A profound change of direction by the property industry’s charity. A Spending Review designed to speed up housing delivery. An extraordinary exchange between a developer and a council.
Unconnected, yes, but together they represent a turning point for property.
At this week’s London Property Summit, the leader of Hammersmith & Fulham council used the most inflammatory language to describe developers that made what he saw as unreasonably low contributions to affordable housing. “I can’t see it as anything other than a rip off,” said Stephen Cowan.
And he left his audience in no doubt who he had in mind by referring to an £8bn scheme in his borough: only CapCo’s Earls Court project fits the bill.
Claiming the developer had made an £8m affordable contribution, Cowan said those who could not afford to do business with him should not try to do so. “We’ll find someone who can.” It was a contribution that was misguided and, most likely, wrong.
In the audience was Gary Yardley, managing director of CapCo, which points to £452m of contributions to community benefits.
Taking the stage next, visibly and understandably incensed, Yardley complained of the lack of dialogue with Cowan (“He wouldn’t speak to me for nine months”). He pointed to the company’s success in delivering places for all (“We have transformed Covent Garden and we are proud of what we have created – whether you have £5 in your pocket or £500”). And he argued that large-scale redevelopment simply wouldn’t happen without private sector funding (“I am painted out to be the bad boy developer again, but there is no money in the public sector to make opportunity areas work”).
As this played out, across the road the chancellor was preparing to deliver a Spending Review that was variously described as a developers’ charter and a source of ambitious housebuilding proposals.
“The future favours the bold,” George Osborne told the Commons. “So we have to be the builders.” It may have been the royal “we”.
And the need to build is clear. Upwards of 250,000 new homes are required annually. Some 170,000 were built last year – and that was the highest number for almost three decades. The government wants to see one million homes delivered by 2020 – an ambitious target, yet one that won’t be enough to satisfy existing and future demand.
Housing is a crisis that touches all income groups and, more than ever, this industry will be expected to find solutions. As the BBC’s Robert Peston wrote ahead of the chancellor’s speech: “If George Osborne has a big idea, it is to transfer the costs of, and responsibility for, building a better, fairer Britain from the public sector to the private sector.”
If true, that means this industry delivering housing for all: from the professionals struggling to afford to live in London to the 83,000 young people who will experience homelessness this year.
It is that astonishing figure that galvanised LandAid to act.
As chief executive Paul Morrish writes this week across the property press (go to EGi to read the full article): “From next year, all our grant-making efforts will go to supporting small to medium-sized charities around the UK working to end youth homelessness. They have the skills and expertise and can build the trust needed to work with the thousands of young people who turn to them for help. And together, united behind LandAid, we can help them. With money, free professional property advice, and the support that LandAid offers so well, we can make a massive difference.” Well said.
Back at the London Property Summit, Jules Pipe, the well-regarded mayor of Hackney, summed up the public sector’s expectations of developers . “The market is entitled to make a profit,” he said. “I don’t expect social responsibility and ethics from pimps and bookmakers. But when someone is changing the landscape of my borough I expect them to at least meet me half way.”
Developers will have their own expectations of Pipe et al – certainty, consistency and commitment chief among them.
This week feels like a turning point in all sorts of ways.
