Now that the election is over, Boris Johnson’s first priority must be to get a grip of the housing crisis in the capital, says Phil McCarvill from IPPR.
The Institute for Public Policy Research (IPPR)’s report, Affordable capital? Housing in London, published today, paints a stark picture of the challenge.
London’s population, profile and status as a truly global city mean that housing demand, which already heavily outstrips supply, will continue to rise over the coming decade.
Against this backdrop, ever greater swathes of London are becoming unaffordable for those earning average salaries. A large proportion of London’s population has already been priced out of buying a home in their city, and now they are finding it increasingly difficult to find affordable properties to rent.
Changes to housing benefit are set to make the situation worse. The first thing Boris Johnson should do is to put pressure on the Government to adjust its welfare reforms to reflect London’s uniquely expensive rental market.
The introduction of an augmented Local Housing Allowance cap for London (just as London Weighting on salaries recognises the high cost of living in the capital) would lessen the disproportionate negative impact of the changes in London, especially for large families.
However, this would only be a sticking plaster. In the longer term, Boris Johnson should convince the Government to devolve power and responsibility for housing benefit in London to the Mayor. This would mean the full housing toolkit would then reside with him and could be brought together to bear on securing the new house-building that London desperately needs.
The Mayor already has power over planning policy, through the London Plan; over land, through existing Greater London Authority land banks and the land he has recently inherited from the London Development Agency and the Homes and Communities Agency; and over capital, including through the proceeds of land sales.
Adding power over housing benefit, and the ability to leverage funding by borrowing against it, would complete the set.
Rather than trying to squeeze London into a national, one-size-fits-all straitjacket, the Mayor could then set housing benefit caps and thresholds that made more sense in the context of London’s unique housing market, and which were more responsive to its particular pressures.
It would also give the Mayor a powerful bargaining chip with which to strike new ‘something for something’ deals with the Local Housing Allowance sub-sector of the private rented market, building on the existing model of local landlord accreditation schemes to win greater security, decency and affordability for tenants, as well as enhancing the support on offer to landlords.
Finally, housing benefit decisions affecting London would then command the democratic legitimacy that comes with the Mayor’s personal mandate of over a million vote.
If such an approach were to be tried and tested successfully in London, the case for devolving power and responsibility for housing benefit to local areas across the country – which IPPR will make in a major forthcoming report – would be strengthened.
And of more immediate concern to Londoners, we might get one step closer to having a capital city in which ordinary people could afford to live.
(Phil McCarvill is an associate fellow of IPPR).
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