_Housing affordability in the city: London
Transport for London (TfL), one of the world’s largest transport operators, is also one of the largest landowners in the UK capital, with an estimated 5,500 acres of sites in and around the city. It is playing an integral role in helping the London Mayor achieve his housing priorities.
In the Mayor of London’s 2018 ‘London Plan’, the document which outlines London’s strategy over the next 25 years, Sadiq Khan set new targets for housing delivery. He says the capital needs 64,935 new homes every year to meet the growing demand for housing. Of these, he says, some 43,500 should be ‘affordable homes.’
Affordable homes are available to rent at below-market rates, and for potential purchasers, a shared-ownership model allows tenants to part-rent, part-buy their homes.
The different typographies of affordable housing, as defined by the London Plan, can be seen to the right. Currently all intermediate rented products such as London Living Rent and Discounted Market Rent should be affordable to households on incomes of up to £60,000 (US$78,196).
TfL is getting creative with ways of delivering affordable housing in London
TfL’s landholdings, combined with the mayoral targets and the need to diversify its own revenue streams due to funding reforms, makes them ideally placed to boost the delivery of homes in London. Peter Elliott, senior property development manager at TfL talks to us about how they plan to deliver.
The Mayor’s recent announcement on affordable homes targets for all new development sites means that as a holder of ‘government’ land, you need to deliver 50% affordable housing across all sites. How are you approaching this?
We have looked at our portfolio to prioritise the schemes most likely to deliver the highest levels of affordable housing. We will be able to navigate the challenges through a holistic approach and using the wider portfolio to achieve financial targets, housing number targets and affordable housing targets.
There is a need to boost the delivery of affordable homes, and all homes, on a relatively short time-frame. How can you meet this challenge? We are looking at different models of delivery, for example, we are trialling modular housing on three sites. Modular housing is interesting on a number of levels and it can help meet some of TfL’s key objectives, namely, quick delivery and potentially increased affordability.
Looking at different forms of tenure also opens up the possibility of generating a longer-term revenue stream, for example, through build-torent or multihousing units. The focus is delivering these tenures where we perceive the market need to be. We are building products that the growth of the private rented sector is telling us that London needs.
What are the important considerations for what to build and where?
TfL don’t just want to build “dormitories”. We have so many opportunities around London to invigorate places. Big schemes are good in terms of housing numbers but how do you stitch those into the fabric of London to make it a city for the 22nd century instead of the 21st?
With the number of developments and units being brought forward, there needs to be vibrancy and place-making elements to each scheme. How does it feel? Is it a destination? Do people want to come to, live in or work in that location?
You need to consider the right mix of residential, amenity and retail. Then more detailed questions need to be considered, such as what does the retail on the ground floor look like? How does public transport interface with it all? What about childcare, do we need to build crèches next to schemes?
We need to ensure that we make developments that are self-contained locations. If you don’t do this then you are unable to create longevity and people won’t want to live there. You may create supply, but the demand will be elsewhere.
The great thing about London is that many of the places we are looking at already have a history, amenities and idiosyncrasies that make them unique. What we want to do is enhance their identity and sense of place to make them more desirable.
What does the future look like for development in London?
It’s all about people and energy. Residential development has the potential to be the battery to drive London. New residential schemes now often have renewable energy elements, be it wind, photovoltaics or ground source heat pumps, enabling them to generate power.
There is no reason why this power could not then be used to electrically charge buses, ambulances, taxis, as well as residents’ vehicles.
We are then not just producing homes for people; we are producing homes for people to produce electricity to power transport and connectivity for the people of London, that’s an interesting vision for this great city.
The Knight Frank Affordable Housing team works on behalf of developers, Local Authorities, Registered Providers and private landowners in all aspects of Affordable Housing.