‘Affordable’ housing? Tell me another...

When private property developers attack the Government for not making them build enough cheap homes, you know something's gone wrong

Three cheers for the Mayor. He’s just bitten the bullet. Looked up to the sky-scraping tip of the housing crisis and offered an answer. The Mayor – in a speech yesterday – invoked the building boom that followed the Second World War: he announced plans to construct 160,000 more homes, to build them taller, and build them denser; this, he said, would make life in the city more affordable for all residents. “We will lose something essential about the gestalt” of the city, said the Mayor’s deputy, if the paltry rate of construction goes on any longer. Everybody knew what that meant: a city gradually given over to the well-heeled, at the expense of the poor, the not-so-poor and the middlingly-off.

Boris Johnson? Alas no. The Mayor giving the speech belonged to New York, not to London. But how Westminster could do with a copy of the Bill de Blasio speech.

Over here the housing situation remains more or less as it was. Or rather, slightly worse than it was at the beginning of the week. A group of private property developers – including the charitable likes of Grosvenor Estates and Qatari Diar, the property arm of the Qatari royal family – have criticised the Government for not making them build enough affordable housing. This “will actually lead to a further erosion of the ability of people from a wide range of backgrounds to live in the heart of the capital,” they write. At which point, presumably, wolves lay down with lambs and leopards moved into shared rental accommodation with goats.

The shortage of homes – affordable and otherwise – puts a crimp on life beyond the M25. Buyers across the country, and particularly in the North West, were taking on unhealthy levels of debt, the deputy Bank of England Governor warned last year, to keep up with 10 per cent house price rises. High demand, low supply. It’s a lot easier to trot out the problem than, like de Blasio, go at it in ways that might create losers alongside the winners.

 

Start with “affordable homes”. The issue here is that the Government’s definition of “affordable” – at 80 per cent of market-rates – is too expensive, and those being asked to build the properties - private developers - have found it too easy to skirt the requirement to do so. Homes are needed at the bottom end of the market, at “affordable” prices that are not, if you look closely, actually unaffordable. As nobody else has managed it since the state stopped building, the Government should take up the burden once more. Housing charity Shelter says £6.1bn over the course of the next parliament – with the same again coming from private investment – would start the engine. A council house boom. If releasing the cost of housing’s chokehold isn’t enough of a reason, try one consequence of it: a reduction in housing benefit.

Or we can stick as we are. A divided house – owners and non-owners; old and young; rich and poor – pulling further apart.

Comments