buy the property within 10 years or lose their home.

It is Shared Ownership schemes, however, that make up the majority of so-called ‘affordable housing’. Shared Ownership means the buyer needs a 25 per cent share in the new property, which in London is upwards of £450,000, far beyond the reach of most Londoners. However, this only gives them the tenancy rights of an assured tenant. They don’t become the owner of the property until they have purchased 100 per cent of the shares. And although they may own just 25 per cent of the property, tenants are liable for 100 per cent of the service charges. Finally, if they default on their rental payments, tenants lose not only their home but also their down-payment on the property as well.

For all these reasons, Shared Ownership, which is the cornerstone of Sadiq Khan’s Affordable Homes Programme, has emerged as the biggest scam in the privatisation of council housing since Margaret Thatcher’s Right to Buy scheme.

Conclusion

The result of these disastrous policies is plain to see. In the year 2016/17 a net housing supply of 45,505 residential units were completed in London, 4,500 short of Sadiq Khan’s electoral promise of 50,000 per year. Worse, in response to a target completion rate of 17,000 net additional ‘affordable’ homes per year – at 34 per cent of the total far less than the figure of 50 per cent Khan claims is his target – a net total of only 7,347 affordable units were completed, less than 16 per cent of the total. Worse still, of these so-called affordable homes, 2,926, over 6 per cent, were for Shared Ownership; 2,103, less than 5 per cent, were for some form of Affordable Rent; and a mere 2,318 units, 5 per cent of the total new builds in London, were for Social Rent. By any measure this is an abject failure to deliver the housing Londoners can afford to buy or rent, and in doing so reduce the homelessness that now afflicts 1 in every 52 of us.

It’s by this example, therefore, that we should anticipate the London Mayor introducing rent controls this year. Sadiq Khan’s conveniently leaked letter sounds like an attempt to shift the blame for London’s housing crisis away from his own failed policies and onto the equally disastrous and nearly indistinguishable policies of the Conservative Government. In cities where some form of market-indexed rent control has been introduced, such as Dublin, Berlin and New York, private landlords have already worked out how to circumvent it – by withholding maintenance, by additional service charges, by increasing the value of the property, or simply by selling it, further reducing the availability of rental housing. The best and perhaps only way to reduce rental costs for the 2.4 million Londoners who rent their homes from private landlords is to increase the supply of homes for Social Rent, rather than demolishing and replacing them with the unaffordable housing the Mayor is currently funding with billions of pounds of public money. And in place of the current programme of estate demolition, we urgently need the investment and policy – which is entirely lacking from the Mayor’s Homes for Londoners programme – for the refurbishment of London’s existing council estates.

John Healey, the Labour Shadow Secretary of State for Housing, likes to talk about what he calls ‘Labour in Power’ as an indication of what a Labour government will do. The example of the more than 150 council estates currently being demolished or privatised by London’s Labour councils, and the policy written by London’s Labour Mayor to accommodate this programme of social cleansing through marketisation, is the clearest indicator we have of what that will be. The time to hold the Labour Party to account on its disastrous housing policies is not when and if it forms a government. It is now.

Simon Elmer
Architects for Social Housing