This is The Housing Fix, a series of articles and dialogues that explore the intricacies and ways of tackling the affordable housing crisis.
There were more protests about affordable housing in London in the past months than in the last few years. This summer, the Southwark Council in London shifted its approach to delivering council housing by moving towards ‘private development agreements.’ This change is not surprising, considering that over 100 councils in England have acknowledged a funding crisis in a report titled “Securing the Future of Council Housing.” This year promises more campaigns and significant organizing action amid the various developments across Southwark.
All of it could represent a turning point. Activist groups in Southwark argue that “overdevelopment offers few genuinely affordable homes is not the solution to our housing crisis.” Even architects in London have taken the plunge to challenge the current model, which they argue is about cross-subsidizing affordable council housing but not investment. Long-time activist Eileen Conn has called for bringing together two campaign streams—housing and planning—that can significantly increase their effect on public debate and policymaking.
I sat down with three key voices on the issue of affordable housing in London—Luke Tozer, director at Pitman Tozer Architects and head of the campaign group Architects’ Action for Affordable Housing; Eileen Conn, former policymaker in the Treasury in Whitehall and community activist for 50 years in the district of Peckham in south-east London; and Andreea Vasilcin, Peckham resident and member of the Aylesham Community Action group (views are her own), to talk about what’s happened and where they go from here.
What follows is a lightly edited transcript of a conversation that took place on April 4 over a video call.
Susana F. Molina: What do you think are the leading causes of the housing crisis in London?
Eileen Conn: In the Borough of Southwark, at least 80% of the population can neither buy a property for themselves nor pay the rents produced by the new developments. So it’s not just a crisis; it’s an emergency. I’m old enough to remember that before the 1980s, local governments in the UK had a house-building program. Local councils built and managed council housing, a form of public housing we now call affordable housing as a whole. Although the housing market was also bearable and affordable for most people, others rented their homes directly from the local authorities. However, in the 1980s, the number of houses built by the councils began to decline due to significant policies in the Thatcherite era that shifted the financing of council housing in London and across the UK.
In addition, the existing council housing stock was reduced by the Right to Buy scheme [you can buy your home at a price lower than the full market value because the length of time you have spent as an eligible tenant entitles you to a discount.] Whatever one thinks about the Right to Buy policy, councils are not allowed to reinvest the money received in building more council housing, at least in London. It seems like a bath with no plug; the water is constantly poured in, and it never actually fills up because the council housing stock is being reduced all the time. Housing associations were supposed to take on some of the burden of the loss of council housing. However, they can’t afford to buy the alleged affordable housing that the commercial developers create following the so-called affordable housing policy.
Luke Tozer: The new labor government has implemented policies that significantly reduce the subsidies for the Right to Buy scheme, yet the number of council housing continues to fall. Reforms should result in durable solutions to long-term primary issues like the lack of significant central government funding for affordable housing and the fact that they are not treating housing as national infrastructure, as the rest of Europe does, and invest in it as such, and stop trying to plug in small patches in the drain.
Last year, the government spent 8.3 billion pounds on housing benefits and about 3 billion pounds on capital to build new affordable homes. If we deliver 1.5 million homes over five years, we need to build 300,000 homes per year—100,000 affordable homes—which would probably cost significantly more than 3 billion pounds. Meeting all new safety and environmental regulations increases the construction costs of newly built homes. In most of the UK, the construction cost is higher than the property’s value, which is another reason why so little is currently being built. That’s the construction inflation built up through external events like Ukraine and Brexit. The cost of building is so high that the profit from private housing sales can’t cross-subsidize 35% of affordable housing within a development. No developer will go ahead with a project where they will make a loss.
Andreea Vasilcin: I’d call it an affordability crisis—yes, we’re building new homes, but they’re out of reach for the people who need them most. This crisis is driven by a mix of things that Eileen and Luke have already touched on: the financialization of the market, the political choices, and the policy failure. For decades, and I think it’s different from Vienna, which I have studied quite a bit in detail, the UK has been treating housing as an asset, not as a fundamental human right, and that allows big developers to have the upper hand when it comes to any development, and to drip feed supply, instead of being planned around real needs.
Developers jointly decide how much housing supply they are releasing, which is done quite slowly so that it doesn’t create an “imbalance” in the market. While developers are not progressing with their planning applications and sometimes landbank, councils are starved of funding for council homes. On top of that, after the financial crisis of 2008, councils and the planning system have been hollowed out by tools such as the viability assessment that allowed developers to build housing whilst recovering from the big crash and keeping the economy in place. However, the unintended consequences we see today in London are that developers still use and abuse the viability assessments to justify that a development is not viable. Hence, they can’t provide affordable or council housing in London and wriggle out of their obligation.
In addition, land is hoarded up and traded for profit as a financial tool rather than used for what communities need. So, in my view, I think we need three things for a structural reform that is multi-folded: public-led development, land value capture to make sure a site hasn’t been land-banked and sold at an unrealistic price that upholds the viability assessment tool, and rent regulation. These three things will rebalance the system in favor of people. Houses are still being built in the UK; it’s just that they are not affordable for the communities living in these spaces.
Susana F. Molina: Why is there a need to build more council housing around the Aylesham Community in London?
Andreea Vasilcin: The indices of multiple deprivation are very high in Peckham, where the Aylesham Community is located. In Southwark, 10,658 people are in temporary accommodation, 18,892 households are on the council’s housing waiting list, and 3,000 households are waiting to join the list. The need for family homes is acute; unfortunately we do not see developments addressing this. In addition, long-standing African, Afro-Caribbean, and Latino communities in Southwark are increasingly being priced out by new developments, resulting in insecure rental arrangements or forced displacement from the neighbourhoods they have contributed to and have long called home.
Susana F. Molina: Are council landlords failing to manage property development efficiently? In other words, can council landlords be trusted to be up to this job? Or are they hostage to political decisions, especially at a time when people are demanding rent freezes?
Eileen Conn: One of the problems is that councilors are now forced to rely on commercial developers to build affordable housing, but it won’t ever work in the current situation. There are planning issues as well. Just recently, our member of Parliament, Miatta Fahnbulleh, a junior minister in the new Labor Government, said in a meeting I attended that, in her view, it was impossible to solve the current affordable housing crisis without having a public council house building program. I agree with her. The developers are just building financial assets. They have to sell those on the market. That was what Luke was pointing out.
In terms of planning, one of the problems is that the Greater London Assembly and the mayor, or it may even be a national government, allocate housing numbers to London boroughs without distinguishing between affordable housing and market financial assets. Therefore, the Southwark Council in London commits yearly to building a specific number of housing units in the borough. Market financial assets are sold on the market to anybody, including people who don’t live in the UK, at least in London. They’re buying them for investment purposes and may or may not be occupied.
Andreea Vasilcin: The first chapter of the London Plan (Policy D1) states how the borough should undertake area assessments to determine different places’ characteristics, qualities, land, and value in order to understand their capacity for growth, form, and character. The very first area assessment mentioned is the demographic makeup and socioeconomic data such as indices of multiple deprivation, health and well-being indicators, population density, employment data, educational qualifications, etc. So, the London Plan boldly says that all those different characteristics must define the capacity for growth of an area. We have yet to see this framework used at the Aylesham development in Peckham. Instead, the developers of Aylesham have dropped the affordable housing provision from Southwark’s policy of 35% to 12%.
Eileen Conn: Since the councils get the numbers of housing to be built without distinguishing between affordable housing and market financial assets, they don’t consider the points Andreea has just mentioned about the planning process. And so people in the council say to us, ‘We can’t take into account what the housing need is in Peckham and around here because it’s got to be anywhere in the borough that we build these houses.’ In London, the council has to develop a borough development plan that identifies development sites and puts in what they call indicative housing numbers on each site. This is supposed to add up across the borough to the number of housing units they have to build in their area over the years (it’s not done yearly but on an average borough plan basis.) It uses methodologies, which are smoke and mirrors, to get to the highest number possible and assign that to a site. Once that number is in the plan, it’s difficult to change it downwards. Thus, there’s a deliberate disconnect to meeting real housing needs; it’s all about housing numbers. But people buying those houses in the market don’t have the constraints everybody else has.
That’s why it is not within the Council’s abilities to do what Andreea suggests; the planning system prevents them from doing it. We know we need development to meet housing needs precisely and fit the neighborhood’s site and community. And that’s what the Aylesham site development plans do not do. They are utterly alien in this context, but the Council says it has to ignore that because that’s not in the planning rules.
If we take the site that we know very well in Peckham, the Aylesham site has 850 numbers attached to it, which is more than double what is sensible in terms of that site. But it’s been determined that number has nothing to do with the site, really, although the council pretends that it has. And so, when it comes to honest, detailed discussions about what should go on the site, the process of change, social change, and economic change is driven by a fixed number of housing units.
Susana F. Molina: How have architects reacted to all of this? What is the campaign “Architects’ Action for Affordable Housing” asking for?
Luke Tozer: The public sector in the UK has essentially outsourced the whole development program to the private sector, including, for the most part, the provision of affordable housing. There used to be big architectural departments and other departments within councils that built homes. Most of the work at our studio is in housing-led regeneration, mainly for the affordable housing sector, local authorities, and housing associations. In my experience, on a day-to-day basis, the biggest problem with planning is that each conservation officer has 60 or 70 live cases they’re working on. It’s an unachievable mismatch between councils’ resources and the needed demand. The only way to change it is to provide more funding for those functions, either by growing the state or bringing in resources from the private sector to enable it.
I fear that the current labor administration isn’t making an impact quickly enough to deliver on the ground because, frankly, it takes between 4 and 10 years to build the homes we’re working on. If you’re trying to deliver within a five-year political cycle, there’s a mismatch between the timing of how long it takes to deliver these projects and how regularly elections come around.
We [architects] are often the first people in the room who come up with an idea and a sketch for a place. We’re involved, typically all the way through until the end. I think we have a unique perspective on the process compared to lots of people, from the planners to the contractors, who come and go.
I guess it’s a bit of a mouthful, but Architects’ Action for Affordable Housing is trying to give architects a voice in the debate. Our campaign tries to avoid being in a situation where it often feels as if we’re pretty peripheral to having any impact on the delivery of affordable housing. Housing delivery is complicated and involves many people coming together to finance it. It involves land, place creation, social structures, and ultimately, as Andreea said, it’s a political act in itself. There’s an idea that having private housing mixed in with social housing is better for everyone. I don’t really have a problem with that, but that’s not the only model. In Singapore and other places, they have government-built social housing and private housing built privately by developers, and they’re separate.
We’ve got over 400 organizations and individuals backing us. We use that network to disseminate good information and best practices amongst our network. Since the election, we have been working to help provide some good examples of where architects have delivered well in the past and assist the government, where we can, in suggesting changes necessary to create the 1.5 million homes they’re trying to do. At the end of this month, we’re about to publish, along with the Architects Journal, a series of 20 case studies of good housing practice, mostly centered around affordable housing but with a few other housing tenures.
Susana F. Molina: From what you all are saying, there is an irrefutable need to rethink London’s development model. Luke already mentioned their actions to move in the right direction. Which other solutions are you proposing to solve the crisis in London?
Eileen Conn: I think Luke touched on the key point there, which is about housing being thought of as infrastructure. And that’s a conceptual issue in the Treasury. Our MP, Miatta Fahnbulleh, a junior minister in the government for Energy Consumers, is also an economist known for understanding how the economy is an interactive system beyond what things like the Treasury deal with. There’s a chance we can begin to work with her on getting from where we are in a completely unsustainable system to provide housing that we can manage.
A coalition of local groups called SHAPE (Southwark Housing and Planning Emergency) came out of conversations between myself and two housing campaigners I know, who are well-informed about planning issues. We discussed two aspects that needed to be brought together, and we did it in a campaign in Southwark: the housing and planning emergency. The coalition brings together local action groups that focus on housing issues, and local campaign groups about planning applications. There’s a whole other social ecosystem for planning campaigns, and the main point of SHAPE is to bring these two different streams of campaigners together across the country. I believe getting together activists from both campaign streams — housing and planning — can significantly increase their effect on public debate and policymaking. This is essential to make the necessary changes to solve the housing affordability crisis.
Andreea Vasilcin: The Aylesham Community Action is a local group of neighbours that have been campaigning on the streets of Peckham for over four years. We have been letting other neighbours and visitors know about the current proposal because, unfortunately, the developer’s and Council’s engagement hasn’t reached wide and deep. Currently, there are 2,400 objections to this site. So you’re getting a lot of energy on all sides: developer, council, community—all firefighting. But this is not productive and is really everyone’s waste of time.
The Southwark Council launched a progressive report called the Southwark Land Commission report, which was the first of its kind in London and second in the country. It contains recommendations to understand how land reform could happen, driven by the community and local expertise. Unfortunately, the Aylesham development is out of the loop due to the time scales, but hopefully, subsequent developments in Southwark will be able to learn from that. One key recommendation is about the local land forums to bring the community together to discuss what the land should be and use that decision locally, a bit like a citizen assembly. There is an open dialog and shared decision-making at the very outset, even before a planning application is put in, or a site allocation is drafted. The other crucial recommendation is a Community Empowerment Fund that supports the local expertise of the community so that people can get involved. Many neighbours don’t have the time because they have caring or work responsibilities.
In addition, viability assessments have to go because we don’t give the developer the option to argue about affordable houses in 300-page viability studies. The Council would have a clear mandate from the government regarding affordable homes and a land reform that really puts the community that lives there front and center, so no one has to firefight.
Eileen Conn: We would have to turn the current planning system upside down and immediately begin to slow the land prices while enabling more council housing to be built in London and beyond. Within the current system, we could start having a mandatory affordable housing unit number attached to the allocations to reduce the unaffordable amount. Now, what I’m saying is the first sketch of something. There are many reasons why that’s not possible at the moment. But we’re going to have to do something because all that’s happening is that London is being filled with houses and flats that are not affordable by most of the population who live and work in London and make it a city.
Susana F. Molina: But, in the meantime, London is draining affordable council housing, and using Eileen’s metaphor, there’s no plug in the bath. Thank you all.
