Stalled Schemes

Meeting: 
MQT on 2013-05-22
Session date: 
May 22, 2013
Reference: 
2013/1389
Question By: 
Nicky Gavron
Organisation: 
Labour Group
Asked Of: 
The Mayor

Question

There are 170,000 homes across London that have planning permission but are stalled. Now that the government has made it even easier to drop affordable housing requirements from developers, how many of these schemes will be able to go ahead?

Answer

Answer for Stalled Schemes

Answer for Stalled Schemes

Answered By: 
The Mayor

Boris Johnson (Mayor of London): Thanks, Nicky. There are, you say, 170,000 that have planning permission that are stalled, actually the Barriers to Housing Delivery report that the GLA commissioned, I think, suggests that there are 210,000 residential units across the capital, which have planning consent and which have not been started. Your real question is: is there any more that we could do to allow these developers, or potential builders, to escape their obligations to build more affordable housing under Section106 in order to let the thing actually go ahead.

Nicky Gavron (AM): Actually no, my question says is it going to make it easier now that the Government is allowing renegotiations of these requirements, so that they can be, well, unblocked, really.

Boris Johnson (Mayor of London): There are two points. We in the GLA, and I think we secured this as part of the legislation, the Government has made a requirement that we, I, will be informed of all applications where a review of Section 106 affordable housing requirements are being undertaken. If a developer decides to reduce the quotient of affordable housing in order to get the thing off the rocks, they have to square it with us. Now what will my attitude be? It will depend on the business case. It will depend on what the toolkit says and whether it is going to happen or not. In the end, I would rather see a lower percentage of something rather than 100% of nothing, if you see what I mean.

Nicky Gavron (AM): Yes. I understand that but on the whole you agree. I gave you a written question in March and you said that you thought it would ensure that stalled schemes move forward. In this report you mention, and you are quite right it is around 210,000/211,000 stalled homes, so it is larger than we thought, but interestingly that report says that 177,000 stalled homes are on large sites, ie there are 250 to 10,000, which is very interesting, I think. They are not the little sites.

Boris Johnson (Mayor of London): Sorry, Nicky, when you say it is interesting, what is your thought there?

Nicky Gavron (AM): A lot of these homes are on large sites, which we will come to in a minute. In that report you mentioned, which was done a few months ago, it does not identify affordable housing requirements, or Section 106, as being a barrier. I am just wondering why you are talking about that at all.

Boris Johnson (Mayor of London): You asked the question. Your question say, 'Now that the government has made it even easier to drop affordable housing requirements ...' I have to answer your question. You cannot blame me for trying to answer your question.

Nicky Gavron (AM): Exactly, yes, but you are talking about it ensuring these schemes move forward. I want to suggest to you that affordable housing is not actually the problem. Just hear this from one of those very major housing developers on one of those large schemes, and this is what they say, 'Across the Group we are focussing on maximising value rather than driving volume'. What they are doing then is rationing supply, and this is right across the board with these large developers. They are rationing supply to drive up prices and drive down volume. In fact, they are land banking. What I want to put to you is, on the basis of that report about large schemes, and on the basis of these being driven by large developers who are trying to drive down volume, do you agree that land banking is a problem?

Boris Johnson (Mayor of London): I think it is pernicious and I gave a speech, I do not think you were there, where I said that we would be prepared to use compulsory purchase order (CPO) powers.

Nicky Gavron (AM): That is good, right.

Boris Johnson (Mayor of London): I mean that, because I do think that to constrict supply in order to push up prices by land banking is plainly against the economic interest of this city. We need to be absolutely clear that that is not going on, where it is demonstrably. I know you love it. The more tyrannical I am the more you love it. I do mean it because I think it is a problem.

Nicky Gavron (AM): Yes. I am very, very glad to hear that now. The point I am trying to make is the majority of these homes, 177,000, are large schemes. Large land developers land banking. There are hundreds of thousands of Londoners on waiting lists, nearly 1 million actually. You have 177,000 homes --

Boris Johnson (Mayor of London): 210,000.

Nicky Gavron (AM): -- sitting there and they could anyway go ahead without renegotiating the affordable housing requirements. What we are looking at is another giveaway to the big guys. We are looking at their profits going up and affordable housing going down. What we need is to get these schemes moving without forfeiting the affordable housing. I want to ask you how are you going to do that and by when?

Boris Johnson (Mayor of London): As I say, I think it is better to have a percentage of something than 100% of nothing. I would rather see these schemes go ahead with some affordable housing than simply not go ahead at all and that is why I have said what I said. By the way do not forget, viewers who have not been tuning in for the last four or five years, may want to be reminded that we have built a record number of affordable homes in the last five years and we are on target to do even better.

Nicky Gavron (AM): Boris, you are missing a point.

Boris Johnson (Mayor of London): I think it is relevant to considerations that we are incredibly active and dynamic in building more affordable homes and if you constantly deny that that will ever happen.

Nicky Gavron (AM): Boris, the point is they will not build, even if you give them this giveaway of saying, 'Don't put any affordable housing' you just put their value up they are not going to build. You are going to have to do naming and shaming, CPOing, lobbying the Government, changing your own planning rules. You have got to do something, 177,000 homes, large developers sitting there and they could be used.

Boris Johnson (Mayor of London): They could be. I am all in favour of using the CPO powers, I have said that. In the end we have to respect property rights in this country to a certain degree. We do not live in a Stalinist system, Nicky, much though you may wish we did. Private property is what it is. I cannot take it off people willy-nilly. This is not Zimbabwe, or whatever. Where there are clear cases of land banking, where people could go ahead with developments it would be massively to the benefit of this city. Not just social homes of one kind and another, but homes for private rent of a kind that Tom Copley [AM] has been talking about. All those things need to happen and they need to happen fast. That is why I said what I have said about CPO powers.

Nicky Gavron (AM): Yes, but not at the expense of affordable housing.

Boris Johnson (Mayor of London): Not necessarily, no.