Can TfL help ease London's housing crisis?

Can TfL help ease London's housing crisis?

Tepilo asks what role TfL can play in easing London’s housing crisis.

It's been said many times that London needs many more homes to be built to fix the capital's housing crisis. What's more, these homes need to be built quickly.

Since becoming London Mayor last May Sadiq Khan has made it his mission to improve the housing situation in the capital. In fact, housebuilding has arguably been his single biggest priority, along with fighting terrorism, reversing police cuts and getting the best possible Brexit deal for London. He has long been eager for Transport for London (TfL), which is one of London's largest landowners, to help develop and provide “genuinely affordable” homes for Londoners.

During his campaign to become the new incumbent at City Hall, Khan placed a heavy focus on housing. He promised 80,000 new homes each year, with first refusal on shared ownership homes for those Londoners struggling to get on the property ladder. He also talked plenty about freeing up public land, particularly the land owned by TfL, for housing use. Since taking up the hotseat, he has been keen to implement this vision, eager to use surplus public land for affordable housing and to fast-track development projects on TfL land.

With London in desperate need of more homes - and fast – using public land is one way of increasing the output of new homes being built at lower prices. There are, however, a number of obstacles in the way of making that a reality and getting the best possible deal for Londoners.

To combat these, and get things rolling, the London Assembly Housing Committee (which holds the Mayor to account on various issues) has released a report - “Homes down the track – a marathon and a sprint for TfL‘ - which outlines a number of recommendations for the Mayor, TfL and their partners on how TfL can play a role in addressing London's housing problems.

The report warned that TfL, like other major public landowners, is not a property developer, and that journeying in that direction would take time and money. It would also imply organisational change with potentially long-lasting consequences. What’s more, the report said that delivering affordable homes on expensive sites would require significant subsidies. As many TfL sites are located in inner London, the opportunity costs may be substantial.

The report also advised that smaller developers need to get back to building homes, rather than just loft extensions and conservatories. It said TfL needs to work closely with London boroughs and housing authorities to shoulder some of the extra costs that smaller developers might not be able to cope with. Smaller builders need more certainty than large-volume builders, who are able to burden extra costs more easily. Housebuilding is a risky game, with many potential attendant costs, so the likes of TfL can help to play a role in giving smaller developers extra certainty.  

Andrew Boff AM, the former Chair of the London Assembly Housing Committee, believes TfL is gearing up to become a significant property developer, with the help of private sector expertise. “In forming joint ventures with its development partners, it is retaining, in the main, a long-term interest, offering it control over what is built, and generating ongoing revenue streams,” he said.

“TfL has set itself the target of starts on sites by 2020 to deliver 10,000 homes,” he added. “Our evidence suggests this is something of a sprint, and we don’t think it’s going to make it unless it takes some more radical steps. Either way, we need to be clear about the trade-offs TfL’s making, to be sure its land is delivering the best deal for Londoners.”

Clearly, then, there are issues with relying too heavily on TfL to plug the gaps in affordable housing and new homes. For one, their primary focus is not property development and building new homes is always going to be secondary for an organisation such as TfL, unless dramatic organisational change was to take place.

What is more likely is TfL farming out development projects to the private sector and its various partners, which could cause some of the same issues we currently have now with land banking and slow planning permission processes. While the Mayor has promised to fast-track TfL developments, how workable this is in reality is less clear-cut.

The cost, too, of building on TfL sites could be considerable, and may challenge the capability of providing affordable homes to Londoners. The idea of TfL supporting smaller developers to increase their output is a good and pragmatic one. As always, a multi-pronged approach will be needed to solve London’s housing issues – TfL alone can’t be relied upon to do it all.

That said, there is clearly public land – owned by City Hall – that could be put to better use, and it’s in the interests of everyone to speed up developments on these sites, or make it easier for developments to be built on these sites, to help increase the number of new homes on offer in London.

The capital needs thousands of new homes, and using public land is one way of doing that – but turning to TfL and its surplus land is not without its downsides, obstacles and issues. As the London Assembly Housing Committee has pointed out, due consideration will need to be given to these issues to ensure Londoners don’t lose out. There are no quick-fixes or magic wand solutions when it comes to housing in London, but if affordable homes can be delivered at lower prices – with as little trade-offs as possible – everyone will win.

Repurposing public land will play a big part in that, but it shouldn’t be the only approach on the table.