London mayor Sadiq Khan’s 50% affordable housing target could be derailed by viability issues in the portfolio of his most important public sector delivery partner, Transport for London.
When contacted by Estates Gazette, developers on TfL’s 13-strong procurement panel cast doubt over whether the sites it owns can be brought forward if the target is applied.
Khan is considering enforcing a flat rate for private developers in London of 35%. His overall 50% target is due to be achieved by delivering a higher rate on public sector schemes and, crucially, across the 75 surplus sites TfL is planning to work on first with the developers.
According to one panel member, if a flat rate of 50% was applied, many of the sites would not be bid on. Another said that while 50% may work in outer boroughs, where land prices are lower, for inner London it would have to be less.
Of the 300 acres across the 75 sites, around two-thirds are in Zones 1 and 2. The GLA and TfL are also considering bringing forward additional sites.
TfL, the largest single landowner in the capital, is under pressure not to sell land cheaply to help Khan meet his higher affordable rate, as it intends to generate £3.4bn in non-fares revenue by 2023 to make up for cuts in government funding made last year.
The mayor’s office is aiming for a 50% affordable rate across the portfolio, rather than on each site. No new TfL sites have been brought forward since February, but the first under Khan are due to come forward in the coming weeks and could be offered with a higher affordable housing component than 50%.
Since Khan’s tenure began in May he has been locked in discussion with TfL around the level of affordable housing on the sites to be brought forward by its Property Partnership Framework.
TfL’s property team has had to review its intended provisions as a result. The organisation has been undertaking a drive to make best use of its property portfolio since 2012, when it appointed Graeme Craig as director of commercial development, and has since expanded its team from five to 20. Former Land Securities chief executive Francis Salway is chairman of its commercial development advisory group.
TfL schemes in Nine Elms, SW8; Northwood, north-west London; and Parsons Green, SW6, previously proposed 25%, 20% and 40% respectively.
Craig said: “We are aiming to deliver an average of 50% affordable homes across our portfolio of sites.
“Working closely with the mayor and City Hall, we are confident that we can bring forward thousands of homes that are affordable to Londoners while also meeting our ambitious financial targets.”
TfL’s delivery panel:
• Balfour Beatty
• Barratt Development with L&Q
• Berkeley
• British Land
• Canary Wharf Group
• Capital & Counties
• U+I with Notting Hill Housing Group
• Land Securities
• Mace and Peabody with DV4
• Mount Anvil with Hyde Housing Association
• Redrow
• Stanhope and Mitsui Fudosan with Taylor Wimpey
SEE ALSO:
• Briefing: 100 days of Khan – the story so far
• Will London mayor change tactics?
• James Murray – the start of a marathon
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