A globally desirable city with high immigration and growth and not enough housing supply: London provides a cautionary example of what happens when supply shortages become chronic.


From PropertyWire.com, Here’s the perspective of London Homebuilders as they call on the next mayor of Greater London to help them increase housing supply. Its an indication of the scale of London’s crisis – still producing only half of what is needed.  Makes you appreciate Vancouver’s relatively balanced supply numbers relative to demand (actual “fit” and affordability vs demand is another challenge!).
I think the UK authors could have covered many other systemic issues. The UK could learn from Canada and adopt specific legal performance (binding purchasers to complete on their contracts) and simplified purchase and sale agreements (the UK is notoriously complex and open to last minute negotiations [“Gazumping”]). These legal changes would create a better pre-sale culture and give developers enough confidence to build in larger quantums. On  the design side, I think there is room for much cross cultural exchange – Vancouver’s contribution being compact mid and high rise models. London is developing some interesting mid-rise buildings that I’ll feature later.


UK Homebuilders want next mayor of London to create new policies to meet chronic housing shortage

(article here, reprinted below)

The organisation that represents house builders in the UK has issued a blueprint for London’s future housing supply which hopes that politicians in the city will take it on board when forming policy. The Home Builders Federation (HBF) says that its 10 point blueprint, Capitalising on Growth, should be taken into account by this year’s candidate in the London mayoral election when declaring their policies for housing in the city which is desperately short of new homes.

HBA
“Current London mayor Boris Johnson is regarded as having done a lot to boost housing supply and put in place a number of measures to continue his vision but he is not standing for mayor this time.
The HBF wants the candidates to adopt ‘tangible, workable and realistic’ policies to deliver the increases in housing supply and build on the significant increases in the number of new homes being built over the last two years.
The document includes recommendations that the next mayor of London ensures sites are viable and deliverable by introducing realistic levels of affordable housing and supporting the delivery of specialist private rented housing.
It also calls on the next mayor to make better use of and improve London’s existing estates while working with authorities in the wider South East to create a strategic approach to delivering homes that can support London’s growth.
The blueprint says that the mayor neds to act as a hub to coordinate efforts by all the public bodies with land holdings in London so that more land actually comes forward for house building and it calls for more underused commercial spaces to be turned into homes.
‘We welcome the very vocal commitments of candidates to increase housing supply in London. We now need to see realistic, workable policies to be developed that will allow these homes to be built,’ said HBF executive chairman Stewart Baseley.
‘If London is to maintain its status as the world’s capital city and keep on powering the national economy, it must continue to attract people, businesses and investment. The capital’s chronic housing shortage and resultant affordability crisis now threatens London’s status as a global powerhouse and can only be solved by a sustained increase in supply,’ he explained.
‘In just two years, housing supply has increased by over 25% but we are still only delivering around half the number of homes needed. We need to maintain a strong investment environment for developers, keep sites deliverable and ensure that planning resources are in place so that builders can obtain planning permission and get on site as quickly as possible,’ he added.”


Regards,
Michael Mortensen, MA MCIP, RPP – a Vancouver Developer & Planner Abroad m4mortensen@gmail.com | www.plan-tlc.com
 

Comments

    1. More like crazy EU rules, Frank. Most people in the UK are quite tolerant of high immigration and do not see the EU as responsible for any excess immigration. It’s a separate issue.

      1. I agree Eric. The UK is a VERY welcoming place and London is such a diverse city. It’s a housing supply issue and frankly a cultural issue, a tug of war … no that’s the wrong metaphor … a game of dodgeball between private sector and government.
        At times, you’ll see statements and promises from some level of the government – national, or local or from the Metro level – about how they will “create” XX,XXX new homes this year” when in fact they really build none – it is the private sector (and increasingly the “third-sector”) that creates new housing.
        In the Post WWII period, the state DID build millions of new units of housing, but clearly that was not sustainable and I think it indelibly shifted the focus of the housing industry in the UK. Before Thatcher took power 1 in 3 homes in London was council-owned social housing. Since her “Right to Buy” policies were implemented and carried on through successive governments, that ratio has fallen to 1 in 4. Still high by Canadian standards.
        Half a century on, the state of much of the council housing stock is of great concern. The ancient Engineer Vitrevius’ talked about ‘commodity, firmness and delight’ as the measure of good buildings … Judge for yourselves. This bit of history is illuminating: https://www.youtube.com/watch?v=Ch5VorymiL4
        Now having backed out of funding new social housing, the state has shifted the focus to the third-sector housing management agencies who look after the thousands of non-market housing estates in the UK. Many of these large agencies HAVE been retrofitting and adding new density to estates, but government policy is sometimes counterproductive. For example, while expecting the Housing Associations to invest to create MORE new housing, the national government recently forced the Associations to REDUCE rents for Council Housing.
        Housing – it is a wicked planning problem! The experience of other global cities like London really does make me appreciate better the creativity, robustness, and responsiveness of Vancouver’s housing industry and our systems in general – legal, finance, governance etc. Notwithstanding our housing challenges in Vancouver, I think we are in a good position to respond if we can bring together and tap the creativity and aspirations of the public, developers, architects and planners to work out the path forward.

    2. The EU imposes far too many costly rules onto countries in housing, agriculture, manufacturing, taxation and social policies. Free labour movement and associated social and social benefit costs are certainly one of the issues, but so are many of the bizzare rules from highway signage to detailed orchard trimming to subsidies to manufacturing plus associated costs that cause many to prefer Brexit over staying in the socialist big-government-is-good EU.

  1. Frank, the other elements that exacerbate the crisis here in London are a) low income (median household income is only £29k/yr) and b) a historical dependence on the state to provide housing. With the withdrawl of the state from funding new housing (since Thatcher’s time) local councils have increasingly looked to the private development sector to fill the void through Connunity Amenity Contributions (“Section 106” contributions in UK parlance). It’s a slippery slope because there is often little left over, after the housing amenity, to reinvest in local amenities.

  2. Michael, thank you for your optimistic view of housing in a primary gateway city. It is very refreshing, especially after reading Kerry Gold’s breathless and rather paranoid diatribe in the Walrus based mostly on inference against wealthy Chinese and developers, and a quick and cavalier dismissal of supply and demand and land use planning. She is foolish enough to project ahead to 2050 and predicts Vancouver will become Monaco, a playground for the one per cent, and not just rhetorically. As if we had such a tiny mono-economy.
    Jonathan Kay follows up with an incongruous blame-the-left editorial about the influence of foreign money in Vancouver’s housing, and actually lays the responsibility at the mayor’s feet. Like Gregor is highest on the totem pole and has the power to affect changes to immigration and the foreign investor program. Upzoning RS1 districts are one thing, but after that the premier will have to act. Anyone want to guess when that will happen?
    Note the feds have committed a half million bucks to investigating this issue. Kudos. Maybe some real data will inject some realism and accuracy into what has been up to now largely conjecture based on incomplete research. I’ll bet a loonie that if the data doesn’t support Gold’s and Kay’s positions to the extent they’d prefer, out will come the diminishing of the study’s methodology and possibly outright denial in future pieces.

    1. Thanks MB. I really do think we have a robust industry in Vancouver and the right fundamentals in place. We are challenged by rising demand and have to find a way forward to create more affordable types of housing paired with great walking neighborhoods served by transit and cycle infrastructure.

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