Give lo­cal coun­cils the cash to build homes and solve this cri­sis

Evening Standard - West End Final Extra - - Comment - Ro­han Silva

IMADE it. At the age of the 37, and af­ter years of liv­ing in rented base­ments and shared houses, I’ve fi­nally man­aged to clam­ber onto Lon­don’s crazy prop­erty lad­der. Thanks to decades of spi­ralling prices, that makes me bang on av­er­age — with the typical first-time buyer in our city now well into their late 30s.

Sadly, things are get­ting worse, not bet­ter — and if you want to know just how bad the hous­ing cri­sis has be­come, con­sider these two facts.

First — the cost of a home in Eng­land has shot up by 173 per cent since 1997, while wages have risen by just 19 per cent. That means home own­er­ship is in­creas­ingly out of reach, and wealth in­equal­ity is widen­ing too.

And sec­ond — an av­er­age young per­son in Lon­don to­day will have to save for 17 years just to glean enough money to af­ford a de­posit on a house.

No won­der the In­sti­tute of Fis­cal Stud­ies has found the chances of a young adult own­ing a home in the UK has more than halved in the past two decades. And it’s no sur­prise too that more peo­ple than ever be­fore are rent­ing — and hav­ing to spend more of t heir in­come on hous­ing costs, be­cause rents have shot up by 50 per cent since the mid-1990s.

It’s all a ter­ri­ble mess. Now, you ask, isn’t it in­evitable hous­ing would be so un­af­ford­able in a ma­jor city such as Lon­don? The an­swer is a re­sound­ing no. In Sin­ga­pore, av­er­age first-time buy­ers spend roughly a quar­ter of their in­come on mort­gage pay­ments, while in Vi­enna peo­ple typ­i­cally pay 25 per cent of their salary in rent — com­pared to a whop­ping 79 per cent of take-home pay in Lon­don.

So what are those places do­ing right? It’s sim­ple — the gov­ern­ment is play­ing a much big­ger and more am­bi­tious role in build­ing homes, and the ef­fect is trans­for­ma­tive.

Eighty per cent of Sin­ga­pore­ans live in houses built by the state — typ­i­cally buy­ing them on 99-year leases, with grants pro­vided by the pub­lic sec­tor. The up­shot is that hous­ing in Sin­ga­pore is em­i­nently affordable, even though the city’s pop­u­la­tion has been ris­ing sharply — and home­less­ness is vir­tu­ally non-ex­is­tent.

Mean­while in Vi­enna, roughly 60 per cent of the to­tal pop­u­la­tion lives in so­cial hous­ing — to­talling 1.7 mil­lion peo­ple in more than 200,000 so­cial hous­ing units.

What’s par­tic­u­larly im­pres­sive is the com­mit­ment to high-qual­ity de­sign and ar­chi­tec­ture — mean­ing that gov­ern­ment homes are sought af­ter and cel­e­brated, and a deep source of pride for the city.

None of this comes cheap. Vi­enna spends more than £500 mil­lion a year on build­ing, sub­si­dis­ing and ren­o­vat­ing pub­lic hous­ing — far more per per­son than we do in the UK. No won­der de­mand for so­cial hous­ing here is far out­strip­ping sup­ply.

In the UK there are now more than a mil­lion fam­i­lies on the wait­ing list for so­cial hous­ing — and a quar­ter of them have been stuck wait­ing for more than five years.

The is­sue is most stark in Lon­don — and if we scru­ti­nise ar­eas such as Ne­wham, we see there were more than 25,000 peo­ple on the wait­ing list last year, but only 588 so­cial homes avail­able. It didn’t used to be like this. In the mid­dle of the 20th cen­tury, lo­cal coun­cils were build­ing 40 per cent of all new homes — much like you find in other coun­tries.

So while we need plan­ning re­form to make it faster and cheaper to con­struct homes in the UK, the truth is the pri­vate sec­tor alone can’t fix the hous­ing cri­sis. Get­ting it right will also re­quire an am­bi­tious and confident role for the state in build­ing hous­ing right across the coun­try.

In the words of the chief ex­ec­u­tive of the Fed­er­a­tion of Mas­ter Builders: “The only times the UK has built suf­fi­cient num­bers of homes is when we’ve had a thriv­ing coun­cil house-build­ing pro­gramme.”

If you want to see the ben­e­fits of this kind of ap­proach, you’ve only got to look at Hack­ney, where mayor Philip Glanville and his team have been push­ing a head wi t h new c o unci l housi ng projects such as the Kings Cres­cent Es­tate i n Stoke New­ing­ton and the re­build­ing of the Colville Es­tate near Hox­ton.

What is strik­ing about these projects is that Hack­ney coun­cil is res­o­lutely cham­pi­oning world-class de­sign and us­ing a mix of fund­ing to get projects off the ground.

As the in­flu­en­tial ar­chi­tec­ture critic Rowan Moore put it re­cently: “By cross­sub­si­dis­ing, talk­ing to res­i­dents and valu­ing good de­sign, the east Lon­don bor­ough is in­vest­ing in some of the best coun­cil hous­ing ever built.”

This com­mit­ment to ex­cel­lence mat­ters. In the words of mayor Glanville: “We de­cided up­front to in­vest in good ar­chi­tec­ture — be­cause if you live in so­cial hous­ing, you want to know it’s been built to last.” Quite right too.

Sadly, it’s too hard for coun­cils to do this on a big­ger scale, be­cause cen­tral gov­ern­ment im­poses a strict limit on how much lo­cal au­thor­i­ties can bor­row against their as­sets and rev­enues to fund coun­cil hous­ing projects.

This is bonkers and needs to change. The good news is that the tide may be be­gin­ning to turn, with the Prime Min­is­ter re­cently an­nounc­ing that this cap on bor­row­ing will be re­moved. How­ever, that’s ul­ti­mately a de­ci­sion for the Chan­cel­lor Philip Ham­mond — and as a for­mer Trea­sury civil ser­vant, I know how much fi­nance of­fi­cials hate the idea of any­one ex­cept them be­ing able to rack up gov­ern­ment debt. With t he Chan­cel­lor due t o de­liver hi s an­nual Bud­get on Oc­to­ber 29, we’ll soon find out whether or not the Gov­ern­ment re­ally is com­mit­ted to this agenda.

If we can cut the red tape stop­ping coun­cils from build­ing high- qual­ity hous­ing, it won’t just help fam­i­lies on the wait­ing list for so­cial homes, it’ll make our city a fairer and nicer place to live. And who wouldn’t want that?

The chances of a young adult own­ing a home in the UK has more than halved in the past two decades

A source of civic pride: the sub­sidised Alt-Er­laa pub­lic hous­ing es­tate in Vi­enna

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