The GLA, led by London mayor Sadiq Khan, has laid out plans to take an interventionist approach to land assembly in order to boost affordable housing in the capital.
This week the GLA bought its first development site, demanded new land assembly and CPO powers from central government and commissioned Savills to help it produce an industrial intensification strategy.
“Our view is that where the GLA could play a much stronger role is through active involvement in London’s land market,” says James Murray, deputy mayor for housing and residential development at the GLA.
“The difficulties in bringing forward land are clearly one of the biggest barriers to building more housing. We want to do everything we can with our current powers and resources to ramp up our involvement in the land market and be a more interventionist player.”
The Haringey project
In Haringey the GLA has bought its first site, the 27.7 acre St Anne’s Hospital, using its £250m land fund.
The GLA will apply for planning permission for 800 homes on the site, 50% of which will be affordable, alongside new hospital facilities. This represents a marked increase on the permission secured in 2015 for 470 homes, of which 14% were affordable.
Previously owned by Barnet, Enfield and Haringey Mental Health NHS Trust, the GLA’s acquisition will speed up development and help remove delays that NHS Trust disposals often incur.
Murray says the GLA’s objective when buying sites is to build more affordable homes and boost the associated social returns, rather than to make a significant investment return.
“The primary objective is not for the GLA to lose money, but it’s also not for the GLA to make money through these land purchases,” he says.
“The purpose is to get land into production with high levels of affordable housing as quickly as possible. So although we will make sure intelligent decisions are taken, the aim is not to make a large profit on the investment decisions, it is to bring land forward quickly.”
Looking abroad for ways to boost CPO powers
Alongside this, the “Capital Gains: A Better Land Assembly Model for London” report released this week has called for the GLA to have more CPO powers, which will be critical for unlocking sites.
The report, written by Urbanism Environment and Design, looked at land assembly models in the Netherlands, France, Germany, and the US to see how these countries brought together sites for development.
It advocates mechanisms for curbing land value speculation in areas due for development and creating special land assembly zones, which could result in values frozen at the going market rate on the date a site is designated an LAZ.
The GLA says the complexity of land assembly in London has hindered the construction of new homes, and that the mayor needs reformed compulsory purchasing powers alongside new land assembly mechanisms and resources.
Murray says the GLA plans to take on both private and public sites to unlock development, with the length of the GLA’s involvement depending on the situation: the GLA could take sites through planning or pass them on to a partner once all the land has been assembled.
Murray says this is not an opportunity restricted to the public sector, and that private sector players are able to approach the GLA with opportunities, provided they accept the social housing requirements.
“One of the really important points about this is that the land fund is there to be used flexibly. We want to make sure the GLA is as responsive and nimble to the different situations we identify,” he says.
“The door is open for conversations with the private sector, housing associations, councils – anyone who has land interests and wants to build more housing,” he adds.
Industrial intensification strategy
The GLA has also appointed Savills to help it balance the competition between residential and light industrial uses in a new industrial intensification strategy.
A residential-at-all-costs mentality has come under fire owing to the amount of employment land this outlook loses. The industrial intensification strategy will safeguard employment space but could also potentially use the land fund to help finance more dense industrial schemes.
“There is a need to understand what is holding back this new market and what can be done to encourage new schemes,” says Rory Brooke, Savills’ head of economics.
“One way to do this is to intensify industrial activity in multi-storey buildings, so that the same amount of floorspace and capacity is provided on less land, freeing up the remaining land for housing-led development.”
Intervention
Critical to the new direction will be what support the GLA receives from national government both in terms of funding and new powers.
“We would want to see the GLA resourced properly and for it to set the bar for quality and pace of delivery. Essentially, the GLA should be going above and beyond on vision and outcomes if it wants to intervene in the land market. Otherwise, what is the point?” says Kate Ives, development director at Wates.
Murray says a team has been assembled at City hall, while the land fund itself is drawn from existing GLA funds, so it is not reliant on government. Sales receipts from schemes will be ploughed back into the fund.
There is a new, public-sector player in the London land market.
To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette
