In my last blog I spoke about the huge demand for housing in Lambeth. Nonetheless, it’s worth repeating the facts. We already have 21,000 people on our housing register – that is, people waiting for a council home or for a transfer to a more suitable one – meanwhile our population is expected to grow by almost 30,000 by 2030.
All this means that there are simply not enough homes to go round. That pressure means that prices in the private sector both to rent and to buy are soaring, and for us as a council there is a rapidly growing demand for council homes.
I also detailed how we’re doing our best in Lambeth to tackle this housing crisis. We’re absolutely committed to building new homes – and let’s be clear, that’s the only real way to get us out of this crisis. However, I was also clear that we can’t do it on our own. And as I said in my speech on affordable housing at the conference, it would be naive to think that we could.
As a council committed to building new homes, we have to work with developers.
However, that doesn’t simply mean handing over the keys to the borough and letting them profit unbarred – no, we work with developers to get the homes we need, and we use our clout to get the best deal for Lambeth and its residents in doing so.
As a baseline we ask all developers to commit to 40% affordable housing in any new project (N.B. boroughs like Tory Wandsworth only have a target of 15%). In fact, with the Streatham Hub development we managed to achieve 50% affordable housing.
That said, as I mentioned in my last blog, the government hasn’t made it easy for us to hold up to this target – by introducing a minimum profit level into ‘viability tests’ for developers, this now means that the ability of the developer to make a profit from a site holds more sway than our local needs. That is, if they feel that building too many affordable homes will make the development unprofitable, then they don’t have to provide them. That makes things very difficult for us – however much we as a council strongly want to build more affordable housing, our hands are tied by national legislation.
But we don’t give up without a fight – Lambeth has secured a review mechanism for viability tests, which means that we get our fair share if the site ends up making more money than first evaluated. We also have all developer’s viability appraisals independently reviewed and scrutinised to check their analysis is fair. Often this ensures a substantial improvement in the deal we secure – indeed this was the case at Vauxhall Sky Gardens where the developers initially said it would not be viable for them to provide any affordable homes; we disputed this and actually secured 35 social rented and 6 shared ownership units.
Where viability issues mean we’re not able to achieve our 40% target, we always make sure developers provide as much affordable housing as they possibly can. For instance, as part of the Vauxhall Nine Elms development we’ve secured 29% affordable housing in Eastbury House, 33.6% in Hampton House and 29.8% in Prince Consort House. And with the Keybridge House development we secured land for a new school.
I believe that affordable housing in new developments is crucial, not just to meet the growing demand for homes, but also so that those new developments end up as mixed communities, with a different mix of backgrounds and people. We don’t just want houses, we want homes that are part of, and contribute to, the community. That’s why it’s important to us that developers provide affordable housing on the same site.
For some boroughs, the principle of asking the developer to give them money for affordable housing instead of building the actual homes is attractive, but what that really means is that places with higher land value such as Vauxhall would price out ordinary people. We don’t want that to happen, so we always start from a point of wanting affordable homes provided on site.
In exceptional circumstances, we sometimes have to get developers to provide affordable housing slightly off their main site, but that can bring other benefits too. It’s not always about the number of new homes being built in total, but also about the number of people they can eventually house – that is, creating enough good family-sized homes too. For example, by agreeing to allow the developer to build off-site from the Shell development in Waterloo, we were able to secure 71 family sized social rented units and a new nursery on nearby Lollard Street, rather than 17 on-site 1 and 2 bedroom units which would not have met local family needs.
I also welcome Labour’s proposal announced yesterday to prioritise new homes for local people.
I think it’s important to give these messages loud and clear to developers – as I did on Wednesday at MIPIM.
*For the record: I didn’t get flown to Cannes, I caught the train to Olympia.